Package Travel Consultation Deep Dives #1 – The future of Linked Travel Arrangements

In this article, the first of Travlaw’s deeper dive into various aspects of the proposed amendments to the UK’s package travel regime, Jackie Martin starts us off with a discussion about the ever-controversial subject of Linked Travel Arrangements…

Linked Travel Arrangements (LTAs) have, pretty much from the get-go, been considered by many in the travel industry (and by consumers it seems!), a confusing and impractical obligation of the Package Travel Regulations 2018 (“PTR”). With the UK Government Department for Business & Trade’s (“DBT”) own recent consultation paper (link) citing them as being “rarely used and difficult to enforce”, the proverbial writing does seen to be on the wall – they will likely be abolished, simplified or become an extension of Packages once the Package Travel Consultation is complete. So where did it all wrong for this supposed enhanced method of consumer protection?

To give you a better understanding of this arguably complex area of Package Travel, we should establish why LTAs were introduced in the first instance! – So let’s go back to December 1992 when the price inclusive “bucket and spade” Packages sold on most UK High Streets were on trend and more importantly – the first ever Package Travel rules were introduced via The Package Travel, Package Holidays and Packages Tour Regulations 1992. The purpose of the 1992 Regulations was to create a system of enhanced consumer protection that included amongst other things the infamous insolvency protection for Packages! However, when the 1992 Regulations came into force there was no real way to predict the subsequent rise of low cost airlines, bed banks and online booking systems that were to follow. The rise of these flexible dynamic booking methods, fuelled a trend away from price inclusive Packages, therefore, leaving a gap whereby consumers purchasing multiple single services were not benefiting from the enhanced protections of the PTRs – and Tour Operators were utilising these dynamic methods of packaging by way of avoiding Packages and the financial protection obligations that came alongside selling them. In fairness, there was a pre-cursor of sorts to LTAs – the long running and quite popular “Flight+” system, albeit that was by definition only with flights “plus” another service in mind.

So, fast-forward to 2018 and Linked Travel Arrangements were introduced with the 2018 PTRs, to bridge this gap by extending some insolvency protection obligations for Tour Operators when either the “Type A” or “Type B” qualifying criteria was satisfied. Conversations with the European Commission in the lead up to the full 2018 Directive suggested that there was concern that travel businesses may try and use a perceived “loophole” to avoid financially protecting what would otherwise be services that required it, so effectively LTAs became an anti-avoidance scheme – better that kind of protection than nothing.

Why are Linked Travel Arrangements so unpopular?

The Type A & Type B qualifying criteria of the LTAs can be somewhat challenging to grasp, even for lawyers! Therefore, a large number of travel businesses choose to make sure they stayed away completely from LTAs, or simply provide insolvency protection for all potential LTAs rather than spending time attempting to establish whether an LTA has actually been created, reasoning that the cost of determining what may or may not be an LTA outweighed just giving all bookings in question full package protection and being done with it!.
Take for example, Type A LTAs, whereby, we humbly submit,the terminology used does not always coincide with the practicalities of everyday life (although some elements such as what “targeted manner” mean seem fairly straightforward). The reason being is that to qualify, a consumer must select two different travel services and make separate payments during ‘a single visit or contract with’ their trader. So what happens when the consumer visits a high street store then temporarily leaves in-between the separate contracts being concluded to take a telephone call? – Or their Internet drops whilst they are browsing on a trader’s websites? – Will this result in a Type A LTA being created?
Similar confusion can be found in Type B LTAs, whereby it can be difficult to track the sale of services from one trader to another within 24 hours to establish if a LTA has been created.
The current drafting of the PTRs does little in the way of answering these questions. Further to this, the LTAs are somewhat unknown to consumers, so little can be found by way of case law. It is not the case, as is often put forward, that “No one is creating LTAs” (Travlaw have advised many, many clients on their use down the years and are aware of many schemes), but they are regularly misunderstood and ignored.

What is the future of LTAs?

As already touched upon, we expect LTAs to be abolished, simplified or become an extension of Packages once the Package Travel Consultation is complete. However, to abolish them entirely could once again open the gap in protection for consumers choosing more dynamic methods of booking services– whilst that would not be wrong/illegal as such it could certainly contradict the overarching purpose of the PTRs which is to enhance consumer protection.

Therefore, simplifying or extending Packages to include LTA could be desirable options. However, they are not without their criticisms;

For example, the government have proposed that by way of simplifying LTAs, a single category could be introduced for extra clarity by removing Type B LTAs entirely and extending the ‘single visit’ element of Type As to 24 hours. Whilst this would go some way toward resolving the issue of a consumer briefly leaving a high street shop or IF their Internet drop – again some consumer protection would be lost be removing Type Bs entirely. That said, it would appear that nominal amounts of consumers or travel businesses would mourn this loss and greater clarity appears to be needed! There is a real risk here that the stated aim of “simplifying” aspects of the legislation could make it more complicated!

That leaves the proposal to just fully include LTAs as Packages. That certainly seems like a simpler route to take and shouldn’t affect a large amount of larger Tour Operator that already financially protect LTAs as if they were Packages. However, this would impose additional financial obligations on smaller operators that may not be eligible or have the funds for insolvency protection etc…, thus resulting in a higher barrier to entry to the industry generally.

Summary

As mentioned above – the DBT has made it clear that LTAs will not stay in place in their current format. With the choices being a) stay, but revise the definition, b) include as a package or c) remove entirely most commentators are leaning towards it being the latter, although our view is that having what are currently LTAs being part of a revised “package” definition is entirely feasible so do not be surprised if that is where we end up.
Either way, the consultation process is only in its early stages. If you have a view on LTAs we would love to hear about it, but otherwise watch out for the full consultation, due in early 2024.

To discuss any of this please feel free to reach out;

Email Jackie@Travlaw.co.uk

call 01132 580033.

This article was originally published on: 23 November 2023

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