Time to restore confidence in package holidays
Travel Weekly reported last week that "Almost one in two UK consumers planning a holiday abroad in the next 12 months want the guarantee of a cash refund if a holiday is cancelled" reflecting an attitude to holiday bookings as the world seeks to emerge from the Covid-19 pandemic.
Without doubt, the tourism industry has been one of the hardest hit, compounded by the fact that Government support has been lacking. Commentators suggest that there is huge pent up demand for international travel and hopes are pinned on the forecasted relaxation of lockdown measures on 19 July which may allow tourists to travel abroad for the school summer holidays.
Tourism providers have had to reconsider their booking terms to reflect both a change in demand from customers but also the quickly changing restrictions under the Government's traffic light system.
Pre-pandemic, the low cost airlines fulfilled our insatiable desires to travel offering a huge variety of destinations at reasonable prices. Tourists would source their desired accommodation separately and build a holiday to their own specification.
Now many of the hotel chains and agents have sought to stimulate bookings by allowing free cancellations up to the date of the stay. This of itself has caused problems with tourists booking two hotels for example, cancelling one at the last minute leaving empty beds and the associated loss of revenue. It is unlikely that blanket 'cancel at the last moment' booking policies are sustainable, especially for the smaller accommodation providers – so the guarantee of a cash refund that consumers seemingly desire may not exist indefinitely.
One of the problems that came to light when the pandemic first took hold was the delay on the part of tour operators selling holiday packages and airlines to make refunds to customers in the event of cancellations.
The law is clear that if a tour operator cancels a package holiday, a refund of the holiday price should be made within 14 days and in the case of any cancelled flight due to depart the UK the refund should be made within 7 days.
Some tour operators pursued arguments which sought to avoid clear obligations under the Package Travel Regulations 2018. Many tourists were denied refunds by their tour operator and were pushed towards their travel insurers, but it is not the place of travel insurance to respond to claims arising as a result of tour operators ignoring their clear legal responsibility.
In some cases, the Competition and Markets Authority has intervened and reminded tour operators of their legal obligations. This is an entirely welcome step. For the one in two travellers who desire the guarantee in the event of a cancellation, they can seldom do better than booking a package holiday. What is needed to restore confidence and in turn generate bookings is a clear commitment on the part of package providers to stick to their clear obligations in law.