Call to close travel protection loophole welcomed by AA

AA Travel Insurance has welcomed a call by ABTA (Association of British Travel Agents) to work with the Government and the travel industry to close what Mark Tanzer, ABTA chief executive, described last week as a ‘huge loophole' that leaves millions of travellers unprotected if their travel company goes bust.

Of the 45 million overseas trips made last year, only 18 million were packages.

Explains Christian Young, chief executive of AA Travel Insurance: "Under current rules, most travellers who book a package that includes travel and at least one other element of their trip, enjoy protection under the Air Travel Organisers' Licence (ATOL) or similar, should one of their travel firms fail.

"But the majority travel without such automatic protection and probably don't realise that they could lose a lot of money - to say nothing of having their travel plans dashed - if they find themselves stranded because of such a failure."

At the Tourism 2023 conference in Barcelona on 8th October, Mark Tanzer told travel industry delegates: "ABTA believes that all holidays should be covered, and is working with the Government and the CAA to come forward with a new scheme that allows members to preserve their business model, and yet provide comprehensive protection."

Because of the existing loophole, AA Travel Insurance this year introduced financial failure holiday protection to all of its single trip and annual multi-trip travel insurance policies.

Young points out that more than 50 holiday firms have collapsed during the past 12 months, dashing travel plans for thousands and leaving others to pay for extra flights home.

"According to ABTA's own figures, each year 27 million people build their own holiday or business travel arrangements by booking each element separately and they may have little or no protection in the event of a company failure. They now automatically enjoy that extra protection with AA Travel Insurance."

He says that few travel insurers offer this type of cover as standard or sell it as an add-on, while others restrict cover to scheduled airline failure.

AA Travel Insurance covers all suppliers of separate travel components including airlines; accommodation suppliers (such as hotel companies and villa owners); car hire companies; ferry operators; excursion organisers and theme parks.

"While of course I welcome Mark Tanzer's bold announcement, it will take time to put such additional protection into place. Until then, AA Travel Insurance policies will automatically close that gap."

AA Travel Insurance now includes financial failure holiday protection automatically, protecting against the insolvency of any independently booked travel or accommodation supplier not forming part of a package holiday up to a maximum of £5,000 per person. Terms & conditions apply, see website for full details. The cover is provided by travel financial failure specialists International Passenger Protection Limited (IPP).

All single trip and annual multi-trip policies bought by telephone or online automatically include financial failure protection. For full information visit AAtravelinsurance.com