Finding out that your tour operator has gone bust is an increasingly common experience. Over 50 UK travel firms have gone to the wall since the beginning of 2009.

"There are three reasons for this," says Derek Moore, chairman of the Association of Independent Tour Operators [AITO]. "Currency has weakened, which means it costs tour operators more to operate abroad. The recession has made people worried about spending. And the public's desire for value and DIY bookings online has forced prices down to ridiculous levels."

However, just because a travel company has gone down, it doesn't necessarily mean you have to lose your cash as well as your moment in the sun. The level of protection you're entitled to depends on what sort of holiday you booked.

Package holidays with air travel

If you booked your trip with a specialist operator like 2wentys or Club 18-30, chances are your deal includes accommodation, transfers and, crucially, flights. That means you're covered by the Air Travel Organiser's Licensing scheme [ATOL], which means:

• A full refund if you haven't yet travelled
• An alternative holiday if your trip was booked through a travel agent
• If you've already travelled ATOL will meet the rest of your holiday costs so you don't have to come home early
• If you can't complete the rest of your holiday ATOL will make sure you're not stranded

Package holidays without air travel

Sometimes travel companies don't include flights in their packages to keep costs down. If you've taken advantage of such a deal, you won't be covered by ATOL but the defunct operator is supposed to give you a full refund if you haven't yet travelled or cover the cost of your return home if you get stranded.

"If the company you've booked with is bonded - that is they're a member of the Association of British Travel Agents [ABTA] or AITO, then you will have no problems getting your money back," says Derek. "If they're not there isn't much you can do. That's how important it is to check the small print when you're booking a holiday. Booking with a bonded company might cost you a little bit more but it means you're protected."

Independent travellers

If you don't like being herded about in big groups and forced to take part in organised fun, there's a fair chance you booked the various elements of your holiday separately. This can work out cheaper than booking with an agent, and reduces the risk of having to live next door to fat Brits in football shirts for a fortnight. But it is dangerous in other ways.

"It can work out cheaper to book flights, hotels and meals yourself online but if something goes wrong you're stuffed," says Derek. "If you've booked a week at a hotel in Spain and the flight carrier goes to the wall before you go, the hotel's not going to care that you can't get there. You'll lose your money and if the airline didn't have an ATOL licence, you'll lose that money as well."

Gap years

If you're booked a gap year trip, your level of protection depends on whether you've booked independently or as part of a package with a company like Realgap or STA Travel. As already stated, packages or trips with bonded companies are much better protected that independently booked excursions.

Last resorts

If neither ATOL, a group like ABTA or AITO or the operator themselves can help, there are other ways to make sure you don't end up out of pocket. Check the small print of your travel insurance as you may be able to claim money back through them if your tour operator goes bust. And if your holiday cost more than £100 and you paid for it by credit card, you may be protected by the card issuer.

"Nobody likes checking the small print," says Derek. "It's not the most exciting part of a holiday but it can save you money. People have got to learn to take the seatbelt approach. You wouldn't drive a car without putting a seatbelt on and you shouldn't go on holiday without insurance."

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Updated: 17/10/2011

Written by Paul French