Sun holidays to cost more as regulators tap travel firms on levy

Regulators want tour operators and travel agents to increase their contributions to a fund used to compensate consumers for failures such as Lowcostholidays.

Industry figures warn such a move will drive up the cost of sun holidays.

The Commission for Aviation Regulation (CAR), which oversees travel agents and tour operators, wants to top up its depleted Travellers’ Protection Fund.

The regulator estimates that this would cost a typical travel agent, with a €2.5 million turnover, an extra €600 to €800 a-year, while it would cost tour operators €1,500 to €2,000 annually.

Payments such as the €3.5 million given to Irish people stranded by last year’s collapse of Lowcostholidays have cut the amount in the fund from a high of €7.5 million in 2007/08 to €1.8 million.

The CAR, led by commissioner Cathy Mannion, fears it will not have enough cash to cover the cost of another similar failure and it has been in talks with the travel industry about increasing contributions to replenish the fund.

Industry groups have already warned that increases in their contributions could hit smaller operators and will also make sun holidays more expensive, as the extra costs will be passed on to consumers.