The EU has agreed a significant overhaul of the Package Travel Directive (PTD), reflecting on lessons learned from the collapse of Thomas Cook in 2019 and the disruption caused by Covid-19, with the new rules expected to apply from about mid-2029.
These will be relevant to any business targeting customers in the EU.
Removal of linked travel arrangements
The current PTD regulates two types of sales: packages and linked travel arrangements (LTAs). LTAs were designed to sit between packages and single travel services, offering consumers a limited level of insolvency protection.
In practice, LTAs have proved difficult to understand and apply, and compliance has been inconsistent at best. As a result, the EU has decided to remove the LTA concept entirely and to broaden and clarify the definition of a ‘package’.
It is doing so in two ways:
Expansion of click-through packages
The current PTD includes a type of package known as a ‘click-through package’. This arises when a traveller books one travel service online and is then linked through to another trader to book a second service within 24 hours, provided certain customer data (name, payment details and email address) is transferred between the two traders.
In practice, this type of package has rarely been triggered because those specific data points are not typically shared.
The new rules address this by widening the test. A wider range of personal data will now be sufficient, provided it enables the traveller to be identified as the same contracting party by both traders.
This could include a name, email address, phone number or even a social media identifier, but data such as an IP address alone will not be sufficient.
Experiences and add-ons: the 25% rule
Under the existing PTD, a combination of an “other tourist service” and either transport, accommodation or car hire will only constitute a package if the other tourist service amounts to a “significant proportion” of the total value of the booking or is otherwise an “essential feature” of the booking.
The revised PTD makes the concept of a “significant proportion” more certain by confirming that an “other tourist service” will be treated as significant where it accounts for at least 25% of the total value of the booking.
A duty to warn where additional travel services are promoted
The reforms introduce a new obligation in relation to the purchase of single travel services.
Specifically, where a business “invites” a customer to buy an additional travel service for the same trip, the business must clearly inform the customer that the two bookings will not form a package and that package travel protections will not apply.
An “invitation” is interpreted widely and includes any prompt or encouragement to purchase an additional travel service for the same trip. But simply making other travel services available to book on a website will not be enough on its own.
A key risk arises where an invitation is made before the customer books the first travel service.
If the required warning is not given at that stage, and the customer goes on to book an additional service within 24 hours at the same point of sale, the combination will automatically be treated as a package. The business will be deemed to be the organiser, with full responsibility under the package travel regime.
Expansion of customers’ cancellation rights
Customers can already cancel a package and obtain a full refund where unavoidable and extraordinary circumstances arise at the destination or its immediate vicinity which significantly affect the performance of the package or transport to the destination.
The new rules clarify and extend this right so that it applies where unavoidable and extraordinary circumstances arise at a traveller’s place of departure, at the destination or its immediate vicinity, or affect the traveller’s journey to or from the destination where that journey forms part of the package.
The reforms also make clear that, while official travel advice may be an important factor in assessing whether unavoidable and extraordinary circumstances exist, they are not determinative in themselves.
Each case must be assessed on its own facts.
The 14-day refund rule
When a refund is due to the traveller, a 14-day deadline to pay the refund will start automatically from the date of termination of the package. The customer does not need to request a refund.
If the customer’s payment details are no longer valid, the 14-day period will run from the point at which the correct details are provided.
Rhys Griffiths is a partner and head of travel at Fox Williams LLP.
