Analysis: Implications of the package travel directive for agents

Analysis: Implications of the package travel directive for agents

Abta's Simon Bunce explains how the PTD will change from 2018

One of the most significant rights the current Package Travel Directive (PTD) gives to customers is the right to hold the package organiser responsible for things that go wrong on holiday, even if the actual services are delivered by other suppliers.

The new Package Travel Directive, due to come into effect in 2018, will reinforce this right.

Under the new directive, if you put together a package for a customer, you will be responsible for all the services included as part of the package.

This means agents who put together a flight and a hotel, for example, will have the same responsibilities as traditional package holiday organisers.

As at present, the customer will be able to cancel the holiday and receive a full refund from the organiser if any of the travel services are significantly altered before departure.

It also means that if the services that form the package are not delivered properly, the organiser will have to fix any problems or make arrangements for suitable alternatives.

If the problems cannot be resolved, and the impact on the customer’s holiday is substantial, the customer will have the right to demand to be taken home early at no extra cost.

When the holiday is not provided as it should be – say a hotel is a three-star rather than the five-star property that was booked – the customer may be entitled to a drop in the price of the holiday and compensation from the organiser.

The new directive addresses unavoidable and extraordinary circumstances, such as the ash cloud that grounded flights in 2010.

At present, it is unclear whether an organiser must pay for any extended accommodation if a customer is unable to return home at the end of their holiday.

The new directive makes clear the organiser will have an obligation to pay for necessary accommodation, but only for a period of three days.

This accommodation should be the same standard as the package accommodation, if possible. After that, the organiser will be required to provide assistance but will not have to pay for further accommodation. The customer may also have rights against the airline or other transport provider.

The limit of three days does not apply if the affected customer notified the organiser before departure that they have reduced mobility, are pregnant, are an unaccompanied minor or need specific medical assistance. In these cases, there is no set limit.

While the liability of package organisers will not change significantly under the new directive, many travel companies may face such liability for the first time due to the widened definition of a package, particularly those offering Flight-Plus arrangements.

All travel companies should review their business models and ensure they adequately protect their positions through effective trading terms with customers and suppliers, and through insurance.

Customers buying Linked Travel Arrangements (LTAs) – a new type of holiday created by the directive – have no additional rights to claim against an LTA arranger for any problems with a holiday other than those under the individual contracts and, in very limited cases, of financial failure.

Liabilities extended

A package ‘organiser’ – such as an operator – will be liable for delivery of services when things go wrong, as now.

Depending on their business model, travel agents and OTAs may face liabilities similar to tour operators, in particular those now selling Flight-Plus arrangements.

Agents who put together a flight and a hotel or car hire will have the same liabilities as a package organiser, including responsibility to:l

  • Pay a full refund if a holiday is significantly altered pre-departurel
  • Fix problems/make alternative arrangements if things go wrongl
  • Reimburse/compensate a consumer if a holiday falls short of that bookedl
  • Pay for up to three nights’ extra accommodation in ‘unavoidable and extra-ordinary circumstances’, such as the 2010 ash cloud.

This three-day limit on claims by consumers not requiring assistance is new. There is no time limit where notified in advance of reduced mobility, pregnancy or other need.

The new Linked Travel Arrangements bring no additional liabilities other than those specified in individual contracts or in limited cases of financial failure.

Abta advises all firms to review their business models, check trading terms with customers and suppliers, and ensure they have adequate insurance.


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