UK: Increased Protection For Package Holiday Bookings – Reform Is On Its Way

Last Updated: 7 February 2018
Article by Christopher Deacon

By the summer 2018 the EU Package Travel Directive will become part of UK law, offering increased protection for consumer holiday bookings and closing a gap in consumer protection for holidays booked online.

The relevant provisions come fully into force by 1 July 2018, just in time for the peak summer holiday season, and at a time when online holiday bookings are at an all-time high. Eighty-three percent of holidays booked in the last 12 months were booked online according to the ABTA Holiday Habits report 2017. Last year also saw yet more high profile holiday companies collapse, notably Monarch.

As well as ensuring holidaymakers are fully protected financially, the reforms will enhance consumer protection when things go wrong by extending the definition of a "package holiday" to the wide range of holidays booked online and on a tailor-made basis. Consumers must be told who the organiser of the package is. It is the organiser who is ultimately responsible for the services provided as part of the holiday booking.

Definition of a "package holiday"

Holidaymakers have been turning to the internet to research and book their travels for the best part of two decades, with travel companies responding by offering various tailor-made options and so-called 'dynamic packages'. These dynamic packages fall outside the traditional definition of a package holiday and, with the law slow to catch-up, travellers have been left without important protections when things go wrong overseas.

The definition of a "package holiday" is now widened to include not only traditional package holiday bookings (where different travel services are sold under one single contract – typically flights, accommodation and transfers) but also dynamic packages, which will include:

  • Holidays purchased from a single point of sale (eg a website or high street travel agent) where you select two or more independent travel services from a range of products relating to a single trip and then pay for them.
  • Holidays where, although there may be different quotes and individual contracts for each service, the services are put together or selected and then sold for an inclusive or total price. The distinction with this type of package is that there may be two or more separate contracts but the organiser sells the holiday to the traveller for a total price.
  • Any holiday which is advertised as a package will be caught by the new law.
  • Where you are sold a product that allows you to select different services once the contract is concluded, this will be deemed a package holiday. For example, a "gift box sale" where you purchase the gift box product and then afterwards select your choice of accommodation or restaurant.
  • Linked online bookings, or "click-through" sales, will give rise to a package holiday contract if you go on to purchase further services by clicking through on a link sent to you within 24 hours of purchasing the first travel service. This typically occurs with an online flight booking where the airline or booking agent sends you a link to an accommodation or car hire website. If you book that accommodation or car hire within 24 hours, and if the first travel service provider passed on your name, address and payment details to the second, then all of those services will be treated as a package.

The wider definition of a package holiday illustrates how many more travel arrangements will be caught by the new Directive. The organiser of a package falling within one of the above definitions has overall responsibility for the holiday, which includes ensuring the different travel services are provided with reasonable care and skill and compensating customers in certain circumstances if things go wrong, notably for personal injury.

Linked travel arrangements

Crucially, linked online bookings should not be confused with "linked travel arrangements." These are separately defined in the Directive as:

  1. Holidays where you select and pay for the services separately, albeit from a single point of sale – such as the same website or travel agent; or
  2. Bookings made within 24 hours of each other as a result of a targeted linked booking process. This usually occurs when you book one travel service, receive an email with a link to another then book and pay for that service within 24 hours. For this type of booking to be a linked travel arrangement, rather than a linked online booking, the travel service provider must not have passed on the traveller's payment details – if payment details are shared then the booking will be considered a linked online booking.

Consumers need to be cautious when booking a linked travel arrangement, which will provide insolvency protection if a travel company goes bust but does not provide the same level of protection as a package holiday if there is a problem with how the travel services are provided, including any claim for personal injury.

Provision of information to consumers

One of the most important features of the new Directive is the requirement that, before the booking is concluded (ie a legal contract entered into), consumers are clearly told the identity of the organiser of the package and provided with their contact details. Knowing the identity of the organiser is important because if you suffer an injury on holiday and you need to bring a claim on your return home it is the organiser who is ultimately responsible.

This gives rise to a potential problem with bookings that involve multiple contracts and also linked online bookings where a contract, (say for flights), is concluded before the second contract, (say for car hire or accommodation), is entered into. It is the second contract that triggers the creation of a package.

The annex to the Directive sets out standard wording for informing consumers when they have booked a package through a linked online booking. The standard wording envisages that the provider of the first travel service will be the "organiser" of the package. It follows that you should be given standard wording by the first travel service provider at the same time as being sent the online link so that there is no doubt a package will be created if you then enter into a contract with the second travel service provider within 24 hours of being sent the online booking link.

The provision of information requirement is intended to give you a genuine choice on whether to proceed with the booking and to leave no doubt as to who the organiser is so that you know exactly who to pursue should any of the arrangements forming part of the package go wrong.

Liability when things go wrong

Following an injury on a package holiday, currently the holidaymaker is required to show the package organiser was at fault (usually with reference to the standards, regulations, customs or practice in the country where the holiday took place).

When the UK government consulted on how it should implement the Package Travel Directive into UK law during the summer 2017, both Stewarts and APIL made a compelling argument for shifting to the package organiser the burden of showing they are not at fault. The reasoning behind this proposal is that the organiser is far more likely than the holidaymaker to know what the local standards are and they will also have ready access to the evidence about how the accident happened. As the UK government has indicated it plans to simply "copy and paste" the Directive into UK law, more far-reaching reform reversing the burden of proof in package holiday cases is unlikely to be achieved this time around.

Financial protection

It is worth mentioning that the ATOL scheme, which protects consumers in the event the travel company or airline they have booked with goes bust before they travel or while they are away, will be extended to cover all holidays now falling within the new definition of a package. This is unlikely to significantly change the current position in the UK because since 2012 many of the holidays now falling within the new definition of a package have had ATOL protection under the Flight-Plus bookings scheme. A Flight-Plus booking is created when you request to book a flight with accommodation and/or car hire on the same day or a day either side of the flight booking.

Concluding thoughts

Publication of the UK's package travel regulations was expected in early January 2018 but is still awaited, meaning travel companies will have limited time to prepare for the changes ahead of July 2018. Although with the UK government's "copy and paste" approach to implementing the Directive, there should be few surprises to the travel industry.

When the reforms come fully into force we can expect travel companies to innovate in an attempt to find ways around the regulations and that will inevitably mean aggrieved or seriously injured travellers having to take their cases through the courts to establish where liability for the proper performance of the package holiday contract lies.

For anyone thinking Brexit might rob them of this additional protection, the answer is no. The Directive must become part of UK law before we leave the EU in 2019, but that would not stop the government from legislating after Brexit to change the level of protection for holiday bookings. Any such move would be a regrettable step backwards at a time when the law in this area is only just falling into line with how most of us now book our holidays.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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