Holiday package protection rules set for overhaul

New holiday package travel regulations and a review into airline insolvency rules are set to boost protection for British holidaymakers.

Europe’s updated Package Travel Directive, which comes into force on 1 July 2018, will extend protection to flight-plus holidays where the customer chooses a combination of services via a single website, call centre or shop.

Under the current regime, buyers of traditional package holidays involving flights and accommodation purchased together are entitled to a refund or to be brought home should a travel company go under. These packages also provide additional legal protection, including the right to a refund if bad weather or industrial action means the holiday can’t be provided.

The rights will now be extended to travel where a combination of a flight plus hotel or car rental is put together on a website. This means it is no longer possible for online travel agents to claim each part of the holiday is separate and therefore not their responsibility.

UK travel industry impact

The EU’s updated Package Travel Directive was published in late 2015, with member states given until 1 January 2018 to adopt it as law before implementation on 1 July 2018. However, the UK version of the regulations was only published in April, giving the industry just over two months to prepare.

Under the existing travel regulations, travel association ABTA estimates that around half of UK holiday travel arrangements — 20 million packages and 3 million flight-plus holidays — are financially protected. From 1 July 2018, flight-plus arrangements will no longer exist and many will become packages.

ABTA pointed out that consumers not booking with an ABTA member will have to rely on UK trading standards if they are concerned a company they are dealing with is not providing the correct protection for travel arrangements.

Airline failure review

Meanwhile, the UK government has started a review of repatriation and refund protection in the event of an airline failure.

Options include allowing airlines to wind down in an orderly fashion so that they are able to conduct and finance repatriation operations with minimal or no government intervention. The review will also consider alternative models for refund protection, including through the travel insurance market.

The moves follow the collapse of Monarch Airlines last autumn, when the Civil Aviation Authority undertook the UK’s biggest peace time repatriation exercise bringing home 110,000 customers at an estimated cost of £60 million.