COVID-19 cancellations: package holidays

The CMA investigated suspected breaches of consumer protection law in the package holiday sector.

From:
Competition and Markets Authority
Published
10 July 2020
Last updated
28 February 2022 — See all updates
Case type:
Consumer enforcement
Case state:
Closed
Market sector:
Recreation and leisure
Outcome:
Consumer enforcement - undertakings
Opened:
7 July 2020
Closed:
9 March 2022

CMA open letter to package travel sector

13 May 2021: The Competition and Markets Authority (CMA) has published an open letter to all package holiday companies to remind firms of their legal obligations and the need to ensure refund options are clear and accessible.

A copy of this letter will also be sent directly to 100 package travel companies that we have received the most complaints about. The CMA is not disclosing the identities of the businesses it has issued letters to.

Update on enforcement action

Teletext Holidays is the trading name of Truly Travel Limited. Truly Travel Limited and Alpha Holidays Limited (which trades as Alpharooms.com) are both owned by Truly Holdings Limited, and are all covered by this action.

High Court hands down judgment in Truly Holdings case

28 February 2022: The High Court handed down judgment granting the CMA’s application for declarations that Teletext Holidays and Alpharooms.com breached the Package Travel and Linked Travel Arrangements Regulations 2018 (‘PTRs’).

The High Court made a declaration that:

“Between 17 March 2020 and 1 December 2021 Truly Travel Limited and Alpha Holidays Limited each failed to pay refunds to travellers following the termination of package travel contracts as required by The Package Travel and Linked Travel Arrangements Regulations (SI 2018/634).”

The CMA sought the declaration from the High Court in this case to highlight the importance of travel firms respecting consumers’ refund rights. The CMA wants to ensure that people can book package holidays with confidence, knowing that their legal rights will be respected if their holiday is cancelled due to unavoidable circumstances outside their control.

As both Truly Travel Limited and Alpha Holidays are in liquidation, neither party participated in the hearing and the ruling was made on the basis of the written material submitted to the Court.

On 2 December 2021: Teletext Holidays and Alpharooms.com entered into voluntary liquidation. To enable the liquidation to progress without interference, the CMA has agreed that its court action, should be stayed – temporarily paused – pending the outcome of the liquidation process with the exception of the CMA’s request for a declaration as to whether Teletext Holidays and Alpharooms.com breached the Package Travel and Linked Travel Arrangements Regulations 2018.

The CMA considers that it is important to continue with its claim for a declaration in order to provide further certainty to people still waiting for refunds for cancelled package holidays. A declaration from the Court may also make it easier for people to obtain refunds in future if their package holiday is cancelled by other providers due to the COVID-19 pandemic and will emphasise to businesses in the sector the importance of complying with their refund obligations.

The Court has ordered that the CMA’s claim for a declaration shall be listed for a hearing on the first open date after 11 January 2021.

What should I do if I’m awaiting for a refund?

Refunds due to package holiday customers are being dealt with by the Travel Trust Association. For further information customers of Teletext Holidays should contact www.ttatravel.co.uk and customers of Alpharooms.com should contact Alphaholidays (traveltrust.co.uk).

18 October 2021: The CMA has filed proceedings against Teletext Holidays.

On 26 May 2021, the CMA announced that Teletext Holidays, had signed undertakings committing to address failures to properly refund package holiday customers for holidays cancelled during the pandemic.

However, the CMA does not consider that enough has been done to ensure that Teletext is able to provide refunds to package holiday customers with outstanding claims or done enough to make sure that it pays all refunds that may in future become due within 14 days, as required by law.

The CMA has therefore filed proceedings requesting that the Court order that outstanding refunds be immediately repaid and that in the future, customers who are entitled to a refund are repaid in the timeframe specified by law with appropriate processes put in place to ensure future compliance. As the CMA is alleging that consumer harm is continuing and that Teletext is in breach of the law, the CMA is seeking that the claim be expedited.

Teletext Holidays is the trading name of Truly Travel Limited. Truly Travel Limited and Alpha Holidays Limited (which trades as Alpharooms.com) are both owned by Truly Holdings Limited, and are both covered by this action.

