In light of the recent Foreign and Commonwealth Office (“FCO”) announcement that advises British people against all non-essential travel worldwide until at least 15 April 2020, many flights have been cancelled and hotels have been closed.
Those who had booked to go on package holidays during this time period may be wondering what rights they have to cancel their holiday or if their holiday has been cancelled by their provider. Likewise, people may wish to know what rights, if any, they have to cancel package holidays after this date.
What are your general rights to cancel a package holiday?
A package holiday is where you have booked at least two different parts of your holiday with the same company at the same time for a single price. It is worth noting that the trip must also be for longer than 24 hours or include an overnight stay. A package holiday can be made up from a combination of at least two of the following: flights, accommodation, rental of cars and motor vehicles, train/coach tickets or any other tourist service that is not intrinsically part of the traveller’s accommodation or transportation. However, to rely on the latter the tourist service must be 25% or more of the value of the package or was advertised as an essential feature of the combination. For example, excursions or rental of sports equipment.
Unless otherwise specified, the Package Travel and Linked Travel Arrangements Regulations 2018 (“the Regulations”) are implied into each combination of such package holiday contracts. The Regulations grant travellers important rights in relation to cancellation of package holidays by either the traveller or the holiday provider. They are also implied into link travel arrangements. This is where the traveller purchases a minimum of two different types of travel services with different travel providers. Protection for such holidays under the Regulations is significantly lower than that of a package holiday.
Under the Regulations, travellers can terminate the package travel contract at any time before the start of the package. However, travellers may be subject to pay an appropriate and justifiable termination fee to the airline/travel agent if they cannot prove cancellation was necessary due to unavoidable and extraordinary circumstances. Unavoidable and extraordinary circumstances include warfare, terrorism, significant risks to human health such as the outbreak of a serious disease at the travel destination, or natural disasters such as floods or earthquakes. It appears that the COVID-19 pandemic could fall under this definition, however, currently this is unclear and so it may be that holiday companies take the view that the termination fee will have to be paid by the cancelling traveller.
The holiday provider can also terminate the package travel contract but must provide a full refund of any payment made by the traveller before the commencement of the holiday. However, the holiday provider will not be liable for any additional compensation for any disruption or additional losses caused by the cancellation.
The Regulations also provide that refunds must be made to the traveller within 14 days after the travel contract is terminated.
It is therefore important to ensure you read the details of your package holiday contract to see if the Regulations apply and whether or not you can rely on them.
What if I booked a holiday for a date up until 15 April 2020 and the Regulations do not apply?
For holidays which do not include the Regulations and are booked for a date up until 15 April 2020, travellers should be able to claim a refund from their holiday provider or rebook the holiday for a later date. This is because of the FCO and government advice in place, which all holiday providers must follow due to the COVID-19 outbreak.
As a result of this advice, all travellers are entitled to either a refund or the option to rebook their holiday for a later date (for further information on this point please click here). This is because during this time no non-essential travel in or out of the UK should take place.
What if I booked a holiday for a date after 15 April 2020 and the Regulations do not apply?
For holidays booked after 15 April 2020 and that do not imply the Regulations, travellers may have difficulties recovering their money at this stage. This is because the current FCO warning only applies until 15 April 2020, meaning holiday providers have no obligation to refund travellers beyond this date for cancelling their holiday as it may well still go ahead. It is therefore advisable to wait until nearer the time of the holiday to see whether the FCO advice changes. This can be checked here.
You may also wish to read your travel contract to see what policy your holiday provider has in place, should you wish to cancel your holiday. It may be that you can rebook your holiday for a later date or attempt to recover the money paid for the holiday through your credit/debit card provider on the basis you have paid for a service that you will no longer receive. You will need to discuss this possibility directly with your bank. This option should however be used as a last resort.
It is also worth knowing whether or not your holiday is ‘ATOL or ABTA protected’. ATOL cover means that if the ATOL protected holiday provider fails and your holiday can no longer go ahead you will be entitled to a full refund if you are yet to travel, or hotel costs and flights home if you are abroad. This protection only applies to holidays which include flights and a hotel and for flights that are not booked directly with the airline.
ABTA protection applies to holidays that do not include flights, such as cruise holidays, coach or rail. Like ATOL cover, ABTA protection means you will be entitled to a full refund if your holiday does not go ahead and any hotel costs or transport home if you are already abroad. ATOL and ABTA therefore provide additional protection should you decide or only be given the option to reschedule your holiday to a later date and the holiday provider collapses.
Can I rely on my travel insurance to recover my money?
If you have already bought travel insurance for your package holiday, you may be able to make a claim for the money you spent on your holiday on your insurance. However, it may be worth noting that the Association of British Insurers have said that ‘travel insurance is for unforeseen circumstances and coronavirus no longer met that criteria.’ This may therefore impact your ability to make a successful claim on your insurance.
However, this will ultimately depend on whether an FCO warning is in place for the date of your holiday and the terms of your insurance contract. You will therefore need to read your insurance policy carefully.
A further update on this topic will be published in due course as guidance and advice is published by the relevant regulating bodies.
To discuss any problems you are experiencing with cancelled holidays, please contact our experienced dispute resolution & commercial litigation solicitors on 01202 786340 or email firstname.lastname@example.org.