Big British Tour Operator Goes Belly-Up

Moral: Read the fine print and buy travel insurance before you travel

Percentagewise, British travelers are more likely to book their vacations (or holidays, in UK-speak) through tour operators than are American travelers. Still, it was quite a shock to travel interests on both sides of the Atlantic when XL Leisure Group, reportedly the Britain's third-largest tour operator, became a casualty of high fuel prices and a looming recession in the UK.

The company canceled all of its flights and stranded what Britain's Civil Aviation Authority estimated were between 85,000 and 90,000 travelers somewhere on the planet. Of these, some 50,000 travelers were abroad on trips booked through one XL's tour companies, 10,000 had simply flown on XL Airways and 25,000 had booked though tour operators that used XL Airways flights. XL's failure also threw into turmoil the plans of something on the order of 200,000 travelers who had booked upcoming trips.

XL Leisure's operated under such names as Kosmar Holidays, Cruise City, Excel Holidays, The Florida Skytrain, Transatlantic Vacations, Travel City Direct, Travel City Direct, Freedom Flights, Aspire Holidays and medlifehotels.com -- and XL Airlways. The company's home page currently includes instructions on what stranded travelers with various of these companies should do now. Meanwhile, Straumur-Burdaras Investment Bank of Iceland acquired XL's French and German subsidiaries, which will continue to operate.

American travelers planning booking package tours -- for value, convenience or both -- might want to check the U.S. Tour Operators Association website for some general advice on the protections they should expect if they are traveling with a tour operator that fails. The website states, "From the association's inception in 1972, chief among USTOA's goals has been to help protect you, the consumer, against loss arising from bankruptcy, insolvency or cessation of business of an Active Member tour operator. To help provide travelers with a solid financial safety net that protects their vacation investment, the USTOA has always maintained a consumer protection program, in which every USTOA Active Member must participate." The site details USTOA's $1 Million Travelers Assistance Program.

And, in these unsure times for travelers, you might consider purchasing travel insurance.