During three months of lockdown, tens of thousands of travellers will have had their holidays cancelled. Many will have found claiming a refund an uphill struggle. So what are your rights when it comes to Covid cancellations? Here's everything you need to know.

My package holiday has been cancelled. What are my rights?

Under the Package Travel Regulations, if you book a holiday including transport and accommodation that is cancelled by the operator, you are entitled to a full cash refund within two weeks.

But the company says it can’t meet that deadline…

Many holiday firms are in an impossible position, unable to meet the legal deadline because they simply don’t have the money.

Britain’s travel industry is facing its greatest crisis in modern times. Good companies that have provided excellent value for decades have had to changed from organisations devoted to providing great holidays into businesses that hand out refunds to disappointed travellers.

Travel has always been a cash-flow positive business. Holidaymakers typically pay months in advance for a product, and take delivery only when they turn up at the airport.

But right now no money is coming in, and the cash flow is all negative. While the travel industry was hoping things would pick up ahead of the main summer months of July and August, the Foreign Office travel warning against all-but-essential travel still applies.

Added to that, the new quarantine rules require returning holidaymakers to self-isolate for two weeks. Unless amended, they will apply until summer 2021. As a consequence, bookings have dried up for the past three months.

Many companies have accepted customers’ money and passed a large part on to an airline or, less often, a hotel – and retrieving it can take months.

So do I just wait?

Unfortunately that is probably the least bad option.

Your travel firm should tell you when it expects to return your money. Alternatively, the company will be delighted to offer you a “refund credit note”.

What is a refund credit note?

A “supervoucher” that can be used to book another holiday with the same company at a later date – or, crucially, redeemed for cash at a certain date. You can think of it as an IOU for a cash refund – one that, if you wish, you can spend on an alternative holiday rather than waiting for the due date to get your money back.

If you accept one, then you should make sure your financial protection under either the Atol scheme (for air holidays) or Abta cover (for cruises and other terrestrial trips) is retained.

Abta, the travel trade association, says: “The Refund Credit Note must expressly identify the original booking reference and attach a copy of the cancelled booking confirmation/cancellation invoice and, where appropriate, Atol certificate.”

“If your original booking had that protection, you would be reimbursed if the travel company failed financially,” says Abta.

I thought that vouchers were valueless if a holiday company went bust?

Previously that was the case, as holders of Thomas Cook gift card found when the company collapsed in 2019. But Abta believes the legal structure of a refund credit note protects the consumer.

All other vouchers – whether given as compensation for problems on previous holidays, or as gifts – have an inferior status and would lose most or all of their value were the firm to collapse. They are not, and have never been, covered by Atol or Abta.

But I need my money back now!

The transport secretary, Grant Shapps, says “All the usual remedies” for retrieving cash are open to disappointed holidaymakers. The easiest route would normally be a “chargeback” or “Section 75 claim” from the provider of the card you paid with. But many card firms are saying that if the holiday company has offered a voucher then you have no further claim.

The alternative is to begin a legal case through Money Claim Online. But if many people do the same it could force companies out of business even faster.

Abta says: “We will come out of the other side and we need to ensure that when we do, holidaymakers are still able to book and take their holidays and that there is a healthy and competitive travel industry to support them.

“The changes we have asked for are reasonable, as has been shown by similar action being taken by governments in other countries.”

Do I have to take a refund credit note if one is offered?

No. The Independent has seen many examples of travel firms pretending that consumer protection rules have changed, and that Abta’s recommendation to accept a refund credit notes has the force of law.

The situation is quite difficult enough without holiday companies misrepresenting their legal obligation to refund.

Anyone who does not want a refund credit note should simply say to the travel firm that they want their money back in full and ask when they can expect it to be returned. Atol or Abta protection will remain in place.

I am booked to travel in a few weeks’ time and I really don’t want to travel. Can I claim a refund?

No. Unless the trip is actually cancelled you have no right to your money back.

But the holiday company may well offer alternatives. Tui, the UK’s biggest travel firm, is offering anyone booked up to 31 August the chance to defer their holiday without penalty (although prices may well be higher than they were). Others will allow you to take a voucher to the value of your trip.

I can’t handle a fortnight of self-isolation when I return. Can I cancel?

You can cancel, but legally you are not entitled to a refund. If the travel firm or airline can safely operate your trip and bring you back to the UK, they will have fulfilled their contract.

