You miss 2 important points that the Government (or more accurately, the Civil Servants) will pounce on as an excuse to do nothing.

1. The payments you would like to see regulated more are mostly abroad and out of the sole control of the UK government.

2. There are already some EU regulations in place about protecting the customers money which require protected bank accounts and/or bonding. But they only cover proper packages,not the sort of itemised mish-mash that is becoming more common. It would make more sense to extend these regulations to all forms of agencies (and not just travel) that hold and pass money from consumer to end supplier.

One easy bit of legislation that the UK Government could act on is a disclosure rule so that these companies were forced to say very clearly in their adverts or website homepage whether or not they traded under the EU regulations. And, if they weren't covered, what protection customers had. Simple Disclosure wouldn't impose any "red tape" on companies but if people saw a notice on page 1 that said the equivalent of "your money is not protected by the Package Tour Regulations and we have no other protection in place" it might make them think about handing money over.

Good post Steve

Hi steve
Sorry mate don't agree on money done abroad.
Thomson / First Choice under the name of Tui, Thomas Cook etc are selling
holidays in Uk to British customers.
The Uk goverment can put their boot in to protect the customer,by making the
travel/tour operators pay up front,a reasonable length of time before the holiday.
Has we all know the firms block book hotel rooms,so should do the honourable
thing & pay up instead of holding onto money,that should have been paid earlier
to hoteliers.

I think that what you are asking for is probably 'doable' in relation to the big TOs - but they are the ones least likely to go bust and whom the hoteliers aren't too worried about. But it needs to be borne in mind that parts of the travel business are based on suppliers invoicing the agent after the visitor has stayed because the companies only pay for rooms used not reserved.

But the area where I think that it would be virtually impossible is in relation to the 'bed banks' and local agencies that aren't always based in the UK but are used frequently by UK based agents. For example, I have frequently used Travel Republic to book hotels in inland Andalucia without any problems but the actual supplier has nearly always been Jumbo Tours which as far as I can tell are a Spanish-based and registered company. I doubt that they would be covered by any UK domestic laws - Travel Republic are only agents and even though they would presumably be compelled to pay Jumbo Tours in advance if your proposal was accepted, it would be hard to enforce any UK law that said that Jumbo Tours must pay then forward it to the hotel in advance.

SM

I didn't mean that I think that foreign transactions are a valid excuse for doing nothing but I bet that will come out as an official reply. And anyway, if the foreign company goes bust it won't help.

Like SMa says, the problem isn't the likes of TUI and TC, it's the little ones who get involved in hopelessly complicated arrangements. They buy flights from airlines which themselves are weak, they book rooms through subcontractors ("bedbanks") without any idea of what deal they have with the actual hotels and if they provide transfers it's probably through a similar arrangement. Then they sell as a dynamic package so you have no EU rights and most of the customers are happy becasue they saved about £40 over TC and TUI. But if they go bust you're stuck, if one of the companies down the chain goes bust you may have some bonding, such as ATOL on the flights, but the company you paid doesn't have the cash to give you so you are stuck for months waiting for the likes of the CAA to sort through claims. And as soon as you introduce specific financial regulation someone will find a way around it, Governments are never quick enough to keep up with business. The companies that have gone bust over recent years have been mainly internet/telesales based - there is a very easy way for that sort of business to get around any UK regualtion and that's to move abroad, a co.uk web domain or UK dialling code means nothing these days.

From what i have heard on the radio and elsewhere, one of the item on the agenda of the current government is a re-vamp of the tour package regulations [mainly being pushed by the CAA] in that the idea of package and dynamic package would disappear, All holidays where a flight and hotel have been booked with an agent within 48 hrs of each-other would constitute a Package, and so those putting together such packages will have to be either bonded [with sufficient funds to cover any possible failure or insured for the same this may become difficult as several insurers have pulled out of this market in recent weeks]

I wait to see if they have the guts to overhaul current regulations as many of the self employed single agencies will no longer be able to trade/compete

brian

You've put your finger on the negative side of the issue - increased regulation will make it very difficult for UK based self employed agents to operate. So then they would be an outcry that so many had been forced out of business and customer choice had been reduced. And the foreign business' masquerading as UK based would carry on unaffected - except the customers would assume they were safe.

