Announcement of £4 billion industry ‘lifeline’ expected this week
A £4 billion travel industry ‘lifeline’ that would underwrite customer refund credit notes could be announced this week, according to reports.
The challenge of providing refunds for holidays that have been cancelled or delayed has become the most divisive issue in the sector during the Covid-19 pandemic.
Trade body Abta has been lobbying under its #SaveFutureTravel campaign for a change in the Package Travel Regulations (PTRs) to allow firms more time to refund and to make sure Refund Credit Notes carry the same weight of protection as the original package holidays.
But consumer anger has been mounting over firms refusing refunds or delaying processing refunds and the sector fears a wave of credit card chargebacks will lead to widespread company failures and job losses within weeks.
A counter #ItsRightToRefund campaign led by former Travel Republic managing director and VIVID Travel founder Kane Pirie supporting a limited grace period for refunds to July 31 but not a change in the law is gaining traction among consumers and some industry bosses.
Following reports of a stalemate in government after different departments disagreed about how to protect firms from failure while maintaining consumer rights, The Sunday Telegraph reports today that an announcement could be imminent.
The newspaper reported that proposals were being finalised over the weekend by transport secretary Grant Shapps, business secretary Alok Sharma and head of Atol Andy Cohen who, it was reported, has given the £4 billion lifeline “his blessing”.
The proposal would see credit notes being officially backed by government guarantee so that should companies that have issued them fail the consumer would get their money back.
The Sunday Telegraph said pleas from other sectors of business for special treatment could prove to be a sticking point, but an announcement is expected as early as this week.
Although the £4 billion scheme would not satisfy those who are demanding all customers receive a cash refund as stipulated under the PTRs, The Sunday Telegraph said it was hoped it would help enough consumers be persuaded to accept credit notes to take the pressure off the industry.
Club Med have issued the following statement:-
On the 17th March 2020 the Government advised against all non-essential travel overseas, initially for a period of 30 days. On the 4th April, it extended this advice for an indefinite period. Therefore, all overseas holidays are currently advised against and whilst it is impossible to predict when this situation will come to an end, we are doing everything we can to support our customers and ensure that their bookings remain both legally and financially protected.
In the coming days, please make note that a Refund Credit Note will be issued in respect to bookings affected by COVID-19, which is fully bonded, financially and legally protected by both ATOL and ABTA Bonding until the 31st of January 2021 and is evidence of customers’ right to a reimbursement after that date.
This Refund Credit Note allows for :
1- March and April departures, rebooking your holiday, including rebooking flights with the original airline, up to April 2021
2- May departures, rebooking your holiday, including rebooking flights with the original airline, up to 12 months after the original date of travel
3- Claiming a refund after the 31st of January 2021
4- An additional “up to £180 per adult and £90 per child”, if the new holiday is more expensive than the original is using the voucher to re book.
We still advise that if you can claim from your insurance company this is likely to be a quicker way of obtaining your money back should you not wish to rebook. If you need a letter to back up this claim from us please do let me know.
We completely understand this is maybe not news you want to hear and we have liaising with Club Med on a daily basis but they are stating that the they are following the latest ABTA guidelines in the absence of any Government intervention – https://www.abta.com/news/coronavirus-outbreak
The situation is still fluid and there are hopes that the Government may still provide a package to the travel industry as above but nothing has been clarified as of yet but refunds may come sooner than 31st January should things change. We also completely understand that you may not accept the above and it remains against the 2018 Package Travel Regulations. If you would like to pursue a refund sooner and the insurance route is not an option, please do forward a letter stating the reasons you are requesting a refund sooner than the proposed timeframe and we will of course forward to Club Med and do all we can to support and lobby on your behalf.