Protect Your Holidays
Two UK tour companies and one airline have gone bust recently, leaving thousands of holidaymakers stranded overseas and many left at home without the holidays they paid for. One of the failed companies, XL Leisure Group, was the third largest tour operator in Britain and those who booked with the firm might have thought their money was safe, but not all of them will get refunds. Here we explain how you can avoid losing your cash next time you book an overseas trip.
Book a package:
The easiest way to ensure you have complete financial protection is to book an ATOL-bonded package. That way, if your tour operator goes bust, the Civil Aviation Authority will step in to arrange for you to continue your holiday or give you a refund.
Don't assume though that all holidays sold by travel agents or on-line are ATOL-bonded. If you book your flight and accommodation separately, the CAA might not consider them a package, even if you booked both with the same company. Check that everything is included on one receipt which bears the company's ATOL number.
Buy flights through an agent:
Bizarre as it may seem, it is sometimes safer to book scheduled flights through an agent rather than direct from an airline. If the airline goes bust, there is no system in place to refund passengers who book direct — which is why the thousands of people who booked with XL Airways were left stranded this week - but those who buy tickets from an agent should get a refund from the Civil Aviation Authority, as long as the agent has an ATOL. If it doesn't, it is obliged to warn you at the time of booking that your flight is not protected.
Note that you will only be refunded what you paid for the ticket, even though you might have to pay considerably more for an alternative flight. If you decide to cancel your trip because you can't find another flight, you might lose any money you've paid for accommodation.
Pay with a credit card:
Under the Consumer Credit Act, card issuers are obliged to refund you for any services paid for but not delivered, including flights and holidays. One important thing to remember here is that the protection only applies to credit cards, not debit or charge cards like American Express, and the protection only applies to bookings worth £100 or more.
Take out insurance:
Standard travel insurance policies won't cover you for an airline failure but you can buy separate airline failure insurance. This only costs a few pounds and it's well worth it for the peace of mind it will give you at a time when many airlines — including some big names — are in financial difficulty.
Some agents will offer you this insurance instead of ATOL protection, though they may add a small charge for it.
It's not necessary to take out airline failure insurance if you are travelling on a charter carrier as these are protected by the ATOL scheme.
Look for the ABTA logo
If you book with an ABTA agent you can be confident you'll get a full refund if it goes bust while holding on to any money you've paid. Agents who are members of AITO and the Travel Trust Association offer similar protection.
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