Lowcostholidays collapses – your rights as 140,000 hit by travel chaos

edited 18 July 2016 at 9:24AM in Overseas Holidays & Travel Planning
832 replies 114.3K views
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  • EngadineEngadine Forumite
    1.3K Posts
    Debt-free and Proud!
    This failure has nothing to do with Brexit. This company had not been in a good place for a long time and numerous rumours have gone around the travel industry over the last couple of years regarding their stability.


    This is the best time of the year for cash flow in the travel industry, Lowcost have taken payment for all their summer bookings knowing they would not pay suppliers until at least September. It is disgraceful that they have waited until now to do this after taking everyone's money. There will be massive fall out in the industry over this one.


    Moving to Palma meant that they no longer had to comply with any of the regulations in the UK, which meant no protection for any of their customers.


    Lowcost Holidays/ Loscost Beds did contract some of their own hotels however they bought many hotels from other companies. Some of which are based in the UK and many are based overseas.


    If you have your hotel voucher it may well tell you on the voucher who Lowcost actually booked you accommodation with.


    In most cases these companies have not been paid (including the one I work for) for hotel bookings made by Lowcost. Therefore these companies are left with no alternative but to cancel you booking that was made by Lowcost. However if the company takes bookings from directly from customers you may be able to rebook with them.


    If it is not a company that takes bookings directly from the public you will have to rebook elsewhere and pay again.


    If you booked through a travel agent then you have more protection as if the travel agent booked flights and hotels for you they will have covered this with their own ATOL licence, they will sort things out.


    It pays to check out who you are booking with and check that they are UK based, too many times people just go for the cheapest price and don't check out exactly who they are giving their money to. It is only when things like this happen that you find out exactly who you gave your money to.


    There is a lot to be said for booking with travel agents as they offer more protection for your money and bookings.
    :j Debt free since 31/01/08:j

  • peachypricepeachyprice Forumite
    22.3K Posts
    Part of the Furniture 10,000 Posts Name Dropper
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    sharp910sh wrote: »
    I called the hotel and they said the booking as made by hotels4u which is a Thomas cook company. They said that payment hadn't been received but they will usually send out the invoice later. Not before. So I'm not sure. I hope.

    The problem I can see arising is:

    Hotel send invoice to H4U
    H4U ask LCH for the money you have paid them
    LCH have gone bust so don't have your money to pay H4U
    H4U don't pay the hotel invoice
    Your room gets cancelled.
    Accept your past without regret, handle your present with confidence and face your future without fear
  • EngadineEngadine Forumite
    1.3K Posts
    Debt-free and Proud!
    Given you are not travelling until August it is high unlikely that your hotel will have been paid. Lowcost possibly made your hotel booking with another company, generally hotels are paid after customers have stayed.


    if you have any paperwork from Lowcost regarding your hotel booking check to see if it mentions who they have booked this with. If not I would contact the hotel today, they will be able to tell you which company they received your booking from
    :j Debt free since 31/01/08:j

  • TonyM19TonyM19 Forumite
    118 Posts
    Part of the Furniture 10 Posts Combo Breaker
    Engadine wrote: »
    Given you are not travelling until August it is high unlikely that your hotel will have been paid. Lowcost possibly made your hotel booking with another company, generally hotels are paid after customers have stayed.


    if you have any paperwork from Lowcost regarding your hotel booking check to see if it mentions who they have booked this with. If not I would contact the hotel today, they will be able to tell you which company they received your booking from

