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.

Coronavirus (COVID-19) update: please check the latest government travel advice that sets out what you need to do, if anything, before you travel abroad and before you return home. You should also check the latest travel advice and entry requirements for each country you visit or transit through. Travel rules can change at short notice, so check the Foreign, Commonwealth & Development Office (FCDO) for the latest information.

Josh Daniels
Travel Insurance expert
5
minute read
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Last Updated 6 APRIL 2022

What protection do I have if my holiday provider goes bust? 

If your holiday provider goes bust, 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.

Customers with more serious pre-existing medical conditions

If you have a serious health condition, the price you pay for travel insurance is likely to be more expensive. However, there are still many providers out there and you should be able to find affordable cover. Whatever happens, don’t be tempted to lie to an insurance provider, because if you do and then need to make a claim, it could be rejected.

When you declare medical conditions on our website, we’ll only show quotes from insurance providers who will cover all declared medical conditions, with no exclusions.

MoneyHelper has launched a directory of insurance providers who may be able to provide quotes over the phone if you have more serious medical conditions. Find more information at MoneyHelper or by calling them on 0800 138 7777.

What should I do if my holiday provider goes 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. If you don’t get an answer, check if the firm has said anything 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 scheme. If your holiday is ATOL protected and the travel company or airline goes bust, you’ll get a refund for your booking. If you’re already on holiday, you should be able to finish your trip and fly home. 

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

What if I’ve only booked flights? 

If you booked your flights 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 more than one service – eg flight and hotel – in a single visit to a provider, but separately. Another example of a linked arrangement is when you book a service and are then prompted to visit another site and buy another service within 24 hours. For example, if you book a flight, and are then prompted to click through to a hotel site. 

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

What happens if the provider 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.

Can I get protection if I booked with a credit card? 

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, the Mastercard, Visa or American Express scheme rules and the terms and conditions of your credit card provider. 

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, say, a hotel or airline goes into administration. Not all policies include this, so it’s important to check 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.

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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.

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