Which? is warning holidaymakers to be wary of enticing ‘low deposit’ breaks sold by travel firms,
Which? is warning holidaymakers to be wary of enticing ‘low deposit’ breaks sold by travel firms, which in some cases fail to make it sufficiently clear that they could be forced to pay up to thousands of pounds if they need to cancel after booking.
When holidaymakers book a package holiday or cottage rental, they’ll often be presented with multiple payment options, which can include paying an initial amount advertised as a ‘low deposit’. While consumers may assume that this figure is the only amount they have committed to paying, in many cases, this is merely a first instalment towards a larger deposit.
Which? is concerned that some firms are not clearly signposting this at the point of sale, leaving customers unexpectedly out of pocket in the event they need to cancel their plans.
Michelle Simons from Northampton told Which? that she would “never book with Tui again” after finding she was liable to pay another £650 to cancel her family holiday to Bodrum, Turkey, after making an initial ‘low deposit’ payment of £150.
Ms Simons told Which? that as she hadn’t been abroad for 13 years, she opted to go into a Tui store to get specialist advice. She said the Tui agent handed her ‘a laminated piece of card with T&Cs on’, but it was not verbally explained at the time of booking that she’d be liable to pay a larger amount if she opted to cancel later on.
Which? has also seen an email confirmation sent to Ms Simons which describes later scheduled instalments as ‘payments’ – which Ms Simons interpreted to be payments towards the remaining balance of the trip, rather than towards a further, non-refundable deposit.
When she later had concerns about her choice of holiday, in part due to reports of high temperatures in the resort area, Ms Simons wanted to cancel the trip and rebook an alternative holiday, believing she’d only stand to lose the initial £150 deposit payment. She told Which?: “That’s when they told me I’d have to pay the full £800 deposit – so another £650 on top of the £150 I’d paid to cancel… I had no reason to think that the deposit I’d paid wasn’t the full deposit.”
When she tried to challenge this, she said a store manager warned her that she could be taken to court if she did not pay the remainder of the deposit. She was not prepared to lose the money and felt she was left with little choice but to go ahead with the holiday.
Which? Researchers tested making an online booking with Tui, finding that in addition to its ‘low deposit’ offer, Tui customers can also select a ‘no deposit’ deal on selected trips. On the payment page the small print sets out that customers are liable for a ‘full’ deposit amount should they cancel their ‘low deposit’ trip, while more confusingly, those on a so-called ‘no deposit’ holiday would also be liable to pay a non-refundable deposit.
Which? believes it would be of benefit to consumers for Tui to set these terms out more prominently earlier in the booking process.
Which? has also expressed concerns about other firms’ low deposit schemes, with some appearing even more confusing.
When looking at a week-long package holiday for two people with love holidays to the Oberoi Beach Resort in the UAE for August 2024, Which? Researchers were offered a ‘low deposit’ of just £29 per person for the £3,490 holiday.
If selecting the low deposit option, loveholidays outlines a breakdown of future costs, calling them ‘instalments.’ It does not clearly indicate that the first two instalments make up the remainder of a larger deposit, meaning a customer might wrongly assume they’d lose just £58 if they wanted to cancel. In fact, they’d be required to pay a further £1,439 to cancel this trip – the remaining deposit due.
While Loveholidays does include a link to its full T&Cs under the heading, ‘I understand and agree to the following,’ Which? Believes the firm could be more explicit about the financial obligations in the main text.
On The Beach requested £30 per guest to secure a booking at HSM Canarios Hotel, Majorca. During the booking process On The Beach signposts that cancellation charges may apply, and hyperlinks to T&Cs – but Which? believe the terms of the low deposit could be made clearer upfront. As with loveholidays, future charges are described as ‘instalments’, rather than clearly emphasising that the next two payments contribute to a non-refundable deposit – which could also be confusing for consumers.
In contrast, Which? Recommended Provider Jet2’s ‘low deposit’ refers to the full deposit payable. At £60 per person this initial payment is higher than with some other companies, but the original £60pp payment is all a holidaymaker would stand to lose if they opt to cancel their trip, with no additional fees.
Meanwhile, Cottages.com offers a low deposit in a similar way to Tui – with the initial low deposit making up just part of a larger deposit due. However, this is made much clearer at the outset, with a pop-up message appearing as soon as you select the low deposit option, outlining precisely the amount that will be due if you decide to cancel – and explaining that this figure is the difference between the ‘low’ and ‘standard’ deposit amounts.
Naomi Leach, Deputy Editor of Which? Travel, said:
“As the cost of living crisis continues to stretch household budgets to the limit, ‘low’ and ‘no’ deposit holiday schemes can be an enticing option, allowing consumers to spread the cost of their holiday over a longer payment period.
“However, we have found many of these schemes can be confusing for holidaymakers, with cancellation fees and ‘top up’ deposit payments sometimes buried in the terms and conditions. If you’re considering a low deposit booking, always take the time to check the terms carefully so you understand exactly what you’re liable for should you decide to cancel.”
Jet2holidays comment for media: Which? & ‘Low Deposit Holidays’
In response to Which? Issuing a warning after it found that holidaymakers travelling with some companies could be at risk of paying large sums to cancel low deposit holidays, Jet2holidays has issued the following comment:
“People work hard and save hard for their well-deserved holidays, so in line with our industry-leading approach to looking after customers, we do everything we can to help them budget and make their money go further. Our low £60 per person deposit helps customers when it comes to budgeting, with the remaining balance due ten weeks before travel.
“Customers booking with Jet2holidays can be assured that they are paying the full deposit payable when they book with us. As a Which? Recommended Provider Jet2holidays will never introduce top-up deposit payments, and we are pleased that Which? has highlighted that our low deposit refers to the full deposit payable. We make the terms and conditions of our low deposit scheme very clear, which is why it is extremely popular with customers. This customer-first approach is one of the many reasons why holidaymakers choose us time and time again.”