What does the Compensation Fund cover for consumers?

The Compensation Fund is designed to protect consumers in the travel industry by providing financial recourse under certain circumstances. Specifically, it covers costs incurred for unused travel services in the event that a travel agency goes bankrupt. This means that if a consumer has purchased travel services through an agency that subsequently files for bankruptcy, they have a safety net that can help recover the money paid for those travel services that they could not use, thereby minimizing their financial loss.

The context of this fund is particularly important in maintaining consumer confidence in the travel industry, as it reassures customers that their financial investments in travel arrangements are safeguarded against the failure of a travel service provider. In contrast, expenses for travel upgrades, cancellation insurance fees, or emergency travel costs are not covered by the Compensation Fund, as those situations typically fall under personal responsibility or other forms of travel insurance, rather than consumer protection against agency insolvency.