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Tens Of Thousands Lose Out After Budget Travel Firm Calls In Administrators

Tens of thousands of British holidaymakers face losing not only their holidays, but their money, after budget travel firm Lowcostholidays group went into administration this summer. When administrators were called in the travel company had 27,000 customers enjoying their holidays across the globe, and a further 110,000 customers booked for the peak summer months. Passengers were left unsure about what would happen with their holidays, but it has been revealed that the online travel company did not have an ATOL licence - meaning tens of thousands will not get their money back.

The 27,000 travellers who were on holiday when the announcement was made were able to return home on the flights that had already been paid for by the company. However, the thousands who were awaiting their departure will have to pay again for the holidays that they had booked.

One traveller spoke of neighbours in Magaluf being kicked out of their hotel after it was announced that Lowcostholidays had gone into administration. He said that the hotel owner was demanding that the travellers paid 700 euros if they wanted to stay. Another traveller reported having saved “every penny for ages” to go on holiday, booking only three days before the company went bust.

Travellers will not get their money back because Lowcostholidays is not part of the ATOL scheme. ATOL refunds travellers from the UK when British travel companies go into administration. The budget travel company had turned over a total of £500 million last year after moving into new headquarters in Palma, Majorca in 2013. It’s believed that the travel group had lodged a bond of 50,000€ - but the total bill has run into the millions.

‘Check your policy and contact the debit or credit card company’

Affected travellers will now be left to fight for their money back through their travel insurance, Spanish travel authorities or their credit card. ABTA, an association that provides expert travel advice and guidance, warned travellers to check with the the airlines they were travelling with, and their accommodation suppliers before travelling as they may also not have been paid.

A spokesperson from ABTA said: ‘Lowcostholidays are not a member of ABTA and they didn’t hold an ATOL licence. Most standard travel insurance policies do not include travel organiser failure. Check your policy and contact the debit or credit card company if that is how you paid. If in any doubt, contact your local Citizens Advice or Trading Standards Department.’

Administrators Smith&Williamson LLP and CMB Partners had attempted to rescue the business earlier this year, but attempts failed and the company went into liquidation. The reason behind the failure of the company was put down to increased competition, issues surrounding Brexit and increased terror threats in destinations including Tunisia and Egypt. One company spokesperson said that the EU referendum brought great uncertainty in the company as many holidaymakers delayed decisions to book holidays abroad. This was then compounded with the final Leave vote and the sudden drop of the pound.

Administrators said: “Customers must go to www.lowcostholidays.com for further information about their position, including details of how to submit their claims in writing. These claims will be dealt with in due course.

The results of this scandal are incredibly damaging for business, and will be complicated to deal with. If your business is facing financial difficulty, contact us today.

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Thursday, 23 February 2017
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