How to Protect Your Holiday

While there’s little that can be done to ensure your holiday provider will not go bust, there are a few steps you can take to ensure you at least don’t lose your money.

Book a "ATOL Protected" Package Holiday

This is by far the safest way to travel in these turbulent times. A package holiday is where flights, hotels, transfers, etc. are bought as a single product and sold by a licensed and properly insured “ATOL” (Air Travel Organisers' License) travel operator.  If you buy an ATOL protected holiday you'll be fully covered in case of something going wrong.

In the UK, the Civil Aviation Authority oversees the ATOL licensing system whereby any operator or airline offering holidays by air pays into a bonding scheme based on its business turnover. Funds thus generated are used to repatriate holidaymakers, or refund money paid in advance for such bonded holidays. It seems even more important in these difficult times then to make sure every element of your holiday is ATOL protected.

This means that when something goes wrong, such as the collapse of a travel operator the CAA steps in to coordinate with other ATOL operators to fly people home, Holidaymakers who purchased from ATOL-protected agents should be able to complete their holidays without too much disruption.If you haven’t taken your holiday yet, a refund will be arranged under the ATOL scheme.  Click here to visit the ATOL website for more information.

How can I check I'm ATOL Protected before I book?

Look for the ATOL logo in adverts and brochures. If you can’t see an ATOL number or logo, either check with the CAA by telephone whether the firm has an ATOL, or visit the ATOL website. If you book through a travel agent, ask which ATOL holder will appear on your ATOL Receipt. Don’t book if the agent won’t tell you.

If you buy an air package from an agent that isn’t from an ATOL-holder’s brochure, ask whether all the items you book will be on the ATOL Receipt – if a hotel or car hire is receipted separately, it won’t be ATOL protected.

How can you protect yourself if you arrange your holiday yourself?

Holidays where you book your flights, car hire and hotels yourself online are not protected by the ATOL scheme, so it's important to think about alternative protection.

Book with a credit card

But be careful here, because you still might not be covered.

You must spend a minimum amount on each element of the holiday

Some charge cards or debit cards do not offer any protection. 

Many people expect their credit card company to step in at times of trouble to arrange for refunds.  However, it depends on the card issuer on whether and how you are protected under the Consumer Credit Act.

If you're stranded abroad, your card issuer probably will not cover the cost of getting you back to the UK as part of your compensation for your lost holiday.

Take out travel insurance

Look for policies which cover against holiday company or holiday provider insolvency.

However, it is vital to check the small print, as many policies don't include cover for the bankruptcy of an airline or holiday company. 

If your policy does cover such an eventuality, you may well be able to claim for alternative flights home, as well as extra nights in a hotel, if required, plus emergency cash and other expenses, check what is included. 

And also remember the important fact that you can only be covered for the component of your holiday that's gone out of business. You can't claim for the others and so you will need to rebook the missing element - possible at a higher price, or possibly with difficulty of any availability at all.

What should you ask your travel agent to ensure you have comprehensive protection of ATOL and the Package Travel Regulations?

1. Is my whole holiday I’m booking ATOL protected; will I receive a full refund or be brought home if my holiday company fails?

2. Will I have full rights as a consumer under the Package Travel Regulations if anything goes wrong before or during my holiday?

If you receive the answer ‘yes’ to both, you should make sure you receive an ATOL confirmation invoice. This is a document issued by ATOL holders to customers (either direct or through agents) when accepting payment that details all the air holiday items that have been booked with them and protected under their ATOL. Agents are required to pass this document on to customers.

If you pay any money - even a deposit - to a 'ATOL' protected travel firm in the UK for a flight or a package holiday by air, the sale usually has to be ATOL protected, and you must get a "ATOL Receipt".

The best advice, though, is to buy your holiday from a reputable operator bearing the ATOL and ABTA logos.