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What should I do if my holiday company goes bust?

It’s a shock to find out your holiday provider is no longer in business – especially if you’re on your trip when it goes bust. Here’s what to do if this happens to you.

It’s a shock to find out your holiday provider is no longer in business – especially if you’re on your trip when it goes bust. Here’s what to do if this happens to you.

Written by
Anna McEntee
Home, pet and travel insurance expert
Last Updated
15 MAY 2023
5 min read
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What protection do I have if my travel company has gone bust?

Whether your holiday company has gone bust today, last week or last month, it can be a stressful time. But it may be possible to salvage your hard-earned break, or at least get your money back. The protection you have will depend on a number of factors, including the type of trip you’ve booked – for example, whether it’s a package holiday – how you’ve paid and whether you have travel insurance.

What happens if my holiday company goes bust while I’m on holiday?

Start by checking if you have ATOL or ABTA protection. Having this in place can stop you losing your money or being stranded abroad if the company you booked a package holiday with goes bust. 

If you booked a holiday without ATOL or ABTA protection, you’ll need to get in touch with your travel insurance provider to find out if you can start a claim.

What should I do if my holiday company has gone bust before my trip?

The first thing to do is to find out whether your holiday will still go ahead. Call your holiday provider’s customer services and seek immediate advice about potential cancellation.

If you don’t get an answer, check if the firm has posted any travel advice on social media, such as Twitter or Facebook. Then get in touch with your airline and accommodation provider.

Check if your payment’s been taken and whether or not they can honour your booking. If your trip can’t go ahead and it’s a package holiday, you may be able to get a refund under the ATOL or ABTA schemes.

What is ATOL protection? 

Air Travel Organiser’s Licence (ATOL) offers financial protection for package holidays sold by UK tour operators. All UK tour operators who sell package holidays that include flights must be part of this protection scheme, which is run by the Civil Aviation Authority (CAA).

If your holiday is ATOL protected and the travel company or airline goes bust, you’ll get a full refund for your booking. If you’re already on holiday, you should be able to finish your trip and fly home on an alternative flight.

Find out more about how the ATOL scheme works

What is ABTA protection? 

ABTA, which was formerly known as the Association of British Travel Agents, can also give financial protection for package holidays. While ATOL covers flight-based holidays, ABTA tends to deal with rail, cruise and driving package holidays.

ABTA is a voluntary scheme, and not all travel companies and tour operators are members, so it’s wise to check before you book.

Find out more about how ABTA protection works

Can I get holiday protection with a credit card booking?

If you booked your trip with a credit card – call your credit card provider, as you may be able to get a refund thanks to Section 75 of the Consumer Credit Act.

To make a claim, you’ll need to have paid more than £100 (and less than £30,000) for your holiday and/or flights and booked directly with the package provider or airline.

However, a refund isn’t guaranteed and will depend on the circumstances. These could include the Mastercard, Visa or American Express scheme rules and the terms and conditions of your credit card company.

If you paid by debit card, you might be able to reverse the transaction through the Mastercard and Visa Chargeback scheme, to which most high-street banks belong.

How can travel insurance help if a company goes bust? 

If you’ve booked independently of a holiday package provider and have a travel insurance policy with end supplier failure, you may be able to claim back the cost of your holiday if the hotel or airline goes into administration or suffers insolvency

Not all policies include this, so it’s important to check with the insurance company before you buy. You may be able to add end supplier failure cover to your policy at an extra cost.

It’s also important to buy your travel insurance policy as soon as you’ve booked your holiday, rather than leaving it until the last minute. That way if your hotel or airline goes out of business before you travel, you may be able to make a claim.

Customers with pre-existing medical conditions

If you have a serious health condition, your travel insurance is likely to be more expensive. Whatever happens, don’t lie to an insurance provider, because this could mean your claim is rejected. When you declare any medical conditions on our website, we’ll only show you quotes from insurance providers who will cover them, with no exclusions.

If your condition is more serious, MoneyHelper has a directory of insurance providers who may be able to provide quotes over the phone. You can call them on 0800 138 7777.

Compare travel insurance

Not only can travel insurance offer financial protection if a holiday company goes bust, it can also cover you for medical treatment, and if your belongings are damaged or stolen.

It only takes minutes to compare policies from a range of providers. Get a quote and see if you can save.

Frequently asked questions

What if I’ve only booked flights?

If you booked flight only through a travel agent – including online – you might be covered by ATOL. But this won’t be the case if you bought the flights directly from the airline.

In this case, you’ll need to see if you can claim on your travel insurance, or under Section 75 of the Consumer Credit Act if you paid by credit card.

What if I’ve booked my accommodation independently?

Accommodation-only bookings made through a travel agent might be covered by ABTA. If you’ve arranged your own accommodation directly with a hotel and it goes bust, you may be able to claim on your travel insurance or your credit card.

What are linked travel arrangements?

A linked travel arrangement is when you book multiple separate services in a single visit to a provider, or you’re prompted to another site to buy a separate service within 24 hours. For example, if you book a flight, and are then prompted to click through to a hotel or car hire site.

ATOL protection does apply to linked travel arrangements, which means you’ll also receive an ATOL certificate.

With this type of arrangement, you’ll be refunded if the airline or accommodation provider goes bust. However, you might not get help to get home if you’re already on holiday.

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Anna McEntee - Insurance expert

Anna’s all about delivering fantastic insurance products at a great price. Value is the most important thing for Anna, as she cuts through the jargon and finds what’s most important and worth your hard-earned money.

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