Administrators have confirmed that all refund credit notes for package bookings made with Specialist Leisure Group brands will be financially protected, with customers entitled to a cash refund.

Wording on Shearings’ website, now taken over by administrators EY, says “some Holiday Credit Notes” issued since March “may have the same financial protection as under their original booking”.

Although the website gives the example of a self-drive hotel stay as a type of booking where a credit note may not be protected, the ambiguity was seized upon by critics of RCNs including the Right to Refund campaign – which called on the CAA to clarify if they were covered or not.

Abta has previously issued advice to Shearings customers saying the “vast majority” of Specialist Leisure Group’s brands’ 64,000 bookings are financially protected, adding that most were coach package bookings bonded with it – which it confirmed are financially protected.

The Civil Aviation Authority also confirmed that all flight-inclusive package bookings are covered under the Atol scheme on Friday, as news of the company’s collapse broke.

However, accommodation-only bookings with Shearings Hotels brands, self-drive holidays, and activity-only bookings are not financially protected.

When approached by Travel Weekly, a spokesman for EY confirmed that bookings cancelled by Shearings had the same protection as the bookings they had replaced, meaning all packages – whether or not they include a flight – are financially protected.

The word ‘may’ was used to indicate that credit notes issued in place of cancelled accommodation-only, self-drive and activity-only bookings were not financially protected, because the original booking was not a package so never had the same level of protection.

Alan Bowen, legal advisor to the Association of Atol Companies, said: “There’s no reason whatsoever to think that package refund credit notes wouldn’t be protected. Customers shouldn’t have any concerns.”

He added: “If they pay them all it should give customers confidence to accept RCNs from other tour operators.”

Wallace Arnold bookings made through SLG brands are protected through the Confederation of Passenger Transport, while holidays booked with third party operators through the agency are unaffected by the collapse.

Shearings: A brief history

1919: Shearings is founded in Oldham in 1919 by Herbert Shearing, although the roots of the business can be traced back to a haulage company called Webster Bros, founded in 1903, and a coach tours operation set up by James Smith in 1914 that offered trips from Wigan and Southport

1949: Herbert Shearing retires and two companies are formed: Shearings Tours (Manchester) Ltd and Shearings Tours (Oldham) Ltd. These are sold to James Robinson, owner of Happiway Tours, in 1953

1963: Shearings Tours are consolidated as Shearings Holidays

1964: The business is sold again and the coaches branded as Shearings-Pleasureways-Ribblesdale, shortened to Shearings Ribblesdale in 1979 and then to Shearings Holidays in 1982

1989: Mecca Leisure Group purchases Pleasurama and merges National Holidays with Shearings

1990: Mecca is taken over by The Rank Organisation, which sells Shearings Holidays to a management buyout in 1996, backed by Bridgepoint Capital

2005: Venture capital firm 3i, which owns travel agency Wallace Arnold, purchases a controlling stake in Shearings

2013: Shearings’ passenger numbers grow to a then-record 1.05 million, with sales of £195m and a profit before tax of £5.8m

2014: 3i and Indigo Capital sell the business for an undisclosed figure to a management team led by chief executive Denis Wormwell

2016: US investment company Lone Star Funds buys Shearings for an undisclosed sum

2017: Richard Calvert is appointed chief executive;
Shearings reports fourth successive year of record sales, profits and passenger numbers; Jane Atkins is appointed managing director of Shearings Holidays;
commercial director Caroline Brown leaves after 20 years with the business

2018: Shearings Leisure Group, the holding company for Shearings Holidays, Coast & Country Hotels, National Holidays and other brands, renames as Specialist Leisure Group

May 2020: Specialist Leisure Group goes into administration