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Thomas cook collapse: advice for stranded travellers

23 September, 2019 By Natali Mansberg The collapse of British travel agency Thomas Cook has left up to 600,000 travellers stranded and out of pocket. Labelled the ‘biggest collapse of a UK holiday package company,’ tourists have been reportedly locked out of hotel rooms and ‘held hostage’ by resorts as a consequence of the bankruptcy.

Natalie Ball director, Comparetravelinsurance.com.au says,

“It would be reasonable to say that for thousands of travellers, the Thomas Cook collapse would be nothing short of a catastrophe. While Thomas Cook customers currently abroad are scheduled to return home via replacement flights, those with future travel plans will no doubt be disappointed and frustrated by their abruptly cancelled holidays.”

Those stranded on holiday are advised not to panic, to speak with your airline or accommodation provider directly, and to hold onto receipts for any additional fees incurred as a result of the collapse.

Ball says, “There is still a lot of uncertainty in relation to the extent of the situation for Australians. Our advice in the immediate term for those directly affected would be to keep communication channels open with the relevant travel providers, keep any additional expenses to a minimum and hang on to your receipts.”

The collapse follows a series of travel provider bust-ups in recent years.

Last December, international accommodation site HotelQuickly ruined dozens of Christmas holidays by cancelling bookings in the last minute. Affected customers were offered vouchers as compensation which later turned out to be invalid. The same month travel company Bestjet collapsed, leaving hundreds of customers furious and out of pocket.

Travel agency busts-will travel insurance cover you?

You’ve booked and paid for your holiday package and your travel agent goes belly-up; your travel insurance has you covered right? Unlikely! Ball warns that travel insurance does not usually provide cover against insolvency or bankruptcy of a travel agent.

“The majority of travellers wrongly assume that travel insurance will reimburse you for loss of prepaid expenses regardless of the reason. However, there are only a few insurers that will cover you for the insolvency of a travel agent.”

“While most insurers don’t cover insolvency, you will find that some providers do offer some benefit in case of the financial default of an airline, tour operator or accommodation provider” notes Ball.

Thomas Cook ceased its Australian operations earlier this year, yet some Aussies are still likely to be affected. Particularly those amongst the British Expat community. As one of the world’s oldest and most high-profile travel brands, we’d anticipate a large number of Australians in or headed to Europe, to have internal flights booked with Thomas Cook airlines and accommodation stays booked at one of their resorts.

Thomas Cook’s British customers are protected by the government-run travel insurance program, which makes sure holidaymakers can get home if a British-based tour operator goes under while they are abroad.

For affected Australians, resolutions are not so clear. In the instance that you fail to receive a refund for your booked holiday, Ball recommends that affected travellers seek reimbursement through their credit card company or financial institution.

“Some banks allow a ‘chargeback’ if you pay for something on your credit card and don’t actually end up receiving the product or service. A chargeback from your credit card issuer gives you a refund when you’ve been wronged in a transaction and the retailer doesn’t provide a refund.”

There is only one travel insurer, SureSave that covers you if your travel agent goes bust, but there are a handful of providers that cover insolvency for other travel provider services. Learn more about cover for other travel services such as airlines, accommodation providers, event bookings and cruiseliners in our guide on travel services insolvency.

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