On the 15th July, it was announced that the popular travel website Low Cost Holidays will no longer trade. The demise of the company is quietly being blamed on the result of the Brexit vote, whilst the official statement blames the ‘recent and ongoing turbulent financial environment’. The Low Cost Travel Group currently has around 27,000 customers on holiday and 110,000 waiting to go. 120 people in the UK also lost their jobs. Smith & Williamson and CMB Partners became administrators of the group. Smith & Williamson said that it was a combination of increased competition, the threat of terror and the referendum uncertainty which led to the closure.
Who were Low Cost Holidays?
Low Cost Holidays were a Spanish travel group, with headquarters in the UK and other offices in Poland, Spain and Switzerland. The group mostly sold hotel bookings through a wholesale group (Low Cost Beds) and retail (Low Cost Holidays). The customers affected by the closure are 60% British, but the group also sold holidays to consumers in Scandinavia and Europe.
The company was registered in Mallorca, with the Balearic Island authorities. Unfortunately, this meant that the company was not part of the ATOL protected scheme that many UK travel operators participate in- which means that Spanish authorities are responsible for any financial protection, even for British customers. Govern de les illes Balears is the Spanish regulator.
What happens now?
If you are already in resort and booked a flight/holiday combination:
If you’re already on holiday, you will already have your return flight tickets, and they remain valid. You may be asked by the hotel, car park providers or transfer services to pay them locally. If you do have to pay, you might be able to make a claim with the provider of your travel insurance. If you paid with a credit card, you may also be able to claim for services that you haven’t used. Make sure to keep a record of any expenses that you incur to claim a refund.
In resort, but only made a hotel booking:
You might be required by your hotel to pay locally, but you may be able to reclaim the money using the methods above. Once again, ensure that you have kept a record.
If you are due to travel and booked a flight/holiday combination:
If you booked a combination of flights and accommodation, your flights will be unaffected, as the payment that you made to Low Cost Holidays for the flight will have been transferred straight to the airline, in the majority of cases. If you have received your flight ticket, you can check in and travel as normal. If you haven’t received the ticket, contact the airline directly to find the status of your booking. If the airline says your booking isn’t valid, you will have to rebook and then reclaim costs through your insurance or credit card provider. Unfortunately, your hotel reservation will no longer be valid, as will transfers/other services booked through Low Cost Holidays- you will have to rebook and then claim for costs using the aforementioned method. Keep a record and register your claim by emailing lowcosttravelspain@smith.williamson.co.uk.
If you are due to travel with a hotel only booking:
Your hotel supplier will cancel the booking and you will have to rebook. Keep a record so that you can reclaim for expenses and also register the claim with lowcosttravelspain@smith.williamson.co.uk.
If you booked through Hoteling.com:
Bookings through this website will also be cancelled, meaning you will have to rebook and make a claim.
Why this happened- what the experts think:
A Business Correspondent for the BBC, Joe Lynam said that the mass holidays industry is a volatile business- often, money earned for future holidays is used to pay for people that are already in resort. Therefore, if there is a sudden dip in customers’ confidence, as there was leading up to the referendum, and the Pound crashes against the Euro, as it did, this can be enough to push such holiday companies over the edge.
Future Advice:
Always check that whoever you book your holiday with is ABTA/ATOL accredited. This means that you are protected financially, should anything happen. Where possible, book with a credit card, as this means you have more chance of getting your money back. Lastly, always keep a record of any expenses that you incur.
