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STA Travel: What does the company’s collapse mean for business and travellers?

Millions of travellers booked formative travel experiences with the company over the past few decades.

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STA Travel UK, one of the biggest names for backpackers and adventurers has gone out of business.

On Friday evening, the Civil Aviation Authority (CAA) announced that the London-based firm had failed with the loss of 500 jobs.

The news leaves thousands of customers who are owed refunds uncertain about when they might get their money back.

These are the key questions and answers.

What was the background?

STA was launched in Australia in 1971. Five years later it capitalised on the collapse of the dominant British student travel enterprise, NUS Travel, to establish a foothold in the UK.

The company’s stated mission was: “We are youthful, adventurous and have a desire to experience new cultures.”

Originally its main appeal was in selling cut-price air tickets to students and young people.

But as low fares for all became more common, and online competitors started to take some of that core business, STA Travel moved into providing tailor-made adventures for a wider age range.

STA Travel UK took over the long-haul specialist Bridge the World in 2010.

Before the coronavirus pandemic began, STA had a network of around 50 high-street stores.

What went wrong?

The firm depended on a constant flow of business to pay staff costs and high-street rents, and for decades it succeeded – despite intense online competition.

But like other travel enterprises, STA saw forward sales dry up because of the coronavirus pandemic.

When travel restrictions started coming into effect in March, many trips were cut short, or did not begin.

Long-stay trips to distant destinations, the mainstays of STA Travel, have since been near-impossible to undertake.

Instead of selling, staff face demands for refunds from thousands of increasingly frustrated customers.

How have customers been affected?

With intercontinental travel almost at a standstill, there are believed to be a negligible number of STA Travel customers abroad. Many abandoned their long-haul, long-stay trips in the spring and flew back to the UK.

Others were not able to start their trips due to the coronavirus pandemic.

There are relative few customers with forward bookings, because STA Travel has sold virtually nothing since March. Most future trips, such as they are, will be the result of customers postponing journeys rather than demanding a refund.

My trip booked with STA was cancelled due to Covid-19. How do I claim a refund?

Most STA sales were package holidays: typically a flight plus some accommodation and one or more adventure tours. Those are covered by the Atol scheme, administered by the Civil Aviation Authority (CAA).

Many customers whose trips were cancelled have been trying to claim money back for months, with the company offering only partial refunds and/or vouchers.

Assuming you have a correctly written “ refund credit note ,” you will be able claim for any outstanding monies owed by STA Travel under the Atol scheme.

The CAA told customers: “Consumers that have accepted valid refund credit notes or are due refunds for the cancellation of their Atol-protected booking will be able to submit a claim to Atol through our online portal.”

What about flight-only tickets?

Abta, the travel association, says: “You will need to contact the airline about your booking. The airline is responsible for your booking and this should proceed as normal.”

If your flight was cancelled due to the coronavirus pandemic, and you have been trying to get your money back from STA, you will need to make a claim direct with the airline concerned.

The CAA broadly concurs, saying: “If consumers have a flight-only booking that was Atol protected, they will only be able to make a claim if they are still due to travel and have not received a valid ticket.

”Otherwise, consumers should speak to their airline, including if the flight has been cancelled or they have received a voucher for a cancelled flight.”

I booked a holiday through STA Travel but a different company is providing it.

Where an Atol-protected package with another tour operator has been booked through STA Travel, your Atol certificate will say “package sale” in the bottom right-hand corner.

Abta says: “You will need to contact the tour operator named on your paperwork or Atol certificate (listed under ‘Who is protecting your trip?’). “Your tour operator should be able to confirm that your booking will proceed as normal.”

How significant was STA Travel?

One of many expressions of sadness was tweeted by Michael Rogers: “I bought a very reasonably priced Round [the] World ticket from STA about 15 years ago and it changed my life. Very grateful for that and very sad news.”

Dawn Smith said: “Booking student travel at STA opened the door to a new and exciting world. Happy memories.”

And Alice Brown wrote: “They sparked my love for travel when I was 21 and planning my first-ever trip.”

Are more travel casualties expected?

Sadly, yes. Travel restrictions are stifling business. In the UK, the rules on different European destinations keep changing. Due to the uncertainty this creates among prospective travellers, sales are not picking up as anticipated.

