The CMA said that Sykes Cottages had now “reversed” its policy of not offering full refunds to customers whose holidays had to be cancelled due to Covid-19 after the authority threatened to launch court action against the operator.

Sykes will offer full cash refunds to affected customers who have not already rebooked, while also agreeing to convert credit vouchers to cash if requested by customers.

The company also has to provide the CMA with monthly reports on how many refund offers have been made and accepted.

These commitments apply to Sykes’ 24 businesses and brands, including Sykes Holiday Cottages, Pure Cottages Group and Carbis Bay Holidays.

The CMA took action through the Covid-19 Taskforce which has received more than 5,500 complaints from consumers about the holiday lets sector “with complaints about Sykes making up a significant proportion of those reports”.

The move comes a month after Hoseasons and sister brand Cottages.com agreed to refund customers with cancelled bookings after the CMA stepped in.

Andrea Coscelli, chief executive of the CMA, said: “It’s good to see our action bringing results for consumers. Sykes is the second major holiday lets company to change its Covid cancellations policy by offering full refunds following CMA intervention. We expect all companies to do so.

“As lockdown restrictions lift, consumers are still having to recoup their losses from cancelled holidays, which increases the financial worries which many people face. Businesses must now do the right thing or risk similar enforcement action themselves.”