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Shearings owner enters administration

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Coronavirus: Shearings collapses with loss of 2,500 jobs ...

Shearings Holidays owner Specialist Leisure Group has entered into administration after failing to secure a rescue deal.

As well as 117-year-old Shearings, Specialist Leisure Group was behind agency Wallace Arnold Travel, National Holidays, UKBreakaways, Caledonian Travel, Sportingbreaks.com, Bay Hotels, Coast & Country Hotels and Country Living Hotels.

With the current travel restrictions in place as a result of the coronavirus pandemic, there were only a “small number” of customers overseas on package holidays, the Civil Aviation Authority said.

However, the company had more than 64,000 bookings – the majority coach package holidays – Abta said, confirming they would be financially protected with customers due to a full refund.

‘It’s crucial to save summer’, says industry coalition

A statement posted on the company’s website this evening said: “The Specialist Leisure Group entered administration on May 22, 2020.

“All tours, cruises, holidays and hotel breaks booked with the Specialist Leisure Group have been cancelled and will not be rescheduled.”

Chief executive Richard Calvert said: “This is a terribly sad day for employees, customers and commercial partners of the Specialist Leisure Group (SLG) and its subsidiaries which have entered into Administration.

“The effects of Covid-19 on our 117-year old company and the wider travel industry have been devastating.

“In the most trying of circumstances, over these past few months, we have fought tooth and nail to save the Group and the jobs of our 2,400 loyal employees serving over 1.1m customers annually.

“It is heart-breaking that the required funding or investment could not be secured to get us through this unprecedented crisis in order to save SLG to and our amazing travel brands.”

SLG confirmed last month that it was in discussions with stakeholders, advisors and the government “to weather the storm of Covid-19”.

Reports at the time said the majority of Shearings’ employees were currently furloughed and said 2,600 jobs would be at risk should the company fall into administration. It had put a pause on new bookings before entering administration.

Shearings Holidays was the UK’s largest escorted tour operator and traced its roots to 1903 when Smiths Happiways was established in Wigan.

It offered holidays to 170 destinations in the UK, Europe and Worldwide, including coach tours, rail holidays and river cruises.

Main stakeholder Lone Star Funds took control of Shearings in 2016, and the company rebranded as Specialist Leisure Group in 2018.

Shearings and Wallace Arnold were both members of Abta. Bookings with Wallace Arnold Travel, which acted as an agent for other suppliers, will go ahead as normal except where bookings have been made with other companies within the Specialist Leisure Group.

John de Vial, director of membership and financial services at Abta, said: “The Specialist Leisure Group included two of the UK’s best-known coach holiday brands, Shearings and National Holidays, two much loved holiday companies who for many years have provided holidays both at home and overseas to a very loyal group of customers.

“Today is a very sad day for these customers and the thousands of staff who will have lost their jobs.

“The fact that two such well-known brands with a loyal customer base have had to call in administrators is a stark indication of the pressure that the holiday industry is under as a result of the coronavirus pandemic.

“Abta has repeatedly highlighted to the government the urgency of the situation and the need to set out a coordinated strategy with clearer communication if it wants to help avoid significant job losses and support companies to weather the storm.”

Atol spokesman Andrew McConnell said: “This is a particularly sad day for customers and employees of Shearings Holidays Ltd, longstanding business and well known UK travel company.

“The company specialised in coach packages and other types of holiday bookings, however, there are a small number of consumers with flight-inclusive packages, which will be ATOL protected. For these bookings, we will be contacting consumers directly or via their agent to provide guidance and support.”

National Holidays and UK Breakaways were members of the Confederation of Passenger Transport, which confirmed affected customers would be due a full refund.

Chief executive Graham Vidler said: “This is a sad day for all those involved with Shearings and the wider coach tourism industry, our immediate thoughts are with those employees who now face an uncertain future. Today’s events show the need for the government to urgently step in and provide support to the wider coach tourism industry, during the Covid-19 pandemic, which has been lacking to date.”

Shearings: Advice for customers

Customers with forward bookings for Shearings Holidays, National Holidays trading as Caledonian and Travel Style, UK Breakaways and Shearings Hotels trading as Bay Hotels and Coach and Country Hotels should click here and follow the instructions on how to progress a claim.

For customers with an ATOL certificate, customers should click here to start the refund process.

Announcement of £4 billion industry ‘lifeline’ expected this week

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File:Civil Aviation Authority logo.svg - Wikimedia Commons

A £4 billion travel industry ‘lifeline’ that would underwrite customer refund credit notes could be announced this week, according to reports.

The challenge of providing refunds for holidays that have been cancelled or delayed has become the most divisive issue in the sector during the Covid-19 pandemic.

Trade body Abta has been lobbying under its #SaveFutureTravel campaign for a change in the Package Travel Regulations (PTRs) to allow firms more time to refund and to make sure Refund Credit Notes carry the same weight of protection as the original package holidays.

