Package Travel and Linked Travel Regulations 2018: call for evidence

This article was co-authored by Francesca Khan, Trainee Solicitor, London.

On 20 September 2023, the UK Department for Business and Trade (DBT) launched its 12-week call for evidence seeking views on how to shape reform to the Package Travel and Linked Travel Arrangements Regulations 2018 (the PTRs).

Background

The PTRs widened the definition of “package holiday” to give greater protection to consumers. Five years on, this call for evidence seeks to understand whether the PTRs have struck the right balance between consumer protection and business freedom.

The call for evidence

With this call for evidence, the DBT aims to:

• Gather feedback from the sector.
• Review the operation of the framework.
• Test whether the PTRs could be more proportionate and effective.
• Ensure that they still provide protection to those who need it most.

Proposed reforms in 11 key areas are covered, falling broadly within three categories:

1. Amending the scope of the PTRs.
2. Simplifying the framework.
3. Increasing flexibility.

1. Amending the scope

Domestic packages

The PTRs apply on all package holidays, including domestic packages. Views are sought on whether this creates a disproportionate burden on businesses. Proposed amendments include:

• Excluding domestic packages from the PTRs.
• Only including domestic packages if transport is included.
• No change.

Setting a minimum-cost threshold

Currently, the PTRs apply to all packages irrespective of their monetary value. Views are sought on whether non-flight packages below a certain monetary threshold should be exempt. This proposed threshold could refer to either the:

• Total price of the package booked.
• Average cost per head.
• Deposit size.
• Some other measure of value.

Who is a “traveller”?

The current definition of “travellers” includes business travellers. This is a wider definition than in other consumer protection legislation. Business travellers, the DBT argues, may not need the same level of protections as leisure travellers, so the review proposes either:

• Excluding business travellers.
• Changing the definition in other ways.
• No change.

2. Simplifying the PTRs

Linked Travel Arrangements (LTAs)

Understanding what constitutes a LTA and what protections they offer under current regulations can be challenging for both organisers and travellers alike. Proposals include:

• Removing the LTAs from being subject to the PTRs.
• Amending the definition of “package” to include some/all arrangements currently defined as LTAs.
• Retaining the LTA category, but limit the ways in which LTAs can be created.

Information requirements for LTAs

It has similarly been reported that information requirements for LTAs are currently too complicated and are difficult to understand. Views are sought on:

• How information requirements that must be communicated to travellers can be simplified.
• Whether any of the requirements feel like an unnecessary burden and could be removed.

What are “other tourist services”?

One of the four types of travel services that can be combined to form a package holiday or LTA, the current definition of “other tourist services” has caused ambiguity and confusion. Feedback is sought on:

• Removing the “significant proportion” criterion and retaining the “essential feature” criterion. This could address ambiguity caused by fluctuations in price.
• Considering whether what constitutes an “essential feature” requires clarification.

Supplier refunds

Currently, liability for the performance of the package is on the organiser, irrespective of whether travel services are performed by third parties. Regulation 29 of the PTRs grants the express right to seek redress from third parties, however this can be difficult to achieve in practice.

• The DBT seeks feedback on organisers’ experience of obtaining effective redress from third parties.

3. Increasing flexibility

Extenuating circumstances

Regulation 15 of the PTRs requires an organiser to refund all payments without undue delay and within 14 days of termination of the contract. This, however, caused businesses considerable challenges during the pandemic. The DBT seeks views on whether:

• A more flexible, bespoke approach should be granted in extenuating circumstances.
• There are any other changes that should be made considering the lessons learned from the pandemic.

Insolvency flexibility

Current insolvency-protection options for organisers of non-flight packages are:

• Bonding.
• Insurance.
• Trust accounts.

The review proposes building in a level of choice into how businesses choose to provide insolvency protections, ultimately granting greater flexibility. Under the proposed amendment, businesses:

• Would still ensure protection of all money paid by or on behalf of customers.
• Could achieve the requirement in Regulation 24(2) of the PTRs through limited bonding through an approved body. This could be done by mixing either trust and insurance, or trust and bonding.
• Would have the flexibility to choose the amount of refund liabilities it wishes to protect through a bond.
• Would have to hold monies above this amount on trust in accordance with Regulation 23 (typically until the contract has been fully performed).

Insurance cover

Under the current regulations, insurance policies of the organiser must be held with insurers authorised in either the UK, Channel Islands, or the Isle of Man. The review proposes:

• Relaxing the territorial restrictions. This could widen the choice available to organisers, ultimately leading to lower costs and more packages available.

Updating information requirements

Feedback is requested on whether it would be beneficial for the Government to be able to more easily modify Schedules 1 to 5, which deal with information that must be provided to the traveller.

Comment

The proposed amendments to the PTRs in this review broadly seek to reduce the regulatory burdens faced by organisers of package holidays. Lower costs and risks faced by organisers, the DBT argues, could lead to greater competition as businesses could offer more packages at lower prices, ultimately benefitting the consumer.

There could, however, be several unintended consequences. Setting a minimum cost threshold may run the risk of denying protection to travellers who can only afford cost-effective packages. It may also lead to uncertainty and inconsistency regarding what constitutes a package. Poorly defining “essential feature” may lead to disputes between organisers and travellers who disagree on what constitutes an essential feature of their package.

Read other items in Personal Injury Brief – February 2024