The industry has broadly welcomed the agreement in principal to introduce a £1 levy to replace ATOL bonding, although there are concerns about how it will be implemented.
ABTA chief executive Mark Tanzer said: “We welcome the Government’s decision.
“This is the first step in a long overdue reform.”
Association of Independent Tour Operators chairman Derek Moore called it: “A step in the right direction.”
Sunvil managing director Noel Josephides, who has long campaigned in favour of a levy said: “It has taken years to persuade the Government that the system of providing financial security for tour operator clients should be changed.
“The £1 levy will not only make it cheaper for established tour operators to provide financial protection, but will encourage others, combining flights and accommodation as agents, to apply for an ATOL now that it is so much cheaper.
“We now have a cost effective and flexible scheme, which can be developed in due course to provide industry-wide cover. This can only improve financial security for the travelling public.”
Wings Abroad sales and marketing manager Chris Mansell said: “It is fair and reasonable that the holidaying public should contribute a tiny percent of the overall holiday cost to provide the necessary overall financial protection.”
However, travel industry accountant Chris Photi, partner at White Hart Associates, expressed concern about the practicalities of implementation.
He said: “I’m worried that all new applicants have got to bond and levy for the first four years, and I’m wondering whether the CAA might extend that rule to companies that have a bad result.
“The CAA vigorously defends the Air Travel Trust Fund – what steps is it going to take to protect this trust fund?”
He added: “I don’t think £1 will turn out to be enough. This is a government that is renowned for stealth and it wouldn’t surprise me if the levy goes up to £2 in due course.”
By Lisa James
