After appearing before the government’s transport committee on Wednesday (6 May), Abta chief executive Mark Tanzer has called on ministers to publicly address the refunds crisis in travel.
Abta welcomes the transport committee’s work to understand the situation facing different types of travel business and their customers.
Travel agents and tour operators are facing different challenges to airlines, and we urgently need government intervention and guidance in a number of areas, including refunds, furloughing and travel insurance.
The coronavirus crisis has meant hundreds of thousands of package holidays have been simultaneously cancelled. While many customers are rebooking their holidays for a future date, some would prefer a refund, which is their right under package travel regulations.
However, the regulations were never designed for a crisis of this nature and scale and many businesses are unable to deliver immediate refunds.
Tour operators have not received money back from suppliers such as airlines and hotels and are unable to meet a 14-day window for refunding a package holiday, and have therefore been asking customers for more time.
Abta has been urging the UK government to provide guidance on refunds since the coronavirus crisis started, but the Government has yet to act or provide any public comment.
Meanwhile, the situation continues to deteriorate for travel agents and for tour operators, as well as their customers, many of whom are understandably frustrated and anxious about the current situation and the status of their refunds.
In a bid to bring some order to an exceptionally difficult situation while ensuring customers keep their right to a refund and financial protection following cancellation of a package holiday, Abta has developed guidance for Members who may need more time to process refunds.
This aligns with the Competition and Markets Authority’s position on preserving the customer right to a due refund, while recognising the fact that refunds may not be able to be paid within the statutory period.
It’s in everyone’s interests for the government to come out publicly and offer support and guidance on this issue.
While the payment rules of the Atol fund are clear, and consistent with the protection of deferred refunds, a lack of public comment has understandably led to some customers feeling anxious or confusing them with holiday vouchers, which do not offer the same protection.
If the government is unable or unwilling to act or provide guidance on the 14-day window for refunds, then it will need to explore other options or face the inevitable failure of these businesses.
An industry-wide collapse of travel agents and tour operators would be the worst possible outcome for these businesses and their staff, for their customers who would have to wait many months for refunds and for the UK taxpayer who would end up footing the bill for the Atol scheme.
Meanwhile, Abta has reaffirmed its guidance on refund credit notes (RCNs) following Tanzer’s appearance before the government’s transport select committee on Wednesday (6 May)
Abta has also made explicitly clear in its guidance consumers are still entitled to a refund: “The consumer has the right to redeem the RCN against a future booking with the travel organiser, or to receive a cash refund.”