Clutching at straws: Looking for good news in a challenging environment

Its fair to say that so far, this summer has not been a vintage year for the travelling public: Sousse, Corfu, Athens and Calais have all seen travel on the front pages for the wrong reasons and there were 2 more stories trending in the travel press last week that brought into sharp focus the contrast in risk of booking packages versus DIY.

 On Thursday Thomas Cook Group (TCG) released their third quarter trading update. Set against the current backdrop they weren’t a bad set of financial results in the grand scheme of things: profits were up, net debt was down and trading was more or less in line with last year. What grabbed the headlines though, was the extent of the financial cost borne by the group following the tragic events in Tunisia.

TCG revealed it had spent around £20m evacuating some 15,000 of its customers from Tunisia to other destinations. Though undoubtedly a footnote in the overall story, the group acted swiftly and its commendable actions went some way towards repairing a reputation battered by the mishandling of the Corfu debacle earlier this year.

Elsewhere this week, news broke that International Villas, a UK based villa rental company operating mainly in Ibiza and Mallorca had gone into voluntary liquidation.On the face of it, International Villas looks a pretty small failure, with a relatively small number of people affected though that will be of little consolation to those poor families who’s holiday plans are left in tatters.  Of course any failure at this peak time of year is bound to garner a disproportionate level of coverage, and so it was in this case where mainstream media picked up the story. To add insult to injury, the company only sold accommodation and was therefore not legally required to hold any sort of licence or offer financial protection, leaving those affected with valid flight tickets but nowhere to turn and little alternative but to pay again for somewhere to stay.

As an interesting aside to the collapse, some media outlets speculated that the Spanish tax authorities had issued proceedings against a number of similar businesses for unpaid local taxes. If this is true, could it be the first signs of a more combative approach from the Spanish tax authorities after so many years of looking the other way while accommodation providers and private owners ducked their tax obligations. Only time will tell, but there are sure to be some nervous expats watching with anticipation.

As the rain continues to batter most of the UK, and we move further into the lates market, these stories tell two contrasting tales of woe. The latter a cautionary tale of the perils of DIY and the merits of ATOL; the former a grim reminder of why its safer to book with a regulated tour operator. It may be clutching straws to look for good news in all of this, but they should at least help to boost the popularity of the Package Holiday.

This article was first published in the TTG on 6 August 2015