16 September 2021: The CMA has notified Teletext that unless it takes urgent action to improve how it handles refunds to package holiday customers the CMA will commence court action.

On 26 May 2021, the CMA announced that Teletext Holidays, had signed undertakings committing to address failures to properly refund package holiday customers for holidays cancelled during the pandemic.

The CMA does not consider that enough has been done to ensure that Teletext is able to provide refunds to package holiday customers with outstanding claims or done enough to make sure that it pays all refunds that may in future become due within 14 days, as required by law.

The CMA has therefore written to notify Truly Holdings that it will take court action unless the firm takes immediate steps to rectify the situation and to ensure that, in the future, customers who are entitled to a refund are repaid in the timeframe specified by law.

Teletext to pay back over £7 million for all outstanding refunds for package holidays

Teletext Holidays is the trading name of Truly Travel Limited. Truly Travel Limited and Alpha Holidays Limited (which trades as Alpharooms.com) are both owned by Truly Holdings Limited, and are both covered by this action.

26 May 2021: Truly Holdings Ltd, the company that operates Teletext Holidays and Alpharooms.com (Alpharooms), has signed formal commitments, known as undertakings, that ensure that all customers it accepts are owed a refund for cancelled package holidays will get their money back. This includes a repayment schedule that prioritises refunds to customers with the longest-standing claims.

Customers waiting for their money back should visit www.teletextholidays.co.uk or www.alpharooms.com from 28 May, where there will be dedicated pages explaining the process regarding refunds and a webform enabling customers to request a cash refund. In addition, Teletext Holidays and Alpharooms package holiday customers who have not received cash refunds but who have Refund Credit Notes for their cancelled trips, which have not expired or been redeemed, should receive an email from the company shortly, asking them to confirm whether they want a refund.

The CMA opened an investigation into Truly Holdings Ltd, which operates Teletext Holidays and Alpharooms.com, on 4 February.

On 30 April, the CMA informed Truly Holdings Ltd that it was preparing to take court action against the firm.

Truly Holdings Ltd has now signed undertakings that ensure that allcustomers with cancelled package holidays it accepts are owed refunds will get their money back within agreed deadlines.

Having carefully reviewed Truly Holdings Ltd’s financial information and how quickly it can realistically make the repayments, the CMA has accepted its commitment to pay back all customers owed refunds by 31 August 2021 at the latest.

Truly Holdings Ltd has agreed to a schedule of repayments, where customers with bookings cancelled:

  • on or before 31 July 2020 will be refunded by 30 June 2021
  • between 1 August 2020 and 31 October 2020 will be refunded by 31 July 2021
  • between 1 November 2020 and 24 May 2021 (inclusive) will be refunded by 31 August 2021

For package holidays cancelled from 25 May 2021 onwards, where customers are entitled to a full refund under the Package Travel and Linked Travel Arrangements Regulations 2018, Truly Holdings Ltd has also committed to pay customers full refunds within 14 days of cancellation.

The CMA will monitor Truly Holdings Ltd adherence with its undertakings. Therefore, it will report regularly to the CMA over the coming months on the time it has taken to refund customers.

Undertakings from TUI UK

13 May 2021: TUI UK has committed to the Competition and Markets Authority (CMA) to give clearer information about refunds upfront to customers whose holidays have been cancelled due to the pandemic

TUI UK have already taken steps to meet the concerns previously expressed by the CMA by improving the information it provides to customers and making it easier for people to get their money back.

These commitments apply to all of TUI UK’s different businesses that offer package holidays, including First Choice, First Choice Holidays, Marella Cruises, Crystal Ski, Crystal, TUI Scene, TUI Lakes and Mountains and Skytours.

CMA issues Teletext with letter before claim

Teletext Holidays is the trading name of Truly Travel Limited. Truly Travel Limited and Alpha Holidays Limited, trading as Alpharooms.com, are owned by Truly Holdings Limited, and are both covered by this action.

