Speakers at the Abta Travel Matters conference have clashed over whether the new EU Package Travel Directive would be better for consumers.
Mike Bowers, Tui Group legal counsel, said the introduction of a new category of travel product, the Assisted Travel Arrangement (ATA) which offers financial protection but not the full protection of a traditional package was potentially confusing.
"This has been an incredibly long process. It's been 10 years to get to this stage.
“From a Tui point of view we were looking for something which was simple and as comprehensive as it could be, and as simple and comprehensive for all those consumers who in their own terms were buying a holiday.
"On the outcome we recognise all the efforts that have gone in that direction. It's not necessarily how we would have written it. One area of concern is, when you think about the simplicity point, when you introduce a new category. Is that going to be truly understood by the consumer?"
The recently agreed wording of the new EU Package Travel Directive has sought to widen the scope of what is considered a package to encompass what are now known as Flight-Plus sales in the UK and online click-through holidays.
But Richard Downs, an Abta board member and founder and chief executive of Iglu.com, said the ATA categorisation potentially allows agents to avoid some of the financial burdens associated with taking the responsibility of a tour organiser.
He said there remained a large proportion of people who prefer package holidays but the majority - 54% according to a European Commission study - travel independently outside of the current regulatory framework.
Downs said: "Some people value package holidays. Equally there is a fair percentage who do not value package holidays and are not or to pay for it. What this legislation will do is widen the net and force people to buy by a package when they did not want a package."
Downs said that means agents selling packages would be forced to provide additional insurances for the product and take liability. "Now the package regulators say we have all got to be in the insurance business. There is a cost to that,” he said.
However, Downs said the ATA, although he described it as “convoluted” and “artificial” offered consumers choice and agents the chance to continue operating as agents.
He said agents could “lead consumers down the route of perhaps lighter touch regulation and perhaps a price point that suits them better. The ATA, I think, needs to be encouraged.”
Downs added he hoped the planned review of the ATA category by the European Commission after the implementation of the new PTD would “widen the net” and make it easier for agents to “provide their services and not become an insurance company”.
Bowers responded by saying Downs’ view “reinforced the point of the danger of having a new category” and “highlights a risk that the legislation leaves open”.
“It leaves open that agents have a choice here and if they structure things in the right way that they will be able to take advantage of a low cost regime. I do not think that’s what the legislation intended,” he said.
Downs explained: “Agents must follow the rules. I’m not advocating that agents try to circumvent or twist the rules.”
He said the issue was one of consumer choice and that the new rules were very clear about the information and conversations agents will have to have with customers about what they are buying.
“There is no question about the consumer having the wool pulled over their eyes. This is a clear opportunity for consumers to buy what they want and to buy at a price they can afford.”
Downs said the danger is that adding more costs and burdens on the portion of business that is regulated risks pushing the proportion that is not regulated up beyond the current 54%.
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