Speaking to TTG at the consortium’s conference in La Manga, Spain this week, managing director Andy Stark said a hike in prices was inevitable, describing the rise in claims as “one of the biggest issues in travel”.
“Our members are seeing this rise in illness claims – we pick it up on their behalf because we [The Global Travel Group] are the [package organiser], so we are the ones who are held liable. But this rise is not sustainable.”
Stark said the group’s insurance company had already “indicated” that premiums would increase as a direct consequence of the increase in claims.
“Our premiums could be going up because of the rate of illness claims. And this increased cost has got to go somewhere, so I do believe holiday prices will have to go up,” he said.
He told delegates that gastric illness claims were costing the industry overall “an awful lot of money”, and were proving to be “damaging”.
“Clearly some of the claims are fraudulent,” he added. “It’s just a disaster, and it’s something that we need to deal with.”
Stark acknowledged the work Abta has been doing with the government in a bid to combat the rise in illness claims, but said he remained “really concerned” about the issue.
He added that the group was now “having conversations internally about what our [package] protection should look like, and whether terms and conditions should be changed”.
“Some of these claims are £2,000 to £3,000 and if you go to court it could rise to the tens of thousands, which could be devastating for [some small businesses],” he said. “It’s unsustainable… something has to change.”
Elsewhere, Stark remained upbeat about 2017 although he conceded that the general election would inevitably lead to a “slowdown” in bookings before things pick up again.
