Wed, 26 Apr 06
This summer, 11.2 million consumers who build their own holidays by separately buying flights, accommodation or car hire from different companies risk losing their money, research commissioned by the Civil Aviation Authority (CAA) has revealed.
Almost half (46%) of DIY holidaymakers rate financial protection as ‘essential’ when choosing a holiday, yet almost one in five incorrectly think their DIY holiday will be protected should their airline, hotel or car hire company cease trading. Alarmingly, a further 53 per cent admit they are unsure whether they would get money back.
The CAA, which operates the ATOL financial protection scheme, is today warning consumers that DIY holidays can be at risk as they are not ATOL-protected.
Flights and accommodation booked separately as part of a DIY break are unconnected. This means that if an airline or accommodation provider ceases trading before consumers travel, holidaymakers will be forced to buy alternative, often more expensive, flights or accommodation. And if travellers cannot purchase new flights, they will be unable to claim back money already paid for the unused components of the holiday, such as hotels and car hire.
Consumers could even run the risk of being stranded abroad if their airline went bankrupt during their break. Following the collapse of Kent-based airline EUjet last July, 12,000 passengers were stuck overseas. They had to make their own arrangements to get home and a further 27,000 with forward bookings had their holiday plans ruined.
Confusion over protection
The CAA’s research also shows that one in three (33 per cent) of DIY holidaymakers believe that their travel insurance will always cover against company insolvency, whilst 11 per cent think that their credit card company would rescue them. The CAA is warning holidaymakers that this is often not the case.
Most standard travel insurance policies will not protect against travel company collapse, and credit card companies will only cover individual transactions above the value of £100. Even when consumers are able to claim from their insurance or credit card company, the compensation will cover only the affected component of the holiday. So if, for example, an airline went bust, pre-booked accommodation would not be covered.
The CAA is forecasting that this summer more British holidaymakers than ever before will create their own DIY holiday overseas, attracted by low on-line prices and an increasing selection of services by “no frills” carriers. Figures show there was a 21.3 per cent increase last year in the number of passengers taking low cost flights from major British airports*, rising from 16.7 million in 2004 to 20.3 million in 2005.
The CAA is highlighting to holidaymakers the benefits of booking all elements of a holiday together with a single, ATOL-protected company. ATOL is the UK’s only licensing scheme for travel companies selling air holidays, protecting over 27 million people each year from losing money or being stranded abroad if their travel company goes bankrupt. Companies are also responsible for all aspects of the holiday under the scheme, so if one element goes wrong, the company must make alternative arrangements or provide compensation to holidaymakers.
ATOL spokesman David Clover said: “Our research shows that although millions of holidaymakers will build DIY breaks this summer, they don’t realise they are at risk. Holiday purchases are still a significant household purchase so we want consumers to make informed choices about financial protection. We must also emphasise to those building their own holidays that they may not be protected against the risks of travel company insolvency.”
He continued: “Booking an entire holiday with one travel company does not mean that consumers have to compromise flexibility for protection. Many of the major online holiday operators allow holidaymakers to build their own tailored ATOL-protected break.
“If consumers are booking DIY holidays this summer, we urge them to take out their own financial protection measures such as buying with their credit card or taking out insurance which covers against the dangers of insolvency.”
For more information and advice about ATOL and holiday protection, consumers should visit www.atol.org.uk or call 020 7453 6430.
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