The UK's competition watchdog has warned package holiday companies to be ready to refund consumers if foreign trips this summer are cancelled by the coronavirus pandemic.
The Competition and Markets Authority (CMA) said it had taken steps to remind package tour operators of their legal obligations over refunds, seeking to avoid what happened last summer when cancelled trips resulted in 23,000 complaints.
Holidaymakers can travel abroad again from May 17 with Portugal the main holiday destination currently on the "green list".
As a result of CMA action, TUI has now given a formal commitment to provide clearer information on refunds upfront to customers whose holidays have been cancelled due to Covid-19.
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The company had already taken steps to meet concerns raised by the CMA, by improving the information it provides to customers and making it easier for people to get their money back.
"We're calling on package holiday companies to make the refund process less hassle in the future," CMA chief executive Andrea Coscelli said in a statement.
The CMA said action it had already taken had helped refund more than £200 million pounds to customers.
Under package holiday rules, cancelled holidays must be refunded within 14 days and customers must be offered a refund, not just a credit note.
Authorities are worried there could be more cancellations this summer as many holiday companies are currently selling vacations to countries such as Spain and Greece which are now on Britain's amber list for travel.
According to the government, people "should not travel to amber list countries or territories for leisure purposes".
Online travel agent On the Beach said it would not be selling holidays for travel until the end of August because of ongoing pandemic uncertainty.
The CMA letter to the package travel sector sets out what businesses should provide and what customers can expect, including:
- Holidays cancelled by package holiday companies must be refunded within 14 days under the Package Travel Regulations (PTRs).
- Any offer of a refund credit note must be accompanied by the option of a full refund. Customers should be able to exchange their credit note for a refund at any time.
- People have a right to a full refund where they decide to cancel their package because unavoidable and extraordinary circumstances at the destination significantly affect the holiday they have booked or their travel there.
- If the FCDO (Foreign, Commonwealth and Development Office) is advising against travel to the package holiday destination when the consumer is due to leave, that is, in the CMA’s view, strong evidence that these unavoidable and extraordinary circumstances are likely to apply. If the consumer is refused a full refund, the package holiday company should fully explain why it disagrees that the holiday or travel is significantly affected.
