The Ultimate Guide To Package Travel Regulations

The Ultimate Guide To Package Travel Regulations

On July 1st 2018, the Package Travel Regulations and Linked Travel Arrangement Regulations were released by the UK Government. Both Package Holidays and Linked Travel Arrangements have different levels of protection and the below information should ensure your understanding about your travel bookings.

A Linked Travel Arrangement is a new arrangement now covered under the Package Travel Regulations. It is not a package and offers less protection than a package holiday. Still, a package holiday is far more protected.

What Is A Package Holiday?

A package holiday will be over 24 hours and include at least two elements outlined below: –

  • Accommodation
  • Transport – this can include a flight, coach or train but does not include airport transfers
  • Car rental
  • Tourism service such as a cookery course, event ticket, excursion or tour guide. This service will be a substantial part of the trip either through time or value

The tourist service must always be a substantial part of the holiday to be qualified as a package. For instance, a golfing break that includes a one night stay at a hotel in Kent with a round of golf, would be considered a package. Your holiday will also count as a package with the following scenarios: –

  • The consumer has been charged an all inclusive price for all the services purchased
  • The consumer has been allowed to choose elements, such as a flight and accommodation, before a purchase has been agreed
  • The consumer has been asked to pay a set price in one payment. How the consumer pays, either through BACS, card or cheque, is inconsequential
  • The holiday is described or sold as a package or a term that implies a package

Package holidays can be both ground based and air inclusive holidays. When a flight is included, an ATOL certificate must be sent to the consumer as soon as the holiday has been paid for. However, if a package without a flight has been reserved, then a confirmation should be received with a full description of the holiday and an outline of the amount charged. Also, there should be a full explanation about how consumer money is protected and through which solution. For instance, all package holidays booked through a Protected Trust Services (PTS) member are financially protected.

What Is A Linked Travel Arrangement?

A linked travel arrangement is also a combination of at least two elements, but the difference between a linked travel arrangement (LTA) and a package is simply defined by how the holiday is sold. The list of services covered by a linked travel arrangement is the same as those previously listed for package travel: –

  • Accommodation
  • Transport – this can include a flight, coach or train but does not include airport transfers
  • Car rental
  • Tourism service such as a cookery course, event ticket, excursion or tour guide. This service will be a substantial part of the trip either through time or value

A linked travel arrangement is what it says on the tin. Whether a consumer books through a website, in a shop or on the telephone, the holiday is booked as separate elements and paid separately. A good example of this is booking a flight and a hotel and having two separate booking contracts with each individual supplier.

One of the most popular examples is a flight website. A consumer will book a flight through the website and then accommodation, car rental and experiences, all through alternative suppliers, are targeted for expanded purchase. If the consumer purchases another element within 24 hours, even with another supplier but through the original site’s targeting, this will be considered a linked travel arrangement.

Linked travel arrangements can be confusing for a consumer to recognise. Another example would be as follows. Consumer A has booked a flight with Company ABC. The consumer receives a confirmation email and then receives a further email from another company advertising accommodation at the same destination on the same dates. Consumer A then books the accommodation within 24 hours of booking the original flight.

The Difference Between a Linked Travel Arrangement and a Package Holiday

A package holiday is more protected than a linked travel arrangement. A package is both legally and financially protected. The legal requirement for any package provider is to supply the consumer with the promised holiday and services as sold. If there is one part of the booked holiday that isn’t as sold then the travel company has a responsibility to correct this, offer an alternative of the same standard or above, or provide either a partial or full refund.

When speaking about financial protection, all travel companies selling packages have a legal responsibility to adhere to Package Travel Regulations and to financially protect consumer monies in case of going out of business. All Protected Trust Services (PTS) members are fully protected, so do always check for the logo when booking. If your travel company were to go bust then all monies would be returned by the protection in place, either through PTS or CAA.

When booking a linked travel arrangement there is only financial protection in place, and this is still lesser than when booking a package. As the consumer has booked with different suppliers, the only monies protected in the scenario of the leading travel company going bust is the monies the leading company is holding. There is no financial protection if the secondary suppliers or travel service providers go out of business. In essence, the only protection in place is with the company that arranged the linked travel arrangement.

Today, many consumers book all elements separately online. In this instance, there is no financial or legal protection under the 2018 Package Travel Regulations. However, if booked through a credit card, or if the consumer has excellent travel insurance, these two vehicles could offer their own form of protection, though the level of cover must be checked by the consumer. If a consumer is booking with a PTS member, then they could also be covered for single elements. You can always check directly with PTS for peace of mind.

If a Consumer Books a Tour, Day Trip, Event Ticket or Experience, Will It Be Covered?

If a consumer is booking a ticket alongside an international flight, then it will be covered by ATOL, but both elements must be booked together. If a package is booked without a flight then it is not covered by ATOL. In this instance a consumer must make sure that they are booking with a company that is Package Travel Regulation compliant and a PTS member.

