The Competition and Markets Authority (CMA) said that consumers “will generally be entitled to a refund when they have paid money in advance for services or goods that cannot be provided because of the coronavirus pandemic”.

The CMA added that if a package holiday was cancelled due to the FCO advising against travel to the destination, then “special protections” meant consumers were entitled to a full refund.

But in other situations, customers may not be entitled to a full refund because government guidance “does not create legal restrictions and will not necessarily mean that a contract cannot be performed”.

Will Hayter, head of the CMA’s Covid-19 Taskforce, added: “If complying with government guidance adversely impacts consumers, our message to businesses is that they should treat their customers fairly and responsibly - including trying to find a mutually acceptable solution.

“In the case of package holidays, including some group trips, if these are cancelled because of the pandemic, for example because of changing Foreign Office travel advice, our clear view is that individual customers who have paid in advance should be entitled to a full refund.”

The CMA has written to some group travel specialists following complaints that a number of these firms had been refusing to give refunds as their contract was with a group, such as a school, university or amateur sports team, rather than individual travellers.

“It is the CMA’s view that the Package Travel Regulations apply to these group travel packages, and that individual customers should be entitled to a refund if they have paid money in advance for a group trip that is cancelled because of the pandemic,” added the authority.