A tour operator has warned that a number of (mostly smaller) British ski tour operators are at risk of going bust because of the impact of the weak pound following the Brexit vote.
“The decision to leave the EU last year had a major impact on the £ to € exchange rate with the rate plunging from over €1.35 to the £ during the 2015/16 ski season to under €1.15 to the £ during the 2016/17 ski season. The impact to the ski industry has been significant due to the fact that most UK ski companies take all their bookings in £ sterling but the majority of their bills e.g. rents, utilities, food etc. are paid in Euros, thus costs have increased by between 15 to 20% purely due to the euro impact,” a blog published by Mountain Heaven explains.
The blog goes on to explain that the result has been that a significant number of ski companies now have very weak finances and indeed a number have recently ceased trading.
These include Evasion Travel, based in Courchevel, which ceased trading in March this year; Rude Chalets based in Morzine which ceased trading recently and Green Rides with a number of chalets in resorts such as La Rosiere and La Plagne which also folded in the last few months.
“Unfortunately for the customers of such companies all the monies paid to them were lost purely due to the fact that they had booked with a company that did not protect the customers money and in many cases they had paid via bank transfer thus not even having the money back protection that you have when paying with a credit card. Often companies with weak balance sheets are unable to accept credit or debit cards as they are seen to be of too great a risk by the card providers hence why they are only able to accept bank transfers but at huge risk to holidaymakers.”
The Mountain Heaven blog strongly recommends that anyone booking a 2017-18 ski holiday checks that the company that they are booking with are financially bonded with the likes of ABTA or ABTOT or protect money in another way for example through a trust account e.g. with ABTrust or the TTA. The company warns that its safest to double check on the ABTA or ABTOT sites that the company’s bonds are still current too.
Other warning signs are that if a company will only accept bank transfers it can be a sign they are considered too great a risk by banks to provide credit card facilities. You can also check a UK-based company’s finances quickly, easily and free of charge via the companies house website ( https://beta.companieshouse.gov.uk) simply go to their last accounts when you get to the filing history section of the companies house website (although be wary that data may be from several years ago due to the long accounting periods).
(Nick Williams, MD of Mountain Heaven)
Mountain Heaven went as far as analysing the status of six smaller companies operating in Plagne 1800 without naming names but excluding larger companies such as Ski World, Ski Beat and Crystal and found that four of the six were not bonded or ABTA members or were even operating legally under EU law (if they offer transfers and accommodation they must provide financial protection under EU law). Three also showed weaker company finances in the last financial year compared to the previous one.
ABTOT Membership Secretary, Samantha Bradbury commented, “There has been a surge in fake holiday internet sites recently, and it is true to say that some genuine travel organisers may also be feeling concerned about the coming season as costs increase – this makes it absolutely vital that holidaymakers check that the travel organiser they book with has arranged financial protection for their holidays. It is easy to find out and it shows both that your travel organiser is a genuine one and is also compliant with the law. Peace of mind is a simple call or a click away with ABTOT protected travel organisers, such as Mountain Heaven.”