Thomas Cook warning for holidaymakers

Holidaymakers with stricken Thomas Cook were today urged to ensure they have "belt-and-braces" financial protection in case the company fails.

The warning from experts came as shares in the world's oldest holiday company crashed by two thirds hours after it revealed it is in emergency funding talks with its banks.

The news triggered alarm among worried consumers over whether it could survive a dramatic downturn in trade made worse by the cancellation of 160,000 holidays in turbulent Egypt and Tunisia.

Bob Atkinson, travel expert at comparison website travelsupermarket.com, said holidaymakers needed to make sure they had the "triple lock" of protection in place.

He said: "They need to make sure that the holiday they book is fully Atol bonded and also that they take out travel insurance with cover for supplier failure. It also makes sense to pay by credit card or with a Visa debit card for transactions over £100. Then they've got belt-and-braces cover."

Rochelle Turner, head of research at Which Travel, said not all Thomas Cook holidays would automatically have protection.

She said: "You need to ask if your holiday is 100 per cent Atol protected and if it isn't, don't buy it. The vast majority are, so the Government will be in for a hefty bill if anything happens to the company. At present all travel companies are at risk."

Thomas Cook, which started operating the first organised holidays in 1841, stunned City investors with its admission that it is in talks with its major lenders. By late morning its shares were down 26.42p, a fall of 64 per cent, to 14.65p.

Thomas Cook took £100million from banks last month but it needs a similar amount again to deal with "the seasonal low period" as it grapples with debts of nearly £1billion. It is expected to close 200 high street travel shops.