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Refunds, Rebooking and our Coronavirus Response

Thu, 07 May 2020

The travel industry has a pretty good history of weathering storms and managing the adversities thrown at it by wars, ash clouds and tsunamis, terrorism, drone attacks, accidents, airline failures and periodic outbreaks of disease in our destinations. However, even for those of us who have been working in the industry for more decades than we care to remember, the scale of the events and uncertainty surrounding the Coronavirus is of a scale that none of us has contemplated, never mind seen before; a complete shutdown of travel services, closures of borders, and the greatest restrictions to personal freedom seen outside of wartime.

Our company alone has had customers stranded in destinations from Tenerife to New Zealand to the Caribbean. Returning these travellers to the UK and keeping everyone informed of events so far as was possible was a significant effort. Half of the company’s staff were involved, across our operations, product management, tour leaders and sales departments, and with many individuals on call, monitoring and responding to developments as they happened.

As a tour operator we are currently operating no holidays, and at the time of writing, don’t expect to be doing so until at least June. 

Everyone who books a package holiday benefits from a high level of financial protection for the money which pays for their holidays. Usually, this is protected between a customer paying their deposit and returning home at the end of their holiday. More recently, we’ve needed to ensure that this protection is maintained between a holiday being cancelled and the monies being transferred to a later holiday booking or being refunded.

In 2018, the rules governing package holidays changed to require any refunds being made within 14 days of the cancellation of a holiday and, in normal business circumstances, this is not an unreasonable or unachievable obligation. However, the scale of the travel shutdown, particularly since the ban on all non-essential travel to anywhere in the world from the 17 March, has caused significant difficulties in companies’ abilities to refund within the 14 days required by the law.

In the months before a holiday is due to take place, tour operators need to make payments to the organisations which provide the holidays arrangements, principally airlines, but also hotels, transport companies, ground handlers and others. As these organisation struggle to understand and cope with the crisis engulfing their businesses, refunds to us are delayed, offered as credits or simply declined.

To cope with the combined situation of needing to financially protect customers monies and manage the constricted flows of cash across the supply chain, ABTA championed the concept of the Refund Credit Note which provides the continuity of financial protection whilst recognising the customers’ legal right to a cash refund.

These Refund Credit Notes are effectively a financially protected IOU from us, the tour operator to the customer and allows holiday money to be protected between the cancellation of the holiday and its allocation to a new financially protected package holiday or an eventual refund.

In the weeks following the shutdown, it has just been impossible for us, and most of our tour operator competitors, to meet our obligations to refund within 14 days. We recognise the concern and frustration that this has caused many of our customers in recent weeks.

We have now provided all customers with cancelled holidays with a Refund Credit Note, which gives everyone some breathing space. Many customers have used them to rebook their holidays for the end of 2020 or into 2021. Others haven’t yet decided what they want to do. Others have asked to exchange them for a refund as soon as possible.

Our Refund Credit Notes have an expiry date, early versions are set to expire on 31 July 2020. As we have renewed our financial protection for another year, more recently issued Credit Notes have an expiry date of 31 March 2021. Anyone with an early expiring Refund Credit Note can exchange it for a replacement on request.

These expiry dates aren’t a target for when we expect to be able to return money to our customers seeking refunds; we aim to provide these to those seeking them without undue delay. In the last week we have processed refunds totalling over £100,000.

We’re trying to be fair, and despite everyone working from laptops and mobile phones, we aim to deal with the problems that arise as fast as possible – we’re sorry if it’s taking a bit longer than we’d hoped. It is our intent that everyone who wishes to receive a cash refund will be able to do so. 

Looking to the future, our product teams are working hard to get as many 2021 walking holidays on sale as quickly as possible so we can be ready to resume holiday operations as soon as we can with holidays available to book when the restrictions lift and the planes are flying again.

The UK travel industry is the best in the world. We started back in 1946 as pioneers of worldwide travel in the post war years. We’re going to be around for a good while longer and will be taking you to where you want to go again as soon as we’re able.

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