uring the past few years, a revolution has been taking place in the way holidays are sold. With a flick of a judge’s wig, it is about to gather pace like an express train.
A Court of Appeal recently ruled that companies can sell components of a holiday together, provided they are not marketed as an inclusive tour, without needing a bond to protect holidaymakers’ money.
For many years, the giants, such as TUI and Thomas Cook, have been among those who have been offering people the chance to build trips themselves, but have been nervous about pushing this because no-one has been quite sure whether these holidays should be bonded, as inclusive packages are.
The ruling is one of the best things to have happened for years because it has clarified a previously uncertain situation.
As far as the big companies are concerned, the gloves are now off. TUI has described the judgement as a “watershed” and immediately pledged to restructure its business so that a greater proportion of trips are un-bonded. It will still offer bonded packages, but they will increasingly become a smaller part of its business.
You can bet your bottom dollar that other operators, and travel agents, will follow suit, selling all elements of a holiday without protection.
It’s far cheaper for them to do this (TUI spends around GBP8 million a year on bonds) and, after all, an increasing number of people want to build trips, particularly to popular short-haul destinations like Spain, by buying their own flights and accommodation.
There is a risk to this approach, though. The consumer angle is that millions more people will be travelling abroad without any kind of financial protection. The big unanswered question is whether people care. Already, millions fly on scheduled airlines without any kind of cover. The difference, though, is that holidaymakers have been taught to rely on their tour operator for all kinds of help in resort.
It will be down to individual choice and the majority of people will take a risk, buy a cheaper, unpackaged trip, and hope that nothing untoward happens to them.
It’s not hurricanes and tsunamis that travellers have to worry about. Anyone with a brand to protect is going to rescue people from a horrendous situation like that, because any savings from doing nothing would not be worth it for the horrendous PR they would get.
But it’s all the other, mundane things that can, and will, go wrong with holidays that will test how far the DIY holiday model can be stretched. If a traveller's hotel goes bust or their flight gets cancelled, it’s tough. You’re on your own, mate. And don’t complain to your operator if you get food poisoning on holiday, because it’ll fall on deaf ears.
The Court of Appeal ruling will also create a distinct two-tier level of service among sellers of holidays and, consequently, a great opportunity for those who continue to offer protection and a high level of service to differentiate themselves.
In short, you will get what you pay for and that certainly hasn’t always been the case in the travel industry.
Jeremy Skidmore has been a journalist for more than 20 years, including four years as editor of Travel Weekly in the UK. He currently writes for several of the major UK newspapers and is a regular travel expert on television and radio. www.jeremyskidmore.com
