Should I Pay the Full Amount on a Cancelled Holiday?

Q.

I have booked a holiday via an Internet site - 1 week in the middle of april 2009, and I have realised that the school Easter holiday break has changed.

Unfortunately the cottage is booked at the Easter period, so I have asked if I can transfer my booking to a different cottage. The company has advised that I can't and I am liable to pay the full amount of the holiday in April unless someone else books it.

What are my rights? I thought we would lose the deposit, but not be liable to pay the full amount? Unless someone else books the holiday,we will now have to foot the bill, and also end up with no Easter holiday unless we take the children out of school.

A.

Unfortunately, this all depends on the terms and conditions in your holiday brochure. Because you are technically 'breaching the contract' by cancelling the holiday, for whatever reason, you are liable to pay the holiday company what's deemed to be 'reasonable compensation.' for their loss. It would be exactly the same if they had cancelled the holiday, they would be expected to pay you back the full cost of the holiday if you had already paid it up front.

If they manage to sell the holiday, then obviously this won't apply, because the holiday company hasn't lost anything. So it's reasonable for them to have a clause about re-selling in the contract. It's reasonable for you to ask them not to pursue any further requests for payment until they have tried to resell the holiday.

The Package Travel Regulations 1992

The Package Travel Regulations 1992 specify the information must be given to consumers before any package holiday contract is agreed or the holiday starts, and the regulations also state that cancellation terms have to be included in the contract. If your brochure and/or the contract don't mention your rights when you have to cancel your holiday, you could possibly have a case for claiming that they are in breach of the Package Travel Regulations, but it's a difficult one to win.

The Office of Fair Trading is looking into some of the charges that are levied on consumers who have to cancel their holidays, because of concerns that some tour operators' cancellation charges are excessive. In some cases, the OFT has asked the tour operators concerned to justify charging so much, but as yet the enquiries are still under way, so there have been no reported decisions. If some charges are found to be excessive, it's likely to have an effect on all tour operators and holiday companies, because they don't want to fall foul of any OFT regulations.

Insurance Claims

One other avenue you could pursue is claiming the cost of the cancellation back on your insurance policy, although to be fair, many policies are strict when it comes to paying out for cancellations, and might not treat a change of school holiday dates as a good enough reason to refund you. Check your policy, and if you're covered for this eventuality, it's probably your best avenue.