Vacation Rentals backs down on no-refund policy after CMA probe

UK: Vacation rental site Vacation Rentals, which owns holiday lettings firms such as Hoseasons and Cottages.com, has reversed its decision not to offer refunds to all customers whose trips had been cancelled to the coronavirus outbreak, following an independent probe by industry watchdog The Competition and Markets Authority [CMA].

The CMA confirmed that Vacation Rentals had voluntarily changed its refunds policy and that the firm had formally pledged to its  customers that they will now be entitled to a full refund if their booking was cancelled owing to restrictions caused by the pandemic. It added that of all of the refund policy complaints it had received since March, a “significant proportion” of them were regarding Vacation Rentals.

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.

The spokesman for Vacation Rentals said the firm had acted “fairly and responsibly at all times” and had “responded and adapted to the evolving issues caused by the Covid-19 pandemic whenever new guidelines from the government were made available”.

“Following the CMA’s statement on 30 April clarifying its view on the law on cancellations of consumer contracts during the Covid-19 pandemic, we acted immediately and expanded the options available to any customers who were due to travel during the government imposed lockdown period to include a full cash refund. By the time the CMA’s investigation into our business commenced, we were already acting in line with the CMA’s guidance,” they added.

Customers claimed they had reported the firm to the CMA after they were offered vouchers, which had to be used to re-book their cancelled trips by the end of August, rather than a full refund.

In a statement issued by the CMA, the authority said: “The CMA’s Covid-19 Taskforce has so far received around 4,500 reports about UK holiday rental companies, with complaints about Vacation Rentals making up a significant proportion of those reports.”

Meanwhile, Andrea Coscelli, chief executive of the CMA, said he hoped that the U-turn would encourage other firms in the travel sector to commit to refunding all of their customers who had had their travel plans disrupted by the virus.

Coscelli said: “Our Covid-19 Taskforce is working hard to ensure that consumers get what they are entitled to, so it’s good news that Vacation Rentals has agreed to offer people the refunds they are due. We know the pandemic is presenting businesses with challenges too, but it’s not right that people are being left hundreds or even thousands of pounds out of pocket – on top of having to sacrifice their holidays.

Consumer group Which? reported Hoseasons and Cottages.com to the CMA as complaints began to arise, however travel editor Rory Boland told The Guardian that other customers were still pursuing claims to receive refunds from other holiday accommodation providers.

Boland said: “There are still many customers struggling to get their money back for cancelled holiday accommodations and package travel bookings. The CMA must continue to investigate these sectors and come down strongly on any firms found to be flouting the law.”

Sykes Holiday Cottages, which has over 19,000 properties on its books across the UK, Ireland and New Zealand, has also faced a public backlash from customers regarding its refund policy but this case represented a significant landmark for the watchdog. It is the first time that the CMA has prompted a change in tact from companies who have refused to refund customers for goods or services cancelled due to the pandemic, and the UK Government’s ban on non-essential travel.

Like the accommodations sector, the aviation industry has been subject to complaints from disgruntled customers as flights between countries remain grounded.