If Your Holiday Is Cancelled, Are You Entitled To A Refund?

There's no denying that the impact of the coronavirus pandemic has been felt by everyone, but one industry has been hit considerably: the travel sector.

The Foreign Office has advised against non-essential travel, and several countries across the globe have shut their borders. This means thousands of holidays, weddings, festivals, cruises and city breaks have either been cancelled or look like they will be further down the line. The lockdown has left hundreds of thousands of people out of pocket and has brought the travel industry to its knees.

So what does this mean for those of us who had holidays booked for 2020? We speak to MoneySavingExpert's Guy Anker and Iona Bain, the founder of the Young Money Blog and Young Money Agent to find out what rights you have in these unprecedented times.

"Under 'denied boarding' rules covering carriers operating within and flying into the EU, anyone whose flight has been cancelled is entitled to a full refund within seven days," says Iona. She adds that the European Commission Regulation (no 261 from 2004) covers your right to a refund. "If your flight is actually cancelled, it will still be possible to ask for a refund. If your airline won't play ball, you have the option to take them to court." However, she says it's much easier to claim on your travel insurance or on your credit card under section 75 of the Consumer Credit Act if you used that to buy your tickets.

Guy agrees: "If a firm cancels a contract and hasn't provided the goods or service, lockdown or not, and the customer is prevented from using that service, they are entitled to a full refund."

He admits that this process can be exhausting because enforcing the law can be tricky. Many airlines, like Ryanair, have been sending confusing emails to passengers, Guy says, implying that they're entitled to a refund but won't receive a payout for another year. "They just send you round and round and round." The key with companies like this? Dogged persistence, unfortunately.

The Civil Aviation Authority states explicitly: "If your flight has been cancelled, the airline must offer you the choice of a refund or alternative flight." However, many holidaymakers have been offered travel vouchers. If you are happy to take the voucher, it would be at your own risk, Guy says. "If you're comfortable with a voucher, and if you think you're going to use it in the future, then take the voucher." He advises accepting vouchers from large, established airlines such as British Airways, which he believes will survive the crisis.

Iona suggests you steer clear: "I personally wouldn't accept travel vouchers at this time, and I recommend exhausting all other avenues first," she says. "Your rights in case of a flight company collapsing are unclear right now, and while government or the wider industry might be compelled to reimburse anyone in that situation, I wouldn't leave it up to chance."

As the government has advised against all but essential travel, your travel insurance should cover you but only if you had the insurance in place before the pandemic was declared on 11th March.

"Any policies bought after that date will not cover coronavirus-related cancellations and disruption," Iona says. "Otherwise, I would make a formal complaint to the insurer if it's refusing to pay out." If that doesn't go anywhere, Iona advises you take the matter further with the Financial Ombudsman.

Debit card payments and purchases are not covered by section 75 of the Consumer Credit Act. However, where the company has cancelled your goods/service, you might be able to claim for a refund under the voluntary scheme called 'chargeback'. To do this, you will have to contact your card company or bank.

If you made your purchase using your credit card, you are entitled to a full refund because credit card companies are jointly liable. "The same applies if the company providing the service goes bust," Guy explains.

This is where it gets tricky. If the holiday is cancelled by the provider, you will be entitled to a full refund. Last week, easyJet Holidays launched a 'deposit return' for summer bookings and other holiday providers might follow suit. If you haven't paid the full balance of your holiday yet, Iona suggests contacting the operator to find out if you can defer your payments, the holiday or both. "If you can make repayments nearer the holiday itself, you will save yourself unnecessary costs now and either only pay once you definitely know the holiday can go ahead or at least get a refund in short order. Otherwise, keep paying in for the time being as this will protect your entitlement to a refund."

Guy agrees: "There's no law to protect people who paid deposits, so this will be a gamble for most. Those who are close to paying off their balance won't want to forfeit their deposit and the rest of the payments, whereas if you paid a small deposit, you might be prepared to lose that sum. If you're close to the end, your loss from cancelling is huge."

The Foreign Office has advised against all non-essential travel so as it stands, you won't be able to go anywhere. "Nobody knows whether we'll be able to travel later in the year, so if you have a flight booked for September, sit tight," Iona says.

"So long as the Foreign Office continues to advise against non-essential travel, or even to the area you're planning to visit, you will be entitled to a refund. Do NOT cancel the trip as you will forfeit your right to a refund in that situation."

If you have a wedding booked for later this year, keep calm and carry on, Iona advises. "It may still happen, and if it doesn't, all of the above applies. Ultimately, it's too soon to think about whether or not guests will be able to make a future date – we just have to take the situation one month at a time. Ultimately, guests will have to work out their own travel refunds and you will have to speak to your venue and suppliers about whether they'll accept refunds or not."

The government has advised against mass gatherings in the UK for the foreseeable future and many other countries around the world have done the same. Wireless Festival is the latest to have been cancelled in light of the pandemic, while Glastonbury Festival 2020 has been postponed to 2021. Most festivals have told ticket holders they can request a refund or carry their ticket over to the following year.

"I would consider whether you do still want to attend the festival as you would have done this year," Iona says. "If the answer is 'yes', I would advise against requesting a refund unless you absolutely need the money now and you don't think you would be able to attend next year. The businesses behind these festivals do still need support, and if they issued refunds to everyone, the industry would collapse."

With that said, not all festivals have been responding to refund requests. If this is the case for you, Iona advises you take the issue further. "Contact your credit card lender and ask about a refund under chargeback or Section 75 if you used your plastic to pay for the tickets. Otherwise, I would report the festival to the CMA (Competition & Markets Authority)."

If you are still paying for the ticket as part of a payment plan, Iona says you should contact the festival and ask them to freeze your payments and pay the rest in 2021 for next year's festival, or request a full refund on the amount paid to date.

For more money-related tips and advice, visit the Young Money Blog and MoneySavingExpert.