New report finds £781m of consumer cash locked up in ‘refund credit’ from COVID-19 cancelled holidays
It also found that 43% of consumers surveyed who accepted an RCN were not offered a full cash refund when their holiday was cancelled - despite this being their legal right.
A new white paper exploring the impact on consumers as a result of holidays cancelled due to COVID-19 has been published today.
As YouGov data on the volume and value of Refund Credit Notes (RCNs) that are currently in circulation comes to light, the paper – which was commissioned by one of the UK’s largest holiday companies, On the Beach, and has been written by financial broadcaster, journalist and consumer expert, Georgie Frost – has revealed that a whopping £781.5 million of consumer cash is currently tied up in said RCNs, or “IOUs” with many travel companies.
It also shows that 43% of the consumers surveyed who accepted an RCN were not offered a full cash refund when their holiday was cancelled, despite this being their legal right.
As a result of the findings, On the Beach has set out five recommendations to help restore consumer trust in the industry – including a call for holiday companies to proactively contact their customers still holding RCNs from 2020 and offer them a full cash refund.
The beach holiday expert is also encouraging consumers currently holding an RCN but don’t want one, to contact their holiday provider now and ask for a full cash refund.
ADVERTISEMENT
It’s estimated that around 8.1 million people had a package holiday cancelled due to COVID-19.
Only half of those with a cancelled holidays received a full cash refund, and 851,000 (nearly 11%) accepted an RCN rather than cash, with the white paper outlining that over a million people with an RCN or rebooking were not offered a cash refund at the point of cancellation, even though this is a legal requirement.
ADVERTISEMENT
What’s more is that 52% of consumers surveyed were unaware of their legal right to cash.
Around 8.1 million people had a package holiday cancelled due to COVID-19 / Credit: Flickr
“It’s sad to think that a family who has saved for months or even years for their one summer holiday abroad has had to fight to get their money back, and in many cases have not been provided with full and transparent information of what they are entitled to when their holiday was cancelled.” said Anna Richardson, who has written a foreword for the white paper.
“Looking forward to your holiday is a massive part of the whole experience, but while there is still so much uncertainty and disruption, people are understandably lacking the confidence to plan and book again because they’re unsure of their rights if it gets cancelled.
ADVERTISEMENT
“The smoke and mirrors being used by some holiday companies is wrong.
“I urge people who had their holiday cancelled to use their right to a full cash refund and contact their travel provider today to ask for their cash.”
Simon Cooper – Chief Executive of On the Beach – added: “COVID-19 shocked the travel industry and it was challenging for everyone in the early months to manage the disruption and volume of cancellations.
“We’re over 14 months on now and yet the knock on impact of refunds on consumer confidence continues to affect the industry. Even now, only a third of people say they would consider booking a holiday to a green list destination, so we have to do something to restore their confidence.
“Without it the industry will continue to be in trouble.”
ADVERTISEMENT
OnTheBeach is encouraging consumers with an RCN to contact their holiday provider / Credit: PublicDomainImages
He continued: “There are millions of people still holding these IOUs, in some cases over a year later with very limited opportunity to go on holiday [and] this is all because some travel companies actively avoided offering cash and used their customers’ money for future holidays as cash flow. No one would expect to receive a loan for this long and pay no interest, so why should these companies continue to hold onto their customers’ money for future holidays?
“To begin regaining consumer confidence and trust in the industry, we want those people with refund credit notes from 2020 to be refunded in full.
“We’re also urging regulators to enforce that holiday companies and airlines hold their customers’ money in separate, regulated trust accounts until the date of travel.”
43% of consumers surveyed who accepted an RCN were not offered a full cash refund / Credit: Flickr
Why are RCNs not in the best interests of consumers?
Where consumers are not aware that RCNs can be exchanged for cash, RCNs hold them to one travel provider, which means that they don’t have their own cash in the bank to spend as and when they want, or put into a savings account earning interest.
RCNs remove the consumer’s ability to shop around for the best holiday deals and dates when they want to rebook.
ADVERTISEMENT
It’s also reported that 6% of all vouchers issued in the UK go completely unused.
What does the report recommend?
On the Beach has set out five recommendations in the white paper to help rebuild consumer confidence in the travel industry, which are:
Automatic Refunds: Automatically refund customers in cash when RCNs have been held for a year.
Proactive Contact: Customers holding RCNs from 2020 should be contacted proactively, notified of their rights and offered a full cash refund.
New RCNs Offered Fairly: Any new RCNs offered to customers who have holidays cancelled in the future must be accompanied with the alternative choice of a full cash refund, with equal prominence.
Financial Protection: Greater protections for customers’ money with ring-fenced trust accounts should be a requirement for all ATOL holders and airlines.
Greater Transparency: Regulators to report on the number and value of RCNs in circulation, allowing potential customers to make informed decisions on who to book future holidays with.
