My business sells package holiday tours: what legislation do I need to be aware of?
Many people go on holiday after purchasing a ‘package’ from a travel agent, either in person or, increasingly nowadays, online. This may consist of:
- transfers to and from the airport;
- activities while they are abroad.
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.
What is a package holiday?
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 could be a hotel, hostel, camping facilities, caravan, etc;
- another tourist service not ancillary to transport or accommodation which comprises a significant proportion of the package.
For a package of services to be included within the definition of a holiday package it must extend for a time period of 24 hours or more and include at least one night’s accommodation.
This means 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.
To fall within the definition of a package the package must be sold at one single price. Package holidays could therefore include holidays where the accommodation and the flights are supplied by two different suppliers, but organised or put together by the same party.
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.
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 organises 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 obligations and imposed by the Package Travel Regulations?
Prior to the sale being completed
Before the completion of a sale for a package holiday the following 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 on health requirements;
- arrangements for the security of the money paid over and what will happen in the case of insolvency.
It is a criminal offence to fail to comply with these requirements – anyone in breach will face a fine.
Under the Package Travel Regulations, certain requirements must be inserted into the contract for the package provided to the customer. This includes:
- the destinations of the trip and the length of time at any of the destinations;
- the transport to be used;
- meals included;
- where accommodation is included the location, degree of comfort and main features;
- the required payment schedule;
- the cancellation provisions.
Travel agents or tour organisers are not allowed to supply consumers with misleading information about the package. This would include brochure material but also any information given verbally. If they breach this stipulation, they would be liable to compensate the consumer for any loss consequently suffered. This would include consequential loss for disappointment as well as direct financial loss.
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 tour operator cannot limit liability for personal injury or death as this is forbidden by the Unfair Contract Terms Act 1977. They can, however, limit liability for any loss or damage as long as it is reasonable.
In what circumstances will this be reasonable?
Liability can be limited in relation to:
- 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, the hotel may claim money from the tour operator 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 which offers packages in this way and therefore within the scope of the regulations will have to pay an annual bond to an approved body (eg, the Association of British Travel Agents (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 given alternative means of getting home.
- if an operator also offers flights as part of their package they will be required to be licensed by the Air Travel Organisers Licence (ATOL). This means that if your travel company fails and your holiday can no longer go ahead you’ll be entitled to a refund if you are yet to travel and hotel costs and flights home if you’re abroad;
- to book flights with the hundreds of airlines associated with International Air Transport Association (IATA), the travel agent must get registered with IATA as an IATA travel agent;
- if the company is a member of the above organisations, 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.
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 EU member state.