Holidays have been greatly impacted by the coronavirus crisis with many cancelled or postponed. Numerous holiday companies and airlines are offering credit note refunds in a bid to stay afloat. However, countless Britons have been left in need of a cash refund rather than a voucher amid these times of economic uncertainty.
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Travel experts have now issued a warning that chasing refunds could have alarming repercussions.
The Chief Executive of UK travel trade association for tour operators and travel agents, ABTA, cautioned today, in his latest travel advice, that a mass demand for refunds could lead to parts of the travel industry collapsing.
Mark Tanzer gave evidence to the House of Commons Transport Committee as it looked at the implications for transport of the coronavirus pandemic.
While Tanzer said he understood the need to get money back, he voiced concerns that many businesses simply won’t be able to cope.
The ABTA chief urged the government to take action and issue guidance in these unprecedented times.
“The coronavirus crisis has meant that hundreds of thousands of package holidays have been simultaneously cancelled,” he said.
“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.”
Tanzer explained that many holiday companies are waiting to receive funds back themselves – hence why offering refunds is impossible.
“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,” he said.
“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.
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“In a bid to bring some order to an exceptionally difficult situation while ensuring that 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.”
Tanzer warned that not only is the current situation causing much anxiety among holidaymakers but it could herald the “worst possible outcome” of businesses folding.
He explained: “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.”
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