It’s the time of year that holiday companies are in full swing trying to sell you the holiday dream. But what should you do if your holiday company goes bust or your trip turns into a “sun, sea, and disappointment” saga.
You’ve counted down the days, bought a suitcase that could fit a small car, and memorised “two beers, please” in the local language. And then – disaster! Either your holiday company has gone bust or the so-called “five-star” resort turns out to be more ‘bin fire’ than ‘boutique’. Fear not, weary traveller. Even when paradise goes pear-shaped, the law is (usually) on your side.
Know your holiday rights and get a refund.
Here’s our definitive 11 point UK guide to surviving a holiday nightmare with your sanity – and possibly your money – intact.
1. When Your Holiday Company Goes Bust: Don’t Panic (Yet)
First things first: Check if you’re protected
The great gods of travel protection may still have your back. Here’s where to look:
- ATOL (Air Travel Organiser’s Licence): If you booked a package holiday (flights + accommodation) through a UK company, you’re probably covered by ATOL. This government-backed scheme means if the company folds before you travel, you get a full refund. If you’re already abroad sipping dubious cocktails, ATOL ensures you’ll be flown home without having to sell your kidney to pay for a new flight.
- ABTA (Association of British Travel Agents): Booked a package holiday (even without flights)? ABTA covers land and sea arrangements – think hotels, coaches, cruises. If your travel provider was ABTA-protected, you could either get a refund or alternative arrangements.
How to check?
Find your booking confirmation and look for the magic words “ATOL protected” or an ABTA logo. If you can’t find it, visit the ATOL or ABTA websites, which have search functions.
Hot Tip: Never assume you’re covered just because you booked through a big website – especially if you DIY’d flights and hotels separately.
What to do next?
- If you haven’t travelled yet:
- Contact ATOL/ABTA and apply for a refund.
- Don’t rebook anything until you’ve got confirmation (or you might end up doubling your losses).
- If you’re already away:
- Keep receipts for any extra costs you incur.
- ATOL/ABTA might tell you to stay in your hotel (it’s often pre-paid) or arrange alternative accommodation.
- If anyone demands payment to let you stay, call ATOL’s emergency helpline +44 (0) 333 103 6350 immediately.
2. No ATOL? No ABTA? Don’t pack up hope just yet.
If you booked without protection (say, directly with an airline and a hotel separately), you still have a few options:
- Credit card protection (Section 75 of the Consumer Credit Act 1974): If you paid £100 or more (even a deposit), and the company goes bust, your credit card company is equally liable. They must refund you.
- Debit card? Try a chargeback, request it through your bank within 120 days of the issue. It’s not a legal right, but many banks will try to claw back your cash.
- Travel insurance: Some comprehensive travel insurance policies cover “end supplier failure.” Dust off your policy documents and squint at the small print.
3. Holiday From Hell: When Paradise Looks Like Purgatory
Maybe the company didn’t fold, but you arrived to find the “luxurious spa” is a paddling pool and the “private beach” is a patch of gravel between two motorways. Deep breaths.
You have rights – and you should use them.
Was it a package holiday?
Package Travel and Linked Travel Arrangements Regulations 2018 (catchy, right?) protect holidaymakers in the UK. If your trip wasn’t as described, you can claim:
- A price reduction, or
- Compensation for ruined expectations.
But there’s a big condition: you must act promptly.
Step-by-step: How to complain while still on holiday
- Raise it immediately with the local rep or the hotel manager. Give them a chance to fix it – they may move you, upgrade you, or throw in extras.
- Be polite but firm. Yelling rarely helps (unless you want a free mojito and an apology note… written in crayon).
- Gather evidence:
- Take dated photos and video (the cracked pool, the mystery meat buffet, the ants’ nest in the bed… Argh!).
- Get names and details of staff you speak to.
- Keep receipts if you spend money trying to salvage the situation (like booking a decent hotel).
4. Complaining Formally: The Art Of The Grumpy Letter
Once you’re back, and you’ve emptied your suitcase of disappointment and laundry, it’s time to unleash the true British weapon; the strongly worded letter.
Here’s how to master it:
a. Start with the facts:
- Booking reference.
- Dates and locations.
- Brief (calm) summary of what went wrong.
b. Mention the law:
- Reference the Package Travel Regulations or any specific promises made in brochures/websites.
c. Show your evidence:
- Attach photos, receipts, and witness details.
d. State what you want:
- A refund?
