The Berkshire-based travel firm, Great Little Escapes, went under earlier this week, leaving thousands of holidaymakers in a state of uncertainty. The collapse of a travel company can turn the anticipation of a getaway into a stressful and bewildering ordeal.

When planning a holiday, the potential failure of your airline, hotel, or cruise company is usually the furthest thing from your mind. Regrettably, it does occur, and when it does, it can be both distressing and costly.

What happens when a travel company goes bust

Chris Payne, compliance expert at Total Travel Protection, said: “End supplier failure refers to the insolvency or financial collapse of a travel service provider – such as an airline, hotel, ferry operator, car hire company, or cruise line – that was supposed to deliver a part of your travel plans. If they cease trading, you may be left without the service you paid for.”

What to do if your travel firm goes bust

If your travel company goes bust, the first step is to determine whether you booked a package holiday, also known as ATOL Protected. If you’ve booked a package holiday through a UK travel company and received an ATOL certificate, you’re in a favourable position. The ATOL scheme, administered by the Civil Aviation Authority, safeguards you if the travel company or one of its suppliers fails.

If the failure occurred before your travel, you should be eligible for a refund.

If you’re already abroad and find yourself in a travel pickle, rest easy knowing ATOL will ensure your safe return home – but it’s key to remember, ATOL’s cover is only for air travel packages bought in the UK.

Did you pay by credit card? Under Section 75 of the Consumer Credit Act 1974, if you paid £100–£30,000 using a UK credit card, the card provider is jointly liable for the failure of the supplier – even if you booked through an intermediary. You can claim a full refund from your card issuer if the service isn’t provided due to insolvency.

Look for ABTA protection. If you booked land- or sea-based travel (e.g., coach tours, cruises, rail), and the company is an ABTA member, you may be entitled to refunds or alternative arrangements under their protection scheme. ABTA does not cover flight-only bookings.

Contact the insolvency practitioner. In cases where ATOL, ABTA, or the Consumer Credit Act doesn’t apply, you can contact the administrator or liquidator handling the collapsed supplier’s insolvency. They may be organising limited refunds or arrangements.

What if you’re already abroad?

Chris said: “If your end supplier fails while you’re away, you should reach out to ATOL or ABTA if applicable. Contact the UK consulate or embassy if you’re stranded with no support.”

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