If you have booked and paid for a holiday and the tour operator has gone bust any rights you have will be dependent upon what type of holiday you booked.
Most package holidays are covered by the Package Travel, Package Holidays and Package Tours Regulations 1992, commonly known as the Package Travel Regulations. A package holiday is a holiday consisting of 2 or more pre-arranged components which will normally comprise of transportation to and from the destination and accommodation at the destination. It may also consist of other significant tourist services.
Where the Package Travel Regulations apply a tour operator or travel firm, is required to secure the monies paid by you to enable a refund to be made in the event of insolvency. Usually the monies will be protected by the tour operator or travel firm bonding to an approved body such as the Association of British Travel Agents Limited (ABTA), the Passenger Shipping Association Limited (PSA), the Confederation of Passenger Transport (CPT), the Federation of Tour Operators (FTO), the Association of Independent Tour Operators Trust Limited (AITOT) or the Association of Bonded Travel Organisers Trust Limited (ABTOT).
If a flight is included as part of the package then it will generally be bonded by a scheme run by the Civil Aviation Authority known as ATOL as well as tour operators and travel firms who offer flights are required to hold an ATOL (Air Travel Organisers Licence).
So how do the Package Travel Regulations help me? Will I still be able to take the holiday as planned?
Where the Package Travel Regulations apply and the tour operator has gone bust since you booked and paid for the holiday it is unlikely that you will be able to take the holiday that you had planned.
You will have the right to a full refund of the monies paid by you. Once you have obtained a refund you can then book another holiday.
If your holiday was not covered by the Package Travel Regulations or bonded it is unlikely that you will be able to take the holiday that you had booked and you may end up losing the monies you paid.
If you paid for the holiday by credit card and paid over £100 you may be able to obtain a refund from your credit card company.
If you took out travel insurance you may be able to obtain a refund from your travel insurers, although many policies do not cover the insolvency of a tour operator or travel firm.
When a company goes bust an administrator or liquidator will be appointed and you may be able to obtain a refund or part refund from them. However, such payments are quite rare as an administrator or liquidator can only make a payment to you if the company has the funds to make a payment.
What if it my travel agent who has gone bust rather than the tour operator?
If your travel agent has gone bust rather than the tour operator you may well be able to take the holiday as planned. If the travel agent placed the booking with the tour operator and paid for it prior to going bust then you should be able to go on the holiday as planned.