Holiday Hell: What to do if your holiday company goes bust

Sun tan lotion, sombrero, baggage limits, bikini, passports, flip-flops. For all that summer holidays are billed as a relaxing getaway from the stress of daily existence there is certainly a lot to deal with. One thing we can’t be expected to plan for is our travel company suddenly going bankrupt.

It doesn’t seem worth worrying about anyway as not only is it a particular far fetched scenario surely if it did happen the powers that be would rectify the situation. Wannabe holidaymakers would never be left thousands of pounds out of pocket and of course there are lots of rules and regulations to stop this ever happening. Aren’t there?

If you have heard of you have either been watching the news or have recently been forced to trade in dreams of sipping white wine in a chateau outside San Tropez for downing strongbows on a bench outside Greggs.

Spanish travel agency collapsed on the 15th July leaving over 140,000 holidaymakers stranded and/or out of pocket. Many were dismayed to discover that they were affected even if they have booked with other providers such as

Company directors said that liquidation of the firm came about as a result of the effects of Brexit. They claim that uncertainty had put off consumers from booking holidays combined with a weaker pound making euros more expensive.

beach facebook

Isn’t the money I paid protected or ring-fenced?

All UK travel operators who sell flights are ATOL protected. This protects the consumer and ensures they do not get stranded abroad or lose out financially if the company ceases trading. Despite the reassuring ‘’ domain lowcostholidays has in fact operated from Spain since 2013 and is not bound by the civil aviation authorities rules.

I’m already on holiday. Does that mean I’m stranded?

27,000 people were already abroad when the company went under. If you are already on holiday then fortunately your plane tickets will still be valid as airlines demand that travel operators pay them upfront. Unfortunately travel operators such as wait up to a month after the holiday before paying hotels so hotel reservations and other services won’t have been paid for. It is also very unlikely that airlines will refund the cost of the flights as they are fulfilling their part of the deal.

Can I get a refund from my bank?

Section 75 of the Consumer Credit Act guarantees that credit card firms are liable if the firm goes bankrupt so if you paid by card you should be able to get a refund from them.

Even if you paid by debit card you may be able to claim on the chargeback scheme if your bank offers this service. If you paid through PayPal you will also be covered by their buyer protection scheme.

Can I claim on my travel insurance?

Most insurance policies won’t cover you for the failure of a travel agency unless you have specifically bought that cover. But it’s always worth checking with your insurer to see where you stand.

Can I take my claim to the Spanish regulators?

It may be possible to make a claim against the Govern de les Illes Balears, the Spanish local authority which regulated Lowcostholidays. The administrators claim that the company have set aside just €1.2 to compensate customers. Shared between all 140,000 customers this would leave each customer with only £7 compensation.

Can my hotel really force me to pay?

Your reservation will most likely have been cancelled already. The hotel is perfectly within their rights to demand payment for the accommodation and may charge a much higher ‘walk-in’ rate. If you do pay remember to keep receipts of all expenses incurred to help with your claim.

How can I make sure my holiday is ATOL protected in the future?

All overseas air holidays booked with UK travel companies must be ATOL protected. The ATOL logo will appear in the company’s promotional material. If you are unsure make sure you check with them directly or use the search function on ATOL’s website here. If the company is ATOL protected then you will receive a certificate.

amazon massage gun