What if you've booked with Thomas Cook?

By Emma Simon

Thomas Cook is to close 200 stores, leaving many holidaymakers wondering whether they should still book a holiday with the company.

Thomas Cook insists that consumers continue to book despite its financial problems. Sam Weihagen, group chief executive, Thomas Cook Group said: “We have instigated significant management changes and implemented a turnaround plan in the UK to address our areas of underperformance.

"Customers have been very supportive in recent weeks and are continuing to book with Thomas Cook. Bookings outside the UK were broadly unaffected by news of our refinancing and in the UK bookings have recovered well.”

The good news is that those who have booked an overseas package holiday with Thomas Cook should be fully covered by the Air Travel Organisers' Licensing (Atol) scheme.

This means that even in the worst case scenario that the company goes bust when holidaymakers are away customers on package deals are flown home without incurring extra expense.

Those who have paid for, but not taken a holiday, will be entitled to a full refund. A travel agent may be able to arrange an alternative holiday, although this is often not possible.

ABTA also provides a similar scheme for those who have booked package deals that don’t include a flight such as winter cruises.

But “independent” travellers, who book flights, accommodation, and other services separately don’t have the same protection.

Many would think that their travel insurance would pay out but many "bog-standard" policies won't provide cover in such circumstances. More comprehensive policies do cover "scheduled airline financial failure” which pays out if your flight carrier goes bust.

It is also possible to buy this cover as a stand-alone policy, although those looking to purchase a policy today should check whether it still includes cover for Thomas Cook flights.

A spokesman for the Association of British Insurers said: “Most standard travel insurance polices are not designed to cover these circumstances. They are there to primarily cover medical emergencies overseas.”

He urges customers to always check terms and conditions of any travel insurance policy carefully.

In addition, customers are always advised to pay for holiday and other big-ticket items on a credit card or Visa debit card.

Under the credit regulations, card providers are obliged to offer a refund if a customer has paid for goods or services that are not delivered, provided the value is between £100 and £3,000. This would cover cases where the holiday company has gone bust.

Bob Atkinson, travel expert at comparison website travelsupermarket.com, says anyone booking holidays should ensure they have "triple-lock" protection in place.

He said: "Holidaymakers need to make sure that the holiday they book is fully Atol-bonded and also that they take out travel insurance with cover for supplier failure. It also makes sense to pay by credit card or with a Visa debit card for transactions over £100. Then they've got belt-and-braces cover."

Rochelle Turner, head of research at Which Travel, said not all Thomas Cook holidays would automatically have protection.

She said: "You need to ask if your holiday is 100pc Atol-protected and if it isn't, don't buy it. The vast majority are, so the Government will be in for a hefty bill if anything happens to the company. At present all travel companies are at risk."