Sykes Cottages has reversed its policy on cancelled bookings and will now offer customers full refunds following a probe by the competition watchdog.

Sykes had been refusing to provide full cash refunds to all customers whose holidays could not go ahead because of Covid-19.

But intervention by Competition and Markets Authority (CMA) has prompted the change after it warned that the company could have faced legal action.

Sykes has now agreed to:

  • Offer a full cash refund to customers whose holidays could not go ahead due to government restrictions at the time and who have not already rebooked
  • Convert credit vouchers to cash, if customers prefer (and as long as the credit voucher has not been used)
  • Provide the CMA with monthly reports on how many refund offers have been made and accepted.

The commitments apply to 24 businesses and brands owned by Sykes, including the Pure Cottages Group and Carbis Bay Holidays, as well as Sykes Cottages itself.

Sykes announced last week that it will now offer full cash refunds to customers whose bookings were affected by government lockdown periods.

Chief executive Graham Donoghue said: “The past few months have been some of the most stressful for UK holidaymakers and most challenging for the sector’s agents and operators.

“Whilst the majority of customers with bookings starting during the current lockdown period have successfully rearranged their holiday to a later date, we recognise that not all those have been able to or wanted to. We are now in a position to offer those customers the additional flexibility of a full cash refund as well as other options.”

This is the second investigation by the CMA into Covid-19 cancellation policies by holiday letting companies after Vacation Rentals last month agreed to offer refunds for all trips which could not go ahead due to the pandemic.

The news comes as a part of a wider programme of investigations into businesses which reportedly have failed to respect cancellation rights during the pandemic.

The CMA identified holiday accommodation as one of the key areas for investigation.

Its Covid-19 Taskforce has so far received more than 5,500 reports about holiday rental accommodation providers, with complaints about Sykes making up a “significant proportion” of those reports.

A number of other firms have voluntarily changed their behaviour and are now doing the right thing.

But others are still not providing refunds to consumers and risk further action from the CMA, which recently expanded the scope of its investigation to include package travel.

CMA chief executive Andrea Coscelli said: “Our Covid-19 Taskforce has received thousands of complaints about holiday rental firms, so it’s good to see our action bringing results for consumers.

“Sykes is the second major holiday lets company to change its Covid cancellations policy by offering full refunds following CMA intervention. We expect all companies to do so.

“As lockdown restrictions lift, consumers are still having to recoup their losses from cancelled holidays, which increases the financial worries which many people face.

“The CMA has shown it will act to protect consumer rights and enforce consumer law. Businesses must now do the right thing or risk similar enforcement action themselves.”

Which? head of consumer protection Sue Davies said: “Which? reported Sykes Cottages to the CMA, so it is good to see the company has now made a commitment to ensure all customers will receive the refunds they are entitled to. Yet many others are still struggling to get their money back for cancelled holiday plans, and regulators must take strong action against any firm found to be flouting the law.”