BUSINESS NEWS Barclays virtual seminar: ‘Travel Sector – The New World Order’. Juliet Dennis reports


Hays: Strict trust account rules would kill start-ups


Trust accounts do not provide a “one-size-fits-all” solution to protect consumer monies, say travel firms responding to the CAA’s planned Atol reform. Hays Travel owner Dame Irene


Hays said new travel businesses would struggle without access to customer funds as working capital. The CAA wants segregated


customer payments, most likely in trust accounts, to become a condition of Atol licensing, not just for Atol holders but for agents. Its trade consultation finished in the summer and a second, with specific proposals, is due next spring. Hays suggested a more flexible


regulatory solution “proportionate to the risk” would be appropriate, based on financial assessments of individual companies, adding: “The regulatory framework around segregation of customer monies is not straightforward.” She said it is “less of a problem”


for “large companies such as Hays Travel” but warned “the application


of strict regulation would kill travel business start-ups”. Hays, who has helped around 50


fledgling companies over 41 years, said it was important start-ups have access to customer funds, particularly if they are starting in the travel sector at a challenging time. “I don’t think there is a one-size- fits-all position,” she said. “To operate


Lewis: Airlines’ lack of liability for refunds is utter disgrace


The chief executive of The Travel Network Group has branded package travel regulations “broken” for allowing “horrific” consequences for firms such as Teletext Holidays, but not airlines. Gary Lewis called for the industry to “shout” to


change a system in which airlines do not face the same obligations as package travel organisers. He said companies operating under the Package


Travel Regulations, under which refunds must be returned to consumers within 14 days, faced extra pressure during the Covid refunds crisis.


travelweekly.co.uk


Dame Irene Hays


with no access to customer funds would be very challenging.” The Travel Network Group chief


executive Gary Lewis said trust funds “are as good as the structure around them”, with some allowing for monies to be used to pay suppliers, for example by taking out supplier failure insurance. He said there is “a place for bonds


and insurance” in the market as well as trust funds, adding that 98% of companies operated correctly and there were adequate funds in the Air Travel Trust Fund to cope. The “huge deficits” in the fund had occurred when Atol-holders, which also owned an airline, such as Thomas Cook, failed, he added. Adam Murray, Flight Centre


Travel Group’s chief financial officer for the EMEA region, called for a more ‘holistic’ approach to protecting customer monies, blaming the refunds crisis on airlines not being subject to the same rules as package companies. “The supply chain failed,” he said.


Truly Travel, parent of Teletext Holidays, recently


appointed liquidators following the termination of its membership of the Travel Trust Association, part of The Travel Network Group. It still owed £1.2 million in refunds to customers as of October 19 despite having paid back £10.8 million since Covid. Lewis said: “The Competition and Markets


Authority going after one of our members has caused huge consequences, when they have walked away from a broken market with the airlines. This is utterly disgraceful. “We should be making a point to the CMA that this


is a broken system. Now is the time we should be doing something about it. “We still have not had money back from the airlines. This is a real breakdown of the system.”


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‘Promote benefits of travel to avert heavy eco taxes’


The industry has been urged to promote the positives of travel to avoid heavy taxation of its carbon footprint. Inside Travel Group founder


Simon King and Flight Centre Travel Group chief financial officer Adam Murray both argued the travel sector should make more of the benefits of travel and how they mitigate negative impacts on the environment. King said: “Travel needs to


take the lead. It’s important we emphasise the positives. But we have to act on the carbon footprint as well, do what we can to mitigate that and be honest on where we can improve.” Murray agreed the industry


had to be proactive and find a “compelling story around travel”. He said: “If we don’t do this


as an industry, we will be an easy target. It’s very easy for government to react to customer sentiment and start throwing taxes out there and then you get to the position where travel becomes a privilege.” The Travel Network Group


chief executive Gary Lewis stressed it was important to act now: “We have to be able to develop practical things, not just pay lip service in the next 12 months. We cannot influence airlines, but we can influence what services customers buy.”


Gary Lewis


PICTURE: Steve Dunlop


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