Atol trade body calls for new package law anti-avoidance rules

Atol trade body calls for new package law anti-avoidance rules

The Association of Atol Companies (AAC) has reassured the trade that it is possible to “avoid all the issues” of the new European Package Travel Directive (PTD).

But the organisation which represents UK package tour operators has warned “bad guys” may try and circumvent the new rules when then come in.

Legal advisor to the AAC, Alan Bowen, addressed delegates at travel industry accountancy firm MacIntyre Hudson's summer update in London last night.

He explained the new 71-page EU directive, which was finalised last month and is due to come into effect in 2017, includes up to six definitions of a package holiday.

This includes a scenario where a holiday is purchased from separate traders through a linked online booking processes – if the name, payment details and email address are passed on from the first trader to the second, and the consumer makes a second component booking within 24 hours.

“So that’s a click-through,” he said. “We’ll have to see how that is going to work because, of course, the temptation will be to make sure that the customer doesn’t buy within that 24 hour period.

“It also says that the second trader – the car hire company, online hotel room provider – will have to tell the first trader that it’s become a package and then the first guy has then got to comply with the PTD. That’s going to be very interesting.”

Bowen moved to reassure the trade that “not everything is a package” and there will remain some situations where it is possible to “avoid all the issues”.

“If you are a retailer and you tell the customer ‘the package is organised by ‘X’, here is their ATOL number and we are a retail agent for them’, that’s fine,” he said. 

“However there are lots of new requirements of information you’re going to have to give to the customer, which if you fail to, you’ll be in deep trouble.

“You can still sell a flight on its own, or a combination on its own and nothing else and it’s not a package so that doesn’t change, however we are going to have to find some method of trying to avoid the bad guys making sure that subsequent sales don’t take place within 24 hours because suddenly what wasn’t a package can become one. 

“There will have to be anti-avoidance rules to make sure that doesn’t occur.”

Bowen also warned that under the new rules “You will be an organiser even if you’re pretending to be acting on behalf of the customer and not the supplier”.

Regarding a new category of holiday known as a Linked Travel Arrangements which must be financially prottected but is not a package, Bowen said:

“So there are six potential alternatives for a package, but even if it’s not a package it could be something called a linked travel arrangement.”

He defined this as two types of travel services which create one holiday resulting in separate contracts with different providers, if one person has “facilitated the separate selection and payment of each service, or if the first trader suggests a second sale within 24 hours".

“What is the difference between that and...a package? It’s how much data is passed on. It’s going to be a real nightmare," said Bowen.

“Customers must be told that they are not protected as if it was a package, but if they are not told, they get many of the rights as though it were a package.

“You can see there’s going to be some real issues here because lots of people are going to say ‘ah well, we didn’t pass information on, the customer made a completely separate choice to book with the company that we mention on our website, so it’s not a package’.”


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