Virgin Holidays customers finally get refunds after trips were cancelled due to coronavirus

Virgin Holidays customers have finally been refunded for package holidays cancelled due to coronavirus following an investigation by the Competition and Markets Authority (CMA).

Under the UK's Package Travel Regulation, when a provider cancels a trip, it is legally obligated to fully refund the customer within 14 days.

However, during the height of the pandemic, many travel firms were struggling to pay the refund as millions of holidays were simultaneously cancelled.

Virgin Holidays has received 53,000 requests for such refunds since 1 March this year, with the number of claims needing to be processed at times 900 per cent higher than normal.

The CMA said it started investigating the travel firm after receiving hundreds of complaints over refund delays.

Even when customers were told that they would be receiving a refund, they still had to wait an “unreasonably long time” according to the CMA. In some cases, this extended to 120 days.

But Virgin Holidays has now processed the outstanding refunds in full, with the last of the delayed refunds paid on 23 October.

Virgin Holidays has also agreed to refund holidays cancelled on or after 1 November within 14 days as per package holiday regulations, and will be submitting regular progress reports to the CMA.

A Virgin Holidays spokesperson told The Independent: "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 were processed at the end of last week, 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 cleared the remaining refund queue on Friday 23 October, when 1,300 bookings were processed, 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.”

The CMA has also secured refunds for travellers from other travel firms.

Last month, Tui agreed to refund all customers by the end of September following intervention from the CMA.

“We remain sorry that holiday refunds took longer to process during the height of Covid-19,” said a Tui spokesperson.  

“The volume of cancellations and customer contacts was unprecedented, and at a time when retail stores, contact centres and offices were closed because of the nationwide lockdown.

“We worked tirelessly to deliver system improvements in extremely challenging circumstances, making refund times shorter prior to the CMA engagement with the package travel sector.  

“Where due, customer refunds will be made within 14 days, as they were prior to the pandemic. We would like to thank our customers for their understanding.”