Monday, 14 September 2020

On the Beach leaves ABTA over refund row

The UK holiday company On the Beach has dramatically thrown down its membership of the Association of British Travel Agents ABTA following a dispute regarding the slow pace of refunding customers for cancelled holidays due to coronavirus COVID-19. 

Whilst the holiday firm has left ABTA, it still holds an ATOL bond with the CAA and says its holidays are financially secure. "Holidays continue to be financially protected by the ATOL scheme and our ring-fenced trust account." a spokesperson for the firm told the travel trades premier publication - TTG. 

"The travel industry is facing unprecedented challenges, and changes are inevitable as businesses and trade organisations adapt.  The current circumstances have presented difficult decisions, and different legal interpretations on complex matters." The spokesperson said. 

ABTA has been unhappy with the lack of progress some holiday organisers had been making with refunding passengers whose holidays have been cancelled, following FCO travel advice changing. On the Beach had refused to refund customers, until the airlines cancelled flights, breaching ABTA's usual rules. "We recognise that the widespread imposition of advisories against travel places many ABTA members under enormous pressure regarding refunds. But ABTA has consistently maintained that the underlying obligation to refund remains, as has been the longstanding practice of the travel industry, and this has not changed as a result of COVID-19.  ABTA believes this is important to ensure consumer confidence in the package holiday market."

This may have been a case of jumping before being expelled from the association,  On the Beach boss, Simon Cooper has been publically dismissive of ABTA in recent weeks, often saying ABTA was "not a regulator or a lawmaker. Industry practice, mainly driven by ABTA’s historic guidance, has been to treat the FCO as a trigger for full cancellation and refund rights for customers.  Industry practice is not law. It is something which can and should change and evolve over time and should certainly change in response to this highly unusual situation.".

That stance has led many in the industry to not only predict the firm's exit from ABTA but also doubt the long term financial security of the company, which earlier this year posted losses of £31.6 million. 


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