On Thursday Qantas said it did not expect to start flying intercontinental routes until the second half of 2021 – signalling the continued closure of a key market, Australia, to UK travel firms.

STA’s holding company said there was no prospect of any improvement this year.

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STA Travel goes into administration with travellers still trying to get refunds

Topic: Travel and Tourism (Lifestyle and Leisure)

Australians are being urged to go on domestic holidays to prop up the tourism and travel industries. ( ABC News: Ian Cutmore )

Thousands of travellers who booked holidays before the coronavirus pandemic are now in limbo after student travel agency STA went into administration.

Key points:

• All 27 STA outlets are "closed for the foreseeable future"
• Customers are being advised to contact airlines, hotel companies and banks about refunds
• The business employs 180 full-time employees

Deloitte joint voluntary administrator Jason Tracy said they were undertaking an "urgent assessment" of the company's financial position and exploring whether a global restructure or business sale could be achieved.

"COVID-19 has brought the travel industry in Australia close to a standstill," Mr Tracy said.

All 27 STA Travel stores across Australia will be closed for the foreseeable future.

The company currently employs 180 full-time staff across the country.

"We appreciate this will be a stressful time for all involved, and in particular customers and employees," Mr Tracy said.

"We will be communicating with them as soon as possible as we assess and understand the situation, and options going forward."

Customers affected by the announcement are advised to contact their airlines and hotels regarding the status of their bookings, as well as their banks and credit card companies, but some are struggling to get their money back.

Brisbane-based Trinity Rafferty had booked a four-week holiday to Europe with her husband in September 2019, before the COVID-19 pandemic began.

Ms Rafferty said she was "absolutely gutted".

Trinity Rafferty is trying to get more than $10,000 refunded. ( Supplied: Trinity Rafferty )

"We're not made of money. We did everything, we saved like mad," she said.

"We paid cash for everything. We didn't put anything on credit because we had the money there. Biggest mistake we could have ever made."

Ms Rafferty said she had been trying to get a refund of more than $10,000 after Australian Government travel restrictions were introduced in March, but was only offered a credit.

She said she was only offered a "blue voucher" valid for 12 months after her original holiday plans, despite paying full price for a refundable ticket.

Trinity Rafferty says she was promised a full refund when she bought the tickets. ( Supplied: Trinity Rafferty )

"How dare this company say, we signed up with terms and conditions saying that if anything happened, if we cancelled within a certain amount of time, that we would actually get a full refund," Mrs Rafferty said.

"But now they've done this and now they're saying that, 'no, we're not going to give you a refund', and they're holding our money ransom."

'It's a lot of money just to say bye to'

Vanessa Churches has a similar story. She had booked a holiday to the US with her husband and in-laws.

Ms Churches said she was trying to recoup $22,000 from STA Travel and was also offered store credit.

"It's a lot of money just to say bye to," Mrs Churches said.

Vanessa Churches (second from left) was set to go to the US with her husband and in-laws. ( Supplied: Vanessa Churches )

She said her in-laws were depending on the refunded money to fund their retirement and that she had postponed IVF plans because of the uncertainty.

Ms Churches said she had lost contact with her store representative in the past 24 hours.

"I think [we were] all a bit stressed out yesterday when we heard about it and not being able to contact anyone," she said.

The ABC has reached out to STA Travel for comment.

Mr Tracy said the announcement was a result of reduced demand for travel because of COVID-19 travel restrictions.

"The collapse of STA Travel in Australia and New Zealand is certainly related to trading conditions caused by the pandemic, and has been preceded by its Swiss holding company recently filing for insolvency," Mr Tracey said.

The travel industry has been hit hard by COVID-19, with Virgin Australia entering administration earlier this year and Qantas this week announcing a $2 billion loss .

With international borders closed, Tourism Minister Simon Birmingham urged Australians to go on domestic holidays to try to pump some money back into the ailing industry, but Qantas chief executive Alan Joyce criticised border closures between states that are making that difficult.

"We don't have clear guidelines for when the borders will open, when they will close," he said.

"So we have this situation where there are large numbers of states and territories that have zero cases and they're not even open to each other."

"It feels like there are no reality-based decisions, it's just maybe the politics, and we think that will cost jobs and [cause] businesses, particularly a lot of the small businesses in Queensland, to go out of business," he added.

