Hotel and Package Holiday Refund Rights in the UK
If you book a package holiday or hotel through a travel company, you usually have strong consumer protection rights in the UK. Many travellers are not aware of how much protection they actually have when booking package holidays, especially when bookings are protected by ATOL or ABTA schemes. These protections are designed to protect customers if travel companies cancel trips, make major changes, or go out of business.
A package holiday usually means a trip where at least two travel services are booked together for one price. This could include flights and hotels, hotels and car hire, or flights, hotels and transfers. Package holidays are covered by specific consumer protection laws in the UK, which give customers refund rights if the holiday cannot go ahead as planned.
If a travel company cancels your package holiday, you are usually entitled to a full refund. In some cases, the company may offer an alternative holiday or travel dates, but you normally have the right to choose a refund instead. These rules are different from booking flights and hotels separately, where refunds depend more on the individual airline or hotel policies.
Understanding whether your trip is a package holiday or separate bookings is very important because it affects your refund rights, your financial protection, and what happens if the travel company goes out of business.
What ATOL Protection Covers
ATOL protection applies mainly to package holidays that include flights and are sold by UK travel companies. ATOL stands for Air Travel Organiser’s Licence, and it is a financial protection scheme that protects travellers if a travel company goes out of business.
If you book an ATOL-protected holiday and the travel company stops trading before your trip, you should receive a full refund. If the company goes out of business while you are already on holiday, ATOL protection should ensure that you can finish your trip and return home without paying extra costs.
ATOL protection usually applies when you book package holidays that include flights, or sometimes when booking flight and hotel together through the same company. When you book an ATOL-protected holiday, you should receive an ATOL certificate, which confirms what parts of your trip are protected.
It is very important to check that you receive this certificate after booking because this document proves that your holiday is financially protected. If something goes wrong with the travel company, this certificate is used to claim refunds or assistance.
ATOL protection does not usually apply to flight-only bookings made directly with airlines, and it also does not normally apply to hotel-only bookings unless they are part of a package holiday. This is why booking a package holiday can sometimes be safer than booking everything separately.
What ABTA Protection Covers
ABTA is another travel industry organisation that provides consumer protection and support when things go wrong with travel companies. ABTA mainly covers package holidays that do not include flights, such as coach holidays, rail holidays, or UK and European package holidays booked through travel companies.
If you book a holiday through an ABTA member travel company and the company goes out of business, ABTA protection may help you receive a refund or help you return home if you are already travelling. ABTA also helps customers resolve disputes with travel companies and provides guidance if something goes wrong with your booking.
ABTA protection is different from ATOL because it is not specifically for flights, but both schemes are designed to protect travellers’ money and make sure customers are not left stranded or out of pocket if travel companies fail.
Many travel companies in the UK are members of either ATOL, ABTA, or both, and you will usually see these logos when booking holidays online or through travel agents. It is always worth checking whether your booking is protected before paying for a holiday.
Your Rights If a Holiday Company Cancels Your Trip
If a travel company cancels your package holiday, you are usually entitled to a full refund. In some situations, the company may offer alternative travel dates, a different hotel, or a voucher, but you normally have the right to choose a refund instead of accepting changes.
If the company makes a major change to your holiday, such as changing the destination, changing travel dates significantly, or downgrading your hotel, you may also have the right to cancel and receive a full refund. Minor changes, such as small timetable changes or hotel room changes, usually do not qualify for a refund, but major changes normally do.
Refunds for cancelled package holidays should usually be paid within a set period of time under UK consumer law, although in reality refunds can sometimes take longer depending on the company and the situation.
It is important to keep all booking confirmations, ATOL certificates, emails and payment records, because these documents are needed if you need to claim a refund or make a complaint later.
Your Rights If a Travel Company Goes Bust
One of the main reasons ATOL and ABTA protection exist is to protect travellers if a travel company goes out of business. This is sometimes called a company going bankrupt, going into administration, or ceasing trading. When this happens, customers can lose money if they are not protected, especially if they have already paid for flights, hotels or package holidays.
If your holiday is ATOL protected and the company goes bust before you travel, you should be entitled to a full refund for the holiday. If the company collapses while you are already on holiday, ATOL protection should ensure that you can continue your holiday and return home without paying additional costs. This is one of the biggest advantages of booking a package holiday that includes flights through a UK travel company.
If your holiday is protected by ABTA, similar protection may apply, particularly for package holidays that do not include flights. ABTA can help arrange refunds or help travellers return home if a travel company fails while customers are abroad. ABTA also provides a dispute resolution service if customers have complaints about travel companies.
If you book flights and hotels separately, you usually do not have the same level of protection if one of the companies goes out of business. This is why package holidays can sometimes be safer financially than booking everything separately, even if separate bookings sometimes appear cheaper at first.
Before booking any holiday, it is always worth checking whether the company is ATOL protected, ABTA protected, or both, and making sure you receive the correct documentation confirming your protection.
ATOL and ABTA Contact Details
If your travel company cancels your holiday or stops trading, it is important to contact the relevant protection scheme as soon as possible. Most package holidays sold in the UK are protected by either ATOL or ABTA, and these organisations provide guidance, refund processes and assistance if travel companies collapse while customers are abroad.
If your holiday included flights and was sold as a package, it is likely to be ATOL protected. ATOL is managed by the UK Civil Aviation Authority and is designed to protect customers if travel companies selling flight-inclusive holidays stop trading. If a company collapses before you travel, ATOL usually arranges refunds. If the company collapses while you are already abroad, ATOL may arrange replacement flights home or allow you to complete your holiday where possible.
