The Package Travel Directive – How It Affects Your Business

How Will The New Package Travel Directive Affect My Travel Business?

The travel market has evolved dramatically in recent years. The internet has allowed consumers to have access to every corner of the globe. Online travel agencies, niche tour operators, alternative suppliers, comparative rates websites, and online travel agencies have boomed through website sales and enhanced visibility to consumers. During this seismic shift in the travel sector, the Package Travel Directive has been developed and revised to bring trading standards and consumer protection up to speed to match the changing market. It is estimated that the new Package Travel Directive will reduce consumer “detriment” costs by 430 million Euros per annum across the EU.

The laws for consumer protection are far clearer and the above savings have been based on the anticipated effects of the following changes:

• The organiser of a package will be made completely liable for any errors or mistakes. They cannot deflect blame onto third party suppliers. The consumer will now always be able to refer to their primary booking point.
• Stronger Cancellation Rights – Consumers will be able to maintain the right to cancel any trip irrespective of the cause by paying a reasonable cancellation fee. Consumers will also have the right to transfer the package to an alternative traveller.
• Free cancellation before departure will also be allowed in the case of natural disasters, war or other serious situations at the booked destination.
• Booking information has to be clear. Consumers have a right to understand what they have booked and a clear explanation of the benefits of the protection offered under package holiday rules.
• Predictable prices will be enforced. A maximum price cap of 8% for possible price increases will be enforced. If there are any further price increases the consumer has the right to cancel the trip.
• The organiser will now be required to support their clients in difficulty. Consumers cannot simply be directed to travel insurance solutions. The organiser must support clients in the case of health assistance and such like.
• In all EU Member States, the organiser of the package must rectify any issues. Also, the retailer, often the travel agent will be considered to be fully liable.
• If a package organiser goes bankrupt a money-back guarantee or repatriation must be guaranteed and this will also be applicable to Linked Travel Arrangements in some situations.

The New Package Travel Directive creates new legal protections for consumers beyond those purchasing traditional packages. These will affect:

• Linked Travel Arrangements – Online travel websites are extremely popular now. Many websites may specialise in one area, such as flights and then direct their consumers’ to all other travel arrangements through links to independent travel firms on their site. If two or more travel arrangements are booked within 24 hours of each other, through links, the new Package Travel Directive is now applicable. All LTA websites must also make package regulations extremely clear to consumers on their websites.
• Pre-Arranged Packages – Any holiday pre-arranged by a tour operator that includes two or more elements will be included under the new PTR. For example, a hotel plus car rental or a hotel plus transport.
• Customised Packages – when a consumer chooses separate components of their holiday from one business, either online or offline they will now be covered by the new PTR.

Obviously, we have also had a further seismic shift in the UK – Brexit.

The new Package Travel Regulations are an EU Directive but consultations will still be held this autumn and the UK government will be changing UK law to meet the new Regulations by Jan 2018 with enforcement from July 2018. No one knows the exact changes to UK law until the government issues a draft bill at the end of 2017. However, the UK Government is committed to implementing the revised Package Travel Directive.

The clearest effect of this in the UK is that any existing Flight-Plus holidays will now be package holidays. Flight-Plus is the term used in the ATOL Regulations 2012 to describe the type of holiday sale where a consumer requests to book a flight with accommodation and/or car hire at the same time or within a day, but which is not currently legally defined as a package.

We are confident the changes will be implemented in 2018. As such it is time for any travel company who thinks they may be affected in any way by the changes of the new Package Travel Directive and/or changes to Flight-Plus, to start implementing consumer protection measures such as those offered by Protected Trust Services.

If you’d like to learn more about the Package Travel Directive, please get in contact with one of Protected Trust Services’ (PTS) lovely staff members by calling 0207 190 9988. Or, you can visit our member support and travel trust account pages to learn more about how we protect you.