Selling Package Holidays

As a business which sells package holiday tours to my customers what legislation do I need to be aware of?

Package Holidays

When many people arrange to go on holiday they do so by purchasing a package from a travel agent which will consist of one or more of the following elements:

  • Flights
  • Transfers to and from the airport
  • Accommodation
  • Activities while they are abroad

It was once the done thing for people to go and visit a travel agent in order to book these elements of a package holiday all at the same time. Currently it is still the done thing to purchase these elements together in a package but often this is done via the internet with various websites operating as an online travel agent and a one stop shop for all your needs while on holiday.

Is there any legislation which governs how these packages are sold?

As selling packages in this manner is such big business in the UK and throughout Europe it is necessarily that there is required legislation in place to regulate all the aspects of this industry. This is achieved by the Package Travel Regulations 1992.

The Package Travel Regulations 1992

In the UK anyone who sells or offers for sale a package holiday must comply with the Package Travel Regulations 1992.

The Package Travel Regulations were first established in the UK due to the UK’s duty as a European Union Member State to implement the rules of a European Directive. This European Directive is binding on all European Union Member States meaning that they will all have laws in relation to package holidays of a similar nature to the Package Travel Regulations.

UK Law

What is meant by a package holiday?

Definition of a package

The Regulations define a package as something which includes at least two of the three following components which are said to make up a holiday:

  • Transport – such as flights, transfers etc
  • Accommodation – this can be anything from hotel accommodation, hostel accommodation, camping facilities, caravans etc
  • Another tourist service which compromises a significant proportion of the package – this could be anything from tickets to an event to a scheduled sightseeing tour

Is there any time limit for a package to be included within the definition of a holiday package?

In order for a package of services as above to be included within the definition of a holiday package it must extend for a time period of over 24 hours or more and the accommodation must be booked as overnight accommodation.

This means that a trip which is simply made up of transport and tourist activities such as transport to a sporting event and a ticket for the event will not be included within the definition of a holiday package for the purpose of the Package Travel Regulations.

What is the case if the components of a package are sold separately?

If the components of a package are sold separately then it will not be termed a package under the regulations and instead will be seen as completely separate elements even if they are purchased by from the same company. In order to fall within the definition of a package the package must be sold by one single price.

Application of the Package Holiday Regulations

The regulations apply to companies who put packages together for sale in the course of their business such as a travel agent or a tour operator.

What is meant by a package for sale?

For a package to be for sale it must be offered by that travel agent or tour operator for a single price for all of their elements. If an individual organizes a holiday for their friends and collects the money before paying for the trip this will not be seen as offering a package for sale.

What is the case if I wish to sell packages in countries outside of the UK?

If you wish to sell holiday packages for countries outside of the UK and you are established in the UK and conducting business in the UK then the Package Travel Regulations will apply to your business.

If you are a company that is established in the UK and you are conducting business outside of the UK then the Package Travel Regulations will not apply to you. You will however, be subject to similar legislation imposed by the country you are conducting your business in especially if that country is another European Union Member State.

What obligations and imposed by the Package Travel Regulations?

Prior to the sale being completed

Prior to the completion of a sale for a package holiday the following information must be provided to the customer in writing:

  • Information in relation to the requirements for a passport and any visa requirements for the country the person may be visiting
  • Information in relation to health requirements
  • Arrangements for the security of the money paid over and what will happen in the case of insolvency

Contractual Requirements

The Package Travel Regulations make clear certain requirements which must be inserted into the contract for the package provided to the customer. Examples of these requirements are as follows:

  • The destinations of the trip and the length of time at any of the destinations
  • The transport to be used
  • Where accommodation is included the location, degree of comfort and main features
  • The required payment schedule
  • The cancellation provisions

Can a travel agent put a term into the contract to restrict their liability towards the customer in case of any problems?

  • A travel agent or a tour operator cannot limit liability for personal injury or death as this is forbidden by the Unfair Contract Terms Act.
  • A travel agent or tour operator can however, limit liability for any loss or damage so long as it is reasonable.

In what circumstances will this be reasonable?

Liability can be limited in relation to one of the following factors:

  • An unforeseen event – force majeure
  • If the damage was due to circumstances beyond the control of the travel agent or tour operator
  • If the damage was caused by a third party who was in no way connected with the contract

It is also possible to put a term into the contract stating that the customer will be liable to pay damages to the tour operator or travel agent due to the damage caused by them while on the trip. If damage has been caused to a hotel for example then the hotel may claim money from the tour operator in order to rectify the damage. It is not unreasonable for the tour operator or travel agent to claim this back from the customer. 

Are there any further requirements under the Package Travel Regulations?

The Package Travel Regulations require that any company who offers packages in this way and therefore within the scope of the regulations will have to be a member of the Association of British Travel Agents (ABTA) and will have to pay an annual bond to ABTA. This bond is required in case the operator becomes insolvent. If this is the case the money held in the bond will be used to ensure holiday makers who may still be on holiday are able to be given alternative means of getting home.

  • If a operator also offers flights as part of their package they will be required to be licensed by the Air Travel Organisers Licence (ATOL).
  • Similarly if an operator wishes to book and print airline tickets they must be an member of the International Air Transport Association (IATA)
  • If the company is a member of the above organisations then the symbols of these bodies will be included in company information such as a letterhead, a brochure and on their website. Looking out for these symbols is a good indicator of how reputable a company providing packages may be.