But consumer anger has been mounting over firms refusing refunds or delaying processing refunds and the sector fears a wave of credit card chargebacks will lead to widespread company failures and job losses within weeks.

A counter #ItsRightToRefund campaign led by former Travel Republic managing director and VIVID Travel founder Kane Pirie supporting a limited grace period for refunds to July 31 but not a change in the law is gaining traction among consumers and some industry bosses.

Following reports of a stalemate in government after different departments disagreed about how to protect firms from failure while maintaining consumer rights, The Sunday Telegraph reports today that an announcement could be imminent.

The newspaper reported that proposals were being finalised over the weekend by transport secretary Grant Shapps, business secretary Alok Sharma and head of Atol Andy Cohen who, it was reported, has given the £4 billion lifeline “his blessing”.

The proposal would see credit notes being officially backed by government guarantee so that should companies that have issued them fail the consumer would get their money back.

The Sunday Telegraph said pleas from other sectors of business for special treatment could prove to be a sticking point, but an announcement is expected as early as this week.

Although the £4 billion scheme would not satisfy those who are demanding all customers receive a cash refund as stipulated under the PTRs, The Sunday Telegraph said it was hoped it would help enough consumers be persuaded to accept credit notes to take the pressure off the industry.

Coronavirus: Government decision on refunds expected next week

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AI in the Travel and Tourism Industry – Current Applications | Emerj

A UK government decision on whether to suspend the consumer refund rules of the Package Travel Regulations is not expected until next week.

The decision by the Department for Business (BEIS) remains in the balance following a meeting of Abta, the CAA and officials of BEIS and the Department for Transport (DfT) on Thursday.

Travel Weekly understands this is likely to have marked the final discussion on the issue.

ABTA has warned the government of “mass failures” and “an industry-wide collapse” if the PTR requirement to refund consumers for cancelled bookings within 14 days is adhered to.

A decision is urgent, not least because Tuesday, March 31 will mark 14 days since the UK Foreign Office advised against all overseas travel – triggering immediate cancellation of more than two million protected bookings.

The total value of refunds owed has not been made public, but Travel Weekly has been told “it’s a colossal number” which threatens wholesale insolvencies.

The government is aware this would deprive most consumers of early refunds and leave the DfT to pick up the bill as the CAA and Air Travel Trust (ATT) which underwrites Atol consumer financial protection is still dealing with the failure of Thomas Cook last September.

The Cook collapse cost the ATT £481 million and the government an additional £156 million, the UK’s National Audit Office revealed last week, with the final bill still to be assessed.

Abta wants a suspension of the legal requirement to refund consumers in full within 14 days of cancellation, requiring a temporary change to the PTRs.

The association and the CAA have been urging the DfT and BEIS to act for a fortnight.

Abta has partially taken the matter into its own hands, advising members to delay refunds and issue ‘refund credit notes’ on ATOL-protected bookings, initially up to July 31.

It wants BEIS, which oversees the PTRs, to make this legal and the DfT – which oversees the ATOL scheme – to confirm protection for the delayed refunds should travel businesses go bust.

Travel Weekly understands government ministers and officials are concerned delaying refunds “is not good news for consumers”.

An industry source said: “They get this [proposed refund credit note] regime will deliver refunds more quickly to people but are worried about how to explain it to consumers.”

Concern that the EU may react to a breach of European rules is also troubling officials despite Britain leaving the EU. All EU regulation remains in force until at least the end of the year.

The source suggested: “The very fact Abta is still in detailed discussions with the government on this is positive.

“Officials understand this is not the industry bleating or crying wolf, but it is a difficult decision for them. Abta is trying to pull off a balancing act.”

The source suggested: “The DfT knows Abta is not over-egging it. They saw how much flak the government took over Thomas Cook.”

The problem is also set to grow worse. The initial Foreign Office advice against all non-essential travel was for 30 days. More bookings will be cancelled as the advice period is extended, adding to the sums to be refunded.

The source said: “The pressure is going to build as time goes on. It’s a rolling problem.”

Abta has said it will stand behind the refund credit notes as a guarantor up to July 31. But for the delayed refunds to work, the DfT [through the CAA] needs to stand behind refund credit notes issued for Atol bookings.

The source noted: “It will only work if Abta and the CAA underwrite it. The CAA is in an invidious position, but it’s not in its interests to have the industry destabilised.”

If BEIS does not modify the PTRs, Abta would “have no choice” but to proceed in advising members to delay cash refunds and provide refund credit notes in their place.

Abta has also asked the government to insist airlines return to refunding customers or their agents for cancelled flights as part of any aid provided to carriers.

It said: “Government-funded assistance should be directed as a priority to the payment of refunds to trade intermediaries and the consumer.”

The CAA is responsible for enforcing the rules on airline refunds under EU Regulation 261 on air passenger rights.

The source said: “The CAA is trying to get action by the airlines by consensus first. The CAA and DfT are working with the same airlines to try to get people home and that is the priority.”