30 April 2021: The CMA has notified Truly Holdings Limited trading as Teletext Holidays and Alphrooms.com that unless it commits to paying customers entitled to a refund for their cancelled package holidays, and agrees to comply with the Package Travel Regulations 2018 (PTRs) going forward, the CMA will commence court action.

The CMA wrote to Truly Holdings Ltd on 24 March 2021 setting out in detail its concerns. To avoid taking court action, the CMA sought a formal commitment from the company, by way of undertakings, to refund consumers due a refund under the PTRs.

Truly Holdings has not agreed to provide undertakings that are sufficient to address the CMA’s concerns.

The CMA has now informed Truly Holdings Limited that it is preparing to take court action and will launch proceedings if it does not repay the outstanding refunds or commit to doing so, without unnecessary delay.

Teletext update

24 March 2021: An investigation by the Competition and Markets Authority (CMA) has identified that Teletext Holidays failed to refund many of its customers for package holidays cancelled due to the pandemic.

The CMA has now written to Teletext to set out its concerns that the company has not refunded many of its customers in accordance with its obligations under the Package Travel Regulations. The CMA has also set out its expectations regarding how the company should now comply with its obligations.

Teletext now has the opportunity to address the CMA’s detailed concerns and avoid any potential court action by signing formal commitments – known as ‘undertakings’ – to refund the affected consumers as soon as possible and take steps to ensure it complies with the Package Travel Regulations going forward.

Teletext Holidays is the trading name of Truly Travel Limited, which is a subsidiary of Truly Holdings Limited. The CMA’s investigation has included Alpha Holidays Limited, trading as Alpharooms.com, which is also a subsidiary of Truly Holdings Limited.

Lastminute.com has now paid back £1 million in outstanding refunds for package holidays

26 February 2021: The CMA warned Lastminute.com that it would take it to court if it failed to refund customers, as promised.

Lastminute.com has now paid back a further £1 million in outstanding refunds to thousands of customers whose package holidays were cancelled, in line with the commitments that it gave to the CMA.

This means that, in total, Lastminute.com has issued over £7 million in refunds due to action taken by the CMA.

Any customers who are still awaiting refunds for package holidays cancelled because of the pandemic should contact Lastminute.com using the dedicated form which is published on Lastminute.com’s website.

CMA issues Lastminute.com with letter before action

12 February 2021: Lastminute.com has not complied with the undertakings it gave to the CMA by failing to pay customers entitled to a refund for their cancelled package holidays by the deadlines agreed, in breach of the Package Travel Regulations 2018.

On 1 December 2020, the CMA announced that Lastminute.com had signed formal undertakings which committed it to pay out refunds to customers whose package holidays were cancelled on or before 2 December 2020 due to the pandemic. Those eligible were due to get their money back by 31 January 2021 at the latest.

The company had also accepted ongoing commitments to pay all customers entitled to a refund within 14 days of their package holiday being cancelled on or after 3 December 2020.

The CMA has today informed Lastminute.com that it will take court action if it does not repay the outstanding refunds within 7 days. To avoid court action, Lastminute.com must also ensure that customers who book their package holidays from now on will receive a full refund within 14 days where they are legally entitled to their money back following the cancellation of their package holiday.

Investigation into Teletext Holidays

4 February 2021: The Competition and Markets Authority (CMA) has opened an investigation into Teletext Holidays as part of its work on consumer protection law in the package holiday sector.

The CMA will now engage with Teletext Holidays to gather evidence on whether the company has broken consumer protection law. The CMA is at the initial stage of its investigation. Accordingly, it should not be assumed that any business under investigation has broken consumer protection law.

Undertakings from We Love Holidays

15 December 2020: We Love Holidays has committed to the Competition and Markets Authority (CMA) to refund customers whose package holidays were cancelled due to the pandemic.

The CMA has been investigating We Love Holidays after receiving hundreds of complaints from people who have been waiting an unreasonable length of time to receive a refund.

