The figures produced this morning show almost 1,000 Atol holders renewed on time with 90 outstanding. The latter figure is certainly higher than last year’s autumn renewals but in fact lower than 2018 when more than 100 were late in renewing, so that does not show a major change from the “old normal”.
The interesting figure may be the number who chose not to renew. At 176 this is certainly higher than any recent year and is probably a reflection of the new normal, particularly for Small Business Atol-holders.
Many agents have been persuaded in recent years to take a small Atol to enable them to dynamically package holidays as requested by customers. With no commitments to beds or flight seats, it was seen by some as the answer to increasing profitability and with supplier failure cover in place, it seemed at the time like a good idea. 2020 of course exposed the risks that few had ever considered and many appear to have decided to jump back into being a pure agent again.
As we all know, suppliers this year didn’t fail, they just closed down and stopped communicating. Customers were told by the press and Which? that package holidays that were cancelled should be refunded within 14 days of cancellation, but the agents no longer held the money. Airlines in particular made it difficult, or in some cases impossible, to obtain refunds and the insurance cover simply never kicked in as the supplier never failed. It seems that the days of dabbling as an operator, profitable though it may have been in the past, for small agents at least, may be over.
For AAC members, this appears to have been one of the easier renewals in recent years, but to some extent, this may only be the calm before the storm.
This year’s renewals have been based on audits of last year’s accounts, which for most travel businesses were extremely good. 2021 renewals will begin with this year’s accounts, which are going to look very, very different.
For this renewal, many operators substantially reduced the size of the licence requested and produced management accounts to justify the request. For next year, the accounts will disclose the real state of the business. Hopefully the next six months will be much better than the last, but the last few weeks have clearly shown that is no longer a certainty at all.
This weekend the prime minister warned that the road ahead would be bumpy, whatever that means. Cineworld has announced it will close down for at least six months making 5,500 employees redundant, and car sales in September were the worst this century. So we are far from out of the woods. A case of ‘hold on tight, there may be more twists and turns ahead’?
