Financial protection schemes for holidays no longer cover significant areas of travel and should be scrapped in favour of a new, simpler system, said the Association of British Travel Agents (ABTA).
In a joint letter to the Civil Aviation Authority, ABTA, the federation of Tour Operators, and other tour operator outlined their proposals.
They said because of the growth of no-frills airlines and the internet, resulting in self-packaging and split contact packaging, consumers are confused as to what is protected and what is not.
They want holidaymakers to pay a fixed sum when booking their travel. The charge would be shown separately to the travel costs and would not be included in the basic price. Ideally the charge would not exceed £1 per person.
Under the proposals, the company taking pre-payment from the client would collect the money. They would then have to account on a regular basis to the statutory body responsible for monitoring protection.
BATA said the scheme would replace the current system where package holidays are protected by credit card companies or through a bond.
"There are too many gaps in the existing travel financial protection schemes," said ABTA chief executive Ian Reynolds. "The new scheme propses to be a catch-all that would simplify the current systems, remove costs related to bonding and credit card risk."
The proposals are based on a Dutch system developed in the 1980s.
