There are many different ways of buying holidays and travel arrangements today. So, it’s very important that you understand whether or not the money that you’ve paid for your holiday is safe if the travel company that you’ve dealt with goes out of business. There are a number of different ways that you can get this protection, but not all travel arrangements are covered so you should always check.
There are two statutory schemes that exist to protect your money and to ensure that you’ll be brought home if your travel company goes out of business. These schemes apply to package holidays and to some flight-only arrangements.
There’s no legal requirement that flights bought direct from an airline, or accommodation-only sales, are protected.
The Package Travel, Package Holidays and Package Tour Regulations 1992 are overseen by the Government’s Department for Trade and Industry ( DTI). These Regulations require organisers of package holidays to provide protection for your money and to bring you home if necessary.
A package holiday is a holiday that consists of two or more elements, e.g. transport and accommodation, that are sold to you as a package at an inclusive price.
If you book a package holiday that includes a flight, then your money must be protected under the ATOL scheme. This is operated by the Civil Aviation Authority (CAA ). If you book a package holiday that doesn’t include a flight, then your money will be protected either by way of a bond held by a trade association, e.g. ABTA, or by way of an insurance policy, or by placing your money into a trust account.
The Civil Aviation (Air Travel Organisers’ Licensing) Regulations 1995 are overseen by the Civil Aviation Authority (CAA ) and require tour operators who sell flight-only arrangements to provide protection for your money and to bring you home if necessary.
This protection doesn’t apply to flights that are bought directly from an airline.
Some travel companies offer protection for your money voluntarily. For example, accommodation-only providers may offer protection although there’s no legal requirement for them to do so.
This protection may be provided by way of a bond held by a trade association, e.g. ABTA, or by way of an insurance policy or by placing your money into a trust account.
If a protection scheme is in place for your money, it’s important that you obtain and keep all relevant paperwork so that you can make a claim for your money if necessary.
Details of the paperwork that you need can be found in our leaflet Your Protection Checklist: Important Information When Making a Booking With an ABTA Member.
If you’ve made your booking through a travel agent, it’s important that you obtain and keep all the paperwork referred to above. This will show that you have a booking with the relevant holiday company.
You should contact the holiday company to make sure that the booking is in place. If it is, then your travel arrangements should continue unaffected.
In the unlikely event that your travel agent has failed to make your booking with a travel company you should contact your credit card company if you paid by credit card. If you didn’t pay by credit card, contact ABTA’s Consumer Affairs Department for advice and assistance. ABTA may not be able to recover your money for you but we can assist in taking the matter up with the relevant authorities.
As you can see, it’s not always easy to know whether your money’s safe when booking a holiday or other travel arrangements. You should always ask when making your booking. If your arrangements aren’t automatically protected, ask if your travel company can offer you an insurance policy that will protect your money. ABTA has arranged a policy specifically for this which is available to buy through most ABTA Members.
Last updated: 18 May 2006
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