Is my holiday protected?

For package holidays, a number of schemes are available to ensure that your money is safe and that you will get to your return destination should your tour operator go out of business (financially fail) when you are on holiday. 

Package holidays sold in the UK or in the European Economic Area (EEA) are required by law to be financially protected. This means that if your tour operator financially fails:

  1. If you are yet to travel, you may claim back the cost of your holiday. 
     
  2. If you are on holiday at the time of the financial failure, you’ll be able to continue your holiday as planned and the costs to get back to your return destination are covered (if your package includes return transport). Or, if you have to return early as a result of the failure, you may claim to be reimbursed for the parts of the package that weren’t provided. 

Package holidays that are for less than 24 hours, or are for business travel, may not be protected.

Travel arrangements that are not package holidays, such as accommodation only, do not, by law, have to be financially protected, but travel companies can choose to protect them. You should always ask your travel company if and how your package holiday or travel arrangements are financially protected.

Flights booked direct with airlines are not protected by any scheme of financial protection.

All schemes of protection for package holidays are designed to assist you if the tour operator financially fails whilst you are on holiday, or where your holiday booked with the tour operator cannot go ahead because the company has failed. 

It will not reimburse you for any other monies that you may be owed by the tour operator – for example, if the tour operator cancelled your holiday before it went out of business (financially failed), the scheme of financial protection will not refund you. This is the same for other compensation payments or unused vouchers.

For information about Refund Credit Notes (RCN) issued as a result of the COVID-19 pandemic, see ‘What is a Refund Credit Note? How does it protect my rights to a refund?’ 

Specific approved bodies, including ABTA, administer financial protection schemes for package holidays that are sold to customers in the UK. ABTA administers a scheme of financial protection for non-flight-based package holidays. The Civil Aviation Authority (CAA) manages the ATOL (Air Travel Organiser’s Licence) scheme of protection for flight-based package holidays. Other approved bodies include the Association of Bonded Travel Organisers Trust (ABTOT).

What is a package holiday? 

Any type of holiday such as a city break, a beach holiday, a ski trip or even backpacking around the world – can be a package holiday. While packages can be ‘ready-made’ by the tour operator, they can also be ‘tailor-made’ to suit each customer’s preferences and budget. 

The definition of a ‘package holiday’ is simply that a tour operator has put at least two parts of your trip together for you, such as your flights, accommodation, car hire and/or tickets to a local attraction. You may book a package holiday direct with a tour operator or book your package with a travel agent. 

If an ABTA Member goes out of business (financially fails):

  • For package holidays not including a flight (eg coach, rail or cruise holidays, accommodation and car hire, skiing arrangements and accommodation), your claim may be administered by ABTA, or another approved body such as ABTOT (depending on who provides the financial protection).
  • Package holidays including a flight are covered by the ATOL (Air Travel Organiser’s Licence) scheme and your claim will be referred to the Civil Aviation Authority (CAA). 

The failure of an ABTA travel agent Member should not affect your holiday if they booked your package holiday with an ABTA tour operator or an ABTA Member responsible for providing your other travel arrangements.

You should contact the ABTA Member responsible for providing your package holiday or other travel arrangements because your booking should still be going ahead – this information will be in your paperwork (contract or emails).

When it comes to claiming your money back following the financial failure of an ABTA Member, ABTA’s scheme of financial protection works as follows:

  • If your claim is for package holidays not including a flight (eg coach, rail or cruise holidays), this may be handled by ABTA, or another approved body such as ABTOT, or by a Financial Failure Insurance (FFI) provider. 
     
  • Package holidays including a flight are covered by the ATOL (Air Travel Organiser’s Licence) scheme and your claim will be referred to the Civil Aviation Authority (CAA).  

If your claim is handled by ABTA:

  • And you had paid the ABTA Member responsible for providing your package holiday or protected travel arrangements (ie not an ABTA travel agent Member) by credit or debit card, you must generally claim your money back from your card issuing bank. We can assist you with that process.
     
  • And the ABTA Member responsible for providing your package holiday or protected travel arrangements (ie not an ABTA travel agent Member), has arranged Financial Failure Insurance (FFI), you must claim your money from the insurer. We will provide you with the insurer’s contact details.
     
  • For other bookings, where protection arrangements (by bond) have been put in place with ABTA by the ABTA Member responsible for providing your package holiday or other financially protected travel arrangements (such as accommodation only, car hire etc.), you can claim your money back from ABTA.

Financial protection for travelling and holidays can be confusing. Remember that the easiest way to find out more is to ask your travel company if, and how, your travel arrangements are financially protected.

Check your travel insurance. Very few travel insurance policies cover companies going out of business (financially failing). They usually cover belongings, delays/cancellations and medical assistance, but don’t usually refund you or get you home if the holiday company fails.

Ask your travel agent for help. Your ABTA travel agent Member can help you with supplier failure insurance for products and services that are not automatically protected.

Did you pay by credit card? Under section 75 of the Consumer Credit Act, payments between £100 and £30,000 made by credit cards are protected if the goods or services that you’ve paid for have not been provided. You must generally request your money back from your credit card issuing bank by making a chargeback. We can assist you with that process. If you used your credit card for a transaction of less than £100, you may be able to claim under the Visa and MasterCard scheme rules. See the guidance on Debit Card payments below.

There are time limits in which you can make a claim; you should contact your card issuer for further information on these limits.

If you paid an ABTA Member who is responsible for providing your package holiday or financially protected travel arrangements (ie not an ABTA travel agent Member) directly by credit card, and that ABTA Member goes out of business (financially fails), you are entitled to claim your money back from your credit card issuing bank and must generally make a claim to them. 

Did you pay by debit card? Visa and Mastercard operate a non-statutory scheme which protects payments made by debit card if the goods or services that you’ve paid for have not been provided. If you paid an ABTA Member who is responsible for providing your package holiday or financially protected travel arrangements (ie not an ABTA travel agent Member) directly by debit card, you are entitled to claim your money back from your debit card issuing bank and must generally make a claim to them. We can assist you with that process.

There are time limits in which you can make a claim; you should contact your card issuer for further information on these limits.

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