European holiday booking company, Lowcost Travelgroup, announced on the 15th July that it has had to go into administration and has ceased trading with a loss of 120 jobs in the UK and over 450 in Poland. The company also had offices in Spain and Switzerland.
The group had approximately 27,000 holiday makers currently in resorts and an additional 110,000 with future reservations, 60% of which customers are British, selling hotel accommodation through its wholesale (Lowcostbeds) and retail (Lowcostholidays) businesses.
After the firms own recovery attempts failed, being blamed on Brexit and the “turbulent financial environment”, Smith & Williamson and CMB Partners were named the appointed administrators. The administrators said that as well as the recent referendum, fierce competition within the holidaying sector and increased terror threats had caused the unfortunate collapse. Finbarr O’Connell of Smith & Williamson said:
“The group experienced significant market headwinds in the run up to the EU referendum as holidaymakers delayed decisions. This was compounded by the Leave vote itself and the subsequent fall in value of the pound,”
“Regrettably, in these extraordinary conditions, the directors had no option but to place Lowcost Travelgroup Limited into administration.”
The good news is flight bookings will be valid in almost all cases, a company spokesman confirmed, but hotels and any holiday add-ons will need to be paid for.
Joe Lynamm from the BBC said:
The mass holidays business and especially selling hotel beds all over the world is a tough one. The margins are negligible. Often – as appears to be the case with Lowcost Holidays – the cash earned for future holidays was used to pay for people that were already away.
So if there’s a relatively sudden dip in confidence leading up to the Brexit referendum and then the pound plunges against the euro after the vote, that can be enough to tip the financial house of cards that some holiday companies have erected.
Tighter EU rules mean that airlines have responsibility for their customers and must get them home. Also many credit card providers include free travel insurance cover.
But the longed for trip away will not now be happening for thousands of Lowcost Holidays customers.
A statement from Lowcost Travelgroup said all flights for people currently in resorts will be able to fly home when their holidays are over, as these have been paid for.
It added, “unfortunately, as regards customers who have not traveled as yet a small number will have problems as regards their flights not having been paid for and many will have problems as regards their hotel rooms not having been paid for”.
The Civil Aviation Authority (CAA) said:
“We understand the Spanish travel company Lowcost Holidays has ceased trading. The company was based in Mallorca and was registered with the Balearic Islands authorities.
“The company was therefore not part of the UK’s ATOL scheme and the Balearic Islands authorities are responsible for the holiday protection arrangements for the company’s customers.
“We believe the company may have had a large number of British customers and many of these are likely to be overseas.
“Our understanding is these customers should have valid flight tickets to use to return home to the UK. We advise customers to check the status of their bookings with their airline and accommodation provider.”
If you are unsure if your future booking is affected by this latest unfortunate situation please check on Low Cost Holidays website or call your booking agent to check and for all future holiday bookings ensure your agent or the website you are booking through has a valid ATOL and where possible ABTA bond so your hard earned holiday is fully protected.
For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 01908 881058 or email: info@TimeshareConsumerAssociation.org.uk