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German MPs agree PTD ‘package’ loophole

The German Bundestag passed legislation implementing the EU Package Travel Directive (PTD) this week, accepting a new category of ‘combined travel packages’ which appears contrary to the directive and to its interpretation in the UK.

A booking of two or more separate travel products from different suppliers will be defined as a ‘combined travel package’ in Germany, but will not constitute ‘a package’ under the legislation and not carry tour operator-style liability.

German travel trade publication FVW reported: “This is primarily designed to cover online bookings, but will also impact on travel agents.”

It noted: “Travel agents creating such packages can avoid tour operator liability by selling the products of different suppliers separately (with two different invoices) or by selling individual components from the same tour operator. Customers can pay the two invoices in one payment.”

This interpretation applies to the new category of Linked Travel Arrangements (LTAs) introduced by the PTD and intended to apply to click-through bookings between websites, for example between airline and accommodation sites.

LTAs will be required to have partial financial protection without conferring tour operator liability on the seller.

However, the EU’s English translation of the PTD explicitly states that any booking referred to as a package will carry the liabilities of a package holiday. It defines a ‘package’ as:

“A combination of at least two different types of travel services for the purpose of the same trip or holiday, if:

“Those services are combined by one trader, including at the request of or in accordance with the selection of the traveller, before a single contract on all services is concluded;

“Advertised or sold under the term ‘package’ or under a similar term;

“Combined after the conclusion of a contract by which a trader entitles the traveller to choose among a selection of different types of travel services.”

The European Technology and Services Association (Ettsa), which represents OTAs in Brussels, welcomed one aspect of the implementation in Germany.

Ettsa hailed “a clean distinction between LTAs and situations where targeted ads do not give rise to an LTA” as “a useful and workable blueprint for others”.

However, the adaptations in Germany have caused alarm in the UK. Industry lawyer Rhys Griffiths of law firm FieldFisher told an Abta travel law seminar last month: “In my view this will be in breach of the regulations.”

A representative of the Dutch travel trade association the ANVR said: “My German colleagues told me they have found a way to make a package an LTA.”

Abta head of financial services John de Vial told Travel Weekly: “Only the European Court of Justice can rule on this at the end of the day.”

Griffiths forecast: “It will be good for the lawyers.”

The German government’s concession follows an intense lobbying campaign by the German trade.

The German Travel Association (DRV) reported German MPs received more than 70,000 letters and emails in favour of the move.

German trade leaders hailed the passing of the legislation, but DRV vice-president Ralf Hieke still suggested: “The new legal rules will further increase the complexity of travel sales.”

The smaller VUSR association of independent agents said it was “disappointed” and appealed to the upper house of parliament, the Bundesrat, to block the legislation next month.

The UK industry still awaits details on implementation of the PTD from the UK Department of Business (BEIS). A consultation expected this spring was delayed by the general election and is not now expected until the end of June or even September

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