Government reassures holidaymakers over cancelled packages

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Finally, after months of indecision, the government has confirmed that it will protect refund credit notes (RCN) issued by travel companies for cancelled holidays.

 

This means that if accept a credit note and your travel company collapses (it could happen), you’ll receive a refund from the ATOL scheme, managed by the Civil Aviation Authority.

 

And if the CAA pot is empty (it could happen), the government itself will stump up the cash to refund you.

 

The confirmation today from Transport Secretary Grant Shapps means you can confidently accept an RCN in lieu of an immediate cash refund for a cancelled holiday.

 

Which is best, cash or credit?

 

You’re still entitled to a cash refund, if you prefer, and to be honest, I’d still say this is better than accepting an RCN but…

 

…some travel firms are offering 25% additional credit to persuade clients to take an RCN instead of cash.

 

That seems pretty generous, but there’s the risk that your holiday company will give you an extra 25% credit then hike its prices by 50%. Two of the UK’s tour operators have done exactly that, as you’ll see from this story I wrote for Which? Travel.

 

Cash in the hand means you’ll be able to shop around for the best deal when you’re ready to re-book. That said, some happy holidaymakers have told me that they’ve been able to re-book holidays with the same travel firm for less than their original booking, so it’s worth doing the maths before you decide whether to take cash or a credit note.

 

If you do accept a credit from your travel company, make sure they issue an RCN – holiday vouchers and other forms of credit note aren’t financially protected.

 

What does an RCN look like?

 

This piece I wrote for Which? Travel explains what an RCN is and what it needs to include. If you’re given a credit note that doesn’t fit this description, don’t accept it. Remember, cash is king and you’re legally entitled to a cash refund, if that’s your preference.

 

 

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