Which? warns against booking holidays with Opodo
Opodo was bought by European travel agent eDreams in 2011 and has now moved to Spain where eDreams has its headquarters.
Travel agents which sell package holidays including flights to UK customers are obliged to offer financial protection – but those based in Europe have to use a scheme based in their home country.
This means Opodo can no longer offer consumers protection under the ATOL scheme, with trips protected by a Spanish scheme instead.
Which? Travel advises consumers not to book package holidays with companies unless they have ATOL protection. It says that although some may be covered by European schemes, there is no way for consumers to verify whether the protection is adequate.
What is ATOL?
ATOL stands for Air Travel Organiser’s Licence and is a UK financial protection scheme run by the UK Civil Aviation Authority (CAA).
If a travel company with ATOL protection ceases trading, the scheme protects consumers who had booked holidays with the firm. It will support consumers currently abroad and provide financial reimbursement for the cost of replacing parts of an ATOL-protected package.
The Civil Aviation Authority (CAA) has warned that the cover offered by European financial protection schemes may not be the same as consumers would expect in the UK.
Under CAA rules, only holidaymakers with ATOL protection will definitely be repatriated back to the UK.
The CAA said: “If your travel firm collapses while you are on holiday, you may need to make your own arrangements to get home and then claim these back from the protection authority. If your return flights cost more than the price you originally paid, you are unlikely to be able to reclaim the difference.”
The coronavirus pandemic has made ATOL protection more important than ever for holidaymakers. Firms including STA Travel, Voyager Travel Direct, Shearings, and Cruise & Maritime Voyages have all ceased trading since March.
European scheme protection
Until recently, for every holiday Opodo sold to UK-based customers, it paid £2.50 per person into the ATOL scheme.
In the Spanish scheme that it now belongs to the rules say that the minimum amount that the financial guarantee must cover is, ‘5% of the invoice for package travel of the previous year (minimum €100,000)’.
Which? was told by the European Consumers association BEUC that this was likely to be insufficient during the coronavirus pandemic.
What does Opodo say?
Opodo said its contribution to the Spanish equivalent scheme is higher than the 5% minimum, at 18%. The cover also protects customers with future bookings and those that are already away.
Opodo told Which?: “CAA advice urges UK customers to check what protection is provided when booking package holidays through EU based companies. All package holiday bookings made with Opodo and eDreams are protected by the Spanish financial protection scheme. This scheme is fully compliant with the standards of protection required by EU legislation and offers the same level of protection as ATOL, allowing UK travel package customers to book their holidays with the highest level of protection.
“Information on how to claim in the case of insolvency is included in a customer’s confirmation email, this includes contact details for the insurer. We have travel guarantees in place to protect our customers everywhere. All our UK customers who booked package holidays with us, and have had these disrupted due to Covid-19, have received cash refunds.
“We are in close contact with the CAA and plan to reapply for an ATOL license for when the Brexit transition period ends. We are in the process of preparing this application and plan to be ATOL protected in January 2021, assuming CAA approval. In the meantime, UK customers booking package holidays with Opodo and eDreams are receiving protection equivalent to ATOL via the Spanish financial protection scheme.”
Other travel firms you should watch out for
Opodo isn’t the only travel agent to leave a UK protection scheme.
Last month saw Loveholidays and On the Beach both resigned from the trade body ABTA.
Most customers of the two firms will still be protected by the Package Travel Regulations – these apply whether or not the agent is an ABTA member – but there is one specific situation where firms leaving ABTA may make a difference.
If you are chasing a refund for a package holiday which you cancelled because the Foreign Commonwealth and Development Office advised against non-essential travel to your destination, yet the firm itself did not cancel the holiday, you may find it more difficult to get your money back.
The Package Travel Regulations state that if “unavoidable and extraordinary circumstances” occur which “significantly affect the performance of the package”, you’re due a full refund even if you cancel.
But the regulations don’t specifically include a FCDO warning as one of these circumstances, and it’s possible that if the flights are still operating, you won’t necessarily be refunded in full.
ABTA has said that it expects its members to fully refund customers in this situation – so you’d have more protection if the holiday company was an ABTA member.