PACKAGE TRAVEL DIRECTIVE & REGULATIONS

Background 

The Package Travel Directive (PTD) came into effect in 1990 and its provisions were introduced into UK law through the Package Travel Regulations (PTR) in 1992. 

The PTD and PTR introduced requirements on the organisers and sellers of package holidays to provide greater protection to purchasers of package holidays in three main areas:  

• The provision of information;
• The provision of security arrangements for monies paid for package holidays and for repatriation in the event of company failure;
• A specific regime for contractual liability in respect of package holidays.

The PTD and PTR have contributed significantly to consumer protection rights and, following changes in the marketplace for travel services, they are under review.  

The Package Travel Directive

The PTD is currently under review as part of the Commission’s review of the Consumer Acquis (see Consumer Protection: EU Revision of the Community Acquis on Consumer Protection). The Commission has produced a draft Consumer Rights Directive which does not include package travel. This will lead to different levels of protection between customers booking package holidays and those booking other forms of travel arrangements. The Consumer Rights Directive is expected to be finalised and adopted in 2010-2011 prior to the adoption of any revised PTD so as to inform the latter.

The Commission launched its PTD consultation on 26 November 2009. The review, which is in the form of a questionnaire, asks for opinions from the travel industry on the scope of the PTD, the level of financial protection consumers should expect from travel agents and tour operators, who should be responsible for any consumer problems, the level of information that consumers should be provided with and other aspects of how the sector operates.

The Commission has also published a report on consumer detriment arising from the sale of dynamic packages.

The Commission’s intention is for options for reform to be available in April-May 2010. This would be followed by the drafting and committee process with potentially a new directive being agreed in 2012.  

The Package Travel Regulations

There is no active review of the PTR although discussions have taken place with the Department for Business, Innovation & Skills (BIS) to identify possible areas of reform following the outcome of the Commission work on the PTD.

There has been significant debate in the UK over the scope of the definition of a package in the PTR and this culminated in ABTA seeking a judicial review of guidance on the subject issued by the Civil Aviation Authority (CAA). The decision in that case provides the clearest available guidance on the matter although there remains concern within the industry that the definition of a package is uncertain.  

ABTA’s Position

The Package Travel Directive 

ABTA has advocated a complete overhaul of the consumer protection regime offered under the PTD to take account of changes in the way that travel services are sold and purchased.

ABTA has been very concerned for a long time that, despite massive changes in the marketplace, changes to the Directive have been very slow in coming. We welcome the launch of the PTD review. ABTA believes there should be a clear consistent approach to regulation applying to all sellers of similar products, and will work with the Commission to address the potential changes.

We are concerned as to the proposals contained in the Consumer Rights Directive, and particularly the treatment of travel. We believe that the negotiations on the Directive risk creating a significant period of uncertainty for the sector as to the nature and extent of its regulatory obligations, and wish for certainty and clarity. ABTA formulated its own questionnaire to solicit views from Members on the PTD review. In addition, ABTA has met representatives of the UK leisure outbound industry to obtain information on the quantitative aspects.

ABTA has met ECTAA to ensure a similar approach and will make input to ECTAA's response to the Commission.

The Package Travel Regulations

Any change in the PTD will eventually lead to a UK review with changes having to be transposed in the PTRs.

ABTA is concerned that the present mechanisms for the provision of financial protection required under the PTRs and the ATOL Regulations do not provide a simple and effective mechanism which is understood by consumers or the trade.

ABTA has submitted a proposal to the Better Regulation Executive (BRE) that the financial protection required under the PTRs should be administered by one government department and that trust accounts should be removed from the list of allowable mechanisms as they do not fully implement the requirements of the PTD. A series of meetings has taken place between BRE, the Department for Transport (DfT), BIS, CAA, ABTA, the Federation of Tour Operators (FTO) and the Association of Independent Tour Operators (AITO).

DfT and the CAA appear to accept that there is a case for companies organising flight-based package holidays that already hold an ATOL to be able to bring their non-flight based package business within the same protection regime and ABTA has been working with the CAA to determine how this might be achieved. The DfT is consulting separately on the ATOL regulations.

last updated: 09 March 2010