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Gooley proposes way to strengthen trust accounts


Ian Taylor


A leading proponent of trust arrangements has acknowledged “the weakness” of many trust accounts and proposed a way to fix it. Mike Gooley, founder and


chairman of Trailfinders, advocates a ‘pay on pushback’ model for passing on payments to airlines and suggests “undercapitalisation is the fundamental issue” in the sector. Gooley outlined his proposal in a


letter to Travel Weekly in response to a claim by Alan Bowen, legal advisor to the Association of Atol Companies, that most travel trust arrangements operate outside Package Travel Regulation (PTR) requirements (Travel Weekly, January 7). Bowen said: “A trust account


operates on the basis all the money goes into the account until the holiday is over. You can’t use the funds to pay suppliers. The trust accounts used by most people don’t operate in accordance [with that]. They allow funds to pay airlines on the basis you insure against their failure.” But he said: “There is no claim


on insurance where the business doesn’t fail. Companies running trust accounts have been in no better position to offer refunds [for cancellations due to Covid]. The


The fundamental


flaw in not safeguarding pipeline monies long precedes the pandemic


trust account hasn’t helped.” Gooley argues: “Alan Bowen


is right in pointing out there are trust accounts and trust accounts. However, escrow [trust] accounting does make the misappropriation of funds much more difficult. The weakness of trust accounts is they have to empty to [pay] suppliers so the safeguard can’t be carried through unless backed by reserves.” He describes the payment of


Royal Caribbean and Carnival


lines extend sailing suspensions Several cruise lines have extended their sailing suspensions. All Royal Caribbean International ships, with the exception of one in Asia, and those of Celebrity Cruises and Azamara will not sail until April 30, while Silversea Cruises is pausing until April 1. Carnival Cruise Line has extended its suspension until March 31. Princess and Holland America Line have also extended their pauses.


6 14 JANUARY 2021 Mike Gooley


airlines months in advance as “the flaw” and suggests “a BSP Pay on Pushback” payment model. Gooley notes: “The objection


is that ‘the industry can’t afford it’. There is truth in this only because it has been allowed by a lack of financial regulation which is applied in all other areas of commerce where the payee is at risk of not getting what they paid for. Undercapitalisation is the fundamental issue.” He points out: “This fundamental


flaw in not safeguarding pipeline monies long precedes the pandemic, which has merely exposed the shortcomings of the system. It is time Whitehall fulfilled its responsibilities to properly protect the traveller.”


Hotelplan wipes out half-term


skiing with no-travel extension Hotelplan UK’s ski brands have extended cancellations until the end of February. The move forced by UK lockdowns affects Inghams, Ski Total and Flexiski, wiping out half-term school trips next month. UK chief executive Joe Ponte said Hotelplan was “extremely disappointed” and confirmed refunds would be offered.


Eligibility clarity could end grants ‘postcode lottery’


The explicit mention of travel agencies in amended lockdown regulations should end the “postcode lottery” of eligibility for business support grants, says Abta. Agencies in England are now


listed among the non-essential retail businesses ordered to close under tier 4 restrictions, bringing them in line with the devolved nations. Tier 4 restrictions apply nationwide in the current lockdown. Luke Petherbridge, Abta’s director


of public affairs, said confirmation from the UK government “should bring an end to the postcode lottery of grants experienced by agents” and secure eligibility for retail, hospitality, and leisure business grants of up to £9,000. However, home-based agents


do not qualify for retail grants and some still cannot access support for self-employed businesses because they haven’t been trading that way for long enough. Many reported resorting to


loans. Not Just Travel co-founder Steve Witt urged homeworkers to take out loans, predicting “a big fountain of water at the end” of the sales


Luke Petherbridge


drought. i Get Social, page 29


UK launches Global Health


Insurance Card to replace Ehic The UK government has launched the Global Health Insurance Card (Ghic), which will gradually replace the European Health Insurance Card (Ehic). The free card will be phased in, with Ehics remaining valid until their expiry dates. Ghic will offer “equivalent protection” post-Brexit and the government says it is “open” to extending reciprocal healthcare beyond Europe.


travelweekly.co.uk


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