On the Beach boss: Refunds ‘cannot be based on FCDO advice’

Travel firms’ obligation to refund cannot be subject to changing government advice against travel to countries due to Covid-19, the boss of On the Beach told the Travolution Summit.

Simon Cooper said the leading OTA warned against allowing Foreign Office (FCDO) advice to dictate consumers’ right to cancel at the start of the pandemic in March.

On the Beach quit Abta last month, along with fellow OTA Loveholidays, over differing views about whether refunds should be paid whenever the FCDO advises against travel to a destination.

The two OTAs argue that if airlines continue to fly, hotels remain open and bookings were made in knowledge of the risk, cancellations by customers should not trigger automatic rights to refunds.

Cooper said there were no grounds in existing legal frameworks that FCDO advice means travel to a destination cannot continue to take place, although a convention has emerged that that is the case.

However, he insisted the Covid-19 crisis had made that convention unworkable for many travel firms.

He added: “You’re going to end up in a position where package operators are saying ‘we’re not going to operate because precedent is normally FCDO advice is not to travel’, but airlines will still fly.”

Cooper said On the Beach accepts FCDO advice is applicable in certain scenarios where it is relevant to the performance of the package.

But he said it should not cover clients who book in the full knowledge of the ongoing pandemic and then the following week cancel and demand a refund because the FCDO advice has changed.

“There is going to have to be some sense applied, because most larger companies in travel need months to plan programmes,” he said.

“They cannot follow this flip-flop, on-off, hot-cold [approach]. It just doesn’t work.”

Farina Azam, partner at law firm Kemp Little, agreed there had to be a threshold beyond which the Package Travel Regulations’ rules regarding a consumers’ right to cancel did not apply.

She advised firms to get their paperwork in order, be upfront about FCDO warnings and advise customers about the availability of specialist travel insurance in the booking process.

Azam said the current situation was a test of the new right-to-cancel regulations introduced in 2018.

She said she would expect any court to find in favour of a client who had booked before the start of the pandemic.

However, she said: “If you’re booking a holiday now, you are fully aware of the fact that there’s a global pandemic and you are fully aware that there are FCDO advisories in place.

“So, I think you do have to separate it out between customers who booked a long time ago when we didn’t even know about Covid and those who have booked since.”

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