The travel plans of almost 140,000 holidaymakers have been thrown into total chaos by the collapse of online travel agency Lowcostholidays on the eve of the peak holiday season.
Those hit include 27,000 people already abroad, and a further 110,000 who have booked but not travelled yet, according to administrator Smith and Williamson. Many flight bookings should still be honoured – it’s those with hotel bookings that will be hardest hit.
In statement on the Lowcosttravelgroup website the company says the move comes “following exhaustive attempts by the group’s directors to rescue the group,” blaming a “recent and ongoing turbulent financial environment””.
The collapse affects anyone who has booked with the Lowcosttravelgroup Ltd, Lowcostholidays Spain, Hoteling.com and Lowcostbeds.com A.G. brands. The group was based in Spain after moving from the UK in 2013.
Here we explain your rights if affected. This story broke late on Friday afternoon – this is the information we have currently but we’ll update this story when we know more, which is likely to be Monday.
I’m already on holiday with Lowcostholidays – what will happen to me?
Your flight rights. You should have your flight tickets which remain valid, according to the administrator.
Your hotel and other rights. You may be asked by your hotel, or any transfer or car parking companies you’ve used, to pay them locally – even if you’ve paid Lowcostholidays for this. Keep receipts in case you can claim back from your travel insurer or credit card firm.
Smith and Williamson says those who booked a combination of flight and hotel can also try to reclaim from Govern de les illes Balears (www.caib.es), the regulator of the Spanish travel agency.
I’ve booked with Lowcostholidays but not travelled yet – what will happen to me?
Your flight rights. The administrator says booking should still stand in most cases, as payment is usually made to airlines at the time you book so they hold your reservation. The problem comes if you haven’t received your flight confirmation details, in which case you should check with the airline directly.
Your hotel and other rights. Hotel reservations and any other services booked through the travel agent, such as transfers, will be cancelled without any refund.
Smith & Williamson says those who booked a combination of flight and hotel can also try to reclaim from Govern de les illes Balears (www.caib.es), the regulator of the Spanish travel agency. When we know more about this, we will update you on what you can do next.
Is it Atol- or Abta-protected?
Lowcostholidays has no Air Travel Organiser’s Licence (Atol) because in 2013 it moved its business to Spain.
Under the UK Civil Aviation Authority’s Atol protection scheme, if you book a flight with accommodation and/or car hire, or in some cases a flight on its own, with a UK travel firm, if the firm that organises your travel goes bust you can continue your holiday if abroad or get a refund if still in the UK. However this protection DOESN’T apply in this case.
Lowcostholidays isn’t a member of Abta, which represents British travel agents.
What if I paid on credit card or debit card? Can I get money back?
In some cases, you may be able to reclaim from your card company if you’ve lost any money, depending on which plastic you used.
Credit card payments. If what you bought costs £100 or more per person (even if you put just 1p of it on a credit card), under Section 75 of the Consumer Credit Act, credit card firms are jointly liable with retailers if something goes wrong – such as a firm going bust – so you should get a refund for non-refundable travel or accommodation. See our Section 75 guide for full info.
Debit card payments. Card issuers operate a chargeback scheme, where they get your cash back from the retailer’s bank if something goes wrong. This is not a legal requirement, but a customer service promise, but is worth trying. See our Chargeback guide for full info.
I have travel insurance. Am I covered?
If you’re out of pocket from the collapse then check your travel insurance policy as you may be able to make a claim.
However, be warned that many policies won’t cover you for the failure of a travel firm unless you have bought specific travel firm failure cover.
If you can claim, ensure you keep any receipts and paperwork to speed up the process.
I can’t get my money back. Is there anything else I can do?
An administrator’s job is to divide what is left of a collapsed company between those owed money.
Sadly, from our experience, customers tend to get left with very little from this process.
The collapse has led to fury among its affected customers.
@lewcommins tweeted: “Malia cancelled without money back because @lowcostholsie have gone bust, absolutely fuming”
@AhhDeeNo added: “I’m going away next Friday with #lowcostholidays anyone know what’s gonna happen? #bust”
What the administrator says
A statement on the website of administrator Smith & Williamson LLP says: “The failure will affect many customers who have purchased flights or holidays, some of whom are on holiday in resorts and some of whom have not travelled as yet. All flights as regards those currently in resorts have been paid for and hence customers will be able to fly home when their holidays are over.
“There are approximately 27,000 customers currently in resorts and 110,000 customers who have booked travel/holidays through the group who have not travelled as yet.
“”Unfortunately, as regards customers who have not travelled as yet a small number will have problems as regards their flights not having been paid for and many will have problems as regards their hotel rooms not having been paid for.””