Simon Bunce, head of legal services at Abta, explains how the Package Travel Directive will change from 2018
The new Package Travel Directive (PTD) will clear its final hurdles in Brussels this autumn and come into effect in the UK in the summer of 2018.
The first step to prepare for the changes is to understand which holidays will be affected.
The new definition of a ‘package’ is much wider than we are used to. It won’t just encompass all holidays which include two or more travel services (transport, accommodation, car hire and other tourist services) that are booked under a single contract with a tour operator. It will also include holidays where the services are booked with separate suppliers where the customer selects the travel services from one shop, call centre or website – including through a travel agent – before agreeing to pay.
This wider definition will turn many holidays that are currently sold as Flight-Plus into packages.
Alongside the package, the directive also creates a new type of regulated holiday – the Linked Travel Arrangement (LTA).
An LTA is a holiday that includes two or more travel services but applies when the customer makes a single visit to a shop or website, and selects and pays for each service separately.
This may not be a particularly common sales model at present, as the customer risks the flight they need not being available after booking the hotel, or vice versa. However, the likely lower regulatory and compliance costs might see this become a more popular model in future.
These LTA holidays offer less protection to customers, with consequently fewer obligations on the travel company offering them.
There has been much talk of ‘click-through’ holidays, where a customer typically buys a flight on an airline website and is then directed to buy accommodation on a partner or linked website.
These holidays will be regulated in future either as a package or an LTA. It will be a package when the customer’s name, payment details and email address are shared between the two websites, and the customer books the second service within 24 hours of the first. Or it will be an LTA when the customer purchases the second service within 24 hours in response to targeted marketing by web link or email without their name, payment details and email address being transferred.
As with the current directive, packages (and in future LTAs) lasting fewer than 24 hours that do not include overnight accommodation are exempt from regulation, as are single travel services such as flight-only or accommodation-only sales.
The new directive also retains the current exemption for packages organised only occasionally, although the organiser must operate on a not-for-profit basis and offer the packages only to a limited group.
A major change under the directive is the exemption of business travel when travel services are sold to someone buying for business purposes, not on an ad hoc basis. In order to be exempt, there must be a general agreement in place between the travel company and the buyer outlining the terms of the business travel sales for a period of time or a series of sales.