Vacation Rentals has changed its policy to ensure customers will have the option of a full refund if a booking has been cancelled because of restrictions associated with the coronavirus outbreak.
The company had initially refused to offer the commitment, but modified is position after the Competition & Markets Authority (CMA) said it would be examining the sector.
Vacation Rentals, which operates popular accommodation sites including Hoseasons and Cottages.com, is one of a number of companies that have been reported to the CMA Covid-19 Taskforce.
The group was set up to monitor market developments and identify the big problems facing consumers as a result of the pandemic and the lockdown.
Other holiday lets firms, however, have not yet agreed to do the same as Vacation Rentals, and the investigation is continuing.
Common complaints include companies refusing to provide full refunds at all or offering only vouchers instead of cash refunds.
The CMA said it would continue with its inquiries into the holiday accommodation sector, which may ultimately lead to court action against companies which fail to comply.
Andrea Coscelli, chief executive of the CMA, said: “Our Covid-19 Taskforce is working hard to ensure that consumers get what they are entitled to, so it’s good news that Vacation Rentals has agreed to offer people the refunds they are due.
“We welcome this step and other holiday lets firms must now follow suit.
“We know the pandemic is presenting businesses with challenges too, but it’s not right that people are being left hundreds or even thousands of pounds out of pocket – on top of having to sacrifice their holidays.”
The taskforce has so far received around 4,500 reports about UK holiday rental companies, with complaints about Vacation Rentals making up a significant proportion of those reports.
Rory Boland, Which? Travel editor, said: “We reported Hoseasons and Cottages.com to the CMA for using potentially unfair terms and conditions to deny refunds for cancelled holidays, so it is good to see these companies have now made a commitment to the regulator to ensure customers will receive the refunds they are entitled to.
“While it is positive to see some firms changing their policy on refunds, there are still many customers struggling to get their money back for cancelled holiday accommodations and package travel bookings.
“The CMA must continue to investigate these sectors and come down strongly on any firms found to be flouting the law.”