Revised Package Travel Regulations mark ‘fundamental shift’

The UK government has now published draft regulations to reform the Package Travel and Linked Travel Arrangements Regulations 2018, with the changes expected to be approved by Parliament and come into force on April 6 next year. 

 

The revised regulations will apply to new bookings made on or after that date.

 

The reforms are targeted in form but potentially transformative in effect. They will significantly expand the scope of the UK regime, in some respects going beyond the equivalent EU law, capturing within their scope many more businesses than before. 

 

Rather than deregulation, this represents a clear policy choice by the government to extend consumer protection into areas that have historically sat outside the regime. 

 

In practical terms, the UK is set to have one of the most far-reaching and comprehensive travel regulatory regimes in the world.

 

Linked travel arrangements to become packages

The linked travel arrangement (LTA) regime has long been a source of confusion and complexity for the industry. Under the reforms, the LTA regime will be removed from UK law. However, and perhaps surprisingly, what was previously a type of LTA will now be reclassified as a package, bringing it within the full regulatory regime.

 

Specifically, a package will now be formed where a customer books one travel service such as a flight and then another, such as a hotel, in separate transactions during a single visit to a trader’s point of sale (a website, app or retail store).

 

This is a major expansion of scope, bringing into regulation many businesses which have not traditionally considered themselves package organisers.

 

For example, booking platforms which operate different tabs where a flight, hotel, car hire or experience can be booked on a stand-alone basis, will be within scope if a customer books two or more of these travel services during a single visit to the platform. 

 

Similarly, airlines operating ancillary sales strategies which allow customers to book standalone hotel accommodation or car hire subsequent to booking a flight will now be within scope if customers book two or more travel services during a single visit to the airline’s point of sale. 

 

Even hoteliers offering local experiences alongside accommodation will be within scope if both are booked during a single visit to the hotelier’s point of sale.

 

These businesses are likely to fall within scope and will need to comply with the full package travel regime, including organiser liability and insolvency protection, by April 6, 2027.

 

For many, this represents a fundamental shift in regulatory exposure, moving quickly from no regulation to full regulation.

 

Faster refunds from suppliers

The reforms also address a longstanding frustration for package organisers: the recovery of money from suppliers when things go wrong. 

 

Currently, there is no statutory deadline for a supplier to refund an organiser after cancelling or failing to perform a travel service. But from next April suppliers will be required to refund organisers within 14 days of a cancellation or of the date the travel service was due to be performed, whichever comes first. 

 

Organisers will also retain the right to claim damages and other redress from any supplier which contributed to the organiser’s liability to the traveller.

 

This is clearly good news for package organisers. Whilst the High Court’s ruling in favour of On the Beach against Ryanair in 2023 confirmed that package holiday organisers can recover losses from suppliers in certain circumstances, the new rules place that right on a clear statutory footing and introduce a defined timetable within which suppliers of all types must refund package organisers.

 

What should businesses be doing?

 

For businesses currently operating sales models which will be caught by the expanded package definition, early assessment is essential. 

 

From early April 2027 these businesses will be subject to the full package travel regime and will need to ensure that customers are provided with full package rights, including pre-contractual information, organiser liability and insolvency protection. 

 

This will require changes to be made to booking journeys, operations, supplier and customer contracts, and insurance and insolvency protection will need to be sourced.

 

Rhys Griffiths is a partner and head of travel at Fox Williams LLP