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'No change in rules on package travel refunds', says govt
The rules around package travel refunds have not changed, TTG has been told, despite the emergence of government-backed advice suggesting refund credit notes (RCNs) were a valid alternative and would carry financial protection.
A Department for Business, Energy and Industrial Strategy (Beis) spokesperson told TTG on Wednesday (13 May) "the rules around package travel and other UK travel bookings remain unchanged", adding the department would continue to work with the travel sector and consumer advocacy bodies "to assess the impact of cancellations made in light of the Covid-19 outbreak.
Under the Package Travel Regulations (PTRs), travel sellers are obliged to provide a full cash refund within 14 days if a trip is cancelled or cannot be operated as sold.
Abta, though, has said the PTRs were not designed to mitigate to deal with wholesale cancellations owing to a major global crisis such as coronavirus and has instead championed a temporary RCN regime allowing travel companies to offer clients deferred refunds that carry the same financial protection as the original booking.
This protection, Abta states, is afforded by existing Atol legislation.
However, while the CAA is understood to be aligned with Abta on the issue, Beis is yet to amend the PTRs to allow the CAA to place the RCN scheme on a legal footing, despite weeks of lobbying by Abta to provide the retail travel sector clarity and reassurance.
The update from Beis also directly contradicts guidance issued by the government-backed business advice service Business Companion last week which, while stressing the PTRs still apply, acknowledges credits notes "as another increasingly popular alternative" which would be "financially protected in the event of future failed travel plans".
The bulletin adds: "Latest CMA [Competition and Markets Authority] advice is that credits, rebooking or rescheduling may be offered as an alternative to a refund, but a refund should still be an option that is just as clearly and easily available.
"Any restrictions that apply to credits, rebooking or rescheduling, such as the period in which credits must be used or services rebooked, must also be fair and made clear to consumers."
TTG understands the advice published in Business Companion’s 7 May Coronavirus Bulletin was set to be withdrawn on Wednesday afternoon (13 May) and replaced with a clarification. It is unclear whether the CAA, Abta or any other travel industry trade bodies were notified before the Business Companion guidance was published.
Commenting on the guidance as it was originally published, Abta said it would give consumers confidence their money was protected, but urged both the government and the CAA to publicly confirm the situation.
The CAA declined to comment when approached by TTG.
A Beis spokesperson said: "Companies have a legal obligation to ensure their consumers are fairly compensated. We are keeping the situation under review and looking at options to support businesses and consumers through this difficult period.
“We continue to engage with the travel sector and consumer advocacy bodies to assess the impact of cancellations made in light of the Covid-19 outbreak.”
The department also stressed rules around package travel "remain unchanged" and it would continue to encourage travel firms to support holidaymakers "as best as possible so nobody is left out of pocket".
James Chapple
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