No refunds for cancelled trips, say tour firms

British travellers who have bought holidays in South-east Asian countries other than Indonesia will not be entitled to refunds or insurance claims if they cancel, it emerged last night.

However, some tour operators have indicated that they may look sympathetically upon customers keen to switch to other destinations. The Caribbean is expected to benefit from anxieties about Asia, but availability is scarce for Christmas and the New Year. The Foreign Office has never before issued such hard-hitting travel advice for such a wide area, including the most popular South-east Asian destinations of Malaysia, Singapore and Thailand.

It warns of the risk of attacks on bars, restaurants, clubs and churches, citing "an increased threat to British nationals and British interests from terrorism in South-east Asia".

But the warning stops short of advising against travel, except to Indonesia.

Customers who want to cancel holidays to other South-east Asian countries are therefore not entitled to cancel without charge or to receive compensation through travel insurance.

British travel agents meeting in Cairo were yesterday trying to come to terms with the Bali bombing and its effect on business.

Nearly 2,000 members of the travel industry gathered in the Egyptian capital amid high security for the Association of British Travel Agents annual convention.

Some delegates, particularly those specialising in South-east Asia, were alarmed by the strengthening of Foreign Office warnings, which urged "extreme caution" in 10 countries in the region.

Abta was trying to keep a brave face. A spokeswoman said: "Although the events in Bali have been terrible, there will be no agenda change for the convention – everything will go ahead as planned."

One sector of the industry was optimistic it could cash in on travel fears. Bill Gibbons of the Passenger Shipping Association said: "Cruise ships are the most secure holiday you can possibly have."

Britain's biggest holiday company, Thomson, has recovered from the downturn following 11 September, according to its managing director, Chris Mottershead. He said: "We've made an incredible recovery and are looking at a record performance this year.'' He would not comment on the fortunes of his closest rival, MyTravel, which is experiencing severe financial problems. Its chairman, David Crossland, has cancelled his presentation at the convention.

The possibility of a war in Iraq was mentioned by one speaker – the British Airways chief executive, Rod Eddington. He said a conflict would further damage the airline's revenue, which is "down 10 per cent in line with capacity reductions". First- and business-class travel has fallen by a quarter on some of the airline's key routes since 11 September last year.