Reform of the Package Travel and Linked Travel Arrangements Regulations 2018 (PTRs) is something that has been on the horizon for several years now.

Most recently, the Department for Business, Energy and Industrial Strategy (Beis) – now the Department for Business and Trade (DBT) – carried out a review of the PTRs in 2022 and published proposals for reform.

The proposed reforms were more limited than many in the industry had hoped and addressed relatively minor changes, such as simplifying the definition of a Linked Travel Arrangement (LTA) and arranging for the publication of a consumer-focused PTRs guidance document.

It had been Beis’s intention to implement reforms via the Digital Markets, Competition and Consumer Bill. However, it now appears this proposal has been shelved and that DBT will instead carry out a more detailed review of the PTRs, prompted by ongoing Atol reform and the impact the Retained EU Law (Revocation and Reform) Bill will have – if it is introduced in its current form.

Exempting UK holidays

While we await more detail on proposals that may arise from this review, one change being considered is removing domestic (UK) holidays from the scope of the PTRs, a change the hospitality industry long advocated for.

It argues the PTRs prevent UK hotels and accommodation providers from adding value to their services, such as by combining the provision of a hotel room with a local attraction, such horse racing, on the basis the cost of providing financial protection and the risk of being responsible for those additional services is too great.

It appears the DBT is giving serious consideration to such a change, potentially to take advantage of the greater room for manoeuvre the government has post-Brexit to amend the PTRs and depart from the approach taken by the EU Package Travel Directive, on which the PTRs are based.

How could exemption be achieved?

There are various ways the proposal to remove UK holidays from the scope of the PTRs can be taken forward. One option is to remove UK holidays from the scope of the PTRs altogether. This would effectively involve amending the PTRs to state that where a holiday, which would otherwise meet the definition of a package, takes place in the UK, the PTRs simply will not apply.

Such a broad exclusion could present challenges. Take, for example, a situation where the package in question is a coach tour across the UK, or a city break including flights from Birmingham to Belfast or Glasgow.

In either of those scenarios, customers could find themselves stranded and experience difficulties in returning to their place of departure if the transport provider were to fail while the holiday was under way.

To address such a risk, a more limited approach could be taken whereby a UK holiday will only be considered as a package for the purpose of the PTRs if it includes carriage of passengers. This would result in the type of arrangements described above still falling within the scope of the PTRs, but more limited UK holidays – such as a hotel and golf break – being exempt.

Benefits and risks of exemption

While exempting UK holidays from the scope of the PTRs is an interesting idea, and one that would constitute reform on a much greater scale than that originally proposed by Beis in 2022, arguments can be made both for and against the proposal.

In favour, it can be argued UK consumers taking part in UK holidays require less protection than those travelling abroad and that it is therefore proportionate to exclude UK holidays from the regulatory burden imposed by the PTRs.

For instance, the need for a consumer to be provided with the breadth of information mandated by the PTRs is arguably not as necessary when travelling in the UK compared with a holiday abroad.

It can also be argued that customers taking part in a holiday in the UK are not as reliant on the PTRs to recover any losses they may incur if something were to go wrong during that holiday; other avenues to recover such a loss exist under English law.

Further, third-party service providers located in the UK are typically more accessible for the purposes of pursuing a claim; it is easier for a customer to bring a claim against a UK supplier directly than would be the case where the holiday takes place overseas.

On the other hand, the proposal presents potential risks too. Some of those risks are explored above in the context of UK holidays that include carriage of passengers.

However, exempting UK holidays from the scope of the PTRs may also prompt a consumer backlash down the line. For instance, while such a change may not garner significant customer interest if or when it is introduced, this may change when the first notable failure occurs and customers find they are left with no way of getting home or no ability to obtain a refund for services not performed. This could present a future reputational risk to businesses operating in this space.

What are the next steps?

The DBT is expected to publish more detail about its proposed reform in the first half of 2023 and so, for now, it is a case of watch this space.

That said, those businesses that currently sell UK package holidays – or those interested in doing so if the regulatory burden is relaxed – may wish to consider the impact that such a change would have on their business and the opportunities it may present if it is introduced.

Luke Golding is a director at Deloitte Legal. This piece was written for issue 15 of Abta’s Travel Law Today magazine, which was published at Abta’s 25th anniversary Travel Law Seminar over 10-11 May where Golding spoke on this topic. To find more information about Abta’s events programme, visit abta.com/events.