How to ensure your holiday is protected
By Chris Torney
As the latest British holiday firm goes bust, thousands of travellers due to head overseas in the coming weeks are asking themselves whether their own trips are protected should the worst happen.
London-based tour company Goldtrail, which specialised in holidays to Turkey, is the latest travel firm to go bust, leaving an estimated 16,000 people stranded abroad.
But the Civil Aviation Authority (CAA) stood into the fray and said that all those affected and overseas will receive help to get back to the UK or compensation because Goldtrail was a member of ATOL (Air Travel Organisers’ Licensing), the scheme set up by the CAA to protect all package holidays that include a flight.
The number of cases that ATOL is expected to have to process, however, means that it could take months for all payouts to be made and has yet again put the spotlight on the protection that is actually in place should you encounter problems with your holiday. Let’s take a look...
Package holidays
Your trip is defined as a package holiday if you have bought two or more elements – for example, accommodation and flight, or hire car – from the same company.
The good news is that if you’ve bought a package, you’re likely to have greater protection if the airline you are booked on goes bust or tour operator gets into financial difficulties.
This is because of legislation in place in the UK that forces holiday companies to ensure their customers’ money – and holidays – are safe from such problems.
Firms have to pay levies into one of several bonding schemes – these are effectively insurance policies against any individual operator getting into difficulties.
The best-known bonding scheme is ATOL, which applies to any package holiday that includes a flight.
Another name to look out for is ABTA (the Association of British Travel Agents), which ensures that its member firms are part of an official bonding scheme. ABTA guarantees that members’ customers will be able to continue their trips and get back home if their operator goes bust while they are away.
When you book your holiday, check with your travel agent or tour company what scheme they belong to, and what protection it offers to customers.
And make sure you have actually booked a package: if you book car hire when you book a flight on the Ryanair or Easyjet website, for example, this does not count as a package trip if you pay two separate companies for these services.
Independent travel
The internet has made it much easier – and often cheaper – to book trips independently, without the help of a travel agent.
But the downside is that you are unlikely to have as much statutory protection. So if you booked your flight direct with an airline, and arranged your hotel stay through a travel website or aggregator, your holiday would not be covered by one of the bonding schemes outlined above.
But there are alternative ways to safeguard your break.
Paying by credit card
If you pay for any element of a holiday with a credit card, you will be able to claim compensation from your card provider if anything goes wrong – provided this part of your trip cost at least £100 (and not more than £30,000) – under Section 75 of the Consumer Credit Act.
You have similar protection if you pay with a Visa debit card, under the Verified by Visa scheme. However there have been reports of bank staff not knowing about this guarantee, so you may have to be persistent when making a claim.
Some companies, in particular low-cost airlines, charge extra for bookings made by credit card: but paying these extra fees could be worthwhile given the protection credit cards offer.
Travel insurance
A travel insurance policy can cover you for an airline going bust, but some policies are better than others. Check your insurance has scheduled airline failure cover, for example.
Even if your holiday is protected by an official bonding scheme, travel insurance is a good idea as it will pay out for a wide range of other problems – if you have to cancel your trip for personal reasons, say, or if you are robbed while abroad.
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