New package travel rules come into force on 1 July: are you ready?

By Simon Phippard

06-2018

On 1 July 2018 national regulations implementing the new Package Travel Directive ("PTD 2") are due to come into effect in EU Member States. The PTD 2 introduces significant changes to the regulation of package holidays. It extends the coverage of protection afforded to travellers by broadening the definition of a "package" and introducing an entirely new concept, the "linked travel arrangement" or "LTA", which is essentially a looser combination of travel services. 

It is not just traditional travel agents and tour operators that need to consider the implications of these new rules. Companies that previously fell outside of the scope of the current regulations could be covered by the new, broader rules. For example, are you a retail business that wants to offer experiences to your customers such as a weekend away at a vineyard? You may fall in scope of the PTD 2.   

The obligations that attach to such companies will depend on their precise role, for example: are they organising packages? or facilitating LTAs? Some of these obligations can be onerous.  For example, under the UK implementing regulations, organisers are responsible for the proper performance of a package, regardless of whether the individual elements (e.g. flight, hotel, car hire) are provided by third parties. On the other hand, some of the obligations that on their face appear to be quite straightforward, such as the obligation on the second trader in an LTA to inform the first trader that an LTA has come into being, may be difficult to comply with in practice. It is important for all travel businesses to review their operations to assess whether they fall in scope of the new rules and if so, which obligations attach and how can their effects be mitigated. 

As we have noted previously, a number of ambiguities remain in the text of the PTD 2 and implementing regulations.  We have not seen much helpful guidance on these points to date. To take an example, the second limb of the test for an LTA requires that the facilitator must have enabled the purchase of a second travel service from another provider within 24 hours of  booking the first travel service "in a targeted manner" . There is no guidance on what "targeted" means in this context. If we consider the example where a traveller books a flight and clicks through a link in their flight booking confirmation email to book a hotel at their destination – in this case is it sufficient for the email to simply say "book a hotel", or does it need more, for example by suggesting specific hotels at that destination? From what we have seen to date, we understand that the key element of targeting is how the facilitator brings a traveller's attention to the second service, and even if this is done with generic wording (e.g. "book your hotel"; "hire a car"), this can still be considered as" targeted" for the purposes of the second limb of the LTA test. However, we would welcome clear guidance on this point, and the other ambiguities we have identified previously, so that travel companies have some much needed clarity on the scope of application of the new rules.   

If you would like to hear more about how the PTD 2 and other EU and national laws could affect your travel business, sign up to join our mailing list for our interactive Travel webinar series. Our first webinar took place on 28 June 2018 and covered the practical implications of the PTD 2 and the new geo-blocking regulation, which is due to come into force in December 2018.