The world is a polarised place right now, but in the true spirit of festive cheer, I have managed to find something that everyone seems to agree on – a near universal point of view that is unifying tour operators and travel agents, Abta and the CAA, accountants and lawyers alike.
I am talking about the entire UK travel industry coming together like Bob Geldof’s Band Aid to sing with one voice that Linked Travel Arrangements (LTAs) are a shambolic, ill-conceived, unworkable mess.
Before I go any further, I should probably explain. An LTA is a new legal concept created by the European Commission (EC) during its reform of the Package Travel Directive, which is due to come into UK law in 2018.
Picture the EC as a fishing boat, trawling holiday arrangements with a big net marked “package”. In reforming the law, the EC’s aim was to bring as many people’s holiday arrangements under the consumer protection framework as possible.
So they’ve made the net wider and its holes smaller, but just in case some holiday arrangements still managed to squirm through the gaps, Jean-Claude Junker is sat at the back of the boat, picking them off with his fishing rod. That fishing rod is the LTA.
An LTA is created when two (or more) different types of travel service are separately selected and separately paid for under separate contracts within a 24 hour period.
They will even apply when two different sellers are involved, via a click-through arrangement, or through a targeted follow-up call or email campaign – though if certain personal details are passed between the sellers, the arrangement will be deemed a full package.
There are frankly too many criticisms of the LTA proposal to cover here in detail, but in summary many of the definitions are so woolly they seem like a court case waiting to happen; it will be virtually impossible to track when one has been created and they could be created unwittingly; and the small print will bamboozle consumers and agents who need to explain it.
At the moment, there do not appear to be many companies selling arrangements that will be classed as LTAs. However, there is one obvious attraction that will motivate some to try and make them work.
The LTA arranger (the seller of the first item in the chain) will only be required to provide financial protection for the money they are holding. In scenarios where suppliers have all been paid and therefore the LTA arranger is no longer holding any client money, they won’t have to provide any financial protection at all.
The Department for Transport is currently trying to decide whether LTAs which include a flight should form part of the Atol scheme, or be kept well away to avoid tarnishing the Atol brand. The CAA does not seem overly enthusiastic about looking after them, and it is easy to see why.
However, keeping them outside of Atol will probably mean that flight-only sales would also have to come out of Atol protection.
Between now and 2018, when they are due to come into force, there is sure to be plenty of disagreement over exactly how LTAs should work.
Martin Alcock is director of Travel Trade Consultancy