Advice for customers hit by Dream Holidays collapse All holidays were Atol protected

20 July 2011

Beach chairs

Customers who bought holidays to the eastern Mediterranean from a tour operator that has ceased trading should get full refunds.

The Civil Aviation Authority (CAA) has stepped in to help about 525 stranded holidaymakers following yesterday’s collapse of Dream Holidays. The tour operator, which launched in 2009, specialised in package holidays to Greece, Cyprus and Egypt.

This is the third  travel company to go bust in less than a month, after Hotel Connect in June, and Gill’s Cruise Centre last week. 

Package holiday protection

In the case of Dream Holidays, the CAA has said that all passengers currently overseas will be able to complete their holidays and fly home as scheduled because it will arrange repatriation.

The CAA is also working to ensure that all protected customers who are abroad can stay in their accommodation until they are due to travel home.

However some hotels may not have received full payment from Dream Holiday so may ask customers to pay again for accommodation. The CAA said customers who were asked to pay again should do so and then send a claim to the CAA on their return home to get a refund under the  ATOL scheme.

About 1800 customers had forward bookings with Dream Holidays, and the CAA said they would be able to claim a full refund under the scheme.

Money should be refunded

Rochelle Turner, Head of Research for Which? Travel, said "This is yet more bad news for UK holidaymakers and the travel industry. Dream Holidays is the second travel firm to go into administration in just four days, and the most recent in a long list of travel companies that have suffered as a result of the economic downturn.

"Fortunately for Dream Holidays' customers, their holidays were ATOL-protected, so people can expect to get their money back, and those abroad will be looked after by the CAA.

"If you are booking a holiday, it's essential you protect yourself in case the worse happens. Look out for the ATOL symbol or check that your travel insurance covers you if your travel company goes bust. Paying for your holiday on a credit card or Visa debit card may also offer you extra protection."

More from Which? Travel

Take a look at our guide to claiming if you're unhappy with your package holiday

Know your rights under the Package Travel Regulations 

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