One of Britain’s largest online travel agents has canceled its membership of the Association of British Travel Agents due to the association’s refund policy.
On the Beach resigned after ABTA set foot and reiterated its policy that members should offer full refunds if the Foreign and Commonwealth Office discourages all travel, except essential ones.
A spokesman for On the Beach said: “The travel industry faces unprecedented challenges and changes are inevitable as businesses and trade organizations adapt.
“OTB has been an ABTA member since 2004, but the current circumstances have led to difficult decisions and different legal interpretations of complex cases.”
Refund Rules: On the Beach has refused to offer refunds to Spanish holidaymakers who have not traveled to Spain after the UK government advised them not to
It said that as of last week, OTB and its subsidiary Sunshine.co.uk have informed ABTA that they will be canceling their membership.
Rory Boland, editor of which one? Travel denounced OTB for its stance on refunds and cautioned travelers against booking with operators refusing refunds.
He said: ‘Travel companies are facing a serious financial crisis, but they are also facing a crisis of confidence – and OTB’s actions will give confidence that it is possible to book a vacation without the risk of losing your money, only further reduce.
Anyone who has canceled their hotel as part of a package holiday will have a full-cost refund under the Package Travel Scheme, but vacationers who decide not to travel because of government advice may struggle to get their money back.
‘We currently advise against anyone booking a holiday with a tour operator that refuses to grant refunds to customers in these circumstances, and we encourage people who are struggling to get a refund not to take no for an answer. accept.
“If enough customers join us and tell On the Beach that its approach is unacceptable, the company could be forced to reconsider and pay to those who owe money.”
We currently do not recommend anyone to book a holiday with a tour operator that refuses to grant refunds to customers in these circumstances and we encourage those who are struggling to get a refund not to take no for an answer.
Rory Boland, editor of which one? To travel
The OTB spokesperson added that both Sunshine.co.uk and OTB travelers are still financially protected by OTB’s ATOL scheme and the foreclosed trust account.
In a trading update in April, OTB said: ‘OTB is also the only publicly traded UK travel company operating a fully ring-fenced customer account that holds customer funds up to the point of travel.
Therefore, unlike most online travel agents, tour operators and airlines, the Group does not rely on cash received for advance bookings to trade.
“Funds received for holidays canceled due to an airspace closure can be reimbursed to customers in cash with a limited impact on the Group’s working capital.”
An OTB spokesperson went on to explain: ‘For non-flight bookings, we have replaced ABTA protection with an insurance policy arranged by International Passenger Protection Limited.
What is the difference between ATOL and ABTA?
ATOL is the UK’s financial protection scheme for all package holidays including flights.
A spokesperson for On the Beach (OTB) said, “The ATOL protection program provides financial protection and peace of mind when you need it most, which is why it is such a priority here at OTB.”
ABTA is now a travel organization. Membership is not mandatory for people in the travel industry, so travel agents are free to cancel their membership at will.
An OTB spokesperson explains: “They have drawn up their own specific code of conduct and guidelines, but they are not regulators.
“Membership is optional and many well-known companies in the travel industry are not members of ABTA.”
“IPP is the global leader in providing financial failure products to the travel industry.
“The policy offers the same level of cover as the ABTA protection.”
Last month, it was reported that OTB refused to offer refunds to vacationers because they were going to Spain a refund after FCO advice changed and travel advice discouraged.
A travel insider said OTB’s hand could have been forced by airlines like Ryanair, which offers no refunds if flights are still operating.
Ryanair says on its website: “Once a Ryanair flight is operational and has no delay of more than two hours, it is not possible to get a refund. All Ryanair flights are changeable, but they cannot be canceled. ‘
An OTB spokesperson explained: ‘It is [ABTA’s] cancellation and refund guidelines no longer reflect the current Covid-19 environment in which we and other travel companies operate. ‘
Commenting on OTB’s resignation as a member, an ABTA spokesperson said: “ We are sorry that OTB has resigned as a member of ABTA following ongoing discussions about refunds to customers when the Foreign Office’s advice changes to all, or all, except recommend essential travel to a destination.
“We recognize that the widespread imposition of travel advisories puts many ABTA members under tremendous pressure on refunds.
But ABTA has consistently maintained that the underlying obligation to refund remains, as does the long-standing practice of the travel industry, and this hasn’t changed as a result of Covid-19. ABTA considers this important in order to create consumer confidence in the package travel market. ‘
In May, OTB raised £ 67 million by issuing shares worth about 20 percent of its share capital to bolster its balance sheet to cope with the impact of Covid-19.
The news of the resignation of ABTA membership comes after it has been reported that many furious OTB customers are taking the package travel website to small claims court for refusing to fully refund travel.
Boland added: ‘This situation has been partly caused by airlines continuing to refuse refunds, regardless of FCO’s advice.
‘Which? has called on the government to provide support to holiday operators or airlines struggling with the coronavirus pandemic – but this support should only be available to companies willing to do the right thing and pay refunds to customers unable to travel due to government advice. ‘
The Competition and Markets Authority has also launched an investigation into her refusal to offer her and ABTA refunds.
In July, the CMA wrote to travel agents to warn them against misleading customers and delaying refunds.
This month, ABTA conducted a survey of its members that found that 39,000 jobs have been lost or endangered in the outbound travel industry since the Covid-19 crisis began.
This figure jumps up to 90,000 affected people when the supply chains to the travel industry are included.
On the Beach shares are up nearly 3 percent today to 286.5p.
How does Covid-19 affect ABTA’s code of conduct?
As a result of the impact of Covid-19, some deadlines for ABTA’s code of conduct have been relaxed.
For example, ABTA members now have an extended 56-day window to respond to customer correspondence instead of the required 28 days, which is likely why so many travelers are delayed after their refund complaints.
ABTA also emphasizes on its website: ‘If a client is currently submitting an arbitration claim under the ABTA scheme, members can request a period of 56 days to file a defense, and it can take 56 days for a reward to be paid.
As for refunds to customers for canceled vacations, due to exceptional circumstances and the number of cases, the Code’s time limit is currently suspended.
“We ask members to issue refunds without undue delay, but accept that there are currently unavoidable delays.”
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