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Massive losses among Aussies puts travel under cloud

January 9, 2017 Headline News No Comments Email Email

Consumer reports of Australians being left out of pocket and losing their hard-earned cash after the collapse of a travel firm have cast a shadow over the start of the New Year.

British firm All Leisure Holidays Limited, trading as Swan Hellenic and Voyages of Discovery, ceased trading on Wednesday, 4 January 2017. See: Major collapse hits thousands of cruise bookings. Some 13,000 forward bookings are affected.

The weekend brought the human side of the collapse to the forefront, as reporters in Australia hunted down those affected locally. The Sydney Morning Herald focused on retired northern NSW couple Kay and Ken Dollery, who had saved hard for what was meant to be the cruise of a lifetime: a 43-day voyage next month from Singapore to Malaysia and Myanmar. It was rounded off by business-class airfares.

The couple have now lost AUD 37,000 and whether they recover any of it is up to the administrators. The couple were told the British cruise line was not offering refunds to any Australian clients.

The Herald said the collapse had left more than 500 other Australians – many of them elderly – in similar positions.

Kay Dollery, 58, said their travel agent had advised them to contact their travel insurance company, only to discover that their policy did not cover insolvencies.

The report quoted AFTA chief executive Jayson Westbury saying people who had paid for their cruises with credit cards could request a charge-back payment from their banks. Westbury said that the now-defunct Travel Compensation Fund (TCF) would not have covered those affected by the latest collapse, as All Leisure Group was a British company and not a TCF member.

The spotlight is still on consumer compensation, however, because of the alarmingly different ways Australian and British consumers are being treated. The extensive adverse media coverage currently being generated by the All Leisure collapse in the UK would be duplicated in Australia if such a thing happened here – but it would be far worse, because many Australian victims would quite likely be unprotected.

In Britain, travel consumers are well protected. The Association of British Travel Agents (ABTA) says that about one third of the 13,000 or so future bookings on the collapsed firm’s books are UK-departing cruises that are financially protected by ABTA. The rest are protected under the company’s Air Travel Organiser’s Licence (ATOL).

Since 1973, by law, every UK travel company which sells air holidays and flights is required to hold an ATOL. If a travel company with an ATOL ceases trading, the ATOL scheme protects customers who had booked holidays with the firm. It ensures they do not get stranded abroad or lose money.

Nick Trend, consumer editor of London’s Daily Telegraph newspaper, said he was confident that few – if any – British passengers would be left out of pocket by the All Leisure Holidays collapse.

“Financial bonding regulations mean that almost everyone who has booked a cruise should be protected,” he wrote. “Under the EU regulations, passengers who are currently abroad on a cruise will be able to fly home on their original flight, or be returned to a UK port.”

The only “a slight question mark” applied to anyone who might have booked their cruise and flights through separate companies rather than as an inclusive package.

The UK Telegraph also reported that All Leisure Group sold off Hebridean Island Cruises – another of its popular cruise brands – in December, for an undisclosed sum to a group of investors led by All Leisure Group chairman Roger Allard.

The group’s tour operator brands Just You and Travelsphere were sold to travel company G Adventures last week and would be operated by G Adventures (UK) Limited.

Meanwhile, data analysed by insolvency firm Begbies Traynor found 2679 businesses in Britain’s travel sector – thought to be made up of about 7000 companies – were experiencing significant distress in the final thee months of 2016. UK online publication Travel Mole quoted Begbies Traynor regional managing partner Julie Palmer saying the trend was worrying and more failures could be in the wind. Begbies Traynor’s report is based on whether companies have County Court judgments against them.

Written by Peter Needham

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