Hotel in Ibiza offers vouchers upon booking cancellation due to coronavirus

Question

I had made 2 bookings with a hotel in Ibiza with a non-refundable rate few months ago. I used credit card to complete 2 bookings. 1 of the bookings costs less than £100, while the other costs more than £100. I have travel insurance coverage.

Now due to Spain government legislation, all hotels are foced to close. Hence, that hotel in Ibiza had cancelled all my bookings.

Instead, that hotel offers a voucher to be spent on future booking.

Obviously, I am not satisfied with the voucher. I do not know when the Coronavirus outbreak would end. I want a full refund on my booking, not the voucher.

From legal point of view, how do I get a full refund from that hotel in Ibiza? If that is possible, what word/quote should I use to convince/persuade that hotel in Ibiza to refund me full amount to my credit card? What is the alternative you could suggest if the above method fails?

Thank you.

Answer 1

Take the voucher

What law applies?

Assuming you booked directly with the hotel then Spanish law applies to this contract. The hotel does not "do business" in the UK so you have no protection from UK consumer law.

If you booked through a traditional travel agent (including an online one) then your contract is with the agent and you should be sorting this out with them; not the hotel. They would be doing business in the UK and UK law would likely apply.

If you used a collation site like Expedia or Booking.com then things get complicated.

I will presume that you made the booking direct for the rest of this answer.

What does the contract say?

Subject to Spanish consumer protection law (which I have no knowledge of) the contract can deal with the hotel's inability to supply in whatever way it wants. I am not going to speculate about what it might say - you have to read it.

Force Majeure

Depending on when you booked, the cancellation due to government response may be a force majeure event which, under Spanish law, excuses the hotel from their contractual obligations.

It will almost certainly be such an event if, at the time you booked, the closure of the hotel by the pandemic was not reasonably foreseeable. So if you booked in 2019 or even January 2020 it probably wasn't foreseeable, if you booked last week it probably was and if you booked in between it may or may not have been.

If this is a force majeure event then the hotel owes you nothing - neither refund nor voucher.

Credit card protection

If there was a force majeure event then the hotel is not in breach of their contract and Section 75 of the Consumer Credit Act will not help you. It only kicks in if the retailer made a misrepresentation or breached their contract.

Take the voucher

If, when all this is over, they are still in business and you are still alive, enjoy your holiday.

Answer 2

For the booking that cost more than £100, you can contact your credit card provider and require them to honour their obligations under Section 75 of the Consumer Credit Act.

The fact that the booking is non-refundable does not matter here, as it is the service provider that is failing to provide the service.

For the booking that is less than £100 you are going to have to make a decision - how much is your time worth, and how much time do you think you are going to expend on trying to recover this sum?

You can attempt a chargeback via your credit card provider (which is separate to a Section 75 claim detailed above and has no minimum limit) but this may fail due to the point gnasher makes.