More protection for online holiday bookings

Nyree Stewart
12 April 2018

The government is to introduce new rules that will ensure more types of holidays booked online will be covered by consumer protection legislation. 

Research from the government shows UK families spend an average £22.10 a week on package travel abroad, and the growth of the internet has significantly changed how people buy their holidays. 

ABTA, the travel association, notes that in 2017 83% of Brits booked a holiday online, compared to 76% in 2016. It says this change in how we book travel - such as using online booking sites - has created a gap in consumer protections, with 50% of holidays not currently financially protected if a company fails.

The government says the new rules, which will be introduced into Parliament this month, will help close this gap. The regulations will come into force on 1 July 2018, with all holidays booked from this date covered by the new protections.  

New rules include:

  • an extension to current consumer protections to cover millions of extra holidays;
  • a requirement for better information to be provided to travellers at the point of booking, making it clear what their rights to refund are; and
  • ensuring the business that puts together the package holiday is responsible for the entire holiday - even if some elements will be fulfilled by other companies.

The new rules will also provide clarity to businesses and increase fairness in the travel industry by making online outlets as responsible for consumer protections as traditional travel agents. The government says it is working with travel industry leaders to develop guidance for businesses to help them comply with the new regulations.

Consumer minister Andrew Griffiths says: “When we book a package holiday, we expect it all to go according to plan, but if a company goes bust it can ruin more than just the holiday, leaving people out of pocket or even stranded. 

“These new rules mean that internet explorers can book their holidays online, secure in the knowledge they will be compensated in the same way as someone who booked their holidays through a travel agent if something does go wrong.”

Emma Grimster, spokesperson at TravelSupermarket, says: “It is absolutely right that package holiday bookings made online should benefit from the same financial protection as those booked via a travel agent, either in person, or over the phone. 

“However, the new rules only apply to packages booked with one supplier, so if you prefer to shop around and book elements of your holidays with different suppliers, or don’t book all elements at the same time, you would be wise to take additional steps to ensure your trip is protected. Namely, paying via a credit card for items over £100 and taking out a comprehensive travel insurance policy, should anything go wrong.”

TravelSupermarket highlights five top tips to book a holiday with confidence: 

1. Pay by card: By paying with a credit card, you are covered by Section 75 of the Consumer Credit Act when paying for anything over the value of £100, even if you only pay for part of the transaction by credit card - even just £1. If you don’t have a credit card, or the transaction is under £100 in value, then pay the whole amount by debit card to benefit by the protection that the Visa Chargeback scheme can offer. Never pay by cash, cheque, pre-paid card or bank transfer as you’ll have no protection at all.

2. Look for ATOL cover: Look out for holidays with ATOL cover, which means you will be protected financially should something happen before you travel, such as the travel company going bust.

3. Take out travel insurance:  Not all trips will have ATOL cover - for example, DIY travel arrangements such as flights, a hotel or a day trip are unlikely to be protected by the scheme. Instead, take out a travel insurance policy that includes end supplier failure. This will protect you should a company you have booked with go bust.

4. Avoid fraudulent websites: Look out for warning signs that a site is not what it seems when you book. For example, a site offering prices that are much cheaper than others.  

5. Seen an offer that looks too good to be true? If in any doubt, put the company name into a search engine and check the reviews online. Then check the memberships and licences they trade under, and remember to only pay by credit or debit card.

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