STA Travel: What does the company’s collapse mean for business and travellers?

Millions of travellers booked formative travel experiences with the company over the past few decades.

Distant dreams: the STA Travel head office in central London (Simon Calder)

STA Travel UK, one of the biggest names for backpackers and adventurers has gone out of business.

On Friday evening, the Civil Aviation Authority (CAA) announced that the London-based firm had failed with the loss of 500 jobs.

The news leaves thousands of customers who are owed refunds uncertain about when they might get their money back.

These are the key questions and answers.

What was the background?

STA was launched in Australia in 1971. Five years later it capitalised on the collapse of the dominant British student travel enterprise, NUS Travel, to establish a foothold in the UK.

The company’s stated mission was: “We are youthful, adventurous and have a desire to experience new cultures.”

Originally its main appeal was in selling cut-price air tickets to students and young people.

But as low fares for all became more common, and online competitors started to take some of that core business, STA Travel moved into providing tailor-made adventures for a wider age range.

STA Travel UK took over the long-haul specialist Bridge the World in 2010.

Before the coronavirus pandemic began, STA had a network of around 50 high-street stores.

What went wrong?

The firm depended on a constant flow of business to pay staff costs and high-street rents, and for decades it succeeded – despite intense online competition.

But like other travel enterprises, STA saw forward sales dry up because of the coronavirus pandemic.

When travel restrictions started coming into effect in March, many trips were cut short, or did not begin.

Long-stay trips to distant destinations, the mainstays of STA Travel, have since been near-impossible to undertake.

Instead of selling, staff face demands for refunds from thousands of increasingly frustrated customers.

How have customers been affected?

With intercontinental travel almost at a standstill, there are believed to be a negligible number of STA Travel customers abroad. Many abandoned their long-haul, long-stay trips in the spring and flew back to the UK.

Others were not able to start their trips due to the coronavirus pandemic.

There are relative few customers with forward bookings, because STA Travel has sold virtually nothing since March. Most future trips, such as they are, will be the result of customers postponing journeys rather than demanding a refund.

My trip booked with STA was cancelled due to Covid-19. How do I claim a refund?

Most STA sales were package holidays: typically a flight plus some accommodation and one or more adventure tours. Those are covered by the Atol scheme, administered by the Civil Aviation Authority (CAA).

Many customers whose trips were cancelled have been trying to claim money back for months, with the company offering only partial refunds and/or vouchers.

Assuming you have a correctly written “refund credit note,” you will be able claim for any outstanding monies owed by STA Travel under the Atol scheme.

The CAA told customers: “Consumers that have accepted valid refund credit notes or are due refunds for the cancellation of their Atol-protected booking will be able to submit a claim to Atol through our online portal.”

What about flight-only tickets?

Abta, the travel association, says: “You will need to contact the airline about your booking. The airline is responsible for your booking and this should proceed as normal.”

If your flight was cancelled due to the coronavirus pandemic, and you have been trying to get your money back from STA, you will need to make a claim direct with the airline concerned.

The CAA broadly concurs, saying: “If consumers have a flight-only booking that was Atol protected, they will only be able to make a claim if they are still due to travel and have not received a valid ticket.

”Otherwise, consumers should speak to their airline, including if the flight has been cancelled or they have received a voucher for a cancelled flight.”

I booked a holiday through STA Travel but a different company is providing it.

Where an Atol-protected package with another tour operator has been booked through STA Travel, your Atol certificate will say “package sale” in the bottom right-hand corner.

Abta says: “You will need to contact the tour operator named on your paperwork or Atol certificate (listed under ‘Who is protecting your trip?’). “Your tour operator should be able to confirm that your booking will proceed as normal.”

How significant was STA Travel?

Millions of travellers booked formative travel experiences with the company over the past few decades.

One of many expressions of sadness was tweeted by Michael Rogers: “I bought a very reasonably priced Round [the] World ticket from STA about 15 years ago and it changed my life. Very grateful for that and very sad news.”

Dawn Smith said: “Booking student travel at STA opened the door to a new and exciting world. Happy memories.”

And Alice Brown wrote: “They sparked my love for travel when I was 21 and planning my first-ever trip.”

Are more travel casualties expected?

Sadly, yes. Travel restrictions are stifling business. In the UK, the rules on different European destinations keep changing. Due to the uncertainty this creates among prospective travellers, sales are not picking up as anticipated.

On Thursday Qantas said it did not expect to start flying intercontinental routes until the second half of 2021 – signalling the continued closure of a key market, Australia, to UK travel firms.

STA’s holding company said there was no prospect of any improvement this year.