If your holiday did not include flights but was booked as a package through a travel company, it may be protected by ABTA. ABTA helps customers with refunds, complaints, dispute resolution and advice when travel companies fail or when customers have problems with travel bookings.
Before contacting ATOL or ABTA, find your booking confirmation, ATOL certificate, ABTA confirmation, receipts and payment records, as you may need these documents when making a claim or asking for assistance.
ATOL (Civil Aviation Authority)
Website: https://www.atol.org
Phone (UK): +44 333 103 6350
ABTA – The Travel Association
Website: https://www.abta.com
Phone (UK): +44 20 3117 0500
These websites also allow you to check whether a travel company is protected and explain the refund or assistance process if something goes wrong.
Flights vs Package Holidays: Important Differences
Many travellers are not aware that there is a big difference between package holidays and booking flights and hotels separately, and this difference is very important when it comes to refunds and financial protection.
A package holiday is usually defined as a holiday where at least two travel services are booked together for one price. This could include flights and hotel, hotel and car hire, flights and transfers, or flights, hotel and car hire combined. Package holidays are covered by Package Travel Regulations, which give customers stronger rights if something goes wrong.
If a package holiday is cancelled by the travel company, customers are normally entitled to a full refund. If the company goes bust, ATOL or ABTA protection should help customers recover their money or return home if they are already travelling.
However, if you book flights directly with an airline and a hotel separately, these are treated as separate contracts. If the airline cancels your flight, you deal with the airline. If the hotel cancels your booking, you deal with the hotel. If one company goes bust, the other booking is usually unaffected, and you may not automatically get a full refund for the entire trip.
This is why travellers sometimes choose package holidays for financial protection and peace of mind, even if they prefer independent travel. Understanding whether your trip is a package holiday or separate bookings is one of the most important things to check when booking travel.
How Long Refunds Should Take
If a package holiday is cancelled, UK consumer law usually requires travel companies to issue refunds within a specific period of time. In many cases, refunds should be issued within 14 days when a package holiday is cancelled by the travel company. However, in reality, refunds can sometimes take longer depending on the company and the situation.
If you paid for your holiday using a credit card, you may have additional protection under Section 75 of the Consumer Credit Act, which allows you to claim money back from the credit card company if the travel company fails to provide the service you paid for. This can be very useful if a travel company goes out of business or refuses to issue a refund.
If you paid by debit card, you may still be able to request a chargeback through your bank. Chargeback is not a legal right in the same way as Section 75, but banks often help customers recover money when services were not provided.
It is always important to keep booking confirmations, receipts, ATOL certificates, ABTA confirmations and emails, because these documents may be needed if you need to claim a refund through a credit card company, bank or protection scheme.
Understanding how refunds work and how you paid for your holiday can make a very big difference if something goes wrong with a booking.
Rupert’s Handy Travel Tips
Booking a package holiday or hotel? Here are a few important tips to protect your money and your trip:
- Always check ATOL or ABTA protection: Make sure your booking is financially protected before you pay.
- Keep all booking documents: Save confirmations, receipts and ATOL certificates in case you need to claim a refund.
- Pay by credit card if possible: Credit cards provide additional protection if something goes wrong with your booking.
- Understand if your trip is a package holiday: Package holidays usually have stronger refund rights than separate bookings.
Want to meet the reindeer behind our travel tips? Find out more in our page Who is Rupert?.
Frequently Asked Questions About ATOL, ABTA and Holiday Refunds
What is ATOL protection?
ATOL protection is a UK financial protection scheme that protects package holidays that include flights if the travel company goes out of business.
What is ABTA protection?
ABTA is a travel association that provides financial protection and dispute resolution for certain package holidays, particularly those that do not include flights.
Can I get a refund if my package holiday is cancelled?
Yes, if a travel company cancels your package holiday, you are usually entitled to a full refund under UK consumer law.
Are flights booked directly with airlines ATOL protected?
Flights booked directly with airlines are usually not ATOL protected unless they are part of a package holiday booked through a travel company.
Is it safer to book a package holiday or book everything separately?
Package holidays often provide more financial protection and refund rights, but separate bookings can sometimes be cheaper and more flexible.
Further Reading & Related Guides
If you are booking a holiday, it is important to understand your refund rights, financial protection and what happens if travel companies cancel trips or go out of business. These related guides explain your rights, travel insurance protection and what to do when travel plans go wrong.
Before booking flights or package holidays, read our Flight Cancelled? Your Passenger Rights Explained (2026) guide so you know when you are entitled to refunds, rebooking or compensation from airlines.
If you are worried about companies collapsing, our Grounded Dreams: What Happens When an Airline Goes Bankrupt guide explains what happens if airlines stop operating and whether you can get your money back.
Travel insurance can sometimes cover cancellations, medical emergencies and company failures, so make sure you read Travel Insurance Explained: Essential Protection for Every Traveller before booking your trip.
If your flight is delayed rather than cancelled, you may still be entitled to compensation, which we explain in Flight Delays in Europe & the UK – Compensation Rights, Tools & Tips.
Finally, if you are booking complex trips with separate flights, hotels and transfers, it is important to understand the risks, which we explain in Self Transfer Flights Explained: How They Work and the Risks.
Last Updated
April 2026
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