Online holidays: know the risks

'If it seems too good to be true, it probably is'

We are all travel agents now, or at least we think we are. Anyone with a broadband connection can construct a holiday that is very different from the "off-the-shelf" packages offered by the traditional tour operators. But "different" does not necessarily equate with "better". As you click your way around the world, it is essential to know the risks.

Last summer, tens of thousands of travellers lost money when EUjet went bust. The no-frills, Kent-based airline ran out of cash and most of its prospective passengers ran out of luck. They discovered an uncomfortable truth: when you buy a seat on a plane direct from the airline, you have precious few rights if the company fails. Some who had bought with credit cards were able to claim the cash back from the banks, but then found that replacement flights were hundreds of pounds more expensive. The handful of people who were cushioned from the collapse were those who had bought seats as part of a package holiday, sold as a single entity by an intermediary. They were protected by the Package Travel Regulations, which demand that tour operators deliver the holiday as promised or make other arrangements - including the option of a full refund. The ATOL scheme is also a useful fallback - it refunds money in the case of the collapse of a package holiday company where flights are involved, such as the recent sad demise of the operator Tapestry.

So what constitutes a package holiday? In principle, any trip where you buy travel - usually by air - in conjunction with other services. This generally means a hotel bed or a rental car. But to be protected, you need be sure that you have bought a package in a single transaction, rather than a series of separate contracts with different suppliers. If you book a flight at, for example, the easyJet or Ryanair site, "clicking through" to these airlines' hotel or car-rental partners will involve a second, unrelated booking.

Thousands of travellers caught up in the recent chaos at Britain's airports found to their cost that such "split contracts" have unfortunate consequences. First, if the flight was cancelled or so heavily delayed that the journey became pointless, the process of getting a refund could be cumbersome: for my British Airways flight, for example, online reimbursement was impossible. So I spent an hour hanging on the end of the phone when I should have been hanging out in Amsterdam. Next was the matter of the "ground arrangements" I had booked - in fact, the maiden voyage of easyCruiseTwo. It wasn't this company's fault that I was unable to reach the vessel, and accordingly no reason why I should be entitled to a refund.

You can lose money online in many ways. While the vast majority of bookings made by British travellers are with reputable companies, as soon as you click beyond the confines of Europe you should be circumspect. Mainstream suppliers such as low-cost airlines and international hotel chains are unlikely to cause problems, but beware holiday companies based in far-off lands making outstanding offers. As with life, so with online travel: if it seems too good to be true, it probably is. Lots of rogues think the internet has made travel agents of them, too.