Thousands of families have lost their summer holiday at the last minute following the collapse of travel firm Holidays 4 UK, with industry experts warning that it is unlikely to be the last.
One travel journalist said the loss of Holidays 4U and Aegean Flights, which mainly sold cheap package holidays and flights to Turkey, would have a ‘knock-on effect’.
An estimated 13,000 people are currently stuck abroad while 50,000 who have future bookings with the group over the peak season have lost their holidays completely.
Simon Calder, presenter of LBC radio’s travel show, said: ‘I have seen price increases for imminent departures to Turkey of between £20-£40 due to the surge in demand.
‘When you have an extra 50,000 people in the market, it’s going to push the prices up.
‘If you have a substantial tour operator going bust so early in the summer it’s difficult to say they’ll be the last.
He added: ‘It is likely to have a knock-on effect for companies trading at the lower end of the market.’
Hundreds who were due to board a flight from Manchester to Dalaman in Turkey on Wednesday night were told they should not travel to the airport.
In theory, all those already abroad should be able to complete their holiday and travel home as normal under the ATOL rescue scheme administered by the Civil Aviation Authority.
However in the past there have been problems with foreign hotels following the collapse of British travel companies. Some have expected customers to pay again for fear they will not get the money owed to them by the travel company.
People with future bookings who have lost their holidays should get all of their money back under the ATOL scheme.
But it will take several weeks for the money to come through and it will be very difficult to find an alternative holiday at such a late hour.
ATOL spokesman David Clover said: ‘There is never a good time for a travel firm to fail – unfortunately the height of summer is the worst possible time.
‘However people who booked ATOL-protected holidays with Holidays 4U who are currently abroad will be able to complete their holiday or claim a refund from the CAA.’
The CAA said: ‘All package holiday bookings and flights are now cancelled and customers are advised not to go to the airport.’
The failure of the Brighton-based firm comes with the travel industry under fierce pressure because of the squeeze on family budgets.
Thomas Cook chief executive Manny Fontenla-Novoa resigned yesterday after the company issued three profit warnings in the last year.
And the specialist travel agent Gill’s Cruise Centre failed last month creating uncertainty for thousands of travellers.
The CAA said: ‘Customers who contracted package holidays with Holidays 4U will be financially protected under ATOL 4097 and should make a claim for a refund through the CAA.
‘Customers are advised to speak to their travel agent about making a claim under the ATOL scheme. Travel agents may be able to book alternative holidays.
‘Customers who booked just flights with Holidays 4U are also ATOL protected and may be eligible to claim a refund for the flight.
‘For any separate accommodation booked with a travel agent, customers are advised to speak to their agent about whether any alternative arrangements can be made.’
Administrators at Price-waterhouseCoopers have been brought in to take over the affairs of the travel firm, which has 18 employees and had an annual turnover of about £35million.
The company was licensed to carry 66,000 passengers during July to September and more than 100,000 a year. It has been trading since 1994 and had offices in Marmaris and Bodrum.
Turkey is popular with Britons despite political turmoil in neighbouring countries because, unlike the eurozone, it is relatively cheap. PwC joint administrator Ian Oakley-Smith said: ‘The company has suffered because of the difficulties faced by the travel industry during 2010 and 2011, as a result of the economic downturn.
‘The company will cease operating with immediate effect. Regrettably most staff have been made redundant.’
While families who have booked with tour operators in the ATOL scheme will get their money back if the firm goes bust, it is more of a grey area for the increasing number who put together their own flights, hotels and car hire.
A family might get flight costs refunded, but they could lose other deposits or payments to hotels and car rental firms if they cannot take up their bookings on the planned dates.