So what are your options if your travel provider ceases operations or cancels bookings due to financial difficulties? You can generally get your money back — but it’s not always automatic.
Step 1: Go to the provider and request a refund
For example, when the cruise line American Queen Voyages shut down and canceled cruises in February 2024, the refund process was laborious. Customers had to go through a manual three-part refund request process because the company itself was not issuing any refunds; an insurance company was.
First, customers had to submit a claim form and provide information including the dates of their canceled trip, their payment method and travel insurance information. Then they had to wait for a denial from the cruise line. Finally, they had to request a refund from the insurance company handling claims for the defunct cruise operator.
Don’t assume getting your money back will be easy or automatic. If a travel provider’s closure means your future booking is canceled, save copies of any emails, texts or notifications you received about the cancellation. If a refund requires manual action on your part, these could come in handy.
Step 2: File a claim with your travel insurance
When the British tour company Thomas Cook shut down without warning in 2019, it left as many as 600,000 customers stranded. Some planes were even still in the air. Although a UK government fund helped get many British travelers home, others had to turn to their personal travel insurance policies.
If your travel provider’s bankruptcy or insolvency happens before your trip begins, your travel insurance may be able to reimburse nonrefundable and prepaid expenses. If it happens when you’re already on the trip, it might cover reasonable additional expenses to help you get to your intended destination or go home.
Still, exclusions can apply. Spirit’s shutdown happened quickly, but the airline had been teetering on the brink for a long time, so insurers may have excluded it.
“For Spirit Airlines, this would be considered a foreseeable event,” Chrissy Valdez, senior director of operations for Squaremouth, a travel insurance aggregator, explains. She notes that the airline announced its financial insolvency in 2024. “So even if you had language that protected you against financial default, Spirit Airlines would not be a covered carrier under that list, because this was coming. This was something that was foreseeable.”
Under federal law, you might be able to get your money back if you used a credit card to pay for the travel reservation. The Fair Credit Billing Act allows you to dispute charges on your credit card and get a refund if you didn’t get what you paid for.
That’s what travelers had to do when Iceland’s Play Airlines abruptly canceled flights and shut down in September 2025. The carrier didn’t offer automatic refunds like Spirit did. Instead, it told passengers who paid for their flights with a credit card to contact their credit card issuers for refunds.
You don’t need documentation to start a dispute. But you may need to provide some later if the merchant indicates they’re still providing services, according to a Chase spokesperson.
What if you paid with a debit card, cash or points?
Debit cards don’t offer the same consumer protections as credit cards. Still, if you paid with debit, it’s worth calling your bank and asking for help.
Cash purchases offer even fewer protections. To get relief in this case, you might need to file as a creditor in the company’s bankruptcy proceeding. Those can take years to resolve, and even then, you might recover only a small fraction of what you paid.
If you paid with points or miles, watch for communications from the provider. You might be able to get some compensation, but the process can vary by provider.
The most important thing: Don’t assume that just because a travel provider shut its doors, you can’t get your money back. It often requires some time and effort to recoup your losses after a sudden closure, but it’s possible.
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