___
You can find more information, and access advice and assistance regarding RCNs from OnTheBeach here.
Featured Image – Unsplash / Dan Gold
UK News
King Charles III’s annual income to increase by more than 50% as crown estate revenue rises
Danny Jones
ADVERTISEMENT
King Charles III’s annual income is reportedly set to increase by more than 50% after the total revenue of the official crown estate rose significantly over the last 12 months.
Posting record-breaking profits since King Charles was coronated back in May, raking in a total of £1.1 billion for the 2023/24 financial year, the crown’s budget is now being adjusted, with a review set for 2026/27.
As per the official royal accounts published this week, the sovereign grant which helps fund members of the royal family and their civic duties is set to rise from £86m this year to £132m in 2025/26, meaning the King is set for a whopping £45m (approx. 53%) pay rise.
The royals currently receive 12% of the crown estate’s overall profits and as the majority of Britain continues to struggle with a cost of living crisis, it’s also the details surrounding last year’s outgoings and overall expenditure that have proved tough reading for many.
It makes no sense that profits from renewable energy projects are funnelled out of poor coastal communities to fund the refurbishment of Buckingham Palace.
Wealth from our natural resources should be invested in our people and communities. https://t.co/D4ZzzFiffk
In addition to roughly £600,000 of the sovereign grant being spent on the King’s coronation and other related events last year, the monarchy’s accounts also revised the £369m set aside for renovations in and around Buckingham Palace, let alone other royal residences.
According to The Guardian, “Royal accounts also show that the Prince of Wales received £23.6m income from the Duchy of Cornwall in his first full year after inheriting the land and property-owning estate from his father.”
Frogmore Cottage, located on the Windsor estate, saw a £2.4m refurbishment on behalf of the Duke and Duchess of Sussex as well but has remained empty for more than a year – though the costs have reportedly since been returned to the public purse.
Perhaps one of the toughest/most frivolous to swallow for the taxpayer, though, is the revelation regarding the two new helicopters. Set to replace the existing aircraft used by the royals for the last 15 years, the two new AgustaWestland AW139s are said to cost £8m a pop.
Making 170 journeys last year and costing a total of £1,096,300, the monarchy’s travel bill rose from £3.9m to £4.2m all-told, with the official royal train remaining the most expensive per mile.
Elsewhere, in the King’s Speech (written for him) following Labour’s landslide updating of the Conservative Party after 14 years, Charles said: “Stability will be the cornerstone of my Government’s economic policy and every decision will be consistent with its fiscal rules…
“Securing economic growth will be a fundamental mission. My Government will seek a new partnership with both business and working people and help the country move on from the recent cost of living challenges by prioritising wealth creation for all communities.”
While the crown and government have reiterated the aim of “rising living standards”, many Brits will understandably struggle to take these words as sincerely as others, with urgent action needed to support some of the poorest regions across the nation.
Ex-Salford rugby player and Andy’s Man Club co-founder receives special honour from University of Bradford
Danny Jones
ADVERTISEMENT
Ex-Salford rugby player, motivational speaker and health coach Luke Ambler has been given a special honour for his work with the men’s mental health organisation, Andy’s Man Club.
The former rugby league athlete and Ireland international – whose career started out at Salford City Reds before moving on to Leeds Rhinos, York, Harlequins and Halifax – set up Andy’s Man Club in 2016 after the loss of his brother to suicide, with the vital support group and charity growing massively since then.
Now hosting more than 4,500 men at over 190 different regional support groups across the country every week, including several here in Greater Manchester – one over at Etihad being the most recent – the non-profit has become a vital resource for men in the UK and only keeps spreading further.
To share this day with my beautiful family, mother in law and Sabrina our General Manager and all those who were graduating was a pleasure and a day I’ll remember for years to come.
As reported by The Hoot, Ambler received an outstanding contribution award from Bradford Uni on Tuesday, 16 July, being presented with the accolade during their ongoing summer graduation.
In typically humble fashion, he dedicated the honour to everyone but himself: “To all my team; my parents, my kids, my family, friends, staff and volunteers thank you – none of us do it alone.
“Thank you also to all of you who have supported us and continue to do so thank you.”
Speaking to the BBC, he went on to add: “It’s amazing to look back on how far it has come… I don’t want to put a limit on it – we really want to help more men and find out why people get into such dark places.”
Male mental health continues to be a hugely overlooked and pressing issue and the impact of organisations like Luke’s cannot be overstated, having not only provided an all-important outlet but also raised huge funds and awareness for the cause.
Meeting every Monday at 7pm, Andy’s Man Club is all about creating a safe space for men to open up about the storms affecting their lives in a safe, judgement-free and non-clinical environment. You can find your nearest location HERE.
Well done from all of us at The Manc Group, Luke. You can watch the presentation and his acceptance speech in full down below.
#ITSOKAYTOTALK
What a lovely way to honour the Andy’s Man Club co-creator.