The clock is ticking on compliance with the new Package Travel Directive. Ian Taylor reports
The government’s decision to call a general election in June has pushed back a longawaited consultation on the new Package Travel Directive.
The Department for Business (BEIS) will not now consult on implementing the new regulations until late June at the earliest, leaving just 12 months for the sector to comply, with agents facing the biggest changes.
Industry lawyer Stephen Mason, senior partner at Travlaw, highlighted the implications at an International Travlaw Network seminar in London this month. He said: “For tour operators there will not be much change, but for agents there will be a very big difference.
“Unless an agent sells just a flight or just a hotel, and nothing else, it will be difficult not to sell a package if you’re selling two elements [of a holiday]. If a consumer goes to an agent and says ‘Book me a flight and a hotel’, that will be a package.”
Now such a sale requires Flight- Plus Atol cover, but does not carry the liabilities of a package holiday.
Mason said: “Many more companies will be brought into the scope [of the Package Travel Directive]. It will create a more level playing field as a whole.
“It won’t change compliance for established operators, but it will level the playing field, so it’s good for them and good for consumers because it extends consumer financial protection. High street agents will be affected.”
Mason argues a switch in regulation from the place of sale to the “place of establishment” of a business will mark another major shift.
He said: “The place of establishment provision could change the shape of the industry. There could be much more cross-border trading and more companies become pan-European, subject to what Brexit brings [for the UK].
“Multinational companies will only need to be regulated once – it could save them a lot of money. For small and medium-sized companies [SMEs], the [current] need to be regulated in every county is a barrier to expansion. This will end – SMEs will need to be regulated just once.”
He added: “It will be a blow if the British industry is not able to use this [provision] after Brexit. It’s all part of the negotiation. [If not] UK companies will need to be established somewhere in the EU to take advantage.”
Agents have just 14 months to prepare to comply, but have still to see government proposals for implementation. BEIS had promised a consultation this spring, with the regulations required to become law by January and to come into force from July 2018.
Mason said: “The BEIS consultation may well not be much of a consultation. The UK has a tradition of implementing EU legislation by copy and paste.
“All EU law already in English law will become part of English law when we leave the EU in March 2019, so the PTD will become part of English law.
“Judgments of the European Court of Justice up to March 2019 will also continue to have a binding effect unless our Supreme Court overrules them.”