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Summary
- CMA has issued a warning to holiday companies to respect the refund rights of the holidaymakers before the commencement of the summer holiday period.
- The coronavirus pandemic has had severe repercussions in the past leading to either cancellation or postponement of travel plans.
- All the hospitality partners, tour operators, and enterprises facilitating the booking services encountered an acute spike in the refund requests.
With the upcoming set of relaxations in Stage 3 of reopening, the government will be allowing the international holidays to resume but with extended checks and a bunch of mandatory prerequisites for the international travellers, especially the people returning to the UK.
The coronavirus pandemic has had severe repercussions in the past due to which a large section of individuals had to either cancel or postpone their travel plans amid the pandemic-induced curbs, with certain border restrictions and limitations imposed by the government on international travel.
Over the course of the last 14-15 months, there has been an unusual disruption in international as well as domestic travel as the Downing Street administration temporarily halted the leisure travel for a number of times during the period, as the UK witnessed a sharp spike in the number of daily infections and additional people seeking hospital admissions.
With the unexpected curbs on the domestic movement and international travel, the number of cancellations rose surprisingly to an unforeseen level. All the hospitality partners, tour operators, and enterprises facilitating the booking services encountered an acute spike in the refund requests from most of the customers as people remained reluctant about the restart of international travel, given the evolving nature of the Covid-19 (SARS CoV-2) virus across the globe.
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Subsequent to the invariable rise in the refunds, there have been instances where the concerned tour operators or the counterparty involved in facilitating the booking failed to oblige the refunds to the customers.
In order to safeguard the customers’ right to get a refund in exceptional and unforeseen situations, the Competition and Markets Authority (CMA) has issued a warning to holiday companies to respect the refund rights of the holidaymakers before the commencement of the summer holiday period, as the UK prepares to restart the international leisure holidays to a selected number of destinations falling in the green list.
The CMA has backed the consumers’ point of view when there is a travel restriction imposed by the Foreign Office. Following the orders from the government of staying at home, people are bound to oblige the orders and have the right to receive a refund for their booking in full.
The CMA has published an open letter to all the holiday enterprises and businesses associated with the leisure travel activities to remind them about the legal obligations as a booking surge is likely in the upcoming summer holiday season as the UK restarts international travel.
The authority has further made it clear that all the package holiday businesses are required to ensure the refund options remain clear and accessible to all holidaymakers. Upon receiving the refund companies against the travel businesses, the CMA has purportedly sent a copy of the open letter directly to as many as 100 holiday operators, without disclosing the names that have been highlighted with the most complaints.
According to the CMA, the governing body received more than 23,000 complaints from the consumers, from March 2020 onwards, about the refund issues with regard to the holiday bookings made in advance that remained unutilised due to the widespread rise in the number of coronavirus cases and primarily due to the restrictive environment across the world.
The CMA, in its latest open letter, has mandated the travel businesses to refund the full amount within 14 days under the Package Travel Regulations (PTRs) if the holiday bookings are cancelled by the company itself. All the customers who cancelled the booking due to exceptional situations are entitled to receive a full refund of their respective bookings. If travel operators have issued a refund credit note, then it should be accompanied by the option of full refund.
The unavoidable and extraordinary circumstances may arise any time if the Foreign, Commonwealth and Development Office (FCDO) has advised against travel to certain destinations for which a consumer has booked the package. Under these conditions, the holiday businesses are required to elaborate on the condition if they have disagreed to issue a full refund to the consumers.
Furthermore, the CMA has empowered consumers to cancel their holiday bookings in such unavoidable and extraordinary circumstances. The consumers stand entitled to receive the full refund in these situations.
Performance of some travel stocks:
- TUI AG (LON: TUI) stocks closed at GBX 428.80, up by 0.33 per cent on 21 May 2021. The stock has returned almost 130 per cent to the investors in the last one year.
- National Express Group Plc (LON:NEX) stocks closed at GBX 284.20, down by 0.49 per cent on 21 May 2021. The stock has returned more than 37 per cent to the investors in the last one year.