Fundamentally, a trip must be 24 hours or more, or include over night accommodation to constitute a package. When booking just tickets for an event, please always advise consumers to be aware and absolutely ensure there is some kind of protection. Ticketing is considered incredibly high risk due to the amount of fraud that takes place in the ticketing industry. Some ticketing companies do offer PTS protection and this is incredibly valuable to consumers.

What If I Need to Increase the Price Slightly After a Client Has Booked the Package?

Each travel business must have excellent terms and conditions to ensure the client is aware of the booking conditions. Within your terms and conditions you can include a caveat that allows small surcharges to be passed to the clients. Some valid reasons that price increases may occur include fluctuations in exchange rate, a change in the taxes and fees that third parties impose, or fuel increases. This must be stated to the consumer within your booking terms before. Always ensure your client has fully read your terms and conditions before they book. If this caveat is not included in your company’s booking conditions then you cannot ask the consumer to pay an increase.

What If a Supplier Makes a Significant Change to One of Our Client Bookings?

Many travel companies may also offer an alternative holiday that may be suitable for you. A significant change should only take place if an incident occurs that is out of the travel company’s control. Some instances could be, a terrorist attack in the area, a natural disaster that has caused extensive damage, or an airline moving the flight times and dates. These examples are not exhaustive, but they highlight the types of situations that can result in a significant change.

Firstly, the leading travel company must contact the client to explain the situation. The consumer must be given the option to proceed with the changes, accept an alternative holiday, or be offered a full refund. You must give the clients a reasonable time to make their decision. If they opt for a full refund then the monies must be cleared in their account within 14 days.

Do Package Travel Regulations Apply To Me if I Organise The Package Myself for a Group of Individuals I Know?

At PTS we are asked this by rugby clubs, charities, sports clubs, and individuals who are helping friends. To be clear, the regulations do not apply to you in the instance that you are only arranging trips very occasionally, for a small group, and most importantly there is no profit involved. It is a big responsibility to look after others’ money and you must be aware that when organising travel outside of Package Travel Regulations, all the monies are at risk and exposed.

What Happens If the Client Reports That There is a Significant Difference To Their Package Holiday?

If a client has arrived on holiday and the accommodation, or any part of the tour that has been booked through your travel company is not as described, then you must resolve this. One of the most important elements of Package Travel Regulations Compliance is ensuring that consumers receive the holiday that they booked.

If the hotel was stated to be five star, but the client has been placed in a three star, then this must be resolved. It is important to remember that a client must give you the opportunity to solve the issue in a reasonable time. In the rare instance that the situation is impossible to resolve, then you can offer the client an alternative or refund. We strongly advise all PTS members to have consistent communication with clients to ensure service levels are met.

Do I Need to Offer My Clients Refunds if there is Political Unrest or Extreme Weather Warnings?

Since the package travel regulations came out in 2018, your customers do have the right to cancel if the situation will result in a significant impact on the holiday. The simple existence of political unrest doesn’t necessarily result in the need to refund as it may be the norm for that country. Generally, the Foreign and Commonwealth Office (FCO) will issue advice against travel to the destination when situations result in refunds.

Above are just some of the frequently asked questions that we hear on a daily basis. In essence, as of July 1st 2018 the new Package Travel Regulations were put into place to be more in line with online bookings and to protect consumers. For a travel company to be fully Package Travel Regulation Compliant, there is a choice of three options: –

  1. Bonding – This is an incredibly expensive option, but one that may be a choice for very large travel companies
  2. Financial Failure Protection – This may seem appealing for start ups as they do offer affordable rates per passenger. Something to be mindful of with FFI is that you are beholden to an underwriter. If there is a huge failure in the travel market, such as Monarch, then the insurance rates will inevitably increase due to the perceived increase in risk.
  3. Independent Trust Account and Insurance – This is the solution offered by Protected Trust Services. The independent trust account is both affordable and scalable. Whether a travel business turns over £10k per annum or £10 million per annum, the transaction fees per person stay the same, resulting in a fully scalable solution.

How Does Protected Trust Services Ensure Package Travel Regulation Compliance?

The trust account solution is now considered to be the only solution to truly protect client money, and the only solution that is truly scalable and consistently affordable for a travel business. At PTS we have built an innovative technological solution that allows the client, travel business or supplier to see exactly where monies are at any given time. PTS are the only solution that completes a daily reconciliation for all monies, and this is the very reason we are now the chosen solution for many travel companies.

Package Travel Regulation Compliance has always been considered to be arduous and time consuming. PTS broke the mould and ensured that any travel business could run their business in an independent manner, whilst easily protecting client monies with the use of technology. The PTS solution is a game changer for both travel companies and the consumer, and we are thrilled to be having such a positive impact in the travel industry.

To find out how we can assist you with Package Travel Regulation compliance, please visit our Package Travel Regulations service page. If you would like to speak to a member of our team, please call 0207 190 9988, or send an email to ask@protectedtrustservices.com. We look forward to hearing from you.