Agents have worked round the clock this weekend to find alternatives for clients who booked with Lowcost Travel Group, which went into administration on Friday.
The collapse left confusion over bookings and who is responsible for outstanding bills.
There have even been reports of holidaymakers being woken up in resort by hoteliers asking for payment.
In some cases, room rates have gone up so clients are being asked to pay more than the price at booking.
Although Lowcost Holidays are not ATOL protected, many travel agents use bed bank Lowcost Beds and the failure has reminded the trade of its obligations when using Lowcost Beds as a supplier for any package or flight-plus arrangement.
The CAA said for customers abroad, agents should ‘ensure current accommodation is either secured or an alternative is provided’.
For customers yet to travel, the CAA guidance says: "ATOL holders are required to either provide a suitable replacement for components that are no longer available or if not possible, you must provide a full refund for the booking."
One agent said: "My cousin is on holiday and got woken up by the hotel to say they had to pay. It turns out they had booked through Sunshine, who use Lowcost. Luckily they had paid it for her and she had also paid on a credit card.
"Maybe next time she’ll book with me. I don’t DP and only use ATOL suppliers."
Travel Counsellors managing director Steve Byrne described the weekend’s activity as ‘all hands on deck’.
He said: "When we became aware of the news about the Lowcost Group our priority first and foremost was to ensure our customers both in resort and due to travel were looked after.
"Our 24/7 duty office immediately ran reports to identify the bookings that may be affected and we have been in constant contact with our agents globally to support them.
"It’s all hands on deck at the moment as a 50-strong support team worked through the weekend, in order to support our Travel Counsellors and customers.
"Our priority at this time is to make sure that customers in resort or due to travel next week can continue to enjoy and look forward to their holiday, putting our care for the customer and our people at the heart of everything we do."
