Scramble to Implement New Package Travel Directive
Below Rajeev Shaunak, head of travel & tourism, MHA MacIntyre Hudson comments on the plans to bring in the new package travel directive as of the 1st July.
“The plan to implement the new package travel directive (PTD) requirements on 1 July 2018 has been confirmed, despite multiple delays in the run up. Given the extent of changes under the directive, it’s doubtful the deadline will be met in practice.
“PTD aims to create additional legal protection for consumers purchasing non-traditional travel packages and addresses the growth in consumers using online travel websites. Travel businesses which create packages for customers involving two or more travel arrangements, for example the flight and hotel, will now be responsible for all elements within this package. The organiser will be obligated to protect the consumer should any suppliers fail – either by refunding the payment, offering an equivalent replacement package or repatriating the customer.
“Consumers will also have the right to cancel any trip where there are “unavoidable and extraordinary circumstances” at or close to the destination, and receive a full refund. The government has however failed to provide clear guidance on what defines these circumstances. Consumers will be able to transfer a package to an alternative traveller up to seven days before departure, and will have the right to up to three nights’ extra accommodation in extraordinary circumstances when they’re prevented from returning home, for example if we experience another ash cloud crisis.
“The definition of what constitutes a package will be widened to include all scenarios where consumers buy two or more travel components. ‘Flight Plus’ arrangements for example, which include financial protection requirements but no liability for death, injury or illness, will now be considered packages. These sales are believed to stand at around 3 million a year.
“The new concept of a linked travel arrangement (LTA) will also be introduced; though not legally a package, it looks like a package to the consumer – for example where a consumer is invited to book an additional travel service (e.g. accommodation or an excursion) via another provider following travel confirmation. The key difference from a package provider is the travel business facilitating the selection and payment of each component is not liable if one of its suppliers fails. Additional services will now include items such as ski equipment hire and even pampering experiences, as long as the add on is at least 25% of the total cost and the package lasts at least 24 hours. Agents will have to balance the pressure to sell add-ons as commissions continue to fall, with all the obligations that go with it.
“One of the biggest changes relates to information given to customers before a sale takes place. Every organiser, and in many cases the retailer, must ensure potential customers have a document detailing the type of sale (package or LTA), the customer’s rights and a link to UK regulations. This could be costly and time consuming in terms of IT changes, and will be difficult to achieve in the case of telephone or face to face sales.
“There will be greater potential liabilities for travel businesses and therefore greater costs to try and mitigate those risks. The need for public liability insurance has clearly grown and areas currently open to interpretation are likely to lead to legal disputes in an increasing litigious environment.
“The necessary changes to prepare for the directive, including enhanced IT systems and terms and conditions, and speculation earlier this year that the deadline might be pushed back have raised serious questions on whether travel businesses can meet this deadline. With no mention of a soft launch approach, anyone not adhering to PTD’s conditions from 1 July 2018 will be breaking the law.”
(Source: MHA MacIntyre Hudson)
