Coronavirus: Virgin Holidays to refund customers £203m for cancelled trips

Suban Abdulla
·3-min read
The watchdog investigated the travel firm after being alerted that customers were waiting an “unreasonably long time” for refunds. Photo: Getty
The watchdog investigated the travel firm after being alerted that customers were waiting an “unreasonably long time” for refunds. Photo: Getty

Virgin Holidays has committed to paying £203m ($266m) to all customers whose package holidays were cancelled due to COVID-19 after hundreds of complaints were made over delayed payments.

The Competitions and Markets Authority said it had “secured formal commitments” from the company to ensure its customers receive their refunds by 20 November at the latest.

The watchdog investigated the travel firm after being alerted that customers were waiting an “unreasonably long time” for refunds. Some customers were told it would take 120 days to get their money back.

While, Virgin Holidays received 53,000 refund requests since 1 March, the company said it has 1,300 refunds left to process by Friday 23 October, worth £4.2m.

Holidays cancelled up to the end of August will be repaid by 30 October, while those cancelled last month or this month will be repaid by 20 November.

Meanwhile, trips cancelled from next month will be refunded within 14 days, which is the maximum length of time under consumer law.

CMA said it was prepared to take the company to court if the refunds are not completed within the agreed time.

“People whose holidays have been cancelled due to coronavirus deserve a prompt and full refund.

“Our action means that Virgin Holidays customers should receive all their money back without further delay.

“We are continuing to investigate package holidays in relation to the coronavirus crisis. Should we find that any business is not complying with consumer protection law, we won’t hesitate to take action,” chief executive of CMA, Andrea Coscelli said.

It comes at a time when Britain’s travel and hospitality sectors have been wrecked by the coronavirus crisis, which saw many package holiday firms cancel trips and flights amid global lockdowns and quarantine lists.

READ MORE: Britons feel less satisfied than ever since pandemic began

To avoid excessive refund delays in the future, the travel firm will also ensure that customers entitled to a refund for a cancelled trips from November onwards will be paid within 14 days.

A Virgin Holidays spokesperson said: “We welcome recognition from the CMA that COVID-19 has resulted in extraordinary pressure being placed on package holiday businesses, including Virgin Holidays. We are pleased to confirm that an outstanding 1,300 refunds with a value of £4.2m will be processed by the end of 23 October, as planned and communicated to our customers.

“Since March, the impact of COVID-19 and subsequent global travel restrictions has led to a huge volume of holiday cancellations. The unprecedented volume of refund requests we have received, combined with constraints on our teams and systems during the pandemic, created significant challenges in the processing of refunds.

“Throughout the crisis we have sought to make improvements wherever possible, including increased processing capability and expanded refund teams. We have gradually reduced refund timeframes and are now 98% through the refund queue, with a remaining 1,300 bookings to be processed on Friday 23 October, in line with our plan to do this by the end of October.

“At every step of the way we have monitored refunds progress carefully against our commitments and will return Virgin Holidays refunds in the normal timeframe of 14 days in November. Our focus now is on rebuilding trust with our customers, recognising that it has regrettably taken much longer than normal to process their refunds. We thank them sincerely for their patience throughout.”

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