Dynamic packaging 'too risky' under new package travel regulations

Under the new PTRs, which came into effect on July 1, agencies shoulder additional responsibility for all services included in a package, while customers can hold package organisers responsible for any supplier failure that affects their trip.

While some have welcomed the regulations levelling the playing field with OTAs, the new PTRs put greater onus on those agencies wanting to work dynamically to bolster the financial protection they have in place.

Amanda Matthews, managing director of Designer Travel, said many agencies were having to decide between continuing to package dynamically and take on additional insurance, or revert to selling traditional packages put together by protected organisers.

“Doing things dynamically is sometimes the only way to fulfil a client’s demands, though,” said Matthews. “Of course, we have to make sure we don’t put ourselves in a difficult legal or financial position. Along with the credit card surcharges, it’s just another pressure on our margins.

“We already go to the nth degree to protect our clients’ holidays,” she added. “Some [agencies] won’t have the protection we have. The test will come if disaster strikes, like Monarch. We’ll see then who is living on a wing and a prayer.”

Simon Morgan, chief executive of Tailor Made Travel, said the potential ramifications of supplier failure all but negated the small financial gain from packaging dynamically.

“It’s easier for me to lose a few percent and maintain compliance than it is to put the company at risk,” said Morgan.

“We have a transparent policy with suppliers on all our margins. They’ve got the licences and the paperwork; we have the commission. It’s not rocket science. Once we’re over the brutality of who is making what, it’s about scratching each other’s backs.”