Bringing Package Travel Protection into the 21st Century
by James Severn & Catriona Boyd
The Package Travel and Linked Travel Regulations 2018 (the “Regulations”) are designed to improve consumer protection and a clearer regulatory environment in relation to package travel holidays (i.e. those holidays that involve a number of components sold together). The existing Regulations date from 1990 and are therefore now outdated in some areas. Accordingly, they have been updated by the 2018 Regulations with the aim of reflecting innovations in the industry such as online booking and also recent consumer protection legislative developments.
The Regulations came into force on 1 July 2018 and the most notable changes are to broaden the definition of a “package”, introduce rules surrounding linked travel arrangements and improve consumer protection.
New definition of Package
The current definition of a “package”, which covers the traditional booking channel where the services are combined by one trader and bought as a single bundle, has been extended to cover what the government terms ‘dynamic packages’.
By that they mean packages that have the appearance of traditional packages to the consumer and compete in the same market but would not have fallen under the traditional definition of a package. For example the new Regulations extend the meaning of package to include situations where the consumer is able to customise the content of their package online according to their needs and then buys this either from one trader or from more than one trader but at a single point of sale.
The scope of packages will also now include those booked through consumer channels for business purposes.
Linked Travel Arrangements (“LTAs”)
An LTA is a holiday that includes two or more travel services, for example transport, accommodation or car hire but does not meet the definition of a “package”. To constitute an LTA these services must be booked in one visit to a website or shop or through linked booking processes within twenty-four hours of each other and they must be selected and paid for separately thus constituting separate contracts with individual travel providers. This is not currently a common method of booking holidays but pre-empts anticipated changes to the online holiday market.
The concept of LTAs have been introduced by the Regulations with consumer protection in mind. They are designed to ensure that consumers are protected against the insolvency of a trader that has facilitated a combination of travel services but where the ties between the businesses concerned are not close enough to constitute a ‘package’.
Traders facilitating LTAs have less stringent financial requirements than those providing packages. However, they must now provide insolvency cover for any loss to the consumer caused by their insolvency; repatriation (where the trader is responsible for the carriage of the traveller); and, depending on exactly what type of LTA is in question, certain information set out in Schedules 6 – 10 of the Regulations.
Enhanced Consumer Protection
The Regulations introduce new information provisions that have the aim of enhancing clarity for consumers so that it will be easier for them to understand their rights if something were to go wrong or if changes are made to their package.
Traders will be obligated to clearly state whether their offering is a package or an LTA at the outset and provide information on the corresponding levels of protection. Significant amounts of prescribed information must be provided to travellers before booking and after any booking is confirmed. Failures to comply can lead to a fine.
Such information includes: the main characteristics of the package; the total price (including taxes and any additional fees); the trading name and details of the organiser; information regarding passport and visa requirements; and information on their cancellation policy. There is no longer any need for the trader to provide a brochure but the trader must choose an appropriate medium to provide the information specified and in a way that allows the information to be retained and accessed in the future without amendment.
Upon conclusion of the contract there is also a requirement for the trader to provide a copy or confirmation of the contract in an appropriate medium, which is to include much of the information listed above and other essential details such as contact details for the trader’s local representatives.
Importantly, if there is any suggestion that the retailer has failed to comply with these enhanced consumer protection measures, the burden of proof is on the retailer to show that they provided the relevant and necessary information in an appropriate medium. Therefore it will be important that records are diligently kept.
Businesses selling package travel or similar services will need to grapple with the new changes so that they can update their information where necessary; redevelop webpages and booking processes to ensure that they show the detailed information to be provided at appropriate times, arrange the necessary insolvency protection and put processes in place for assisting travellers in difficulty. Although the traditional package travel market will have to make some changes following the implementation of the Regulations, it is those companies offering LTAs that will have to make most changes as they have previously been unregulated. It is anticipated that the Regulations will enhance protection for travellers as online booking systems change and develop in the future.
If you have any queries about this article, please contact James Severn, whose details appear below.