Nearly 40% of customers are more likely to consider booking direct with the tour operators Thomson, Virgin, Thomas Cook, Mytravel, following the collapse of XL Leisure Group - because they are confused about financial protection and this is seen as the safer option.

Research conducted by Lateholidays.com suggested only half of customers who have booked a holiday in the last year were confident their trip was protected by ABTA or ATOL, while 15% knew they would not be protected.

A total of 32% were undecided if the holiday was protected, while the remainder failed to answer.

Late holidays have seen evidence of this change. “People want security after XL’s collapse. A large influx of customers have come back to us saying they will never book with a travel agent again, with direct booking seen quire rightly as the safer option.”

As the economic situation worsens, concerns are growing over future collapses. The majority of the 2,071 people surveyed (60%) said they would be happy to pay £1 into a central fund to cover flight bookings in the case of airlines failing.

Lateholidays.com said “There is a clear demand to extend coverage to all flights so travellers can make their choice of booking channel and payment method without havingto worry.”

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