More protection is good news for British holidaymakers

Few things can be more upsetting than the travel provider going bust.

Published 20 April 2011 in Featured Articles

For people who look forward all year to a holiday, few things can be more upsetting than the travel provider going bust. This situation is even worse if the firm was not covered under the ATOL (Air Travel Organisers' Licensing) guarantee scheme, which means there is no requirement to refund money.

The existing ATOL scheme only covers those who book a package option, with flights, transfers and accommodation all booked together for one overall price. Not all providers are part of the ATOL scheme, and the government says that the way some businesses operate can be misleading.

For example, some travel providers combine products, such as low cost flights and cheap hotel deals, to make it look like a package, but the consumer is actually separately purchasing all the different elements of their break - meaning they are not covered.

This should become less of a problem as a reform of the Government-backed scheme is expected to be in place early next year to help an estimated six million more travellers have their holidays protected.

The reforms will:

•    Extend protection to include 'flight plus' holidays - covering trips including a flight where the various elements are purchased within a specified short period. While these are a package in all but name, they fall outside the existing legal definition of one.

•    Deter businesses from misleading consumers about their level of protection. Some companies offer holidays which might look like packages, but make the transaction as an 'agent for the customer' - without explaining to them that this means forfeiting ATOL protection. Under the new rules, customers will be given a more straightforward explanation.

•    Bring in standardised information to replace the wide variety of documents which companies currently issue to travellers, in order to make it clear when their trip is ATOL protected.

Even so, there will still be no consistent protection for all booking methods, and there are calls for the Government to go further in its reforms. For example, some of the big UK tour operators have said they want to see the scheme extended to cover flight-only sales made by airlines.

Meanwhile, although people are now far more likely to shop around for their holiday, some fail to compare travel insurance policies and so may obtain poor value by buying the tour operator's own cover.

It is easy to find competitive and good quality travel insurance online from reputable providers and it makes sense to obtain a travel insurance quote from a company not connected to the holiday provider to see which provides better value and cover.

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