ABTA chief executive Mark Tanzer has reiterated a call for the government to provide guidance on customer refunds in the wake of the coronavirus pandemic.

Tanzer has previously urged customers to “support” travel agents, by taking vouchers or rebooking holidays instead of demanding cash refunds.

While the law is clear holidaymakers are entitled to a cash refund, Tanzer argued travel agents risked being overwhelmed if they are forced to comply.

Giving evidence to the House of Commons transport committee, Tanzer said: “The coronavirus crisis has meant that hundreds of thousands of package holidays have been simultaneously cancelled.

“While many customers are rebooking their holidays for a future date, some would prefer a refund, which is their right under package travel regulations.

“However, the regulations were never designed for a crisis of this nature and scale and many businesses are unable to deliver immediate refunds.

“Tour operators have not received money back from suppliers such as airlines and hotels and are unable to meet a 14-day window for refunding a package holiday, and have therefore been asking customers for more time.”

ABTA has been urging the UK government to provide guidance on refunds since the coronavirus crisis started, attracting criticism from some consumers.

The Competition & Markets Authority launched an investigation into the situation last week.

Tanzer continued: “If the government is unable or unwilling to act or provide guidance on the 14-day window for refunds, then it will need to explore other options or face the inevitable failure of these businesses. 

“An industry-wide collapse of travel agents and tour operators would be the worst possible outcome for these businesses and their staff, for their customers who would have to wait many months for refunds and for the UK taxpayer who would end up footing the bill for the ATOL scheme.”

ABTA has advised, if tour operators are not able to immediately refund customers, they can offer customers financially protected refund credit notes for cancelled packages, to be redeemed either for a cash refund or another holiday at a future date.

This has been poorly received by consumers, who have in some cases demanded cash refunds.