Friday, 5 Jun 2020

Coronavirus: Package holiday refund rules to be suspended – will you get your money back?

Coronavirus has ruined holidays left, right and centre for many distraught Britons. Normally, those who book package holidays are refunded within two weeks if their trip is cancelled. However, travel industry bodies are saying that in the current global crisis, the Package Travel Regulations 2018 are not fit for purpose and will lead to the end of many otherwise successful travel businesses.

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Travel companies earning no revenue during this difficult time could be sent out of business if they are forced to hand back payments for cancelled holidays.

As a result, rules of package holiday refunds are being suspended.

On Friday, the European Commission updated its guidance on refunds for package holidays.

The European Commission is now encouraging customers to accept vouchers or credit notes – as long as the holidaymaker can eventually reclaim their money.

This guarantee must be backed by insolvency protection, with the above vouchers turned into IOUs backed by the state, reported The Independent.

This comes as transport secretary, Grant Shapps, promises to protect Britain’s travel industry.

Shapps is expected to agree to firms issuing credit notes which will enable the jet-setter to rebook a holiday within two years.

Holidaymakers who do not redeem the voucher will be able to claim the sum in cash.

If, before this is possible, the travel company goes bust, the government-backed Atol scheme will provide financial protection.

Travel trade association ABTA praised the development.

Mark Tanzer, Chief Executive of ABTA, said on Friday: “ABTA has been in urgent talks with Government ministers and officials throughout the week, as well as working with European trade associations at a European government level, to progress the asks that we set out in our letter to the Prime Minister on Monday.

“Today, the European Commission updated its guidance on the Package Travel Directive (PTD) in relation to customer claims refunds.

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“It encourages customers to accept credit notes, as long as the customer is allowed to ask for a full refund, eventually, if he or she does not make use of the credit note towards a new booking.

“Crucially the Commission states that the credit note should be covered by appropriate insolvency protection.

“This is an extremely positive step and shows that the Commission recognises the strains being placed on tour operators due to Coronavirus.

“The Package Travel Directive is the legal framework on which the UK Package Travel Regulations are based, and we now need the UK Government to follow the European Commission’s lead and confirm a similar approach.

“This new guidance will give customers the essential assurance that they will either get a holiday or their money back, as well as providing a much needed helping hand to travel companies through these difficult and unprecedented times.”

However, until the rules definitively change, entitlement to a cash refund remains in place.

The news is likely to upset holidaymakers who were initially guaranteed a full refund if their holiday was axed.

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