The fact that you would then need to self-isolate is not their problem.

But the travel industry recognises that very few travellers will want to go on holiday if they then are obliged to stay indoors for two weeks.

The two biggest holiday companies, Tui and Jet2, were planning to restart operations in mid-June, but have now moved to mid-July and may well delay the resumption still further unless the quarantine rules ease.

I was caught up in the coronavirus shut-down and lost half my holiday. Can I claim anything back?

Yes. The travel firm owes you a proportion of the cost of the trip because it was unable to provide the holiday that you had booked.

The Package Travel Regulations say: “The organiser must offer the traveller an appropriate price reduction for any period during which there is a lack of conformity, unless the organiser proves that the lack of conformity is attributable to the traveller.”

Since anyone whose holiday was curtailed clearly didn't cause the “lack of conformity,” the travel firm should already have offered the “appropriate price reduction”.

The way that this is calculated is slightly weighted in the travel provider’s favour, because the value of the flights is deducted before any settlement is calculated.

Suppose the price of a one-week trip was £900 per person, of which £200 represented the air fare – and £700 was the cost of the hotel plus meals.

You would be due £100 for each of the days that you lost. If you got only one day of holiday, and received only a £600 refund, you may well feel miffed, but that is the way the system works.

My flight has been cancelled. What are my rights?

You are entitled to a full cash refund within a week of the date of departure. If only one leg of a return trip is cancelled, you are entitled to a refund on the whole trip – as long as it was booked in a single transaction with the same airline.

Now that aviation is resuming at scale, you have a potentially more valuable entitlement under the European air passengers’ rights rules: being rebooked at the cancelling airline’s expense on a rival carrier. If easyJet grounds your Manchester-Malaga trip, and cannot offer you a reasonable alternative, it must book you a suitable flight with another airline.

The airline has cancelled my flight but offered another on the day before or after. Do I have to accept it?

No, you can insist on a full refund or being rebooked on a suitable flight.

My flight hasn’t been cancelled, but I wish it had been. The airline says I can’t have a refund

European air passengers’ rights rules do not entitle you to a refund on a flight that is operating, even if government restrictions mean you cannot travel on it.

Many flights are continuing, and as the resumption at scale gathers pace it is likely that millions of people have flights booked that they no longer wish to take.

Airlines that offer a voucher in these circumstances are actually doing you a favour. They are legally entitled to say that they can satisfy the contract between you, and if you choose not to avail of them, the airlines can hang on to your money. Some carriers are doing just that.

You could try claiming from your travel insurance; this is feasible on some policies so long as you can demonstrate government advice or instruction against travel. “Disinclination to travel” does not count.

My flight was cancelled and I’m only being offered a voucher. Can I insist on cash?

Yes. Airlines that say you must take a voucher (either purely for future travel or redeemable for cash after a year or more) are effectively forcing customers to provide an interest-free loan for 12 months.

This is in breach of European air passengers’ rights rules. But until the Civil Aviation Authority intervenes on the side of consumers, you will find it difficult to enforce your rights.

My flight was cancelled and I feel I was tricked into accepting a voucher. Can I demand cash instead?

Many airlines, including British Airways and easyJet, have been steering travellers to accept a voucher for future travel rather than a full refund.

Some of them have been sailing very close to the wind in terms of the European air passengers’ rights rules. It is likely that the Civil Aviation Authority will investigate and could insist that airlines must offer a cash alternative in cases where customers were not given a full picture of their rights.

I booked a flight and hotel separately. My flight has been cancelled. The hotel is non-refundable. Do I claim from the airline?

No. Because you decided not to book a package holiday, the airline’s cancellation is not the hotel’s problem. You might be able to claim on travel insurance, if you have a pre-coronavirus policy. But it may be best simply to insist the cancelling carrier re-books you on another airline.

My cruise was cancelled. What are my rights?

Assuming you booked it in the UK (or through an EU provider), then a cruise is covered by the Package Travel Regulations since it comprises transport and accommodation. So you are entitled to a full refund within two weeks of the cancellation notification – though in practice you might have to wait three months.

All cruise lines are offering vouchers, usually with a 25 per cent uplift, which you are free to accept if you like – but cash must also be an alternative.

If you booked direct with a US cruise line or agent, then you are not covered by European rules.

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