What to do if your travel company goes bust – from claiming compensation to rebooking your holiday

A NUMBER of travel companies have gone into administration in recent years and, with others posting huge losses in recent weeks, Brits are right to be concerned about what might happen if their holiday provider goes bust.

But there are a number of ways that holiday bookings made by Brits are protected, from ABTA and ATOL certification to having the right insurance and paying with a credit card.

Here, Sun Online Travel explains what happens when a travel company goes bust, such as how to claim compensation and how to rebook a holiday.

Am I protected if my travel provider goes bust?

If you've booked a package holiday with a reputable travel company, you should have protection for your booking through either ATOL or ABTA.

ATOL (Air Travel Organisers License) is a scheme run by the UK Civil Aviation Authority (CAA) and applies to package holidays with flights and some flight-only bookings.

If you are abroad when the travel company goes bust, the scheme will make sure "you can finish your holiday and return home" - similar to the holidaymakers who were affected by Monarch Airlines in 2017.

Brits who have yet to go on holiday will receive a full refund through ATOL within 28 working days, although this can take longer if they are dealing with large number of claims.

Any non-flight holidays, such as cruise holidays, are covered by ABTA.

They offer both legal and financial protection and protects you whether your holiday was mis-sold or the holiday provider goes bust.

ABTA would also protect Brits by ensuring they are able to get home and get a full refund in the event of the company going into administration.

It is also best to book a holiday on a credit card, as this offers protection for holidays over £100 under Section 75 of the Consumer Credit Act.

Bookings that are flight-only are also protected by credit cards, as most are not covered by ATOL.

It's also worth having travel insurance, and checking the fine print to make sure you're completely covered.

How will I be able to rebook my holiday?

If you've booked your holiday through an independent travel agent, they might be able to book you onto another holiday.

The CAA explains: "It depends on the type of booking you have and which business you booked with.

"For instance, if you booked through an agent they may be able to move you to an alternative holiday.

"If that happens, they will probably ask you to fill in a form so they can claim the cost under ATOL.

"In some cases, consumers will still be able to travel on their holidays."

However, sometimes the replacement is not always the same value as what was paid and some providers will increasing prices due to demand.

This means Brits could be forced to pay out the difference or go through their travel insurance for a similar holiday option.

Travel insurers are not required to cover the extra cost of a rebooked holiday on a like-for-like basis, although it is worth checking with the provider.

For added protection, make sure you take out comprehensive travel insurance as soon as you've booked your holiday.

Protection through travel insurance

If you’re not covered by ABTA, ATOL or your credit card, you might still have cover if you have the right type of insurance.

You should check the fine print of your insurance for both Scheduled Airline Failure Insurance (SAFI) and End Supplier Failure to see whether you would be covered.

SAFI is flight coverage only while End Supplier Failure will include certain other costs as well, depending on your policy.