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Originally Posted by markymoan
Cheers punky if that is the case they aint going to be happy
they did ask for another location (spain) but was told they had to pay the difference
i think it stinks 
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Well, that depends on the price difference.
Not saying this against your friend mate, but a bit of general info about this:
Tour ops can't just dole out full refunds though. The clients money, 90% normally, has already been passed onto the hotel. The tour op probably doesn't have the cash to pay out his claim, let alone say if the tour op has hundreds of clients wanting full immeadiate refunds. The tour op only holds the middle man profit, 10% and so they'd have to fight the hotel for the money, or wait through insurance. Making companies go bust isn't the way to deal with disputes. It isn't really a case of no wanting to pay out refunds, its not being physically able to (blood out of a stone, etc.)
That is why replacements are better, it can be sorted with the new hotel on account, and give the tour op a month's grace to try and get money back from their indemnity insurance company, which probably will pay out for terrorism, and the original hotel, and settle the bill with the new company.