BUSINESS NEWS Package Travel Regulations reform: Government starts 12-week consultation. Ian Taylor reports Domestic package plans revised Ian Taylor
Government proposals for reform of the Package Travel Regulations (PTRs), published in a consultation on Monday, contained no real surprises. The Department for Business
and Trade (DBT) has dropped the most contentious proposal under the previous government – to remove lower-priced package holidays from the regulations. It has also dropped proposals to remove domestic packages altogether from the PTRs and to remove all mention of Linked Travel Arrangements (LTAs). However, the DBT is considering
exempting domestic packages which do not include a travel element from the PTRs and invites views on whether that “would support businesses to offer more choice to consumers”. It notes: “We are looking to encourage the provision of arrangements that involve accommodation and other tourist services, such as excursions or admission to events and attractions.” The alternative option is
“to keep all domestic packages in scope” of the regulations. Allied to this, the department
proposes to clarify when “other tourist services”, such as concert
Right of redress: ‘What could boost supplier response?’
Proposals to clarify travel organisers’ right to redress from suppliers when things go wrong should prove welcome. The Department for Business notes Regulation 29 of the PTRs
travelweekly.co.uk
Proposals to remove domestic packages from the PTRs have been dropped
Insolvency cover: ‘Would you like more flexibility?’
tickets, sports events, excursions, ski passes or spa treatments, form part of a package. Currently, “other tourist services” form part of a package if they make up a “significant proportion” or are an “essential feature” of a package. The DBT notes the UK “could
diverge” from the EU approach by removing the “significant proportion” criterion and perhaps clarifying what constitutes an “essential feature”. Alternatively, it could leave the regulation as it is. It recognises the need for
reform of the regulations on LTAs, noting “few businesses use them [and] we want to understand why that is, what benefits there are in the current system [and] whether greater benefits could be secured by a reformed LTA model?”
provides organisers with “an express right” to seek redress from a third party if an organiser is required to make a refund or price reduction or pay compensation and the actions or failings of the third party contributed to triggering the payment. But the department also
recognises “the requirement for organisers to provide refunds within 14 days may not align with the time it takes to receive recompense from suppliers”.
However, the department
proposes either to leave LTAs as they are or to retain the LTA category but “limit the ways in which an LTA can be created”. There are currently two types
of LTAs, involving the purchase of two or more services for a single trip: type A, involving two or more services under separate contracts with individual providers made on a single contact with a point of sale; and type B, involving separate payment for two or more travel services for the same trip through targeted, linked booking processes within 24 hours. The government proposes
replacing these with a single definition, abolishing type B, “to provide clarity about when an LTA will be created”. Industry stakeholders have 12 weeks to June 30 to respond.
It notes: “Organisers have
indicated . . . they can find it difficult to get redress from third parties. Some [suppliers] will refuse to refund the organiser, often claiming they are not required to.” The consultation suggests a time limit of 14 days for third parties to make payments in redress and asks, among other questions: “What else could improve package travel organisers’ ability to get timely and effective redress from suppliers?”
The consultation recognises the need for increased flexibility for organisers in securing insolvency protection, albeit this can only apply to non-flight packages as flight packages are subject to the Atol Regulations. The current
regulations require insolvency protection through bonding, insurance or trust arrangements. The Department for Business
notes a trust account must be combined with insurance provision to cover repatriation and associated costs, and an organiser may combine trust arrangements with additional insurance to provide cover for refunds. The department says it is
considering also allowing a combination of bonding with trust arrangements, noting that “most businesses agree having multiple routes to comply with the regulations is preferable”. It asks whether businesses would like this additional flexibility or prefer the requirements to be left as they are. The government also proposes
removing the current territorial restrictions on insurance cover against insolvency which mean policies must be held with an insurer authorised in the UK, Channel Islands or Isle of Man. It suggests relaxing this restriction could widen the choice available and lower costs, and seeks industry views on this.
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