What to do if your holiday provider goes bust

When you're planning and booking that long-awaited holiday, the fact that your holiday provider might go bust is unlikely to be something that crosses your mind.  

Thankfully while this is rare, it does happen — Thomas Cook, Flybe and Monarch are some recent examples.  The good news is that in some cases, your holiday can still go ahead. If it cannot there is legislation in place to protect you financially.  In addition, if the holiday was booked on your credit card you may be able to get a refund.  Also you may be able to make a claim on your travel insurance.  How protected you are will all depend on how your holiday was booked. 

In the unlikely event that this does happen to you, below are some handy tips.

Before you travel 

If your holiday provider goes bust before you travel, you should contact them to make sure that your booking is in place. If the travel agent you booked with goes out of business, this should not affect your travel plans.

Review your booking documents to see if your holiday is covered by the ATOL and ABTA schemes.   Having this protection in place can stop you losing your money (and being stranded abroad) if the company you booked your holiday with goes bust.  In this regard, a package holiday is your safest bet.

You may also be able to be referred to the Civil Aviation Authority (CAA) if your holiday was booked through an ATOL member and included flights.  However, with an accommodation-only booking, there is generally no additional financial protection offered. In this case you will have to go through your credit or debit card provider or travel insurance for this.

If you booked your holiday on your credit card, you may have a claim under the Consumer Credit Act 1974 if the holiday cannot be provided.  This covers holiday bookings between £100 and £30,000. If you did book your holiday on a credit card, you could contact your bank and request a charge back.

Whilst booking with a credit card offers more legal protection, there may be some options available to you if you book a holiday with your debit card. Visa and Mastercard operate a non-statutory scheme which protects payments if the services that you have paid cannot be provided. Therefore you may be able to claim your money back from your bank.

Check your travel insurance because not all policies will cover you in the event that a travel company goes bust. As always make sure you double check the small print to ensure the policy includes end-supplier failure. This should cover you if companies you have booked through, such as your airline, car hire firm or accommodation supplier, go bust.

While you're away

If you've already travelled and your holiday provider goes bust while you're abroad, you'll no doubt become very concerned as to how you might get home.

If you're on a package holiday booked through an ATOL member you will be able to finish your holiday and fly home.

Sadly, if you have booked a DIY holiday you will not have this guarantee.  This could leave you having to pay out additional money for flights and accommodation, and depending on your travel insurance you may not be covered.

Other things to be aware of

• Package holidays that are for less than 24 hours, or are for business travel, may not be protected.
• Flights booked directly with an airline independently are not protected by any financial security scheme.
• In 2022/2023 Action Fraud (National Fraud and Cyber Crime Reporting Centre) found there to be a significant increase in people looking for cheaper holiday deals and paying for fake flights and accommodation. Do your research before booking a holiday. If a deal looks too good to be true it may well be!

Again, whilst it is rare for holiday companies to go bust you can protect yourself by following some simple steps when booking your hard-earned holiday.

For more holidaying advice, visit our dedicated 'Safe Travels This Summer' section on our website.