A dream holiday turned to disaster when a family found their hotel overrun with homeless people.

Sara Parnell arranged the four-day break in New York through travel agents Ebookers as the perfect gift for her mother Sonja's 60th birthday.

But instead of settling into a comfortable hotel after their long flight, Ms Parnell, her sister Louise Cameron, 30, and their mother found themselves stranded at night with no rooms.

When they arrived at the Malibu Studio Hotel they had to push past an intimidating group of people shouting and drinking in the entrance.

They found two men in charge at the top of the stairs behind a bullet-proof screen.

Ms Parnell, an Inland Revenue manager from Worthing, said: "When I told the two men we had a reservation they laughed. They said the building had been closed for months and was being used as a hostel for down-and-outs.

"It was one of the worst winters and we were alone in the freezing weather in the middle of nowhere. It was a nightmare.

"I spent half of the next day on the phone trying to sort out the fiasco."

The trio were later put up in a different hotel, which Ebookers' US agent reserved after realising the Malibu Studio Hotel was closed.

The hotel error was not the first blunder Ms Parnell encountered.

Three months before the holiday, another of Ms Parnell's sisters due to travel became pregnant and Ms Parnell wrote to Ebookers asking for the name on the ticket to be changed so Louise could go instead.

Ebookers said it did not receive the letter but Ms Parnell said a cheque for the holiday inside the envelope was cashed two weeks later.

She said: "By the time I realised the name hadn't been changed it was less than 60 days to the departure date. Ebookers said the fee to change the ticket had gone up from £100 to £200.

"I wrote to Richard Branson to explain what happened and the airline waived Ebooker's fee. In fact, I was told by Virgin it doesn't charge to change names."

Ebookers gave Ms Parnell £172.53 for expenses and £100 for goodwill following the debacle.

The company was then fined £3,000 by travel agent watchdog Abta in September this year for its conduct.

Ms Parnell said: "I'm not pursuing this for money. I want to let people know.

"It's an achievement to have got this Abta ruling and I want to show other people they can stand up to firms."

Abta spokesman Sean Tipton said: "There were a lot of things Ebookers did that we found unacceptable.

"We fined it for the way it dealt with the booking.

"It went to appeal. Often if companies have a good case the fine is reduced but in this case it went up.

"It clearly made a number of errors. Abta members must abide by our strict code of conduct or face fines."

A spokesman for Ebookers, also known as Flightbookers, said: "The original hotel had been temporarily closed for renovation. We were not told until Ms Parnell's day of travel.

"I appreciate Ms Parnell's frustration but we have compensated her and she accepted it. We feel the case has been dealt with."