Letter to the CEO of the Competition & Markets Authority

Dear Dr Coscelli,

I am writing to you following the CMA announcement last week that its COVID-19 taskforce intends to investigate reports of businesses failing to respect cancellation rights during the Coronavirus (COVID-19) pandemic.

One of the sectors it is looking at is holiday accommodation and I am writing to you in the hope that the CMA takes especial note of the likely effect of its statement that it considers exceptions to full refunds should be ‘relatively rare’.

Many small hotel and guest house businesses in my constituency of West Cornwall and the Isles of Scilly survive on a relative shoestring with little in the way of cash reserves and it would not take much to make their businesses unviable. The knock-on effect on the wider Cornish economy, which is heavily dependent on tourism, could be devastating.

The CMA advice states that customers are entitled to a refund of their deposits if:               

  1. A business has cancelled a contract without providing any of the promised goods or services
  2. No service is provided by a business, for example, because this is prevented by lockdown restrictions
  3. A customer cancels or is prevented from receiving the service, for example, due to lockdown restrictions

I am urging both the CMA and Government to make allowances for the exceptional circumstances of the coronavirus pandemic and the catastrophic effect it could have on the Cornish economy if the CMA’s investigations focus too heavily on the consumer’s rights.

Holiday accommodation owners throughout the UK closed their doors as soon as lockdown was announced and cancelled bookings due to the national directive to cease unnecessary journeys.

Businesses here in West Cornwall have been more than reasonable and, in most cases, have been clear that the customer will not have to pay to re-book their holiday, no matter when they return.

Of course it is right that the consumer is protected from unscrupulous businesses, but given the circumstances and especially considering that many of these businesses do not qualify for Government support, it is very likely that many previously profitable and sustainable hotels and B&Bs will not survive this year if they are forced to pay cash refunds for cancellations due to lockdown.

I hope that the CMA’s COVID-19 taskforce is able to strike a fair balance between safeguarding the rights of the consumer and ensuring that large numbers of small, independent and previously viable tourism businesses do not face economic ruin.

I would very much welcome some reassurance from the CMA in this matter.

Yours sincerely,

Derek Thomas

MP for West Cornwall & the Isles of Scilly (St Ives)