UK: Holiday cottage rental agency Sykes Holiday Cottages is to issue thousands of customers refunds for cancelled bookings during the Covid-19 lockdown period, after action from an industry watchdog prompted the company to reverse its coronavirus cancellations policy.
The Competition and Markets Authority [CMA] launched an investigation into Sykes Holiday Cottages and the 24 businesses and brands it owns [including Pure Cottages Group and Carbis Bay Holidays, as well as vacation rental site Vacation Rentals, which owns brands such as Hoseasons and Cottages.com, at the end of April after it claimed that 80 per cent of the complaints it had received since the lockdown began in March were related to cancellations and refunds
The CMA threatened legal action against UK holiday accommodation and private event providers who fail to provide refunds to those affected by cancellations of holidays and weddings due to the coronavirus outbreak.
Its main case against Sykes resulted from the agency reportedly refusing to provide full refunds in cash to all of its customers who had had their bookings cancelled due to the Covid-19 pandemic.
However, Sykes has since reversed its initial policy and has now pledged to offer the refunds in full to customers whose bookings were cancelled or who had not already rebooked, effective across all of its 24 brands. It will also convert credit vouchers into cash if the customer requests it, and provide monthly reports to the watchdog on how many refund offers have been made and accepted.
Sykes Holiday Cottages chief executive Graham Donoghue said: “The last few months have been some of the most stressful for UK holidaymakers and most challenging for the sector’s agents and operators.
“Whilst the majority of customers with bookings starting during the current lockdown period have successfully rearranged their holiday to a later date, we recognise that not all those have been able to or wanted to. Throughout June, more than five thousand customers have received a full refund,” he added.
Consumer law states that full refunds must be offered if a business cancels a contract without providing any of the promised goods or services. By extension, it also applies if no service is provided due to restrictions resulting of the current lockdown, or if a guest cancels because of said restrictions.
Though Sykes has reversed its cancellations policy, it insisted that the “wheels were in motion” before the CMA investigation began two months ago.
CMA CEO Andrea Coscelli told the Gov.uk website: “Our Covid-19 Taskforce has received thousands of complaints about holiday rental firms, so it’s good to see our action bringing results for consumers. Sykes is the second major holiday lets company to change its Covid cancellations policy by offering full refunds following CMA intervention, and we expect all companies to do so.
“As lockdown restrictions lift, consumers are still having to recoup their losses from cancelled holidays, which increases the financial worries which many people face. The CMA has shown it will act to protect consumer rights and enforce consumer law. Businesses must now do the right thing or risk similar enforcement action themselves,” he added.
Sykes becomes the second major holiday lettings firm to back down after the CMA probe, just under a month after the watchdog confirmed that Vacation Rentals had voluntarily changed its refunds policy and formally pledged to fully refund customers if their booking was cancelled owing to restrictions caused by the pandemic.
Vacation Rentals, which manages 22 brands offering short-term holiday lets in the UK, Ireland, France and Italy, had argued that it began offering refunds from 30 April, despite guests’ claims to the contrary. That date was when the CMA sent guidance to travel firms detailing consumer rights and refunds and threatened to take them court if they failed to comply.
Based on complaints received by its Covid-19 Taskforce, the CMA identified holiday accommodation as a key area for investigation. According to the watchdog, it had received over 5,500 reports about holiday rental accommodation providers at the time of writing, of which complaints about Sykes made up a “significant proportion”.
The Covid-19 Taskforce was launched on 20 March to scrutinise market developments, identify harmful sales and pricing practices as they emerge, and take enforcement action if there is evidence that firms may have breached competition or consumer protection law.
At the same time, the CMA revealed the latest update on the work of its Covid-19 Taskforce, and advised people to disclose any concerns by using an online form to report a business.