AITO urges Government to assist SMEs to survive the Coronavirus Outbreak

March 17, 2020 | AITO Specialist Travel

Travel Insights Report

AITO, The Specialist Travel Association (www.aito.com) – following a meeting of its Board of Directors (“Council”) on 16 March – seeks urgent Government backing to assist its 120-plus SMEs (small and medium sized enterprises), together with many other SME tour operators, to survive in the wake of the global crisis caused as a result of Coronavirus, also known as Covid-19. 

Says AITO’s Head of Commercial, Bharat Gadhoke, in conjunction with Industry Affairs Director, Noel Josephides: “The 2018 Package Travel Regulations, or PTRs, are quite simply no longer fit for purpose.  The rules, designed to cover normal trading circumstances, cannot function in the current extreme situations in which we find ourselves.  We have no option but to add our voice to that of others in the industry to demand Government action to protect our long-established specialist businesses.

“Having to adhere to the PTRs – which require tour operators to refund consumer payments in full should the holiday company prove unable to fulfil a package – places hundreds of companies in the simply untenable position of being a lender of last resort. 

“Many of our members pay for airline and accommodation services well in advance and are extremely unlikely, in the current highly difficult trading scenario, to receive refunds from the suppliers concerned.  In this global crisis, it would be unreasonable to expect that they be required to abide by the requirements of the PTRs, which were not designed to cope with a disaster affecting every country and every destination worldwide. To do so would lead to innumerable company collapses and the loss of many thousands of jobs, which would cost the Government dear for many decades to come.

“We urgently call on Government, instead, to invest significantly in the long-term survival of SME tour operators and travel agents by altering the scope of the PTRs to enable agents and operators legally to defer planned holidays – or, at least, to refund only monies that suppliers have refunded to them, having first taken a reasonable margin to cover the initial work involved in organising the holiday.”

AITO understands that the Italian Government has already suggested an alternative to the refund requirements of the PTRs and that this scheme is being considered by other EU members in order to safeguard the survival of their own leisure travel industries.  Say Gadhoke and Josephides: “We need urgent confirmation that our own Government (a) is involved in these discussions and (b) that it recognises that speed is absolutely of the essence.”

AITO also asks the UK Government to ensure that Merchant Acquirers (whose services facilitate the use of credit and debit cards) moderate considerably the sums of monies they are beginning to hold back from some tour operators and travel agents in order to minimise their own (the Merchant Acquirers) risk.  “The extent of the Merchant Acquirers’ action on this front is already having a serious and deleterious impact on the cash flow of such tour operators and travel agents”, claims the AITO team. 

AITO is keen to stress that it is not only airlines such as British Airways and easyJet, and the giant tour operators such as TUI, amongst others, that are deserving of Government support, but also the many SMEs which form the backbone of the outbound travel industry and which add creativity and fresh thinking to the million or more holidays annually that they fashion with care and know-how. 

Editors:  For further information on AITO, established in 1974, and its 120 specialist holiday companies and associated AITO Specialist Travel Agents, visit www.aito.com.

Press:  To interview Noel Josephides or Bharat Gadhoke, the AITO Industry Issues team, please contact Travel PR on 020 8891 4440 or email s.ockwell@travelpr.co.uk (Sue Ockwell, mobile 07831 126 356) or her colleagues Jackie Franklin (j.franklin@travelpr.co.uk) or Charlotte Griffiths (c.griffiths@travelpr.co.uk).