Holidaymakers warned about the dangers of the low deposit getaways

Holidaymakers tempted to book holidays for next year with companies offering ‘low deposit’ breaks should be wary of hidden charges if they end up having to cancel the trip.

Consumer champion Which? warns that what most companies mean by ‘low deposit’ is not that the deposit is lower than usual, just that you pay your deposit in instalments.

They’ve seen complaints from holidaymakers who feel travel companies aren’t making this clear enough, making them think they’ll only lose the small deposit if they cancel.

Which? reviewed various holiday companies offering low-deposit breaks and found not all clearly signposted that customers are liable for the remainder of the deposit amount at the point of sale. This information is sometimes buried in the terms and conditions.

Their investigation revealed who are the worst culprits for misleading holidaymakers:  

Loveholidays and On the Beach

A week-long package holiday to the Oberoi Beach Resort in the UAE for August 2024 on the Loveholidays website is £29 per person (pp) to secure the low-deposit scheme. Holidaymakers might assume that if they cancel a trip for two, they’d lose just £58.

But by cancelling even a few days after booking, they’d have to pay another £1,439* – despite the fact they can no longer go on the trip.

The initial £29pp is not the full deposit but a snippet of a larger non-refundable deposit, totalling just over £748pp.

Even where the Online Travel Agent (OTA) outlines the breakdown of upcoming costs, it doesn’t indicate that any of the payments are the remainder of a deposit you're liable to pay – even if you cancel. Instead, it labels them as ‘instalments’. 

While Loveholidays includes a link to its full T&Cs under the heading ‘I understand and agree to the following’, the OTA could be more explicit about the financial consequences of booking and cancelling a low-deposit holiday in the main text.

Similarly On The Beach requested a low deposit of £30pp to secure a package holiday booking at HSM Canarios Hotel in Majorca. It also calls future payments ‘instalments’, rather than clearly emphasising that the initial low deposit plus the first two instalments make up a full deposit. This is mentioned only in the terms and conditions.

On the Beach signposts that cancellation charges may apply, hyperlinking to relevant T&Cs underneath, but this requires a customer to click to discover more information. It could be more transparent.

Under consumer law, companies should present information clearly and in a timely manner, without omitting important information, so that consumers can make informed decisions when making purchases.

Tui customer confused by deposit payments

Tui customer Michelle Simons booked her low-deposit holiday in a Tui store in Northamptonshire. As she had not been abroad for 13 years, she wanted specialist advice.

After settling on a holiday to Bodrum, Turkey, she made a low-deposit payment of £150 for her family of four.

She said the Tui agent handed her a laminated card with T&Cs, which she skimmed through. She claims that the agent did not verbally explain that she’d be liable to pay a larger deposit if she cancelled later.

A follow-up email from Tui confirmed her booking and described later scheduled instalments as ‘payments’. Michelle thought these would pay off the final balance rather than top up the deposit, and Tui didn’t clarify this in the email.

Later, she grew concerned about her holiday selection, partly due to reports of high temperatures in the resort area, and decided to cancel. She thought she’d only lose the £150 she’d paid upfront.

She told Which?: ‘That’s when they told me I’d have to pay the full £800 deposit – another £650 on top.

‘I had no reason to think that the deposit I’d paid wasn’t the full deposit.

‘You don’t take a deposit and then another deposit, it doesn’t make sense.’

When Michelle tried to challenge this, she said a store manager warned her Tui could take her to court if she did not pay the remainder. 

Unprepared to lose that sum of money, she felt like she had little choice but to go ahead with the holiday. 

‘They should’ve clarified it at the time of booking,’ she told Which?

Because of her experience, Michelle said she would ‘never book with Tui again’.

Tui and Sykes online bookings

Tui offers this low-deposit option online, too. It asks for a £25 - £75pp low deposit for short and mid-haul beach holidays. You can even select a no-deposit option.

However, you’re liable for the full £200pp if you cancel – just as Michelle discovered.

Where Tui breaks down its low-deposit scheme on its website, it doesn’t explain that the next instalment is part of your non-refundable deposit.

It’s only at the point of payment in small print that it explains: ‘You will still be required to pay the full deposit… if either you cancel your holiday, cancel or fail to set up your Direct Debit, or we cancel due to non-payment’.

Similarly, cottage holiday provider Sykes occasionally runs a low-deposit offer.

Like Tui, it doesn’t make you click on any links to discover your liability. Instead, its top-up deposit terms and conditions appear below the cost breakdown in small print. 

Tui and Sykes seem clearer than Loveholidays and On the Beach, but both companies could make any further liability more prominent to avoid confusion.

Tui told us: ‘We welcome this feedback from our customers and strive to make booking a Tui holiday as easy as possible. We will review how we communicate our low-deposit offering during the online booking process as our customers tell us they value our low or no-deposit offers, and the option to spread the cost of their holiday via direct debit.’

Who’s doing it well?

Which? said Jet2Holidays is doing it well. The travel operator refers to its deposit as a ‘low deposit’ but it doesn’t need top-up deposit payments.

Therefore, if a holiday requires a £60pp deposit that’s all you pay. If you subsequently ended up cancelling the holiday, you’d pay no extra.

Which? also says Cottages.com as making they deposit system clear. Their breaks need top-up payments – similar to Sykes and Tui. However, when you choose the low-deposit option, a message immediately appears on screen outlining your liability.

If says: “If you cancel, you will have to pay £123.75. This is the difference between the low and standard deposit.”