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The new definitions of package travel

In the second of a series looking at upcoming Package Travel Directive reforms, Simon Bunce, Abta’s director of legal affairs, highlights how to recognise when you will be defined as the organiser of a package under the new legislation

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Abta’s director of legal affairs, highlights how to recognise when you will be defined as a package organiser under the new PTD regulations

When the new Package Travel Directive is introduced on July 1, 2018, many businesses involved in selling travel services – travel agents, airlines, accommodation companies, ferry companies and others – will find

that they themselves are now the organisers of package holidays. This means that they will have a greater responsibility for the services that they sell and for the protection of their customers’ money if they or any of the service providers fail. That is a big change.

 

Get organised

A package will be, as it is now, a combination of travel services (transport and/or accommodation and/or car hire and/or other tourist services) for the purposes of the same trip or holiday.

 

If the customer has bought a combination of those services and has a single contract for them all, this will be a package. If that contract is with you, you will be the organiser. If you are the agent for another company that sells the services under one contract they will be the organiser and you will continue to be their agent. Again, this is no change from the current position.

 

Where things get more interesting is when you arrange the sale of the travel services so that your customer has contracts with the individual travel service providers. So, for example, where you act as agent for the various suppliers, or you sell one service yourself but arrange for the customer to buy other services from other companies.

 

If the customer buys these services from your shop, website or call centre and all the services have been selected before the customer agrees to pay for them, this will be a package and you will be the organiser. You will be the organiser even if you have acted as agent for all the service providers.

 

This is a significant change and will particularly affect agents who currently sell Flight-Plus holidays or who operate a shopping basket model on their website.

 

If you sell online you may also find that what you sell has become a package if you sell one service such as a flight or hotel

accommodation, then forward the customer’s name, payment details and email address to another travel company and the customer then books further travel services with them within 24 hours of booking with you. You – as the company that has passed on the customer’s data – will be the organiser of the package. You will therefore be responsible for the services provided by the other company and in the event of their financial failure.

 

There are other ways that you may be defined as the organiser, perhaps without intending to:

 

  1. If the customer buys a combination of travel services that you have offered or sold at a total price, they will have bought a package. If you have not acted as the agent of another company that is the organiser, you will be the organiser.

 

  1. If the customer buys a combination of travel services that you have advertised or sold as a “package” or some similar term, they will have bought a package. Again, if you have not acted as the agent of another company that is the organiser, you will be the organiser.

 

  1. If you have a contract with a customer that allows them to put together their own combination of travel services from a selection that you put to them, you may have created a package and you may be the organiser. This is primarily intended to cover “gift box” type arrangements, which are more common in certain European countries than they are in the UK but other types of prizes or incentive products might also fall into this category.

 

If you are involved in any way in selling travel services, you need to take a close look at the new definition of “package” to see if what you sell, and the way you sell it, comes within that definition. If it does, and if you can’t identify another company that is the organiser, you may find yourself with much greater responsibility and liability in future.

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