More Holiday Protection Needed, Say MPs

Government changes to the system that protects holidaymakers from tour company collapses should go even further, according to a report by MPs.

The Atol (Air Travel Organisers' Licensing) scheme was introduced in the early 1970s but is "now in a mess" and requires fundamental reform, the Commons transport committee said.

Changes taking effect from Monday will see a bespoke certificate issued to each customer to clarify the protection provided.

Cover will also be extended to "Flight Plus" bookings which will require tour operators to apply Atol protection when accommodation and/or car hire is booked within a day of booking a flight.

"The Government has not clearly based its reforms to the Atol scheme on evidence from consumers," said the committee.

The MPs also said it was unfair that those booking a short, low-cost package paid the same protection contribution - currently £2.50 a passenger - as those on extensive luxury holidays.

The committee recommended that this contribution should be linked to the value of the holiday.

It had once covered the vast majority of holiday bookings involving air travel but now covers fewer than 50% and this proportion is "falling rapidly", the report said.

The committee's chairwoman Louise Ellman said: "We welcome the changes to Atol that are being introduced.

"Flight Plus will extend financial protection to millions of people who put together their own travel packages with travel agents, mainly over the internet.

"New Atol certificates to be issued with holiday bookings should provide greater clarity for holidaymakers."

Aviation Minister Theresa Villiers added: "These improvements will mean that up to six million extra holidays will be protected each year, providing much needed clarity and reassurance for millions of people.

"These reforms will equip Atol to deal with the realities of the modern holiday market, enabling the scheme to protect holiday makers more effectively for many more years to come. This is an important step forward for consumer protection.

"We will consider the report and its recommendations carefully and will respond in due course."