Travel Regulations Insolvency
Booking a holiday is incredibly exciting and there is a good chance that it is going to cost you a lot of money to take your family away or perhaps head on a holiday with friends. As well as your travel insurance you will need other forms of protection for example travel regulations insolvency.
We often wait some time before we go on holiday, building up that anticipation and just general feelings of excitement of all the fun that we are going to have.
So, what happens if we hear that after booking and paying for that dream holiday, the tour operator has gone bust? Do you have any rights if the worst happens? The answer is yes, but these rights will depend on the type of holiday that you booked to go on.
I booked a package holiday
A package holiday is when you have booked at least 2 components of your trip together, in advance. This will usually be the flights and the hotel that you are planning to stay at, however, package holidays can also include food, transfers, insurance and excursions or trips whilst you are on holiday too.
The majority of package holidays are covered by the Package Travel, Package Holidays and Package Tours Regulations 1992 (more commonly known as the Package Travel Regulations).
If a travel firm or tour operator has entered into insolvency and the Package Travel Regulations apply, then you will be entitled to a refund of any monies that you have paid.
You will often find that any monies that you have paid towards your holiday are protected due to them being a part of the Association of British Travel Agents, the Federation of Tour Operators or the Association of Independent Tour Operators Tour Limited.
For those package holidays that include flights, then the flight costs will be bonded by a scheme such as those run by the Air Travel Organisers Licence or ATOL as it is most commonly known.
What does this mean for me?
You may be wondering what exactly the Package Travel Regulations can do for someone who has found that their travel firm or tour operator has entered into insolvency.
Especially if you are still keen to go on the holiday that you have booked. Unfortunately, if the tour operator has gone bust, then it is unlikely that you will be able to take the holiday that you had planned. You will receive a refund however, and you can then use this money to enable you to book another, similar, holiday.
I booked another type of holiday
If you have not booked a package holiday, then chances are that your trip is not going to be covered by the Package Travel Regulations. There is also a chance that your holiday will not be bonded to a body or organisation, which means that any money that you had paid is unlikely to be recovered.
There is a light at the end of the tunnel if you did pay via credit card and the cost of the holiday was over £100, then you may be able to speak to your credit card company to organise a refund under section 75 rule.
Not only this, but if you have organised travel insurance to cover the break, then you may also be able to obtain a refund from your travel insurance company, however, you should carefully check your policy as it may contain a clause that does not cover you if the tour operator or the travel firm go bust.
One final chance at obtaining your refund is, if the company has gone bust and an administrator or liquidator has taken over, then you may find that you can contact them to try and retrieve some of your money.
It is worth pointing out that this particular approach rarely works and you will only receive money back if they have the funds to spare.
Is it different if the travel agent goes bust rather than a tour operator?
If you have booked your holiday through a travel agent and it is them who has gone bust, then you may still be able to travel. This does depend on whether or not the travel agent placed the booking with the tour operator and whether or not they made any payment on it prior to going bust.
It isn’t a nice feeling to have a holiday cancelled for reasons that are out of your control. But it is good to know that there are things that you can do in order to retrieve your money and hopefully put it towards another holiday.
About the Author
This article was written by a member of the Expert Answers team and posted by Lloyd Barrett, Admin & Customer Services Manager for online advice service Expert Answers. Expert Answers provides legal advice to users in the UK who post a question on their secure platform.