“Catastrophic damage to the UK travel industry, and widespread consumer detriment” – that is the warning from Abta about the effect of the coronavirus crisis on holiday firms.

The travel trade association’s chief executive, Mark Tanzer, is demanding government action to ease consumer regulations in favour of the industry.

Millions of holidays in March, April and May have been cancelled because of the worldwide shutdown. Under the Package Travel Regulations, travellers are entitled to a full refund within two weeks.

Abta is asking for that time limit to be extended to four months, with government backing to protect holidaymakers if their travel firm goes bust. The association also wants a government-backed emergency consumer hardship fund to help fulfil refunds when hotels or airlines cannot or will not hand back money to tour operators.

Many travel businesses are refusing refunds to customers, often claiming incorrectly that the rules have been eased. They insist they are only obliged to provide travel vouchers.

Since the Covid-19 outbreak began, there have been no changes to consumer protection. But Mr Tanzer said there must be – as “normally successful travel businesses employing tens of thousands of people are facing bankruptcy”.

The Abta chief executive said: “The global pandemic has put enormous financial strain on tour operators and travel agents, with businesses seeing a collapse in sales while facing immediate repatriation costs and refund demands for cancelled holidays on a scale that is unmanageable. 

“Existing regulations are entirely unsuited to deal with this situation. These businesses are themselves waiting for refunds from hotels and airlines.

“Without this money, they simply do not have the cash to provide refunds to customers within 14 days. Customers with cancelled holidays will face lengthy delays in getting money back if travel firms are forced into bankruptcy.”

Abta has also called on the government to take “strong enforcement action” against airlines that withhold refunds due following the cancellation of flights.

But Tim Alderslade, chief executive of Airlines UK, said: “Airlines are facing unprecedented challenges keeping vital routes open to repatriate stranded British travellers and transport critical supplies as part of cargo operations.

“Airlines are complying with the guidelines published by the CAA but are facing a longer than usual volume of claims to get through, and the current restrictions imposed nationally mean they are not able to bring in additional staff to deal with them. We are thankful to passengers for their continued patience.”

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