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STA Travel ceases trading – what you need to know

STA Travel ceases trading – what you need to know

Student travel firm STA Travel UK has ceased trading, claiming it was left with "no choice" following the impact of the coronavirus crisis on tourism.

The travel agency, which specialises in package tours for backpackers and young people, has more than 50 stores across the UK.

STA Travel was a member of trade body ABTA – the Association of British Travel Agents – which says the majority of holidays sold by the company were packages that included flights. These are protected by the Civil Aviation Authority's ATOL scheme, which means customers will be refunded for cancelled trips.

ABTA says that STA Travel also sold some packages that didn't include flights, but that these would be covered by ABTA's own reimbursement scheme.

The number of people currently abroad or with bookings with STA Travel has been reported to be low, due to the coronavirus pandemic. Many people returned from holidays when the scale of the crisis became apparent in the spring, and few people have booked new trips with the operator since then.

See Coronavirus Travel Rights for more information about the impact of coronavirus on world travel.

I'm abroad on an STA Travel trip now – what should I do?

STA Travel says in a statement on its website that customers who hold a "live booking" will be contacted with further information in the coming days.

The Civil Aviation Authority (CAA) says that if you have flight tickets back to the UK as part of your package, your flight should be valid. The flight itself won't be operated by STA Travel as it's not an airline, so you should check directly with the airline operating the flight.

In the worst case scenario that you can't travel, a CAA spokesperson has said that arrangements are being made for ATOL-protected customers to continue their holiday and return home as normal, so you won't end up stuck.

If you have a flight-only booking, it's likely it won't be protected under the ATOL (Air Travel Organiser's Licence) scheme. In this case, you should contact the airline operating your flight to find out your next steps.

I've a future booking – what should I do?

What you should do if you've got a booking depends on exactly what type of booking you have, and who you booked it with.

As STA was a tour operator and elements of its packages, such as flights, were operated by other companies, it's worth checking directly with those companies if your trip can still go ahead.

We're checking with ABTA whether some trips may still go ahead, but assuming they won't, here's what to try in different scenarios to get a refund:

  • If you've booked a package with a flight from STA Travel, you'll be covered by the ATOL scheme. ATOL protection means that if you hadn't started your trip at the point STA Travel stopped trading, you'll get a full refund. You can make a claim on the CAA website.

  • If you booked a package not including a flight from STA Travel, ABTA has said you'll be able to get your money back from it via the ABTA protection scheme. You can find out how to do this on the ABTA website.

  • If you have a flight-only booking through STA Travel, it's worth contacting the airline itself to see if you can still travel. This will likely depend on whether STA Travel had paid the airline for the flight. If you can't travel, it's worth submitting a claim via your card provider to get the cash, if you paid by card. 

    It's worth trying the chargeback scheme first if you paid on debit or credit card. If your booking cost more than £100 and you paid on credit card you could also try Section 75. If a card claim is unsuccessful you could try your travel insurer, though it'll likely only cover you if you have specific supplier failure cover.

I'm owed a refund for a cancelled STA Travel package – will I get the money back?

ABTA has previously told us that if a customer is due a refund for a cancelled package but hasn't received that money yet and the firm they've booked with goes bust, they will get their money back if their holiday is covered by the ABTA scheme.

ABTA has said this also applies if you had a holiday cancelled and were given a refund credit note. A refund credit note is a type of credit note that firms started issuing earlier this year as a result of the coronavirus pandemic.

Those waiting for a refund for a package including a flight should be covered by the ATOL scheme.

If you have a standard voucher issued by STA Travel, you likely won't be covered. If this is the case, you could try claiming back money from your card provider if you paid by card. As mentioned above, it's worth trying the chargeback scheme first if you paid on debit or credit card. If your booking cost more than £100 and you paid on credit card you could also try Section 75.

Can I claim on my insurance if I've lost out financially and can't get the money back another way?

As covered above, most people affected by STA's collapse will be able to claim from the ATOL and ABTA schemes for their financial losses, or failing that, their card provider.

If you aren't able to claim via one of these methods, you could try going to your travel insurer, though there's no guarantee of success.

Some scenarios where you might go to your insurer would include if you have been offered a voucher that isn't covered by the schemes, or if you have consequential losses, such as car hire or activities booked at your destination that you now can't use as your trip isn't going ahead.

Claiming on insurance in these scenarios isn't guaranteed to work, but it's worth approaching your insurer and seeing what it can offer you, as it may cover some losses.

What does STA Travel say?

An STA Travel statement said: "The global impact of the coronavirus pandemic has brought the travel industry to a standstill. Over recent months, we have taken decisive measures to secure the business beyond Covid-19.

"However, sales have not picked up as anticipated due to consumer uncertainties, further restrictions and renewed lockdown measures, which are expected to largely continue into 2021. This week, it was announced that STA Travel's Swiss parent company, STA Travel Holdings AG, had filed for insolvency.

"Today, as a result of that decision, and upon reviewing the UK business, we have been left with no choice but to cease trading with immediate effect."