ABTA chief issues cash-flow warning

ABTA chairman John McEwan has warned agents to keep a close eye on their cash flow following the sudden failure of Scottish agency Cambuslang Travel.

The company ceased trading on August 21 to the surprise of the Scottish trade. Owner John Wilson said the recession and decline in the family market had triggered the closure.

McEwan warned the industry could see more failures as the peak season ends. “If there are failures, they will be between October and January,” he said. “Everyone should be taking a good look at their business – you have got to be able to cover future costs.”

He added: “Some travel agents are not so good at looking at their future financial position.”

McEwan said agents should also be prepared for further airline failures following the collapse of SkyEurope on Monday. He said: “I would not be surprised if there are more. It is important for agents to be selling scheduled airline failure insurance.”

The demise of Cambuslang Travel raised fresh questions about financial protection. Customers who booked overseas dynamic packages with the agency may not be covered since the company did not hold its own ATOL.

There were 1,000 forward bookings, 300 of them UK theatre-trip packages put together by the agency. Customers have received their theatre tickets, but will have to make a claim for their accommodation.

Wilson said: “We had been going for 25 years, but the recession got us. We relied heavily on the family market, and families are either not going away or are taking domestic breaks. Customers were afraid to commit themselves to a holiday because of uncertainty about their jobs.”