UK package holiday operators warned over consumer refund rights

Competition watchdog writes to 100 firms after forcing Tui to make it clearer customers can get cash refunds

Last modified on Thu 13 May 2021 05.31 EDT

The UK’s competition regulator has warned the holiday industry that it must inform travellers of their refund rights, as it forced Tui, Europe’s largest travel company, to make it clearer that customers can get cash back.

The Competition and Markets Authority (CMA) on Thursday said it had written to 100 package tour companies reminding them of the need to offer refunds for cancelled holidays and to pay back customers within a fortnight.

The travel sector has been among the worst-hit sectors during the coronavirus pandemic, with international movement still heavily restricted even from those countries – including the UK – that have forged ahead with vaccination programmes.

On the Beach, an online travel agent, on Wednesday said it would not sell any holidays for this summer across June, July or August because of doubts over whether they would go ahead.

England's traffic light system: what does it mean for international holidaymakers?

Ministers say that from 17 May at the earliest international travel for leisure may be able to resume, and that countries would be placed in a traffic light system, with green, amber and red lists that would set out the rules for things such as testing and quarantining for those returning to England:

Green: passengers will not need to quarantine on return (unless they receive a positive result) but must take a pre-departure test as well as a PCR test on arrival back in the UK. A handful of countries and territories are on the initial green list including Australia, New Zealand, Israel, Portugal and the Falkland Island.

Amber: travellers will need to quarantine for 10 days, as well as taking a pre-departure test and two PCR tests (on day two and day eight) with the option of paying for a private Covid-19 test on day five (the test to release scheme) to end self-isolation early.

Red: arrivals will be subject to restrictions currently in place for red list countries, which include a 10-day stay in a managed quarantine hotel, as well as pre-departure testing and and two PCR tests.

Which list a country is put on will depend on a number of factors including the percentage of the population that has been vaccinated, infection rates and the prevalence of “variants of concern”.

Given travel is a devolved matter, the administrations in Scotland, Wales and Northern Ireland will decide whether to follow suit or adopt a different approach.

Rupert Jones and Aubrey Allegretti

The CMA warning comes as the UK government prepares to ease restrictions on holidays. From Monday 17 May travellers from England will be allowed to visit a dozen destinations on the green list, without needing to quarantine. They are Australia, New Zealand, Singapore, Brunei, Iceland, the Faroe Islands, Gibraltar, the Falkland Islands, Israel and Portugal, including the Azores and Madeira, and two British overseas territories in the Atlantic.

However, the regulator has been concerned by travel firms’ repeated failures to inform customers of their right to cash refunds if it is forced to cancel bookings. Since March 2020, the CMA has received more than 23,000 complaints from consumers about refund issues, it said.

Tui, an Anglo-German travel company that was a member of the FTSE 100 until the start of the pandemic, has formally pledged to provide clearer information on refund rights after the CMA intervened.

The CMA had previously forced, LoveHolidays, Teletext Holidays and Virgin Holidays to pay out refunds to customers rather than just offering credit notes.

Andrea Coscelli, the CMA’s chief executive, said: “We want to make sure people are fully aware of their refund rights, so they can make informed choices about booking a holiday.

“We’ve secured millions in refunds for people who couldn’t go on their hard-earned trips over the past year and now we’re calling on package holiday companies to make the refund process less hassle in the future. We expect all firms to give clear cancellation options and will consider appropriate steps if we see companies breaking the law by refusing or delaying refunds this summer.”

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