Consuming Issues: Beware the DIY approach when booking that trip
Saturday 07 August 2010
The fallout from the collapse of the British tour operator Goldtrail last month is still being felt. Those who booked holidays with the company and were unable to travel will be part-way through the process of trying to get their costs refunded. But what protection do you have in the event of a tour firm or airline going bust, and how likely are you to get your money back?
Goldtrail, based in New Malden, Surrey, was the latest in a string of airlines, tour companies, car hire firms and hotel brokers to collapse in the past two years. Each one brought with it media reports of distressed and confused travellers who actually had no right of redress, other than to contact administrators and add their names to creditors' lists, or seek a refund via their credit-card provider.
With each collapse, cracks within the travel industry itself widen. There are always rows between the Civil Aviation Authority (CAA), groups such as the Association of British Travel Agents (Abta), travel suppliers, agents and their customers about who is actually responsible for refunds.
The sale of travel arrangements has customers exposed to the vagaries of the law. What you buy and how you buy it dictates what protection you get, and the rules governing those sales are woefully out of date. It is easy to book believing you are covered, only to find later that you are left high and dry.
Before the arrival of the internet, most people went on holiday with a tour operator, having booked via a travel agent. Organising trips any other way was time-consuming and difficult. In the early 1990s, the rules were revised and the EU Directive on Package Travel was introduced. The governing body for British tour operators, the CAA, updated its rules and since then packages have been sold under its Air Travel Organisers' Licensing (Atol) scheme.
Holidaymakers now have more protection if their travel company collapses. If it happens when you are away, you can continue your holiday as normal, while those yet to travel can apply for a full refund. Clear and simple. Yet two major factors have changed the landscape. Low-cost airlines give us cheap flights to destinations all over the world. Online booking allows everyone to be their own travel agent, and also allows those with products to sell, such as hoteliers, to offer their wares directly to customers, cutting out the need for tour operators.
Even Atol-bonded tour operators have jumped on the bandwagon, with several selling flights or hotel stays outside of Atol, making it hard to know what is or is not covered. These changes have resulted in most leisure trips sold today being bought without Atol protection, which most people are unaware of. This is where many put themselves at risk of losing their money if their travel firm goes bust.
That no-frills flight to Malaga for £49? No protection. That hotel in Marbella for only £149 from a hotel broker? No protection. The bargain car hire bought online? No protection. However your neighbour, who buys a complete package with the same flight, hotel and car hire is covered under Atol. There is no level playing field and the industry is not making it easy for people to book safely.
Recent events such as volanic ash cloud expose customers to differing treatment as well. EU261, the rule on flight delays and cancellations, is woefully inadequate and leaves some customers out of pocket if airlines refuse to pay out. Yet the EU is pressing ahead with plans to extend a similar scheme to ferries.
For years, there have been calls for a review of all the rules and in 2009 the Department for Transport began consulting the travel industry. The European Commission also plans to review the EU directives, yet these processes are slow and we cannot expect rapid changes. Any scheme should encompass all forms of travel, whichever way we purchase it, and clear rules for when things go wrong.
How to protect yourself
* Book your travel with a tour operator registered with the CAA's Atol scheme
* Pay for your holiday with a credit card. If the transaction is more than £100, you are guaranteed protection under the Consumer Credit Act
* Buy travel insurance that includes "end supplier failure" or a standalone policy for company failure
Bob Atkinson is a travel expert with travelsupermarket.com
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