Holidaymakers Benefit from New Consumer Rights

Major online travel agents appear to be complying with new rules that are designed to provide millions of holidaymakers with far more consumer rights.  The new Package Travel Regulations, which came into force at midnight, comprise the biggest shake-up of holiday protection in a generation. They are designed to give holidaymakers who book through online travel agents the same safeguards as traditional package holidays.

Simon Calder has been studying the new rules – and assessing the impact on Day One.

Q What problems are these rules solving?

Proper package holidays are the gold standard of travel. By booking flights and accommodation in a single transaction from a tour operator, you transfer all the risk to the company. A cancelled flight or an overbooked hotel? They have to sort it out and provide a refund or compensation as appropriate.

But with the growth of online travel agents, people have been buying what they think is a package holiday, only to discover when it all goes wrong that the travel firm denies all responsibility. 

Package holiday changes to benefit millions of travellers.

It’s summed up with the case of a couple called Chris and Janette from Perthshire, who contacted me from Croatia a couple of days ago to say they had turned up at their holiday hotel in Mali Losinj only to find it has been closed since Christmas.

If it had been a proper package holiday, the travel firm would have needed to run around and find an alternative immediately and/or pay compensation. As it was, they called their online travel agent only to be told: “Haven’t you read the small print? Your contract is with the supplier of that product, which is a hotel booking service. So sort it out with them.”

Q What has changed?

The basic rule is now common to all channels of booking: if it looks like a package holiday, with flights, accommodation and possibly a rental car all included in a single transaction, then it has all the prodigious consumer protection that comes with a proper package.

The government reckons the change could bring valuable extra protection to as many as 10 million British holidaymakers.

Q What are the travel agents saying?

Leading companies have changed their terms to reflect the new rules with varying degrees of enthusiasm. On the Beach, one of the biggest firms, says very directly: “On the Beach will be fully responsible for the proper performance of the package as a whole.

“Additionally, as required by law, On the Beach has protection in place to refund your payments and, where a flight is included in the package, to ensure your repatriation in the event that it becomes insolvent.”

Travel Republic, part of the Emirates Group, acknowledges it may be obliged to pay compensation, provide assistance or make alternative travel arrangements, saying: “We do so because we are obliged to do so [by the new rules], not because we have a contract with you to supply those arrangements.” 

But appears not to have updated its terms and conditions. After the new rules took effect, the company was stuill saying: “Sunshine, because we act as booking agent, accept no responsibility or liability for the acts or omissions of, or services provided by, Travel Suppliers.

But whatever the terms say, online travel agents which sell flights and accommodation in a single transaction are obliged to provide assistance and if appropriate, compensation when travel arrangements go wrong.

Q Are there any loopholes?

Yes. The new rules introduce the concept of “Linked Travel Arrangements,” which provides much weaker consumer protection – basically there’s no improvement from the old rules. Typically a Linked Travel Arrangement involves buying a flight and accommodation in separate transactions with separate payments, or – after buying one element, such as transport – clicking through to book another travel product.

Agents are obliged to specify if they are offering Linked Travel Arrangements. Just in case they forget, the key issue is: if you’re asked to pay separately for flights and accommodation, there’s a good chance you won’t get any extra protection.

Q What do the holiday companies say about the new rules?

The whole industry is quite cross, because this is an EU directive which was issued in 2015, but the actual British law was only revealed 10 weeks ago –  which hasn’t given them long to comply with the changes. 

Online travel agents say their additional obligations will increase their costs and push up holiday prices.

One controversial element of the new rules is that holidaymakers have a new right to cancel with a full refund in the event of “unavoidable and extraordinary circumstances occurring at the place of destination or its immediate vicinity and which significantly affect the performance of the package, or the carriage of passengers to the destination”.

There’s no clear definition of what that might mean – for example if, heaven forbid, there were a terrorist attack in a resort 40 miles from the one you’re booked in, it is not certain whether you would have the right to cancel if you decided you did not want to go ahead with the holiday. 

Q Many people will have booked summer holidays through online travel agents before today but are going to travel this month or next. Are they now covered?

No, the new law does not apply retrospectively to existing bookings, which will lead to some odd situations. Suppose you booked through an online travel agent before 1 July for a hotel that turns out to be closed. When you call to complain the firm can just shrug. But if I book the same deal today, the online travel agent must solve the problem and pay appropriate compensation. 

If you are a complete DIY holidaymaker, who finds flights direct from an airline, books a hotel independently, then nothing changes; the only protection you may have is from your travel insurance or credit card provider.

Q These rules come from an EU directive. Do they apply beyond Europe? And will they continue after Brexit?

They apply to holidays organised by any company in the European Union for travel worldwide. It is not clear if, after Brexit, British holidaymakers who book with a firm based in the EU. But for trips booked through UK firms, the regulations are now enshrined in UK law and will continue in force after Brexit.