Thousands of holidaymakers who booked with Lowcost Holidays could receive a refund of just a few pounds, administrators have warned.
The budget tour operator blamed ’the recent and ongoing turbulent financial environment’ when it went into administration late last week, leaving 27,000 customers stranded abroad.
A further 110,000 Lowcost customers were left out of pocket on future holiday bookings.
The company wasn’t registered with the UK government-backed Atol scheme, which would have compensated customers in full.
Instead, it had lodged £1.09m with authorities in Mallorca – enough to only pay out around £8 to each customer affected by the company’s collapse.
Those currently abroad are now having to pay for their hotel accommodation again, as well as other incidental costs. Read our guide to your rights if you’ve booked to travel with Lowcost Holidays.
Thousands of holidays at risk
The administrators, Smith & Williamson, said there were approximately 27,000 customers currently at resorts and 110,000 who had booked trips but were yet to set off, with about 55% of the group’s customers being British.
The Civil Aviation Authority (CAA) said the company was based in Majorca and was registered with the Balearic Islands authorities and therefore not part of the UK’s Atol scheme.
Atol protection would normally ensure you can return home and get your money back if a company goes bust.
A message from Lowcost Holidays via their website told holidaymakers their flights home would still be valid but warned that hotel owners, as well as companies offering services such as airport transfers, may ask them to settle their bills before leaving.
It advises customers to claim for any extra payments that they are asked to make from their travel insurer, credit card company or the government of the Balearic Islands.
Check your bookings still stand
Which? Director of Policy and Campaigns Alex Neill said: ‘If you’re currently on a trip booked through Lowcost Holidays, you may be asked to pay for your hotel or flights again by the providers.
‘If so, you should pay on a credit card so you may be able to claim money back through your credit card provider. You should also check the terms of your travel insurance to see if you are covered.
‘If you are yet to travel, check with your airline and your accommodation as soon as possible to find out if your bookings still stand.’