The committee advising the UK government on holiday financial protection has called on ministers to “revisit elements” of Europe’s Package Travel Directive following Britain’s exit from the EU.
The UK’s Air Travel Insolvency Protection Advisory Committee (Atipac) suggests in its annual report to the Department for Transport that areas of the directive “can be reassessed, removed or redrafted”.
The committee, which includes UK industry representatives, trade and airline associations, consumer groups and aviation regulator the CAA, has highlighted two key areas for change post-Brexit.
It argues for reversal of the directive’s switch of regulation to the ‘place of establishment’ of travel organisers, and it says concerns around the new category of Linked Travel Arrangements (LTAs) “could be addressed in a post-Brexit world”.
Atipac describes “much of the directive as sensible and consumer focused”. But it states: “The committee would expect companies that sell in the UK to be licensed on the basis of place of sale rather than place of establishment.”
It highlights the failure last year of Mallorca-based Lowcostholidays, which relocated from the UK to cut the costs of financial protection.
The report points out Lowcost had a bond of just €1.3 million with the Balearic Islands’ authorities to protect holidays to a value of almost £500 million and labels the arrangements “inadequate”.
Atipac warns: “It was the [credit and debit] card industry which paid the cost of the failure. This may well impact on the view the card industry takes of travel-related risks in future. It could mean travel businesses will be required to pay more to accept cards.”
The committee argues the financial protection for LTAs “is transient”, “likely to confuse consumers” and opens “opportunities to evade the provisions of the directive”.
It also identifies a significant ‘hole’ in the provisions, pointing out LTAs “operated by accommodation sites such as Booking.com and Airbnb . . . would be out of scope”.
The report concludes: “Subject to Brexit and the UK’s future relationship with other European countries, the committee supports a return to the notion of ‘Place of Sale’.
“The Committee’s concerns around LTAs could [also] be addressed in a post-Brexit world.”
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