Travel Company Failure Protection: What UK Travellers Need to Know
When booking a holiday, it is easy to focus on destinations, hotels and flights. It is also worth checking what would happen if the travel company you booked with stopped trading. Travel company failure protection can help eligible travellers recover their money or continue their trip if a provider becomes insolvent.
What is travel company failure protection?
Travel company failure protection is a general term for arrangements that protect customers when a travel organiser or another travel provider cannot meet its financial obligations. The protection available depends on what you booked, who you booked with and how the holiday was put together.
In the UK, one of the best-known schemes is ATOL, which applies to many flight-based package holidays and certain flight bookings. Other package holidays may be protected under the Package Travel and Linked Travel Arrangements Regulations 2018. Some travel businesses also belong to trade associations that offer their own forms of financial protection.
How ATOL protection works
ATOL stands for Air Travel Organiser’s Licence. It is a financial protection scheme operated by the UK Civil Aviation Authority (CAA). If an ATOL-protected travel company fails, the scheme may help customers who have not yet travelled to obtain a refund. Travellers who are already away may be helped to complete their holiday and return home.
ATOL protection does not apply to every flight or holiday. Before paying, check whether the booking is covered and make sure you receive an ATOL Certificate. The certificate should identify the booking and explain which parts of the trip are protected. Keep it with your booking confirmation and other travel documents.
Protection for package holidays
A package holiday generally combines at least two different types of travel service—such as transport, accommodation or car hire—for the same trip, subject to the rules and circumstances of the booking. If a package organiser sells a package to you, it must provide insolvency protection under the relevant UK regulations.
The exact arrangements can vary. They may include an insurance policy, a bond or another approved financial guarantee. Ask the organiser how its protection works and what you should do if it stops trading. If you book services separately, you may not have the same package-holiday rights, although a linked travel arrangement can have some protections.
What about ABTA membership?
ABTA membership can provide useful standards, advice and complaint-resolution services. However, ABTA membership alone does not automatically mean every booking is financially protected. Check the specific protection that applies to your holiday, particularly if flights are not included.
Is travel insurance enough?
Travel insurance and travel company failure protection are different. Some travel insurance policies may cover financial failure, but this is not a standard benefit and exclusions can apply. Check the policy wording carefully, including which providers are covered, when the cover starts and whether you must contact the travel company or card provider first.
Travel insurance may also cover other risks, such as medical emergencies, cancellation for an insured reason or lost belongings. It should not be assumed to replace the legal or financial protection attached to a package booking.
Steps to protect your booking
- Check the company’s legal name and whether it has the relevant licence or protection arrangements.
- Ask what protection applies to each part of your booking, especially flights and accommodation.
- Read your ATOL Certificate or package-holiday documents and save copies somewhere accessible.
- Pay by credit card where appropriate. In some circumstances, payments made directly to a supplier on a credit card may qualify for protection under Section 75 of the Consumer Credit Act. Eligibility depends on the transaction and other conditions.
- Keep receipts, booking confirmations and messages from the travel company.
- Read your travel insurance policy for any specific cover relating to supplier or travel company failure.
If your travel company stops trading
Contact the relevant protection provider or scheme as soon as possible and follow its official instructions. If your trip includes flights, check the CAA’s guidance on ATOL claims. For a package holiday, contact the organiser’s stated protection provider. You can also speak to your card provider about whether a card dispute or statutory protection may apply.
Avoid making replacement bookings or cancelling arrangements before checking the official advice, as doing so could affect what you can claim. Keep records of any extra costs and communications.
Check before you book
Travel company failure protection can make a significant difference if a provider becomes insolvent, but the cover is not identical for every trip. Confirm who is responsible for your booking, what financial protection applies and how to use it. A few checks before paying can help you travel with greater confidence.
This article provides general information, not legal or financial advice. Protection depends on the booking and the rules or policy terms that apply. Check with the travel organiser, protection provider or relevant UK authority for guidance about a specific booking.
Understanding Your Protections: FAQs on Travel Company Insolvency and Holiday Security
- What protection do I have if my travel company goes bust?
- How can I check whether my holiday is ATOL-protected?
- Are package holidays protected if the travel company becomes insolvent?
- Does travel insurance cover travel company failure?
- What should I do if my travel company stops trading before or during my holiday?
What protection do I have if my travel company goes bust?
If your travel company goes bust, the protection available depends on what you booked. ATOL may protect eligible flight-based holidays, while package holidays must have insolvency protection under UK rules; check your ATOL Certificate or booking documents for details. If you booked flights, accommodation or other services separately, protection may be more limited and can depend on your travel insurance or how you paid. Contact the relevant protection provider or scheme for guidance, and keep your booking confirmations and receipts.
How can I check whether my holiday is ATOL-protected?
To check whether your holiday is ATOL-protected, ask your travel company and look for an ATOL Certificate, which should be sent when you book or pay. Check that it names the lead passenger and the travel company, and lists the holiday services covered. You can also verify the company’s ATOL status using the Civil Aviation Authority’s online ATOL holder search. Not every flight or holiday is protected, so check before booking and contact the CAA if you are unsure.
Are package holidays protected if the travel company becomes insolvent?
Yes. In the UK, package organisers must have insolvency protection in place. If the organiser becomes insolvent, this protection may provide a refund if you have not travelled or help you complete your trip and return home if you are already away. Flight-based packages are often protected by ATOL, while other packages may use a different financial protection arrangement. Check your booking documents, including any ATOL Certificate, to see what applies to your trip.
Does travel insurance cover travel company failure?
Travel insurance may cover travel company failure, but it is not included in every policy and exclusions can apply. Check the policy wording for “supplier failure” or “end-supplier failure” cover, including which companies are covered and what you need to do to make a claim. This cover is separate from protections such as ATOL or package-holiday financial protection, so check what applies to your booking before you travel.
What should I do if my travel company stops trading before or during my holiday?
If your travel company stops trading, check your booking documents to find out whether your trip is ATOL-protected or covered by another insolvency arrangement, then contact the relevant protection provider for instructions. If you are already abroad, contact the organiser’s emergency number or protection provider before making alternative arrangements, and keep receipts for any extra costs. You may also wish to contact your travel insurer and, where relevant, your card provider. Avoid cancelling or booking replacements until you have checked the official guidance, as this could affect your options.