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55,000 customers affected in collapse of UK holiday firms

Edmund Heaphy
·Finance and news reporter
People cool off at Sant Sebastia beach in Barceloneta neighbourhood in Barcelona, Spain, August 16, 2015. Spanish consumer prices rose slightly in July from a year earlier, the second increase in a row as the economy strengthened and retailers and hotels hiked their charges. The prices of package holidays were up from a year ago in July, National Statistics Institute (INE) said. Hotel, cafe and restaurant prices were up 0.9 percent year-on-year in July when the summer tourism season got underway. REUTERS/Albert Gea      TPX IMAGES OF THE DAY
Holidaymakers cool off at Sant Sebastia beach in Barcelona, Spain. Photo: Reuters/Albert Gea

Malvern group, the owner of two popular UK holiday companies, has collapsed into administration, affecting around 55,000 holidaymakers.

Late Rooms and York-based Superbreak Mini Holidays, known as Super Break, has ceased trading.

On their website, Malvern Group said on Thursday that those on package holidays would be protected by Abta, the association of travel agents and tour operators.

It warned, however, that Super Break hotel-only holidays would be cancelled and that people currently on holiday could be forced to pay again.

It advised them to contact the association or their credit card provider for further assistance.

However, Abta said on Friday that, while Superbreak was a member of the association, Late Rooms was not.

But Late Rooms, acting as an agent, had not taken money for bookings, which would be payable to the accommodation supplier directly, Malvern said.

“If you booked directly with Late Rooms, customers are advised to contact the hotel as we understand that payments were made directly to the hotels and therefore bookings should go ahead as planned,” Abta advised.

“If you have booked a holiday with Super Break, we regret that all bookings that have not departed may be cancelled. The vast majority of holidaymakers’ travel arrangements will be covered through one of a number of different types of financial protection,” it said.

Abta noted that approximately 400 Super Break customers, comprising of 167 bookings, are currently on holiday overseas or in the UK.

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Malvern last month appointed accounting firm KPMG to oversee a quick fire sale of the company after India travel specialist Cox and Kings defaulted on its loan repayments.

Because Cox and Kings owns 49% of Malvern, Malvern was unable to secure interim funding, such as loans, from banks — and thus ran out of money before a sale could happen.

Malvern noted, however, that it had “interest from potential purchasers”.

It is likely that Malvern will continue to accept bids after it enters administration, which is also expected to be overseen by KPMG.

READ MORE: Travel money tips as the falling pound pushes up holiday costs

Hugo Kimber, the executive chairman of Malvern, said that the collapse was a “devastating blow” for the company’s employees, who he said “have invested so much time and effort into building Malvern, its brands and trips technology platform.”

“This is equally difficult for all our suppliers, partners and customers who will be impacted by this news,” he said.

“To be so close to delivering our goal of an integrated, dynamic and commercially successful business, that could provide significant value through its innovative products, is heart-breaking.”