The dangers of Do-It-Yourself holidays
By Darren Cronian on Friday, July 25th, 2008

Over 20 million holidaymakers will take a DIY holiday this summer and I wonder how many of those holidaymakers realise that they have no financial protection if their airline or hotel chain goes bust. The increase in low cost airlines has certainly made consumers more confident.

The dangers of Do-It-Yourself holidays

It’s important to know the dangers of DIY holidays

If you have booked your holiday with a company that goes out of business, you might not be able to get your money back and worse still, you could be left stranded abroad. If you pay with your credit card then you can only reclaim the money back if the value totals £100 on each part of your holiday.

New airlines struggling

Oasis Hong Kong went into administration earlier this year and left passengers stranded in Hong Kong. What was a low cost flight turned into an expensive one as they would have had to pay for a flight back to the UK. A number of airlines including Cathay Pacific helped passengers out, by offering discounted flights for those affected.

Consumer experiences

It took those passengers who had paid by credit card, over 2 months to get the money back, and you can read about their experiences on this blog post, which provides some valuable advice from consumers who have gone through the process of trying to get a refund from an airline due to insolvency.

Insurance to protect DIY travellers

I am surprised that more insurance companies have not created policies which include cover should the airline or hotel go into administration. Tonight, I spent some time looking around a few travel insurance companies websites, and I could not find a policy which copes with Do-It-Yourself travellers.

I’d be interested to hear any nightmare DIY holiday stories, or have you travelled without any glitches.


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10 responses to “The dangers of Do-It-Yourself holidays”

Richard | 26 July, 2008 at 12:12 pm

Darren, I do not think insure companies would take the risk of insuring for insolvency, because we live in a very unstable world right now. It is worth adding that using a big travel agency or tour operator, which is established will lower the chance of you getting stranded abroad.

Nick | 26 July, 2008 at 12:46 pm

Darren

We live in a world where price is King. This means while there are a few insurance companies that offer Financial Protection this is limited. After all they have found customers will buy a £9 policy without Financial Protection over a £10.50 with.

But that is not the only difference of course, the other easy example is what happens when you arrive at your destination to find your hotel has over booked due to a conference that is happening locally… and the do not charge you but all local hotels are full so your left on the street!

Or how about a hurricane, where customers of tour companies are flown home on “rescue flights” and others are flown to another country and left there on there own to fend for themselves!

An estimated cost of protecting passengers on a package is £30. Would you pay that on top of your £9 insurance? (Plus the companies margin of course)

We see many customers who will save themselves £20-£30 by DIY’ing there holiday, but leaves them open to problems they just do not think about.

There is a debate within hotel booking companies about “principal status” where the company takes responsibility for the customers, as opposed to an “agent” where the contract is with the hotel. The debate is not just about the cost of protection, but the fact that principles have to pay VAT, so adding to the price. Again it all comes down to price.

So booking a package means not only protection, but VAT as well, all adds to make a larger bill.

Rohan | 26 July, 2008 at 12:52 pm

I have not booked a package holiday in over five years and we have not had any problems but we know the potential dangers. I think the different we save is sometimes not worth the risk, but we also enjoy booking our own flights and hotel.

Darren Cronian | 26 July, 2008 at 1:03 pm

@ Richard

Good point about using established companies. There seems to be more risk with new airlines. Everyone was raving at the launch of Oasis, that you could buy cheap £75 tickets from HK to London, it was obvious that something would go wrong with flights that cheap.

@ Nick

Great comment. Some more dangers about booking DIY holidays, the hurricane and overbooked hotels are two good examples. I wonder though Nick, if I was to book a hotel through ebookers, and it was overbooked when I arrived, would they have to find me alternative accommodation?

@ Rohan

It’s important to know the dangers - apparently 1 in 5 DIY trips end in disaster, according to the CAA, so it’s important to weight up is paying less for a holiday worth it if you are stranded abroad and have to pay for another flight home.

Nick | 26 July, 2008 at 1:30 pm

Darren

Good queston as e-bookers along with others act as both agent and principle, so if there acting as agent I would think no…. but it just a guess, they may do. Some companies go beyond what they have to do.

Darren Cronian | 26 July, 2008 at 1:54 pm

@ Nick

I have heard of hotels who have gone out the way to help the customer, if an issue has occured, i.e. overbooking, but they do not have to. I suppose it depends on how much you value your customers and if you mind negative comments about the hotel on hotel review sites.

Darren Cronian | 26 July, 2008 at 1:57 pm

I have contacted ebookers through their customer services form.

I’ll update these comments when I have received a response. Initial thoughts are that I am impressed that it was so easy to get in touch with a travel company! We’ll see if I receive a response though ;)

Darren Cronian | 26 July, 2008 at 3:06 pm

Hats off to Ebookers. Sent customer services question at 1.58pm got response at 2.41pm. I wish more online travel companies were like this

“Please be advised in case of such a situation our supplier usually provide us with an alternative in advance before the passenger is due to travel. But in case of unforeseen circumstances we do take responsibility and assist the passenger with the best of our ability.”

Rohan | 29 July, 2008 at 5:43 am

Do the CAA have a reason to say that 1 in 5 end up in disaster when they are ATOL regulators and want people to book with ATOL members? Sorry I am critical but of all of the people who I speak to who book their own holiday none of them have had problems.

You would have to be pretty unlucky.

Darren Cronian | 29 July, 2008 at 6:56 am

@ Rohan

You are starting to sound like me :) I agree that you’d have to be pretty unlucky, but even so, there’s an element of risk, sometimes I take the risk, sometimes I dont, depending on the type of holiday I am taking.

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