ATOL and ABTA protection gives holidaymakers reassurance they are not alone when things go wrong and anyone booking a trip is advised to ensure their operator is a member of either scheme, depending on the type of trip you are taking.
Yet as the compensation rules for cancelled package holidays could be set to change, research has shown that consumers often don't understand the current rules around their refund rights and entitlements to replacement holidays and flights, according to the Civil Aviation Authority, which oversees the ATOL scheme.
This is Money reported that the CAA noted that 'consumers lack knowledge of the key elements of ATOL protection,' especially around compensation when airlines fail.
Read more: Ryanair ordered to refund flight after customer refused to break Covid travel advice
So what are ATOL and ABTA, what do they both cover and why do you still need travel insurance?
All about ATOL
What is ATOL?
The ATOL scheme (which stands for Air Travel Organisers Licence) is a financial protection scheme that protects you when you book a package trip that includes a flight. The scheme was introduced in 1973, following a series of high-profile business failures, and ATOL now protects millions of travellers each year.
How does it work?
ATOL protection covers you before and during your trip. When you purchase a trip that is ATOL protected, you will receive an ATOL Certificate. It will show you who and what is covered, as well as provide guidance on what to do if your travel company stops trading as an ATOL holder. Every time you book a package holiday with a flight, you will pay £2.50 per traveller into a trust fund, which is used to repatriate, refund, or reimburse travellers if their travel operator ceases trading
What does it cover?
If a package holiday company goes bust during a trip, ATOL protection will help you to continue your trip by:
- Ensuring you can stay in your holiday accommodation, if possible
- Reimbursing you for any money you spent to replace ATOL protected parts of your trip, e.g car hire, transfers
- Arranging flights home, depending on the circumstances.
What's not always covered?
Some flight-only bookings: Your travel company should make it clear if your flight-only booking is ATOL protected before you book. If you book an ATOL protected flight, you will be sent an ATOL Certificate after making a payment. However, you will not receive a valid e-ticket in exchange for payment. If you purchase an airline ticket from an airline or travel company and you receive a valid e-ticket in exchange for payment, the ATOL scheme does not cover this.
Booking with a travel agent: Travel agents often sell trips on behalf of other companies. You may need to check which travel company originally created your package trip to see whether they are an ATOL holder.
What's never covered?
Accommodation-only bookings: Accommodation-only bookings are not ATOL protected as these do not include a flight.
Flight-only bookings: ATOL does not pay out for cancelled flights alone, only for airline travel as part of a package holiday.
All about ABTA
What is ABTA?
Protection from ABTA, or the Association of British Travel Agents, covers package holidays that don't include a flight. So if your trip includes travel by road, sea or train, that is where ABTA steps in. The organisation was founded in 1950, as the Association of British Travel Agents.
How does it work?
In addition to financial protection, ABTA members are also bound to comply with the ABTA code of conduct. Booking with an ABTA member also provides recourse should there be a problem or complaint with the travel company.
What is covered?
ABTA administers a scheme of financial protection for non-flight-based package holidays. All package holidays sold by ABTA members are financially protected if the company goes out of business. This means:
- If you haven’t yet travelled, you can claim a refund for the holiday
- If you’re already on holiday when the company goes bust, you can continue with your holiday as planned or, if you have to return early because of the company failure, you can claim for the parts of the holiday you missed
- If you haven’t yet travelled, you can claim a refund for the holiday
- If you’re already on holiday when the company goes bust, you can continue with your holiday as planned or, if you have to return early because of the company failure, you can claim for the parts of the holiday you missed
What might not be covered?
Short trips: ABTA says package holidays that are for less than 24 hours, or are for business travel, may not be protected.
Flight-only and accommodation only bookings: Although there's no legal requirement for ABTA members to reimburse you if something goes wrong, some travel operators will, so check what protection is in place before you buy.
What is not covered?
Package holidays including a flight: These are covered by ATOL
What is not covered by ATOL or ABTA?
A lot of things are not covered by either scheme, which is why you need travel insurance in place as soon as you book your trip to fill the gaps.
For example, if your luggage is lost or stolen, if you need medical treatment overseas, if you need to cancel a trip or if there are any delays that rack up extra costs for you, these will have to be claimed via your travel insurance.
DIY package holidays are also not covered by either scheme. If you have booked a flight by itself through a travel firm, that may be ATOL protected if the firm fails, but it depends on the circumstances.
You can get extra protection if you book travel or accommodation using a credit card, as Section 75 protection means your credit card firm can pay out for cancellations in certainn circumstances, although only works on amounts between £100 and £30,000, and the cancellation cannot be your fault.
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