Abta’s head of financial protection fears Linked Travel Arrangements, a form of protected bookings introduced by the new Package Travel Directive (PTD), can be “gamed”.
John de Vial, Abta director of financial protection, warned: “You could have a Linked Travel Arrangement [LTA] with a flight in it that is not protected by the CAA.”
He told an Abta travel law seminar in London on Wednesday: “I’m very concerned about the system being gamed.”
LTAs are intended to apply to ‘click-through’ bookings between websites – for example, where a consumer buys a flight from one site and clicks a ‘targeted’ link to another to buy accommodation or car hire.
They will require financial protection against the risk of a trader going bust without carrying the liabilities of a package.
The Department for Transport has confirmed the CAA will oversee financial protection for LTAs involving a flight booking. But de Vial believes LTAs where a flight is not the first element booked could fall outside this protection.
He said: “The concern for me is that what is selected first [by the consumer] is what will drive whether an LTA is a flight-led LTA or an accommodation led LTA. I’m very concerned about the system being gamed.”
De Vial suggested an intermediary “can construct the system” to avoid Atol protection by making a booking appear ‘accommodation-led’ even when it includes a flight.
He said: “We have to get this clarified.”
De Vial told Travel Weekly: “Booking and payment technology is moving so fast. LTAs will carry no TOMS VAT, have no [package] liability issues. That is quite an incentive.”
The Department for Business (BEIS) has still to consult the industry on its proposals for implementing the new PTD.
Some leading industry lawyers believe tracking LTA bookings will prove unworkable. But Abta believes they could prove attractive, including to some Abta members.
Rhys Griffiths, partner and head of travel at Fieldfisher, told the Abta seminar on Tuesday: “To make an LTA work you’re going to have to track customers, share that data with other companies and try to reconcile [the bookings].
“I don’t think anyone is going to do that, and I don’t think anyone will care because no one likes LTAs.”
Travlaw senior partner Stephen Mason agreed, saying: “Rhys poured cold water on whether LTAs would ever thrive and I share that view.”
But Abta director of legal affairs Simon Bunce said: “Around regional Abta meetings there has been a quite a lot of interest in LTAs because the liability is so much lower.”
De Vial told Travel Weekly: “There is a spectrum of views about how big LTAs will be.”
“It’s something we need to future proof carefully. We probably have to live with whatever arrangements are put in place for five years or so.”