In the third of a series looking at upcoming Package Travel Directive reforms, Simon Bunce, Abta’s director of legal affairs, explains the Linked Travel Arrangement and what it means for you
The new Package Travel Directive (PTD), which will become UK law from July 1 next year, introduces a new type of regulated holiday – the Linked Travel Arrangement (LTA).
If you sell an LTA, you will not be a package organiser but you will have new responsibilities to provide information to customers, and in some cases to enter into additional financial protection arrangements.
The new responsibilities will apply to travel agents and companies that sell single travel services, such as flights, car hire or accommodation only, if they have arrangements for their customers to book other services with other suppliers.
Mixing it up
As with package holidays under the new directive, the new rules apply where the customer buys a combination of transport and/or accommodation and/or car hire and/or other tourist services for the purposes of the same holiday or trip.
If your customer purchases a holiday or trip during a single visit to your shop, website or other point of sale and you have arranged that the customer will do that by selecting and paying for the individual travel services separately rather than choosing all the services making up the holiday before committing to pay, this is likely to be an LTA. If the customer selects all of the services before agreeing to pay, this is likely to be a package holiday.
So if, for example, the customer books a flight and pays for it and then, as a separate transaction during the same visit to your shop or the same session on your website, they make a booking for car hire with another company, this is likely to be an LTA.
If you are selling in this way, rather than organising packages or acting as an agent for a package organiser, you will have to give your customers specific information telling them that they are not buying a package holiday and do not have the same rights as a customer who buys a package.
An LTA will also be created where the customer makes a booking for one travel service with you, whether you are selling it yourself or acting as an agent, and, through some arrangement that you have with another company, they are then made an offer and make a booking with that other trader not more than 24 hours after the confirmation of the first service.
This might happen where the customer books a hotel on your website and then, because of an arrangement you have with another company, receives an email from that company offering car hire in the same location as the hotel and for the dates that they have booked at the hotel, and the customer books car hire with that company within 24 hours of confirmation of booking the hotel.
Again, if you have this type of booking arrangement, you will have to give the customer specific information telling them that if they book the other service they will not be buying a package holiday and do not have the same rights as a customer who buys a package.
Question of protection
In all cases where your booking processes lead to the customer buying an LTA, you will have to ensure that the monies that you take for any of the services sold are protected so that the customer gets a refund or the service provider is paid in the event that you go bust before the trip takes place. If you are responsible for the customer’s transportation, this protection should also provide for repatriation where necessary.
LTAs are a totally new type of regulated holiday. Until we see the final regulations, the format in which customers should be given information is unclear. Equally, the arrangements for protecting the customer’s money have not been set by either the Department for Business or the Department for Transport, so it is not clear whether the current protection schemes that apply to package holidays will cover LTAs.