This article was first published in Travel Weekly on Monday 16 May 2022.
Following the publication of reforms that the Government intends to make in relation to Package Travel Regulations (PTRs) as well as address other areas of consumer protection, we look at the key proposals.
Reform of PTRs
The Government has recently carried out a mini-review of the PTRs by consulting with stakeholders in the industry. This is not the root-and-branch review which some have been calling for, with the Government instead decided to focus on what can only be described as peripheral issues. In short, the Government has decided to make the following changes:
- The definition of a Linked Travel Arrangement (“LTA”) is going to be simplified so as to address concerns that LTAs are confusing and rarely used in practice.
- To clarify when an “other tourist service” is capable of forming a package or a LTA when combined with transport, accommodation or car hire. For instance, when a customer books a hotel and a theatre trip in a single booking, there is scope for differing interpretations as to whether this is a package. The Government is proposing to clarify this area of the PTRs.
- In recognition of the difficulties which can sometimes exist in souring insolvency protection (e.g. a bond), the Government plans to improve the flexibility of the insolvency protection provisions of the PTRs. We suspect this will allow a greater element of “mix and match” so that package organisers can use multiple methods to protect customer monies.
- The horribly complex information forms which have to be provided to customers before they book are going to be tackled, with BEIS being given the powers to make changes to these forms. BEIS also intends to publish a consumer-facing guidance document which explains the PTRs.
It is a shame that the Government has not taken the opportunity to give the travel industry and consumers the “Brexit dividend” promised by tackling more important and difficult areas of the PTRs where reform is needed. This is precisely what the EU has decided to do with its root-and-branch review of the package travel directive.
Tackling subscription contracts
The use of subscription contacts is in its infancy in the travel industry, but some do see the benefits of offering special deals and discounts in return for a regular payment. The Government sees the benefits of this model to the consumer, but it is going to pass new laws which address certain practices in this model. The new rules will require companies to:
- Provide clearer information to the consumer before they enter into a subscription contract;
- Send a reminder to customers before a subscription auto-renews and also before a free or low cost introductory offer comes to an end; and
- Make sure customers have an easy mechanism for exiting a subscription contract.
Fake reviews
An honest an impartial review from a customer who has actually used a travel service has a powerful influence on the purchasing decisions of other consumers. The Government is keen to ensure that this important resource is not corrupted through the industry of fake reviews. As such, the Government is intending to outlaw the following practices:
- Commissioning or incentivising fake reviews;
- Hosting consumer reviews without checking that the reviews are genuine; and
- Offering to submit fake reviews.
Holiday savings clubs
There have been terrible examples in the recent past of consumers losing their investment when a Christmas savings club has become insolvent. Unlike for package travel, no insolvency protection exists for consumers in these circumstances and so they stand to lose all their savings when the scheme fails.
The Government intends to address this consumer risk with measures which are broad enough to cover holiday savings schemes. The Government will pass new laws to ensure that consumer payments to a savings scheme must be protected by way of a trust account or financial failure insurance.
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