Lowcostholidays had 27,000 clients already traveling and 110,000 more waiting to go on holidays when they went bust last week. That’s a lot of travelers currently scrambling to make last-minute arrangements.
It came as a surprise to most. Lowcostholidays had been conducting business as usual before the news broke. They literally sent out promotional emails in the morning and went out of business in the afternoon of the same day.
Lowcostholidays blames it on Brexit. Apparently, the uncertainty discouraged a lot of people from traveling. And it didn’t help that the pound dropped in value, when half of Lowcostholidays’ customers were Brits.
The effects of Lowcostholidays going bust on travelers
People have lost a lot of money due to Lowcostholidays going bust.
Paid £1600 for a holiday with low cost holidays and now they’ve gone bust we won’t get the money back or the holiday LOLLLLL
— Callum Benton (@CallumBenton) July 15, 2016
Flight tickets to go home remain valid for those who were already traveling because Lowcostholidays had already paid for those. Same goes many future flights, but not all.
It gets worse: Lowcostholidays did not pay upfront for hotel stays. So travelers have arrived at the hotels and been asked to pay for their stays again, even though they had already paid for it in full through Lowcostholidays.
Ahahaha low cost holidays have gone bankrupt and we were forced to pay for our whole holiday again or told to leave our apartment
— Millie Miles (@milliemilesxx) July 16, 2016
To add insult to injury, this second payment probably costs more because last-minute rates tend to be higher.
Just turning around and going back home is also not a cheap option at this point, because they’d have to book the flights home.
Travelers also have to pay a second time for airport transfers and car parking.
How to deal with Lowcostholidays going bust
First things first: You should always keep a copy of all your travel booking receipts.
There are several ways you may be able to get reimbursement:
- If you paid with a credit card, you could get your money back from the card company.
- If you paid with a debit card, you may be able to ask for a “chargeback” and get your money back from the bank. Check with your bank to find out if you’re covered.
- Standard travel insurance policies don’t usually cover a travel company going bust. But if you have what’s called the supplier failure coverage or supplier financial default coverage, you may be covered. Read your policy and check with your travel insurance company.
- Some government travel regulators may provide reimbursement. For example, the Irish Commission for Aviation Regulation has said that they would reimburse travelers who booked both flights and accommodation with Lowcostholidays. Lowcostholidays moved their operations to Spain in 2013, but it’s still unclear whether the Spanish Govern de les illes Balears will provide reimbursements.
How to prepare for travel companies going bust
Unfortunately, this isn’t the first time a travel firm goes out of business.
It won’t be the last time either.
What you can do for future travel bookings:
- Use a credit card when you make travel bookings to get purchase protection.
- Get supplier failure coverage or supplier financial default coverage from your travel insurance company. This coverage may be part of the standard comprehensive policy, or you may have to add this coverage at an extra fee. You can get quick travel insurance quotes from World Nomads and Squaremouth.