Lowcostholidays.co.uk: the now-bankrupt firm that didn’t sell low-cost holidays and wasn’t in the UK

The man who pays his way

Thousands of summer holidays have been put at risk by Low Cost Holidays' collapse (Getty/iStockphoto)

Planning a holiday? Human nature means you look at the big picture, not the small print. You envisage sun and sea, or culture and cuisine. Your picture might include a drink by the water’s edge as the sun goes down. But it doesn't involve fretting over the legal intricacies of your booking.

Not only do the terms and conditions look dull, they are surely irrelevant: in 2016, it must be impossible for travellers in their tens of thousands to lose their money?

As 140,000 angry and disappointed customers of Low Cost Holidays are discovering, it is all too easy for cash to vanish. They have paid hundreds or thousands of pounds to a firm that closed down last weekend.

The people whose summer plans are now in jeopardy could be forgiven for thinking they were booking a low-cost holiday through a British company. After all, that was what the name of the company, and its reassuring “co.uk” domain seemed to promise.

But you did not need to read the small print very assiduously to discover that you were dealing with a Spanish online travel agency, not a British company. And you weren’t buying a low-cost holiday. Instead, you were paying a middle man to pass on your details and your money to the suppliers of the individual components of your trip.

Your personal data may have reached all the suppliers, but for tens of thousands of holidaymakers, their cash did not - as they have been discovering since Low Cost Holidays went bust.

Airlines demand payment upfront from agents, on the reasonable grounds that they have the upper hand. They believe they can fill up their planes without the help of intermediaries. If an agent wants to put people on a particular plane, they must pay up immediately. But many hotels and transfer companies depend on online travel agents to deliver business. It appears that Low Cost Holidays paid them in arrears, typically two months after they had provided the room or the ride from the airport.

Still, millions of British holidaymakers choose to book through online travel agents. On occasion, I do, too. But only when I can identify some real value for surrendering the wealth of consumer protection that comes with a package holiday. And that doesn’t happen often.

Low Cost Holidays claimed, and its surviving ilk will insist, that online travel agents are able to provide an astonishing breadth of choice at unbeatable prices. But let’s look at easyJet and Ryanair, the budget airlines that will carry the bulk of UK travellers to the Med this summer. Unless I am mistaken, they will never sell seats to an online agent more cheaply than direct to the public. So you could simply use a fare-comparison website such as Skyscanner, Dohop or Kayak, and then book direct with the airline. Not only do you save on the agent's fee, you also cut out a layer of complexity if anything goes awry. For example, most airlines are happy to correct minor spelling errors free of charge. But at least one online agent will charge £150 if you ask for a change to be made within four weeks of departure.

There are plenty of accommodation comparison websites, too. Again, I use them freely, but then contact the property direct to negotiate. You might be able to choose between paying in advance at a discount, or full price on arrival. Either way, you are not sending to an intermediary, possibly based abroad, your hard-earned cash, with no guarantee that it will be passed on.

Human travel agents can be marvellous, and I book with them frequently and enthusiastically. When things go wrong, a good agent will intervene on your behalf. But online agents often take a very different view.

Any customers who cared to see what Low Cost Holidays would do for them discovered they were on their own. The firm said: “We will not be liable in respect of quality complaints, any general losses, distress or disappointment suffered by you in relation to your booking, and any such claims must be directed to the relevant supplier of the element in question.”

An analogy would be going to a restaurant, paying in advance for your meal, discovering that the steak is impossibly tough and the wine is corked - and being told by the proprietor that your quibbles rest with the butcher and the winemaker.

Booking through an online agent can mean you accept a big burden of risk. So the only time I use one is when it is being used by airlines to discount fares below published prices.

Earlier this summer I bought a flight from Toronto via Amsterdam to Gatwick through Tripsta.co.uk, a company with a London phone number but which is actually based close to Syntagma Square in Athens. I happily handed over £140 for 4,000 miles of air travel on two quality carriers, Air Canada and British Airways. When I had asked for a one-way flight on either airline, each quoted many hundreds of pounds. But they seemed happy to offload empty seats on midweek flights via the Greek connection.

Internet shopping for travel reveals all kinds of tempting deals. But don’t just check that the price is right. Delve a little deeper to make sure you are happy with the risks you are taking on, or your low-cost holiday could prove much more expensive that you imagined.

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