‘Tourist Services’ under the Package Travel Regulations 2018
In this article, Nick Parkinson, Associate at Travlaw, discusses the importance of understanding what constitutes a ‘tourist service’ for the purpose of the Package Travel Regulations 2018, a regulation which is of course at the very heart of the Travel & Leisure industry.
We are often asked by our clients whether any of the services they are providing would be regarded as ‘tourist services’ for the purpose of the Package Travel Regulations. As if often the case, there are some clear cut examples, but there are also some ‘grey areas’.
Why Does it Matter What A ‘Tourist Service’ Is?
The term ‘tourist service’ is not a new concept. It appeared in the old Package Travel Regulations from 1992, and survives in the current 2018 Package Travel Regulations (‘the PTRs’). However, it continues to cause a lot of confusion for the travel industry.
The main reason why this concept is so important is because it is one of the factors that will determine whether or not a holiday will be treated as a ‘package’. Potentially, travel companies could be selling package holidays without realising it, and committing a criminal offence in the process!
The importance of understanding what could amount to a ‘tourist service’ does not stop there. Let’s say that you are already selling a package (e.g. flight and hotel) and you throw in a ‘tourist service’ on top. In doing that, you will be liable for anything that goes wrong during that ‘tourist service’. Accidents inevitably occur from time to time even in low risk scenarios, such as a tourist bus being involved in a road traffic accident. It is vital, therefore, to make sure that you are adequately covered under your public liability insurance policy.
We should quickly recap on what constitutes a package.
What is a ‘Package’?
Keeping it simple, a package holiday will be created when a travel company supplies at least two different services from the following categories of ‘travel services’:
- Carriage (e.g. flights, trains, cruise ship)
- Rental of motor vehicles
- Tourist Services
The first thing to clarify is that, for example, simply supplying accommodation at two different hotels would not create a package. The two services need to be from different categories.
The traditional package that we think of would consist of a flight and accommodation, but any combination of two items from the above list would constitute a package. However, the difficulty comes where a travel company generally sells only one of these services but then decide to start including ‘extras’. The question is whether these ‘extras’ would be considered as ‘tourist service’. If so, all of a sudden we are selling a regulated ‘package holiday’!
We should therefore take a look at the definition of a ‘tourist service’
What is a ‘Tourist Service’?
Tourist services are not defined by the PTRs. Good start! The PTRs do, however, tell us two important things about what kind of tourist services will be caught by the PTRs.
Firstly, we can disregard tourist services that are an ‘intrinsic part of the travel services’ (i.e. flights, accommodation or car rental). Secondly, any other tourist services will be caught by the PTRs if either:
- They account for a significant proportion of the total value of the travel services, or
- They represent an essential feature of the trip or holiday, or
- They are advertised as an essential feature of the trip or holiday,
There are quite a few words for lawyers to scrutinise here. What does ‘intrinsic’ mean? What is a significant proportion? What would be an essential feature? Finally, what is a ‘tourist service’ as opposed to ‘any other service’?
Let’s work our way through the above using two examples. These examples are entirely typical with the kind of queries that we have had over the last year or so.
Rome – including tickets for the Colosseum and Vatican
Let’s say we are offering accommodation in Rome at £1,000 for a week. Included in the price are entry tickets to two of the major tourist attractions in the city. These tickets are worth £100.
If the tickets are a ‘tourist service’ for the purpose of the PTRs, then we are now supplying a package holiday and not just accommodation. To find out if the tickets do constitute a ‘tourist service’ we need to ask ourselves up to 3 questions:
- Is it a tourist service? Yes, sightseeing is clearly a ‘tourist activity’
- Are they an intrinsic (essential) part of the travel services? No
- Do any of the following apply?
- Does it account for a significant proportion of the holiday? No
- Was it advertised an essential feature of the holiday? That depends
- Does it otherwise represent an essential feature of the holiday? Probably not
Questions 1 and 2 are fairly straight forward, but question 3 is worthy of further explanation.
What is a ‘significant proportion’?
The PTRs, surprisingly, do not elaborate on what would constitute a ‘significant proportion’ of the holiday. The answer, however, is hidden away at para 18 of EU Directive 2015/2302 (‘the EU Directive’), being the EU legislation that required the UK to implement the PTRs in the first place. The explanation in the EU Directive, unlike the PTRs, is clearly set out. If any tourist services account for 25% or more of the total travel services, that would be a significant proportion. With tickets costing only £100 against a holiday costing £1,000, we are well below that threshold in this example.
So far, it is not looking like the tickets would be deemed to be a ‘tourist service’ under the PTRs, but it gets a muddy at question 4.
How does the ‘essential feature’ test work?
This can get tricky. Visiting a couple of ‘major attractions’ is not essential to a trip to Rome. After all, there are plenty of other things to do in Rome! So the tickets probably do not represent an essential feature of the trip or holiday. However, if a big ‘song and dance’ is made about these trips in any marketing materials, there is a real risk that it could be said that it has been advertised as an essential feature. If so, it will be deemed to be one of the kinds of tourist services that are caught by the PTRs, thus we have now supplied a package holiday and not just accommodation!
Alternatively, had the sight seeing tickets been worth £250, it wouldn’t matter if or how it was advertised because that would be over 25% of the total cost of the holiday – thus deeming it a tourist service.
Let’s consider a second example.
Let’s say airport parking is ‘thrown in’ with the cost of a return flight from London to Glasgow. The total cost is £100, but the parking is worth £30. Again, let’s work our way through the same 4 questions about the airport parking:
- Is it a tourist service? Hmm…
- Are they an intrinsic (essential) part of the travel services? Probably not.
