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Travel industry regulations – get your head around travel agent bonding

Let's talk about the importance of this undeniably dry but essential part of booking a holiday - travel agent bonding.

October 30, 2021

It’s fair to say that travel agent bonding is not the first thing anyone thinks about when they’re booking their holiday – I certainly don’t – but my god it should be.

And the ironic thing is, just like other grown-up things such as house or life insurance, if you’re only thinking about it when you need it, it’s most likely too late.

What on earth is travel agent bonding and why am I banging on about it?

In the world of travel, when we talk about bonding we mean the protection travel agents are obliged to provide for their customers if something goes wrong.

It’s for the ‘What if…?’ situations we all dread – what if my flight is cancelled? What if my tour operator goes bust?

And bonding is different to travel insurance – travel insurance is also really important, and I’ll cover why in another post, but only covers for such things as lost/stolen belongings, delays/cancellations and medical assistance.

What it won’t help you with is if your holiday company fails and you’re stuck abroad.

If that worst-case scenario should happen, either when you’re away on your hols or before you go, double-check your tour operator or travel agent is with ATOL, the Air Travel Organiser’s Licence.

It’s a government-run financial protection scheme operated by the Civil Aviation Authority (CAA) and if a tour operator or travel agent sells flights, they must have an ATOL – what we call bonding.

Peace of mind for you

It offers peace of mind to holidaymakers, and the good news for us is that if the worst happens, under ATOL you’ll get a refund for your holiday, or be offered alternative holiday and/or transport.

ATOL only covers UK companies though, and it’s not the most straightforward of schemes – there are various caveats so the best advice I can give is if not 100% clear your booking is ATOL protected, ask and only stop asking when you have a definite answer you’re happy with.

For example, DIY packages (where you pick and choose different parts of the holiday yourself) bought in the same transaction get full protection (both financial and legal) but if you buy a DIY package in separate transactions (even if on the same website visit), you only get limited protection; you wouldn’t be covered if the airline or hotel goes bust, but you would if the holiday booking company did. Clear as mustard, right?

If a flight isn’t included in your package, it won’t be covered by ATOL, so check the tour operator is registered with ABTA, the leading association of travel agents and tour operators in the UK.

Its members are financially protected, meaning your money is safe if you make a booking and the company goes bust. You’re entitled to a refund or will be given help to continue your holiday as planned. When you book, it’s up to you to check what coverage your booking has, but if the tour operator or travel agent is a member of ABTA, they’ll be proudly shouting about it, so it should be fairly obvious.

If you like to book directly with either airlines or accommodation providers, please use a credit card to make the payment – simply because if either were to fail, they’re not obliged to reimburse you. But if the transaction is over £100, Section 75 of the Consumer Credit Act says the credit card company is equally liable with the supplier if something goes wrong; you’d be entitled to a refund from your credit card company, but that’s where the assistance would end – you won’t get any further support with rearranging travel plans or finding alternative flights.

It’s a whole other ball game if you use a third party site to book flights or accommodation (eg Expedia or Skyscanner) individually, even if you use a credit card – for Section 75 protection to kick in, there must be a direct relationship between you and the supplier.

My head hurts too…