We Love Holidays has engaged constructively with the CMA. Having carefully reviewed We Love Holidays’ financial information, and how quickly it can realistically repay customers, the CMA has accepted its commitment to repay over £18 million to 44,000 customers by the end of March 2021.

This is in line with We Love Holidays’ commitments to pay customers refunds by the following dates:

Refunds for accommodation and transfers

  • For holidays cancelled before 1 November 2020, customers will be paid by 31 December 2020.

  • For holidays cancelled between 1 November 2020 and 31 December 2020 (inclusive), customers will be paid by 31 January 2021.

  • For holidays cancelled between 1 January 2021 and 30 April 2021 (inclusive), customers will be paid within 14 days of cancellation.

Refunds for flights

  • For holidays cancelled before 24 August 2020, customers will be paid by 28 February 2021.

  • For holidays cancelled between 24 August 2020 and 31 October 2020 (inclusive), customers will be paid by 31 March 2021.

  • For holidays cancelled between 1 November 2020 and 31 March 2021 (inclusive), customers will be paid by 30 April 2021.

  • For holidays cancelled between 1 April 2021 and 30 April 2021 (inclusive), customers will be paid by 31 May 2021.

For holidays cancelled from 1 May 2021 onwards, where customers are entitled to a full refund under the Package Travel and Linked Travel Arrangements Regulations 2018, We Love Holidays has also committed to pay customers full refunds of all holiday costs within 14 days of cancellation.

The CMA wants to ensure that We Love Holidays adheres to its commitments. Therefore, We Love Holidays will report regularly to the CMA over the coming months on the time it has taken to refund customers.

Undertakings from Bravonext SA trading as Lastminute.com

1 December 2020: Bravonext SA trading as Lastminute.com has committed to the Competition and Markets Authority (CMA) to refund customers whose package holidays it cancelled due to the pandemic.

The CMA has been investigating Lastminute.com after receiving hundreds of complaints from people who have been waiting an unreasonable length of time before receiving a refund. Lastminute.com told the CMA that it was currently due to refund more than 9,000 customers.

Lastminute.com has engaged constructively with the CMA and has committed to ensure that these customers receive refunds by 31 January 2021 (with at least half of these paid by 16 December).

Lastminute.com has also agreed that anyone entitled to a refund for a holiday it cancels on or after 3 December will be paid within 14 days.

The CMA wants to ensure that Lastminute.com adheres to its commitments. Therefore, Lastminute.com will report regularly to the CMA over the coming months on the time it has taken to refund customers.

Undertakings from Virgin Holidays

12 October 2020: Virgin Holidays has committed to the Competition and Markets Authority (CMA) to refund all customers whose package holidays were cancelled due to the pandemic.

The CMA has been investigating Virgin Holidays after receiving hundreds of complaints from people who are having to wait an unreasonable length of time before they receive their refund. Virgin Holidays informed many customers that the wait could be up to 120 days. Since 1 March 2020 the company has received 53,000 refund requests.

Virgin Holidays has engaged constructively with the CMA and has committed to ensure that all of its customers receive their refunds without undue delay and by the following dates:

  • holidays cancelled before 1 September 2020 will be repaid by 30 October 2020
  • holidays cancelled from 1 September to 31 October 2020 will be repaid by 20 November 2020

The CMA wants to ensure that Virgin Holidays meets its obligation to pay refunds on time in the future. Therefore, Virgin Holidays will report regularly to the CMA over the coming year on the time it has taken to refund customers.

These commitments apply to all Virgin Holidays businesses that offer package holidays, including Virgin Holidays Cruises.

Undertakings from TUI UK

16 September 2020: TUI UK has committed to the CMA that customers awaiting their refunds for holidays that were cancelled due to coronavirus (COVID-19) will receive them by the end of the month.

The Competition and Markets Authority (CMA) has been investigating TUI UK after receiving thousands of complaints from people that they were not receiving refunds for their cancelled holidays within 14 days. Consumer protection law requires refunds within 14 days.

TUI UK has engaged constructively with the CMA throughout the investigation and while the vast majority of people have already received their refunds or rebooked during the CMA’s investigation, any outstanding refund requests for people who had their package holiday cancelled as a result of coronavirus will be paid by 30 September 2020.