So what is a package holiday? If you read the definition then because you have booked a flight and hotel together YOU THINK you have booked a package holiday. Of course we here on HT know that is not always the case.
Government when considering regulations really needs to forget all the advice given by "The Experts" which invariably means those with a vested interest, and get rid of all the variations on a theme that causes so much trouble.
If you book a flight then you have booked a seat on an airplane.
If you book a hotel then you have booked accommodation.
If you book both together then as far as the general public is concerned they have booked a package. It really is very simple. The fact it is an independent agent who has done this for you rather than a TO is irrelevant. Tui and Thos Cook don't own the hotels and often may not actually use their own aircraft but that is treated as a package holiday.
I agree what I say is a rather simplistic approach but why does it need to be any more complicated. If you adopt this approach you have got rid of a great deal of confusion. The next thing then needs to be financial security. An interesting point is on the bonding. It would seem that no actual checks are carried out to ensure companies operate within the restrictions the bonding is supposed to apply. Perhaps if you were to make the banks liable then they would take more care at extending credit to the dodgy outfits.

The fact these companies can continue to trade long after it must be obvious (to them) that they are not going to be able to deliver is the biggest disgrace. It is bad enough that people are going to lose their holidays but the tales often related here on HT when some of these companies have sold holidays only hours before pulling the plug is to me a criminal act.

I doubt we shall see any real change for many years. It is always tinkering at the edges yet each time we are assured that it will prevent such things happening again.

All I am really advocating is the KISS principle. "Keep It Simple Stupid" but I guess that is far to complicated.

fwh

What I advocated was.
No matter what the travel company be, thomson,alpharooms,travel Republic etc,
The customer has to pay the balance 6 - 8 weeks before departure.
So why not bring in a ruling that the hotel booked is paid 2 weeks before departure.
The travel company have the money from the customer, so they should pass on the
money to the said hotel.
But it goes down to one thing, greed,while the monies are in the travel companies
coffers its making money.
Its not send a cheque through post to pay for the hotel, I thought we were hi tech
with electron & transfers,in this day & age.
The companies know what people are going in what hotel,if they have 50 rooms booked
per week for the season, they have sold 40, they have the money from the customers,
pay the amount agreed.
How many families can afford to pay again for a holiday, not a lot.

All businesses want to hang on to any money coming in before they pay it out..it is called credit control which in turn regulates cash flow. It is not necessarily greed. It is called survival.

I want my customers to pay on 30 days, but I do not want to pay my suppliers until 60 days..in the meantime, any excess cash I generate is used for other day to day running of things...such as wages etc.

This will be exactly the same with Travel Companies..and no amount of regulation will make it any different. Sometimes they just cant survive.

Correct, this is one reason why they are so anxious to sell summer 2012 before people have taken 2011 - some companies need the cash now to pay the 2011 bills. And when they get to 2012 the 2013 customers will fund it. Sooner or later there will be a big crash. But it isn't just the travel industry doing this sort of thing, they just do it more.

I can't see the government doing anything like this. They have far bigger issues on their plate and IMHO they will just let the normal rules of business apply.

The problems are not with the likes of TUI and TC that sell package holidays covered by the package tour regulations. It's with the ones that sell dynamic packages but imply to customers by ommission that they are booking a traditional package holiday, although no doubt their websites & terms & conditions will show appropriate disclaimers.

With all the low cost airlines & bed banks, virtually anyone is able to set themseves up with a web domain to put the two together & arrange a transfer, thus creating a hopelessly complicated tripartite financial arrangement, to which you can often add in an unhelpful credit card company & an insurance company that don't want to pay out if possible.

When things go belly up it seems to take months to unravel this. Monies have to be recovered from so many different places & so many different bodies are involved.

IMHO it's naive to expect the government to instruct companies, some of which are here today and gone tomorrow & some much better known like TR, OtB to pay hotels abroad in advance. As said it is all about cash flow and companies like to hang on to their money for as long as possible, before paying suppliers often out of necessity to keep in business. They will be paying this years hotels from next years deposits in some cases.

The thing that would worry me about further regulation is that it may close down the market even further & then TUI & TC wouldn't even have TR, OtB, alpha rooms etc to compete with & the limited choice we currently have would be restricted even further.

At the moment we can pay our money & take an albeit limited choice. Save 30 or 40 quid per person perhaps and take a punt on the company. There is only so much they can discount before they go under and everybody wants cheaper and cheaper holidays.

Very interesting discussion.