    I'm not holding out a great deal of hope for the accommodation tbh. The accommodation was booked by Lowcostbeds.com AG, which isn't filling me with confidence.
  • Booked with Lowcost Holidays for 1 week to Lanzarote family of 4 (Booked 28th May) Paid with debit card. Payment taken on 30th May for accommodation (says paid to Lowcost Holidays) and flight payments taken 31st May (Says paid to Ryanair).
    We are meant to be going 27th July. Ran the hotel this morning who said we are still on their system and was booked through "Hotels4U" on 28th May. Finally got through to Hotels4U who said that although we are still on the hotel system the payment will not go through and will be invalid. apparently all hotels will get an email stating this on Monday.
    My flights are still showing as confirmed on Ryanair website but I cannot get through to anyone on the phone to confirm directly.
    Alternative accommodation in Lanzarote is now scarce and prices have rocketed from £1,000 to £8,000 (absolutely shameful they are cashing in).
    My travel insurance covers me for Airline failure but not end supplier failure. Am I completetly doomed? If the flights are still valid but I can't find alternative accommodation in my price range so have to forego the flights, would I be able to still do a chargeback for the whole amount with Visa Debit?
    Anyone got any advice?
  • Westin wrote: »
    No, you can't unfortunately claim the difference in price.
    Westin wrote: »
    You can only potentially reclaim from your credit card provider the cost of the transaction made and not an additional amount for your new accommodation.

    I would suggest calling the hotel and checking the status of the reservation. It is likely you will have to rebook and pay again but ask them if they will honour the original Lowcost rate.

    This is not correct. The CC provider is also liable for the additional costs. I can't post a link but this example (from the FOS website) explains it well:
    As a wedding anniversary present for her parents, Mrs K paid for them to join her and her husband, together with their two children, on a holiday in Florida. She used her credit card to buy six return flights, at a total cost of £2,890.50.

    Just a few days before they were due to fly back at the end of their holiday, the family learned that their airline had gone into receivership. In order to get home, Mrs K had to book flights with a different airline - at a total cost of £1,980.60.

    Once they were home, she made a claim to her credit card provider, under section 75, for the cost of the flights from the USA. In due course the card provider refunded £1,349.25 to her account.

    Unhappy at receiving less than the amount she had claimed, Mrs K complained to the card provider. It told her the amount it had credited to her account was the exact amount it had recovered from the failed airline. It said the airline had confirmed that this sum 'represented the portion of the original payment that was attributable to the return flight'.

    Mrs K thought it was unfair to simply refund her the cost of the unused portion of her original tickets. However, the card provider was not prepared to reconsider the matter, so she brought her complaint to us.

    complaint upheld
    The failure of the airline with which she had booked return flights meant that Mrs K was obliged to buy tickets from a different airline to get her family home from their holiday. It was clear from the evidence that she had paid a reasonable price for these tickets.

    The card provider's liability to Mrs K under section 75 was not limited to passing on any refund it was able to obtain from the airline. The card provider was also liable to her for the additional costs she had reasonably incurred as a result of the airline's breach of contract.

    The flights from the USA had cost Mrs K £1,980.60, so the card provider's refund still left her out of pocket by £631.35. We upheld the complaint and told the card provider to pay her this amount.

    There was a similar situation a few years back when SilverJet went bust. Those who paid by CC were able to reclaim the full cost of a business class ticket with another airline, which were far more expensive than their original flights.
  • Hotels 4 U are not honouring any bookings. all hotels booked via Lowcost via Hotels4U will get an email next week stating to cancel all rooms. Absolutely gutting.
  • TonyM19TonyM19 Forumite
    118 Posts
    Part of the Furniture 10 Posts Combo Breaker
    My travel insurance says my cover for End Supplier Failure is nil on the package I took out. I'm assuming that this particular avenue is closed for claiming anything back from them.
  • edited 16 July 2016 at 8:52AM
    richardwrichardw Forumite
    19.4K Posts
    Part of the Furniture 10,000 Posts
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    edited 16 July 2016 at 8:52AM
    Some airlines' flights are easily changeable, so consider doing this if the accommodation situation is very difficult.
    Posts are not advice and must not be relied upon.
  • hugo15hugo15 Forumite
    116 Posts
    Part of the Furniture 10 Posts Combo Breaker
    Hmmm..... Although it says LCH booked with Expedia and I have a Travelscape Ref number they cannot find my booking. I have spoken to the hotel who have confirmed the booking is in place and that it is pre-paid. Now whether this means they have the cash or that they have a contract to get paid by Expedia I don't know. I'm trying to get a reference number from the hotel to give to Expedia. Maybe then I can find out if LCH paid Expedia. Resigned myself to the fact that I will probably have to pay again. For some reason I have paid 2/3rds of the holiday by credit card and 1/3 by debit card. Not sure what the chargeback position would be in this situation?
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