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Consumer - Booking your Holiday in the Current Climate

Friday, 29 January 2010

Tina Leonard, our Consumer Expert

What's the safest way to pay?
The safest way to pay is always by credit card. This is because if the company goes bust you can claim a 'cash-back' from your credit issuing bank. In order to do this you will have to register as a creditor with the people in charge of the wind-up and submit this evidence to your bank.

Is there a bond that covers you if a travel agent goes bust?
You are safest if you book a package holiday with a travel agent / tour operator that is bonded. A package holiday is defined by law as containing at least two of three elements: flights; accommodation; other services.

When an agent is bonded it means that it pays a % of sales into a scheme run by the Commission for Aviation Regulation (CAR). This scheme ensures that there is a fund in place that will repatriate you if you are stranded abroad, and will refund you if you have not yet travelled. A similar scheme, called the Air Travel Organiser's Licence (ATOL) is run in UK by the Civil Aviation Authority (CAA).

So, if, for example, you had booked a holiday with Budget Travel and you were stranded abroad when they closed down, you would have been flown home. If you were still waiting to go on your holiday you wouldn't have been refunded.

To claim you have to fill out a claim form, available on their site, with details of your holiday and costs. If you are abroad and had to buy another flight and/or spend extra on additional night's accommodation, include those details also, and attach all receipts you have. Check for details.

What about booking your accommodation and flight separate? Are you covered if you book with an airline and they go bust?
There is no similar scheme at all for airlines, which means that if you book directly with an airline or book a flight only with a travel agent you have no come back.

However this is not the case in the UK. The UK has a scheme, run by CAA / ATOL, which also protects you if book a flight only with a travel agent / tour operator. This is a fund that provides for airline failure and it means that if you book a flight only via and agent you can apply for a refund. This does not apply to booking with an airline.

There will be a new EU Regulation coming out on licensing and pricing and an amendment to the original proposal included that airlines should have sufficient insurance cover to repatriate or refund due to insolvency. This was taken out of the final text.

Back in Ireland, in 2008 and into 2009 there was a Dept of Transport consultation on the issue and the ITAA called for legislation on airline bonding and it is hoped that CAR will propose new measures to protect consumers who book flights directly with airlines.

However, a note of caution: In the UK similar demands for regulatory reform were rejected by the government there 2.5 years ago, no doubt in part as the result of heavy lobbying from the airlines, who of course would have to pay, as the tour operators do now, for membership to such schemes.

What about booking your accommodation separate from a private owner through ads?
Again there is no separate bond for this. Under consumer law the information provided must be accurate and true, not misleading etc. If you book from an individual selling a holiday cottage you don't have your consumer rights so it's wiser to book via a business.

If you have to change a name on flight or can't make a holiday due to unforeseen circumstances. Does travel insurance cover you for any of that?
Most airlines charge for changing a name on a flight and travel insurance is unlikely to cover this.

Most airlines do not give refunds if you have to cancel. In that instance you will most likely be entitled to something from your travel insurance.

When buying a policy, check that the amount covering cancelled holidays is enough. i.e. no point being €500 if your holiday costs €2,000. Also, check any exceptions to that terms, i.e. existing illness etc.

How can I protect myself?
. The only real advice is to make sure that when you book a package holiday you do so with a licensed travel agent or tour operator. CAR's website ( has a list of all licensed travel agents and tour operators and also has a list of defaulters.

. If booking a flight only with an agent or a flight directly with an airline, be aware that you have no protection.

. Book with well known airlines and do your research well if booking a flight only with a little known carrier that runs charter flights.

. If the worst comes to the worst, try and seek a refund from your credit card provider.

. Also, check your travel insurance to see if it covers airline insolvency.