New EU rules just made protecting your holiday more complicated


Over the years I’ve reported on many EU initiatives that have proved to be of significant benefit to British travellers, from the deregulation of air services (which forced down airfares) to the many advantages of the euro (easier border crossings, reciprocal health cover, financial protection, and so on).

This week saw the implementation of the last travel-related directive before we leave the EU. The latest version of the Package Travel Directive, first forged in Brussels in 1990, should do much to expand the financial and legal protection for holidaymakers.

But, as we shall see, the way it has been implemented is complex, and how it will work in practice – and whether the public will be able to understand it – remains unclear.

The new EU directive will protect more holidays

Credit:
Dennis Fischer/Dennis Fischer Photography

The problem with the original rules is that they were designed to work in a situation where most people bought traditional package holidays from a tour operator who booked the flights, accommodation and other elements of the holiday as a single, comprehensive deal which was legally and financially protected. With the advent of cheap flights and the opportunities for more independent arrangements offered by the internet, millions now shun tour operators or book arrangements through websites which they may have thought counted as packages.

The protection rules have been adapted over time, but online travel companies have still been able to avoid the expense of protecting customers’ money. Abta estimates that last year 50 per cent of holidays booked were not financially protected. Those who might have assumed they had booked a package, with all the security implied, found that, when the holiday went wrong or the firm they booked with collapsed, they hadn’t.

The idea behind the new rules is that many more of these travel arrangements will be covered. The Department for Business, Energy and Industrial Strategy (BEIS), responsible for implementing the directive, estimates that an extra 10  million holidays a year will be protected. That sounds positive, but rather than simplify the situation the new arrangements have complicated it. And nearly a week after the law came into force, neither the BEIS nor the CAA, which is responsible for the Atol protection scheme, has managed to produce any comprehensive guidance for consumers about their new rights. In fact, so far, the only source of advice for travellers are incomplete briefings by the trade body Abta and Citizens Advice (citizensadvice.org.uk).

The key problem is that the Government has created a second category of holiday that offers lower levels of protection – both financial and legal – than a traditional package. Broadly, this “linked travel arrangement” (LTA) covers you if you have “bought two or more travel services in a single visit to a shop or website”. However, in many circumstances, this definition could also constitute a full-blown package and the differences between the two will be hard for a layman to perceive. Abta’s explanation (see abta.com) runs to more than 800 words. Who will read that before booking a holiday?

As the implications become clearer, I will do my best to shed light on your new rights (there are others in addition to financial protection). In the meantime, here are three things you can do to protect yourself:

  1. When booking a “package” holiday, ask what protection you have. Is it fully bonded by Atol, or just one of the new LTAs? Book an Atol-protected holiday if you possibly can.
  2. Book with a credit card, then at least you will have additional financial protection if a company goes bust.
  3. Buy a travel insurance policy which includes cover for the financial failure of travel suppliers (end supplier failure). Most do not, but the one I buy from P J Hayman (pjhayman.com) does.





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