UK guidance for businesses on the Package Travel Directive implementing regulations – much needed clarity or do ambiguities remain?

11 September 2018

Lucinda Richmond Wigg, Simon Phippard

Over the summer the UK's Department for Business, Energy and Industrial Strategy (BEIS) published guidance for businesses on the domestic regulations that implement the new Package Travel Directive – the Package Travel and Linked Travel Arrangements Regulations 2018 (PTRs) – which came into force on 1 July 2018. This article briefly examines whether the guidance adequately deals with the ambiguities in the new package travel rules that we have identified previously. In our view, key questions remain over the PTRs' application in practice.

In July, as the PTRs came into effect, BEIS issued guidance to businesses on the new package travel rules. The purpose of the guidance is to set out the government's intentions underlying the PTRs, but it is of course ultimately for the courts to determine any issues of interpretation.

In the most part, the guidance restates travellers' rights and travel service providers' obligations under the PTRs in respect of both packages and linked travel arrangements (LTAs). It helpfully incorporates a number of short case studies which show the rules being applied in practice, but only at a high level. It also provides more detail in relation to certain rules, for example:

  • so-called "other" tourist services that are not intrinsically part of the carriage of passengers, accommodation or car hire will only count towards a package/LTA where they: (i) are combined with one of the aforementioned services; and (ii) account for a significant proportion of the value of the package/LTA. "Value" is not defined in the PTRs but the guidance confirms it will often be assessed by reference to the purchase price. However the guidance notes that the intrinsic value of the services may be considered where the prices of the main travel service(s) and the "other" tourist service are artificially adjusted in order to circumvent the application of the rules; and

  • on the topic of "other" tourist services, a common example of what would not fall into this category is access to on-site facilities such as a swimming pool, sauna or gym (as this would usually be considered an intrinsic part of accommodation). However, the guidance elaborates on this: if access to such onsite facilities is part of the room rate, BEIS is comfortable that it should not count as a travel service in its own right (and would therefore not count towards a package). However, if such access is subject to an additional charge and in particular where the facility can be accessed by external persons (i.e. not hotel guests), it could constitute a separate service and, depending on its value in proportion to the other travel service element(s), could constitute a package.

While the guidance does give some helpful insight for travel businesses, it does not adequately address a number of significant ambiguities in the new rules. For example:

  • both definitions of an LTA require a facilitator. The guidance acknowledges that "the concept of facilitation is broad and includes the idea of 'enabling', 'making it possible to', 'encouraging' and similar ideas", but this does not provide a tangible threshold as to the level of assistance a trader needs to give to travellers in order to be considered a facilitator for these purposes. It remains unclear whether active assistance is required;

  • for the second definition of an LTA (or "LTA Type B" as it is referred to in the guidance) the facilitation must be targeted. However the guidance does not elaborate on what "targeted" means in this context, other than noting that the transfer of data on destination and travel dates could be relevant when determining if an LTA Type B has come about; and

  • the guidance restates that standard information should be provided to the traveller before they are bound to any contract that leads to the creation of an LTA. BEIS does not appear to consider the practical issues of this obligation for a facilitator: at the time of the first booking, no LTA exists. The trader cannot be certain that an LTA will come into effect, because that is at the option of the traveller and depends on whether, and as critically when, they book the second travel service, if at all. It therefore appears that the facilitator must always provide the requisite information, in case an LTA is created, but some discussion on this point in the guidance would have been welcomed.

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 next webinar, taking place on 9 October 2018, will explore the legal implications of artificial intelligence in the Travel sector.

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