- Do any of the following apply?
- Does it account for a significant proportion of the holiday? Yes. It is worth 30% of the total cost of the trip, i.e. more than 25%
- Was it advertised an essential feature of the holiday? Unlikely (but it doesn’t matter having already ticked the 25% box)
- Does it otherwise represent an essential feature of the holiday? Unlikely (but it doesn’t matter having already ticked the 25% box)
This time, question 3 is fairly straightforward whereas questions 1 and 2 are worthy of a bit more consideration.
What is an ‘intrinsic’ part of the travel services?
Under question 2, there may be potential for lawyers to argue about what ‘intrinsic’ means. However, my view is that it would have to be something that is not only within the process of air travel, but that is also essential in order to travel by air.
Applying that interpretation:
- Any services provided before check-in at the airport, or after passing through the arrival gates, would automatically be excluded. That would exclude airport parking, or say a ‘free local sim card’ for your phone on arrival. They are not even within the process of air travel, let alone essential to it
- As to any services that are within the process of air travel, only the essential ones would be caught by the Regulations. So a bus transfer from the gate to the aircraft would be covered, whereas a VIP luxury lounge pass with a glass of champagne would not!
In this scenario, the main focus will be on the first question. Is airport parking a ‘tourist service’ to start with? If so, then it will be one of the kinds of tourist services that are caught by the PTRs (because it seems to ticks all of the other boxes at questions 2 & 3 above).
What is a ‘tourist service’?
Although the PTRs do not define what a ‘tourist service’ is, once again we are given some guidance from our old friend, the EU Directive. The EU Directive does not define a tourist service either, but (at recital 18) it does at least confirm that the following may be tourist services: admission to concerts, sport events, excursions or event parks, guided tours, ski passes and rental of sports equipment such as skiing equipment, or spa treatments
Parking is not on the list. Great! However, can we confidently say that this is therefore not a tourist service? This question seems to split the lawyers right down the middle!
My view on ‘what is a tourist service’?
In my view, I would lean towards saying that parking is not a ‘tourist service’ to start with, for which I can put forward four arguments in support:
- The examples from the EU Directive are all leisure based activities that tourists typically partake on holiday. Parking is merely a ‘means to an end’ and, although it may not be an intrinsic (or essential) part of air travel, it seems much closer related to that than any of the examples of fun filled activities to be enjoyed at the destination as listed in the EU Directive.
- Surely, not every single service a tourist receives during a trip or holiday would be regarded as a ‘tourist service’? If it did, that would render the word ‘tourist’ in the phrase ‘tourist service’ meaningless. For example, if a tourist receives a McDonalds after visiting a museum, surely that would not be a ‘tourist service’, albeit it is a service that just happened to have been provided to a tourist whilst doing ‘touristy activities’.
- The EU Directive (recital 5) states that, although the purpose of the legislation is for consumer protection, it must also ‘strike the right balance between that and the competitiveness of businesses’. For flight only sales to suddenly become ‘packages’ just because airport parking is thrown in, sounds like a step too far to me! By the same token, the example of a ‘sim card for the local country’ provided on arrival could also potentially convert a ‘flight only’ sale to a package.
- The EU Directive does not even say that the examples provided are definitely ‘tourist services’, rather it says that they ‘may be’. This suggests that it will depend on the circumstances (it is indicative rather than prescriptive). This point is less significant for this example, because parking is not on the list anyway, but ‘even if it were’ on the list – it still wouldn’t be a foregone conclusion. So this point is less important for parking. It could, however, be of more interest in other scenarios.
The Alternative Point of View
As stated, I would lean towards saying that parking is not a ‘tourist service’ for the reasons above, but this is a question that often splits lawyers down the middle. Arguments to the contrary may be:
- Airport parking is clearly a service catering for travellers, a large proportion of which are tourists. If the customer that books airport parking happens to be a tourist, it seems entirely plausible to construe that as a ‘tourist service’.
- The objectives of the Directive are geared around ensuring a ‘high level of consumer protection’ (see recital 6 and others). If referrals to the European Court of Justice (CJEU) in respect of claims under Regulation 261 are anything to go by, one would anticipate that there is a good chance that any referral to the CJEU as to the scope of ‘tourist service’ may be a ‘consumer friendly one’
Other Common Scenarios
You may be forgiven for feeling a bit dizzy right now. So here are some other examples that illustrate the range of scenarios that we are often asked about:
- Skiing holidays (accommodation and ski-slope pass)?
- Murder Mystery Weekend in Barnsley?
- Business Conferences with accommodation?
- Business Conferences with accommodation & an afternoon of sightseeing?
- Education (e.g. school trips, or exchange programs for language students)?
Some of these questions are much easier to answer than others!
As is often the case, some things are clear cut but there are always grey areas. The law makers seem to like giving the lawyers things to argue about, and there is no shortage of things to argue about when it comes to the PTRs. If in doubt, make sure you seek legal advice. And, of course, there are no better lawyers to give you advice on travel & leisure related issues than the team at Travlaw!
Have a Query? Get In Touch
Navigating through the Package Travel Regulations can, of course, be a daunting prospect at times and the consequences of ‘getting it wrong’ could be significant. Nobody wants to commit a criminal offence by selling packages without realising it!
We do, however, have a fantastic team here at Travlaw who can cover the needs of your business whether that be in relation to the PTRs, disputes, employment issues, drafting T&C’s, compliance, or even Brexit! Indeed, we act for numerous tour operators, travel agents, hotels, airlines all over the world and we would be delighted to discuss the PTRs, or indeed any travel law related issue that affects your business.