Tui UK has committed to paying any outstanding refunds for package holidays cancelled because of the coronavirus pandemic by 30 September after the regulator received a deluge of complaints that the travel company was breaching consumer law.
The Competition and Markets Authority (CMA) said thousands of people had complained that Tui UK was not paying refunds within the 14 days mandated by consumer protection law.
Tui, Europe’s biggest holiday company and the biggest tour operator in the UK, will also write to all customers who have accepted credit notes in place of a refund to give them the option of converting it into a cash refund.
Tui has committed to regularly reporting the time it has taken to make refunds to customers over the coming year. The measures apply to all of Tui’s brands, including First Choice, Marella Cruises, Crystal and Skytours.
The pandemic has caused chaos for the global travel industry and has put severe financial pressures on companies as they struggled to refund customers for holidays that were no longer possible.
The CMA has received more than 25,000 complaints about cancellations and refunds across the travel sector, including those from Tui customers.
Tui last month reported a loss of €2bn (£1.8bn) in the first nine months of its financial year after revenues crashed by 98% between April and June, the period of the most intense lockdown restrictions in its main markets. It is cutting 8,000 jobs and has closed 166 UK and Ireland stores to cut costs.
However, the CMA has insisted that companies must abide by consumer protection laws.
Andrea Coscelli, the CMA’s chief executive, said: “It’s absolutely essential that people have trust and confidence when booking package holidays and know that if a cancellation is necessary as a result of coronavirus, businesses will give them a full, prompt refund.”
Coscelli also raised the prospect of further action against the package holiday industry as the CMA investigates its response to the Covid-19 crisis.
The regulator has written to more than 100 package holiday businesses to remind them of their obligations to comply with consumer protection law and has opened investigations into a number of operators, it said.
A Tui spokeswoman said: “We remain sorry that holiday refunds took longer to process during the height of Covid-19. The volume of cancellations and customer contacts was unprecedented and at a time when retail stores, contact centres and offices were closed because of the nationwide lockdown.”