- Compensation?
- An apology written in something more dignified than crayon?
e. Give a deadline:
- Politely say you expect a response within 14-28 days.
Send it by email AND recorded delivery for maximum drama (and proof).
5. If They Ignore You: Escalate With Gusto
- ABTA complaint process: If the company is a member and stonewalls you, ABTA can step in.
- Alternative Dispute Resolution (ADR): Many travel companies and airlines offer ADR. Although currently voluntary, it’s free/cheap and often quicker than court.
- Small Claims Court: For amounts under £10,000 (England/Wales). Filing fees apply, but you don’t need a solicitor. You just need evidence, patience, and a strong cup of tea.
6. A Note On “Acts Of God” (And Other Excuses)
Not every problem = compensation. If your hotel was hit by a hurricane, a biblical plague of locusts, or a local government shutdown the water supply, these are “extraordinary circumstances.” Generally, companies don’t have to pay up if it’s genuinely outside their control.
(Still, it doesn’t hurt to ask nicely. Companies sometimes offer goodwill gestures.)
7. DIY Holidays vs Packages: Know The Difference
| Package Holiday | DIY Holiday (you booked separately) | |
| Legal Protection | Very strong (Package Travel Regulations) | Very little |
| Refunds if company collapses | ATOL/ABTA covers you | Section 75 (credit card) might help |
| Ease of complaint | Clear procedures | Much trickier |
8. How to Holiday-Proof Your Future Travels
Future you will thank you if you:
- Book ATOL-protected packages where possible.
- Pay by credit card (never bank transfer).
- Get travel insurance the day you book – not just when you’re packing the flip-flops.
- Check reviews thoroughly (TripAdvisor, Trustpilot, etc.).
- Read the terms and conditions (yes, even if they’re longer than War and Peace).
9. Booked a DIY Holiday?
DIY travel gives you freedom – but also responsibilities. You’re your own tour operator, your own legal department, and sometimes your own emergency rescue service.
You picture yourself as a savvy world traveller, piecing together perfect flights, charming hotels, and Instagrammable excursions like a master of logistics. Fast-forward to reality: the airline goes bust, the hotel doesn’t exist, and your “luxury transfer” is a man called Dave with a rusty bike.
First, accept this cruel truth: you have fewer automatic protections than if you’d booked a package holiday.
10. Pro Tips for DIY Holidaymakers
- Credit cards are your best friend. Always use one for any travel bookings over £100.
- Comprehensive Travel Insurance: Look for policies that cover “Scheduled Airline Failure Insurance” (SAFI) and “End Supplier Failure” (ESF). It covers you if a hotel, airline, or tour provider collapses before or during your trip. Always check if ESFI is included as many budget policies don’t and buy travel insurance at the time of booking – not the day before you leave.
- Research like your life depends on it: Check reviews, Google Maps street views, and double-check company reputations before booking.
- Keep all booking confirmations and receipts neatly filed, because the one you lose is always the one you’ll desperately need.
- Book through reputable websites: Sites like Expedia, Booking.com, or Hotels.com often have their own guarantees or customer protection if something goes wrong.
11. If Your DIY Trip Is a Shambles (But the Company Still Exists)
- Complain directly to the individual provider (airline, hotel, etc.).
- Refer to their Terms and Conditions: Was what you booked described inaccurately? If so, you could claim under the Consumer Rights Act 2015 for “services not provided with reasonable care and skill.”
- Gather evidence: Photos, video, receipts, booking confirmations.
- Escalate complaints to regulatory bodies:
Airlines – CAA (Civil Aviation Authority) for UK flights.
Accommodation sites – Site mediation services or online reviews.
Small Claims Court – For larger disputes (up to £10,000).
Our Final Words of Wisdom
We hope it never happens to you, and holiday disasters feel horrible in the moment. But remember: You have strong consumer rights. Whether your travel company collapses faster than a dodgy beach lounger or your luxury villa turns out to be a mouldy shed, you don’t have to just suck it up.
With a bit of know-how (and maybe a good solicitor or two), you can claim refunds, get compensation, and maybe – just maybe – turn that horror story into a well-earned tale of triumph back at the pub.
After all, isn’t a good travel story almost as valuable as a tan?
Where to next?
• Holiday Competitions
• Don’t Forget Your Fingerprints: A Brit’s Guide to 2025 Travel
• Travel Shop