"We need to get people back in jobs, otherwise we're going to have a cliff that's going to be bigger than the financial impact that COVID-19 has already caused."

STA Travel 20 E. University Drive, Suite 201 Tempe, AZ 85281

Phone: 212-473-6100

Email: [email protected]

Book online

Benefits of Using STA Travel:

• World’s Largest Student and Youth Travel Company
• Exclusive student and faculty rates on flights
• 24/7 Emergency Hotline
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Home > Benefits

With ISIC, you get 150,000 exclusive student discounts in over 130 countries. You save on your travels, when booking flights, accommodations and rental cars, as well as on your studies, leisure time, in restaurants and bars, or when shopping in a wide variety of online stores. Here you can find all our ISIC discounts

Available for

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STA Travel – Travel for world discoverers

<p>STA Travel believes that travel helps people discover the world in all its diversity and broaden their horizons. The mission: to make cheap flights and affordable adventure travel accessible to students, young people and world explorers. STA Travel loves nothing more than learning a new language, culture or environment and exploring the world. Travel is a passion, and the company uses that passion and its experience to create for you your very own life-changing travel experience.</p> <p>STA Travel offers you cheap flights, around-the-world tickets, adventure travel, volunteering projects, work & travel packages, car rentals & campers, travel insurance & more. You can find STA Travel in 15 STA Travel stores throughout Germany and at <a href="http://www.statravel.de" target="_blank">www.statravel.de</a>.</p>

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Exclusive Student Fares

<p>Cheap student flights with STA Travel STA Travel offers you cheap flights all over the world. They are the specialists for around-the-world trips, open jaw flights and multi-stop flights. As an ISIC, IYTC or ITIC cardholder, we offer you flight deals that are exclusive to us. When booking your flight, you benefit from particularly favorable rates and special fare conditions. Your card number has to be entered during the booking process.</p> <p> </p> <p>You can find your flight offers online or in any STA Travel store.</p> <p> </p> <p>These are your advantages:</p> <ul> <li>low fares, exclusively for ISIC, IYTC, and ITIC cardholders</li> <li>flexible rebooking of your student ticket</li> <li>especially favorable cancellation conditions</li> <li>free stop-over on the flight route possible</li> <li>maximum stay in the destination up to 12 months </li> <li>also possible as one-way ticket</li> </ul> <p>Your ISIC, IYTC or ITIC card serves as proof to book airfares with STA Travel.</p>

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Visit STA in New York City: 722 Broadway, New York, NY, USA 10003

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Website: www.statravel.com

Overview of STA Travel

STA Travel is the world’s largest student travel organization helping students travel in over 90 countries. They offer real value and flexibility, as well as genuine advice and first-hand experience. They are dedicated to providing young people with products and services that make travel fun, affordable, and safe. Site features include flight booking, hotels, hostels, travel insurance, global rail as well land tour products. Information on activities and destinations. Special deals, both domestic and international. STA Travel has more than 200 stores around the world, helping more than 2 million students annually.

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STA Travel offers the very best in student travel.  At STA the emphasis is on helping students, teachers, and anyone who is age 26 and under to find the very best travel deals and accommodations so that they can enjoy their trip no matter where they are headed.  Travelers can even apply for their International Student Card, International Youth Card, or International Teacher Card directly from the STA website.  By ensuring the best prices and flight flexibility and the most highly rated accommodations, it's no wonder STA Travel is one of the best resources for traveling students.

Through STA students and young people can find cheap flights to the US, Europe, Asia, Australia, and Latin America.  In addition, hotels and hostels can be found in all of these regions, allowing travelers to  find the right accommodations to suit their needs and budget.  And that's not all.  Travelers need more than their flight and a place to stay and STA knows that.  That's why they also help travelers find the cheapest train fares, discount cards for attractions and restaurants, visa services, and global cell phones so that travelers can stay in touch with loved ones while they are away.

Visit the STA Travel website to get information on trip planning, the best places to go for spring break, tours, and the best travel deals., including specific companies and locations that have travel deals, last-minute travel deals, and special sales and savings.  Travelers can even use STA to get a total price estimate for their trip, allowing them to plan it out to the very last detail and know what they will be spending.  This is a great way to have a stress-free trip so when you are ready to plan your next trip, visit STA Travel and see what they have to offer.

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