Travel firms established in other countries within Europe are not required by law to hold an ATOL when they sell flight-inclusive holidays in the UK. (Europe in this instance means countries in the European Economic Area.) However, under European legislation, travel firms selling package holidays within the EU must provide financial protection to consumers. In these circumstances, the consumer must go to the protection authority of the country in which the business is based for that protection.
Not all countries operate comprehensive protection schemes and in some cases financial protection will be more limited than ATOL. If your holiday is not ATOL protected, the CAA will not be able to assist you and you will need to deal with the protection authority of that European country.
Travel firms based outside Europe, for example those based in the USA, are required to hold an ATOL in order to sell flight inclusive holidays to the UK.
What are the risks?
Booking a holiday without financial protection or with limited financial protection puts your holiday and your money at risk.
You could be left out of pocket with no holiday or even stranded abroad if your travel firm collapses while you are abroad. The standard of financial protection offered by European countries other than the UK is variable and although some provide protection that is comparable to the UK, others do not. The following are issues that might arise.
Find and pay for your own way home
If your travel firm collapses while you are on holiday, you may need to make your own arrangements to get home. If your return flights cost more than the price you originally paid, you are unlikely to be able to reclaim the difference.
Pay again for your hotel
Even if you paid your travel firm in full before departing on your holiday, it is likely that your holiday accommodation owner will not have been paid by your travel firm and will demand, during your stay, that you pay a second time.
Delays in getting money back
If your travel firm collapses before you travel, you will want to reclaim any money you have paid and you may need to make a claim from the protection authority of the country in which the travel business was based. Claims for repatriation costs or refunds may have to be made through a Court in that country, which can take many months or over a year.
In some cases, the funds available for protection may total less than the claims of all a collapsed travel firm's customers, meaning you may not receive a full refund. In European countries where there is no protection scheme in place, you are unlikely to receive any refund.