customers face refund battle after marketing tie-up with failed Lowcost Holidays

Amid all the fallout from the collapse of Spain-based OTA Lowcost Holidays the impact on fellow online agent and more importantly its customers has drawn little attention.

The two firms had a B2B arrangement whereby, now Swiss owned after its €120 million buyout by Bravo Rumbo in 2015, acted as a marketing channel for Lowcost Holidays.

The deal was similar to a previous arrangement Lowcost had with easyJet Holidays which had stated its ambition at the time it was announced in 2010 to become one of the UK’s big three holiday providers.

However that three year partnership, which was extended by a year due to technology requirements delaying the switch to Hotelbeds’ Hotelopia, was not renewed in 2014 and was understood to have fallen well short of expectations.

The sudden collapse of Lowcost Travel Group at the height of the travel season this month has left one or two customers bemused.

One wrote on TripAdvisor on July 16 in a post headed “Lastminute sold me a lowcost holiday!!!!”:

“I am wondering if there is anyone else out there who feels screwed over by e.g. you bought a holiday in a sale genuinely believing it was a holiday and then after buying it all your literature is lowcost…..and now you have no accommodation due to the administration.”

Travolution asked for a response. A spokeswoman said:

“ group had a marketing and advertising agreement with Lowcost Holidays Spain S.L (part of lowcost Travel Group) – Lowcost Travel Group were not a fulfilment partner for our holidays.

“ had no direct involvement in the booking process as the booking path was hosted by Lowcost Holidays Spain S.L. They also collected all payments and were solely responsible for the customer service and operational process relating to these bookings. The role of was purely to act as an advertising and marketing channel for lowcost Holidays Spain S.L.

“We, at, are very sorry for the impact caused by the Lowcost Travel Group entering into administration. As usual we will do all we can to assist customers impacted by this incident, but the company liable for these bookings remains to be Lowcost Holidays Spain S.L. We can only monitor the situation and do our utmost to provide updated information as soon as it becomes available to us.

“Shortly after the announcement, we sent an email to all clients affected, as well as updating our website with an alert and landing page with useful travel advice along with the appropriate actions to be taken for such bookings in all situations, whether it be returning from a holiday or those yet to depart.

“It goes without saying that our customer care team are fully prepared to advise clients on the best course of action to take.”

With Lowcost collapsing with an estimated £75 million black hole in its accounts and only a €1.3 million guarantee lodged with the Spanish regulator the firm’s administrator is expecting customer payouts to be as low as 1p in the £1.

As the advice on Lastminute’s site suggests, holidaymakers who booked through the website face a battle to recoup their losses.

Lastminute’s terms and conditions include the interesting recent addition relating to financial protection of their customers’ money, which does not suggest good news for those hoping to be reimbursed.

“If you have booked a package via the Holiday booking path on/before 30th of June 2016, see Lowcostholidays S.A.’s terms and conditions, these will apply to your booking. Bookings made on/after 1st of July 2016, please refer to our standard Flight + Hotel Booking Terms and Conditions, these will apply to your booking.”

Lowcost Holidays famously moved its headquarters to Palma, Majorca, in 2013 specifically to avoid the UK’s more stringent Atol regulations that would have ensured protection prompting a clear warning from the UK regulator the CAA that consumers could not expect the same level of protection.

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