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Holiday Booking Protection

By: John Rowlinson - Updated: 19 Sep 2014 | comments*Discuss
Atol Caa Abta Aito Psa Tta Easyjet

With the excitement and anticipation of going on holiday, possibly the last thing on your mind is financial protection, but with around two seemingly respectable travel agents and tour operators going out of business every month, it does need considering.

In general you'll be asked to pay all, or some of the cost up front which means there is a risk of being left out of pocket, or stranded if this 'deposit' is not properly protected. If you've booked a package holiday this shouldn't happen as, by law these must be protected.

So How Are You Protected?

When a company offers two or more elements of a holiday such as a flight and hotel or hire car, and offers them as a 'pre-arranged' combination, it is legally required to protect your money. A company offering one element such as 'hotel only' does not have to offer protection. In this case, where no protection is in place, you would be wise to book with a credit card.

Beware of 'split contract' bookings where a travel agent sells you a package holiday, but splits the invoice so that you pay for the flight separately to the hotel, which can leave you without protection.

There is a similar lack of financial protection provided by low-cost airlines such as EasyJet and Ryanair where you can book a hotel or rent a car to go with your flights. This might feel like a 'package' holiday, but it is not and you are not covered under the bonding laws. If one of these companies goes out of business, you risk losing your money.

Always Book by Credit Card!

The safest way to get protection when booking travel arrangements is to use your credit card. As long as the transaction bears the name of the company you are booking with, say the airline, your credit card issuer should refund any losses. The disadvantage here is that some companies, such as EasyJet charge extra if you book by credit card, and try to persuade you to use a charge card or debit card, which will remove your protection.

Bonding Organisations

Below are the organisations that run the main official bonding schemes. Companies can fraudulently use their logos so if you want to be sure you are covered you should check directly that the operator or agent is a current member.

Association of British Travel Agents (ABTA)
ABTA is the UK's Premier Trade Association for Tour Operators and Travel Agents. ABTA has over 1000 tour operators and over 6000 travel agency members in the UK who are responsible for around 85% of the holidays sold in the UK.

All ABTA's members must protect their customers' money either through their own bonding scheme or alternatively through ATOL, AITO, PSA or the Federation of Tour Operators (www.fto.co.uk), which organises the bonds for several of the biggest companies.

If you have booked your holiday through an ABTA regulated tour operator or travel agent and they go bust whilst you are on holiday, you will be able to continue as originally planned, and ABTA will ensure you get back home. If you haven't already started your holiday, you'll get your money back or be given help to make alternative arrangements for the holiday to proceed. Many ABTA tour operators also provide bonds to the Civil Aviation Authority under the ATOL scheme.

You may lose your money if an ABTA travel agent makes a booking for you with an unbonded company that goes out of business. Your travel agent should warn you of this before you book.

To check ABTA member status or for more information visit www.abta.com.

Air Travel Organisers' Licensing (ATOL)
The CAA's ATOL scheme is the largest bonding and licensing system, protects all package holidays that include a flight, plus many flight-only deals.

ATOL protects you from losing your money or being stranded abroad by carrying out checks on the tour operators and travel organisers it licenses, who may have an ATOL license themselves or act for an ATOL holder, and taking a financial guarantee called a bond, which is lodged with them.

You are protected if an ATOL licensed agent or operator goes out of business before you fly when ATOL will make a refund to you generally within 4 weeks. If you are abroad, they will arrange for you to finish your holiday and then fly you home. The following are protected:

  • Package deals, discounted, charter and scheduled flights booked through a company that holds a current ATOL license.
  • Bookings where you are given an official ATOL receipt for your payment.
You are not protected on any booking made directly with a scheduled airline or via a travel agent where you are given an airline ticket instead of an ATOL receipt.

To check if the company you have booked with is ATOL registered go to The ATOL website where you can enter either the registration number or the company name.

Association of Independent Tour Operators (AITO)
AITO bonds all holidays offered by its members that are not covered by the ATOL scheme. To check AITO member status or for more information visit www.aito.co.uk.

Passenger Shipping Association (PSA)
The PSA represents cruise and ferry tour operators and you are protected on some package holidays offered by PSA members that do not include a flight. Many PSA members also hold bonds with other organisations such as ATOL.

Travel Trust Association (TTA)
The TTA has around 500 members that protect clients' money, whether or not it is a package holiday, through trust funds which the TTA ensures are properly run and regularly monitored. The TTA also makes up any shortfall of up to £11,000 per passenger.

Scheduled Airlines
Scheduled airlines are not normally bonded and if you are concerned you should consider taking out insurance against the failure of the airline, or at the very least booking by credit card.

Other Organisations Offering Protection
The Association of Bonded Travel Organisers Trust providing mainly coach holiday protection.Bonded Coach Holidays: www.bondedcoachholidays.co.uk
Yacht Charter Association: www.yca.co.uk

And Finally... Scams!

Holidays should present the opportunity to relax and enjoy the sun but there are plenty of scammers working the travel market who will take your money and leave you high and dry.

www.SafeFromScams.co.uk has a number of articles to help alert you to Travel Scams. Three common ones we discuss and offer preventative advice on are: Holiday Club Scam, Holiday Scams, and the Timeshare Property Scam.

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Share Your Story, Join the Discussion or Seek Advice..
[Add a Comment]
I am thinking of booking a tour of India with Compass India Inc. As they are an Indian company, is there any protection similar to ABTA ot ATOL that would apply? Thanks
SQ - 19-Sep-14 @ 8:38 PM
@Cathy D. You'd have to check the actual insurance policy details to find that out. Without seeing it we cannot help, sorry.
SafeTravel - 3-Jul-14 @ 10:38 AM
I was added on to an holiday booking my name is on the invoice as well as the lady who booked the holiday would I be covered by holiday insurance which is also on the invoice
Cathy D - 1-Jul-14 @ 5:48 PM
has a travel company got the right to ask for more money a substancial amount to go back into a hotel that we did not want to be changed in the 1st place. taking in mind we travel Christmas day. We have got confermation saying the flight and acomaation were booked into the 1st hotel
ako - 19-Dec-13 @ 11:56 PM
I am thinking of booking a tour of India with Compass India Inc but I am a little concerned about how I will be protected as they are not a UK company and not ABTA bonded. What protection should I expect - is there an Indian equivalent to ABTA?
BJM - 24-Oct-13 @ 9:49 PM
PEGGY - 26-Sep-12 @ 5:09 PM
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