The trade has been issuing RCNs to customers whose holidays have been cancelled since the start of the pandemic in March 2020. Atol financial protection for these RCNs has been extended to the end of September 2022.
On the Beach, which is not currently selling holidays for departures before September 2021, commissioned research from YouGov which found around 851,000 consumers were currently holding RCNs adding up to a total of £781.5 million.
Simon Cooper, On the Beach’s chief executive, said: “Covid-19 shocked the travel industry and it was challenging for everyone in the early months to manage the disruption and volume of cancellations.
“We’re over 14 months on now and yet the knock-on impact of refunds on consumer confidence continues to affect the industry.
“There are millions of people still holding these IOUs, in some cases over a year later with very limited opportunity to go on holiday.
“This is all because some travel companies actively avoided offering cash and used their customers’ money for future holidays as cash flow. No one would expect to receive a loan for this long and pay no interest, so why should these companies continue to hold on to their customers’ money for future holidays?”
On the Beach is calling for people who are still holding RCNs from 2020 to be fully refunded if they now want their cash back.
“We’re also urging regulators to enforce that holiday companies and airlines hold their customers’ money in separate, regulated trust accounts until the date of travel,” added Cooper.
The online agency has made several recommendations for the travel trade, including giving automatic cash refunds when RCNs have been held for a year, notifying customers with 2020 RCNs of their right to a full cash refund, and ensuring new RCNs are offered “fairly” with the choice of cash refund as an alternative.
On the Beach added it would be “providing advice and assistance” to help consumers with RCNs to get cash refunds – the survey found that 52% of people were “unaware of their legal right to cash”.