Some customers may have accepted Refund Credit Notes. It is important they know they are entitled to a cash refund as an alternative. TUI UK has now given formal commitments to the CMA to contact customers who have an unused credit note, to let them know they can convert it to a refund, which will be paid within 14 days.

The CMA wants to ensure that TUI UK meets its obligation to pay refunds on time in the future. Therefore, TUI UK will report regularly to the CMA over the coming year on the time it has taken to refund customers.

These commitments apply to all of TUI UK’s different businesses that offer package holidays, including First Choice, First Choice Holidays, Marella Cruises, Crystal Ski, Crystal, TUI Scene, TUI Lakes & Mountains and Skytours.

Update on group travel

The CMA has written to certain companies specialising in package holidays for groups to explain its view on when consumers should be offered a refund. As is usual practice, the CMA will not be naming the companies in receipt of these letters.

It follows complaints about companies whose primary business is selling package travel to groups, such as:

  • schools
  • groups such as scouts and guides
  • amateur sports teams
  • university teams or societies
  • voluntary groups
  • social groups

The CMA has noted that, in several cases, businesses are claiming they are exempt from the Package Travel Regulations (PTRs) as the organisation that booked the trip is not a “Consumer”.

The CMA believes that this is generally incorrect. Regulation 2(1) sets out that the Regulations cover “any individual who is seeking to conclude a contract, or is entitled to travel on the basis of a contract concluded”. Furthermore, Article 12 (4) of the Package Travel Directive envisaged that payments may be made by third parties on behalf of the ultimate ‘traveller’.

The CMA takes the view that the PTRs are intended to protect consumers who have booked package holidays and should therefore be protected from losing money.

Investigation launch

Package holidays was named as one of several sectors being investigated by the Competition and Markets Authority (CMA) following reports of businesses failing to respect cancellation rights during the coronavirus pandemic.

The investigation was launched as a result of intelligence gathered by the CMA’s COVID-19 Taskforce, set up to monitor market developments and identify the major problems facing consumers as a result of the pandemic and the lockdown. The CMA has been receiving reports that businesses have not been respecting their customers’ statutory rights to a refund for package holidays that were cancelled by either party due to certain lockdown restrictions imposed by authorities in the UK and abroad.

The CMA also issued a statement on its views on consumer protection law in relation to cancellations and refunds during the current crisis.

If people have been affected by unfair cancellation terms in the wake of coronavirus, they can report them to the CMA using the CMA’s online form.

Read our letter to to all package holiday businesses

Published 10 July 2020
Last updated 28 February 2022 + show all updates

  1. Update on enforcement action.

  2. Update about Teletext Holidays and Alpharooms.com enforcement action published.

  3. New update on enforcement action.

  4. Truly Holdings Ltd, the company that operates Teletext Holidays and Alpharooms.com (Alpharooms), has been notified by the CMA that unless it takes urgent action to improve how it handles refunds to package holiday customers, the CMA will commence court action.

  5. Truly Holdings Ltd, the company that operates Teletext Holidays and Alpharooms.com (Alpharooms), has signed formal commitments, known as undertakings, that ensure that all customers it accepts are owed a refund for cancelled package holidays will get their money back. Undertakings published.

  6. Undertakings from TUI UK published.

  7. CMA issues Teletext with letter before claim.

  8. Teletext update published.

  9. Lastminute.com has now paid back a further £1 million in outstanding refunds for package holidays.

  10. CMA issues Lastminute.com with letter before action.

  11. Investigation launched into Teletext Holidays.

  12. Undertakings from We Love Holidays published.

  13. Undertakings from Lastminute.com published.

  14. Virgin Holidays has committed to the CMA to refund all customers whose package holidays were cancelled due to the pandemic. Undertakings published.

  15. Undertakings from TUI UK published.

  16. The CMA has written to certain companies specialising in package holidays for groups to explain its view on when consumers should be offered a refund.

  17. First published.

Contents