The New Package Travel Directive

2nd August 2018

With effect from 1st July 2018, the Package Travel Regulations 1992 were replaced by the new Package Travel Directive.

The Package Travel and Linked Travel Arrangement Regulations 2018 has changed the definitions of what travel components &/or selling procedures constitute a package. This not only impacts the immediate travel industry, including some fundamental changes for the traditional travel agent, but the new regulations have potentially far-reaching implications for many non-travel related businesses, such as event organisers, clubs and societies.

Before we review the new regulations, let’s review the outgoing …

Package Travel Regulations 1992

Tour Operator

A Tour Operator under the Package Travel Regulations 1992 is defined as an entity &/or organiser which packages together two of three components/travel services:

Travel Agent

The traditional high street travel agent who sells off the shelf travel packages of other operators, TUI/Thomas Cook/Jet2/Virgin Holidays and also sells single component elements to a consumer.

In doing so ensuring the holiday contract is between the operator and the consumer, and the travel agent takes a commission for doing so.

Flight Plus

A travel business trying to be somewhere in the middle. Packaging up single components of other operators at a non-inclusive price and not accepting liability for the package.

Flight plus was a loop hole that existed and became more prevalent with the advent of the Internet and it meant that business’s avoided the regulations that package travel directive imposes. This ultimately gave the consumer no real protection, from either package provision side but also financial bonding.

Exemptions Under The Regulations

Now let’s review the new set up …

The Package Travel and Linking Travel Arrangements Regulations 2018

Tour Operator

Under the new regulations, the component/travel services list has now been extended. However the principal is still the same; two or more different types combined are now classified as a package:

Transport/carriage of passengers.

Furthermore, there are now 6 categories governing the circumstances in which travel services combine to create a package:

Category 1

Single contract (usual package scenario, where Travel Services are sold at an inclusive price).

Category 2

Sold in single booking process, where Travel Services from different suppliers are combined within one booking.

Category 3

Sold at an inclusive / total price, where Travel Services from different suppliers are combined within one transaction.

Category 4

Sold as a “package” (or under a similar term), where the words for instance “combined-deal”, “all-inclusive” or “all-in arrangement”.

Category 5

Contract allows subsequent choice, where a trader sells a product that allows a traveller to select different travel services after they have concluded the contract will also count as package.

Category 6

Sold through linked online booking process, where the traveller’s name, payment details and email address are sent from the first trader they purchase from to the second and a contract is concluded.

These changes close the “loop-holes” (Flight Plus) that had been exploited to sell elements of the booking separately to avoid the old Regulations.

They also now embrace many firms who would previously have escaped the Regulations, e.g. Hotels, Clubs, Societies, Event Organisers, Hospitality providers, Car Hire, Ticket Agencies; the list goes on …

Travel Agent

If a Travel Agent falls into any of the above categories they are Tour Operator (no if’s or but’s!). It is now essential they have full indemnity agreements in place with their suppliers to fall back upon, otherwise they could be held liable should a claim arise.

LTA’s (Linked Travel Arrangement)

Strict selling procedure outside of the above categories, no combining of components, no transferring of data, inclusive prices etc. The seller must also state it is an Linked Travel Arrangement in all of the documentation.

Exemptions

Conclusion

The 1992 PTR’s have experienced a number of fundamental changes. However the good news is, if you were a Tour Operator pre 1st July 2018, nothing much has changed.

The largest area of change is for Travel Agents. It is now imperative they have indemnity agreements/contracts in place with their suppliers, to ensure they have the correct liability insurance in place and an above-standard Professional Indemnity policy.

Furthermore, many businesses and trades which historically went unnoticed by the 1992 Package Travel Regulations may now need to consider the legal implications of the new legislation.

Luke Hills is an Assistant Underwriter at Vantage Underwriting. He can be contacted at luke.hills@vantageinsurance.co.uk

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