CAA warning over DIY holidays

More than 11 million holidaymakers risk losing their money this summer by creating their own travel packages, according to research from the Civil Aviation Authority.

The CAA warned consumers that DIY holidays can be at risk as they are not ATOL-protected.

The authority forecast that more British holidaymakers than ever before will create their own DIY overseas holiday this summer, attracted by low online prices and an increasing range of flights by no-frills carriers. Figures show there was a 21.3% increase last year in the number of passengers taking low cost flights from major British airports, rising from 16.7 million in 2004 to 20.3 million in 2005.

CAA research shows that almost half (46%) of the 11.2 million estimated DIY holidaymakers rate financial protection as ‘essential’ when choosing a holiday.

But almost one in five wrongly think their DIY holiday will be protected should their airline, hotel or car hire company cease trading. A further 53% admit they are unsure whether they would get money back.

The CAA says there continues to be confusion over financial protection protection with one in three (33%) of DIY holidaymakers believing their travel insurance will always cover against company insolvency, whilst 11% think their credit card company would rescue them. The CAA warned that this is often not the case.

“Most standard travel insurance policies will not protect against travel company collapse, and credit card companies will only cover individual transactions above the value of £100,” the CAA said. “Even when consumers are able to claim from their insurance or credit card company, the compensation will cover only the affected component of the holiday. So if, for example, an airline went bust, pre-booked accommodation would not be covered.”

Consumers could run the risk of being stranded abroad if their airline went bankrupt, the authority pointed out. Following the collapse of Kent-based airline EUjet last July, 12,000 passengers were stuck overseas. They had to make their own arrangements to get home and a further 27,000 with forward bookings had their holiday plans ruined.

ATOL spokesman David Clover said: “Our research shows that although millions of holidaymakers will build DIY breaks this summer, they don’t realise they are at risk.

“Holiday purchases are still a significant household purchase so we want consumers to make informed choices about financial protection. We must also emphasise to those building their own holidays that they may not be protected against the risks of travel company insolvency.

“Booking an entire holiday with one travel company does not mean that consumers have to compromise flexibility for protection. Many of the major online holiday operators allow holidaymakers to build their own tailored ATOL-protected break.

“If consumers are booking DIY holidays this summer, we urge them to take out their own financial protection measures such as buying with their credit card or taking out insurance which covers against the dangers of insolvency.”

Report by Phil Davies