Package holiday or book it yourself? What ATOL protection means for you

Booking your own flights and hotel can feel like the savvy option, and sometimes it is. But a package holiday from a UK company often comes with something a do-it-yourself trip may not: ATOL protection. Here is what that means and how to weigh it up.

What is ATOL?

ATOL (Air Travel Organiser's Licence) is a UK financial protection scheme run by the Civil Aviation Authority. It protects you if the travel company you booked with goes out of business.

• If it happens before you travel, you can claim back the money you paid for the protected trip.
• If it happens while you're away, the scheme aims to let you finish your holiday and get you home, rather than leaving you stranded.

It is not travel insurance. ATOL does not cover delays, cancellations by the airline for other reasons, illness or lost luggage, so you still need insurance as well.

Which bookings are protected?

ATOL generally covers packages that include a flight, booked with a UK-based company, plus at least one other part of the trip, such as accommodation or car hire. "Flight-plus" bookings, where you book a flight and then a hotel or car hire through the same company at around the same time, can be covered too.

Booking a flight on its own directly with an airline, and booking a hotel separately elsewhere, is usually not ATOL protected. Rules have detail and change over time, so check the Civil Aviation Authority's website for the current position.

The certificate is the proof

When you book an ATOL-protected trip, you should be given an ATOL certificate. Check that it lists every part of the trip you paid for: anything missing from the certificate isn't protected. If you were expecting protection and didn't get a certificate, ask the company for one straight away. Keep it safe, and take a copy on holiday.

Is a package cheaper?

Sometimes. Tour operators buy flights and rooms in bulk, so a package can beat the price of booking the same things yourself, especially for beach holidays at busy times. At other times, especially for city breaks or flexible dates, booking separately is cheaper. The only way to know is to price both:

1. Price the package, including transfers, bags and board basis.
2. Price the same flights, hotel and transfers separately, with the same luggage.
3. Compare like for like, then decide how much the protection and convenience are worth to you.

Tips before you book

• Watch low-deposit offers. They spread the cost, but check when the balance is due.
• Compare board basis. All-inclusive can save money for families; half board may be better if you like to eat out.
• Pay by credit card where you can. It can give you extra protection on purchases over £100 under section 75 of the Consumer Credit Act.

The bottom line

Don't assume either option is cheaper; price both. If the difference is small, the financial protection of an ATOL-protected package is often worth having. This is general information, not financial advice. See our package holiday deals and all travel deals.