Two of the UK’s largest online travel agents, On the Beach and Love Holidays, have left the Association of British Travel Agents (Abta), following disputes over customer refunds.
The move means thousands of customers who had complained to Abta no longer have access to support through its arbitration scheme.
Both companies refused to refund customers’ flights after holidays were cancelled when the UK Foreign Office advised against all but essential travel to Spain at the end of July. The refusal to comply with Abta’s rules prompted the association to issue a statement in mid-August confirming that companies were obliged to issue refunds when the FCO warns against travel, despite the challenges of the coronavirus crisis.
On the Beach and Love Holidays – which are licensed to carry 1.2 million and 1.1 million passengers a year respectively – had agreed to refund accommodation and transfer costs but refused to accept responsibility for flights that continued to operate despite the FCO advice.
In a statement about its decision to quit the association, On the Beach said it was “unable to align with Abta’s position on blanket full refunds in the wake of the Covid-19 pandemic”. It added: “We have a process in place to assess all cancellation requests on a case-by-case basis to establish to what extent their holiday is impacted by FCO advice, with refunds processed accordingly.”
LoveHolidays said the Package Holiday Regulations (PTR), which obliged companies to issue a refund within 14 days, were not fit for the current crisis: “The current package travel legislation was never designed to deal with disruption on the scale we have seen since March 2020.”
Membership of Abta is not mandatory for UK travel firms, and businesses can choose to leave at any time. But a spokesperson for Abta said being part of the association was “a way of showing customers you are trustworthy”. Both companies have already faced a backlash from angry customers on Twitter, many of whom had turned to Abta for help in trying to obtain refunds.
Research released this week by Which? revealed that no UK airlines have been fined for breaking consumer law on delays, cancellations and refunds in 17 years. It also found that since 2003 the Civil Aviation Authority (CAA) has only made one application to the courts to force an airline to comply with the law. Which? is now calling for the CAA to be given powers to fine airlines, after what it calls “six months of blatant disregard of the law on refunds for cancelled flights during the pandemic”.
Rory Boland, editor of Which? Travel, said consumer confidence in booking a holiday was at an all-time low: “[On the Beach and Love Holidays] will be retaining some money now. But in the long term the lack of confidence in the protection a package holiday offers will be severely diminished.”
The news comes in the same week that Tui agreed to pay all refunds for trips cancelled due to coronavirus by the end of September, after the Competition and Markets Authority (CMA) received thousands of complaints from customers who had waited weeks for refunds. Abta called on the government to relax the PTR in March arguing that they were not designed to cope with cancellations of the scale caused by coronavirus but the rules remain unchanged.
