We’re celebrating 50 years of the ATOL scheme financially protecting package holidays. Our society has changed a lot since 1973 and this is reflected in how we book and enjoy trips around the world.
From the 1990s until the present day the travel industry has embraced some major changes – particularly the technology we use to research and book our trips away and this looks as if it will change further in the coming decades.
Despite everything that has happened in the past 30 years including wars, recessions, pandemics and terrorist attacks, our desire to travel seems to be undiminished and the package holiday has proved to be nothing if not resilient since those first organised trips to the Mediterranean started in the post war years.
1990s – not just Britpop, Beckham and Blair
The 1990s started with the first Gulf War which followed Iraq’s invasion of Kuwait. The resulting economic recession caused a slump in foreign travel which contributed to the collapse of the International Leisure Group (ILG), then the UK’s second largest holiday group, in March 1991.
The ATOL scheme was heavily involved in helping the 35,000 ILG customers who were abroad at the time of the failure and also with refunding the 600,000 people who had advance bookings with the company.
During the rest of the 1990s, the British appetite for travel recovered and continued to grow. The package holiday market at that time was dominated by four big names: Thomson, Airtours, Thomas Cook, and Owners Abroad, rebranded as First Choice in 1994. By the summer of 2000, the ‘Big Four’ accounted for 56 percent of all package holidays covered by the ATOL scheme.
The early to mid 1990s were still pre-internet so many people booked trips overseas through high street travel agents such as Thomas Cook, Lunn Poly and Going Places or found deals through Teletext on their television.
Before the rise of smart phones and cashless payments, once abroad people relied on guidebooks, cameras (film and then later digital), cash and travellers cheques. Playing CDs on a Discman and sending postcards were still the order of the day.
Impact of low-cost airlines and the internet
However, change was coming with the rise of low-cost airlines and technological advances meaning people would increasingly research and book their foreign trips online.
Throughout the 1980s and 1990s, the European Council relaxed the rules to create a common aviation area across Europe, allowing low-cost carriers including EasyJet and Ryanair to enter the market. British consumers soon took to low-cost airlines and started a trend of moving away from traditional two weeks in the sun in favour of shorter trips, often city breaks in continental Europe.
Between 1996 and 2015, passenger numbers at UK airports increased by 85 percent, from 135 million to 251 million – driven by flights sold by low-cost carriers and online booking.
The low-cost carrier boom also helped the growth of regional airports around the UK including Stansted which became London’s third major airport in 1991 after £400 million redevelopment featuring a Norman Foster designed terminal building.
Increasing use of the internet saw the rise of online travel agents such such as Lowcostholidays, Expedia, On the Beach and people starting to use aggregator sites such as Skyskanner and Kayak to search out the best deals.
Consumer protection also went through a big change in the 90s with the introduction of the Package Travel Regulations in 1993. Among other reforms these new EU rules gave consumers greater powers to take legal action against tour operators.
Rocky start to the 21st century
As we entered the 21st century, geo-politics again hit the travel industry hard. The 9/11 attacks and other terrorist incidents in Bali and other popular tourist destinations had a massive impact on sales of foreign travel resulting in profits slumping at airlines and tour operators.
By the mid 2000s, the big Four tour operators were feeling the pressure from low-cost airlines, the switch to online bookings and the lingering effects of these terrorist attacks. The industry responded with mergers: Airtours (rebranded as MyTravel in 2002) merged with Thomas Cook in 2007. In the same year, TUI, which operated the Thomson brand, merged with First Choice.
The global financial crisis of 2007-2008 was the biggest economic shock since the Wall Street Crash of 1929. Its effects contributed to the collapse of the XL Leisure Group in September 2008 which hit 85,000 people who were abroad at the time. It was the biggest collapse of a British tour operator since 1974 when Court Line became insolvent – again the ATOL scheme stepped in to repatriate package holiday customers who were abroad and organised refunds for the hundreds of thousands more who had XL bookings bit were yet to travel.
The last leg of our story – 2010 – 2023
The impact of the global credit crunch continued into the 2010s, which were marked by the collapse of Monarch Airlines in 2017 and Thomas Cook in 2019. Thomas Cook was one of the biggest players in the British travel market having been established in Victorian times when Thomas Cook himself organised a train trip from Leicester to Loughborough for 500 people.
Thomas Cook’s collapse saw the ATOL scheme step in deliver the biggest repatriation of people since the Second World War. The ATOL team helped 140,000 people to get home in 14 days. We also contacted 3,400 hotels to ensure ATOL protected customers could continue their stay at their resort until they were due to fly home – 94 per cent of people we helped travelled home on their original departure date. This huge operation included co-ordinating 150 different aeroplanes on 746 flights departing from 55 destinations in 18 countries around the world.
More recently the devastating COVID-19 pandemic has wreaked havoc on the travel industry, with the number of overseas trips collapsing in 2020 and 2021 and the number of travellers is only now getting back to pre-pandemic levels.
The package holiday goes from strength to strength
As of March 2023, approximately 20 percent of Brits surveyed said they had booked a package holiday over the last year, reflecting that they are is now so much more than bucket and spade trips to the Med.
While all-inclusive trips to sunny destinations remain as popular as ever, ATOL protected package holidays have now spread to destinations much further afield than Spain or Greece, as well as city breaks, winter-sports holidays, cruises, trekking and adventure tours and even trips to see Santa in Lapland now being commonplace.
Currently Jet2 is fighting it out with TUI for the title of Britain’s biggest tour operator. EasyJet Holiday and British Airways Holidays are also prominent in the top 10 ATOL holders – along with online travel agents (OTAs) Loveholidays, Booking.com. On the Beach and Lastminute.
Last year 26 million passengers were protected by the ATOL scheme, with ATOL protected bookings making up £27.7 billion in sales.
It’s been an eventful 50 years, but whether they book by visiting a travel agent or do it all online anyone who organises a holiday financially protected by the ATOL scheme can jet off safe in the knowledge that they will not be left out of pocket or stranded abroad in the rare event that their tour operator collapses.
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