Media & Updates

15th November 2016

How will Brexit affect new holiday protection rules?

Long-awaited plans for the reform of consumer protection rules on package holidays remain unclear following the Brexit vote.

One of the consequences of Britain’s vote to leave the European Union has been uncertainty over its adoption of the EU’s new Package Travel Directive.

The rules, which update the directive of 1990, should extend financial protection to more consumers by widening the definition of what constitutes a package beyond the traditional ready-made holiday purchased from a tour operator.

Each member state has until January 1, 2018 to incorporate it in to law, which is one year before the UK’s likely exit from the European Union.

Feedback delay

Brexit has inevitably raised questions about whether the government will still implement the directive, particularly as it has allowed the timetable for an industry consultation to slip towards the end of this year.

This delay in obtaining feedback has sparked fears that businesses will not have enough time before the regulations are introduced to adapt and change systems, particularly in relation to protection under the ATOL scheme.

The Air Travel Insolvency Protection Advisory Committee, whose members include the main travel trade bodies, has concerns about some aspects of the directive but is anxious that ministers press ahead with the consultation.

Package definition

Under the rules, a package will be defined as a travel arrangement consisting of two or more elements: transport, accommodation, car rental or other tourist services for the purpose of the same trip or holiday.

This covers not only pre-arranged holidays but also a selection of holiday components made by the traveller and purchased from a single business on the telephone, in a shop or online.

It explicitly provides that the costs of both refunds and repatriation in the case of tour operator failure are covered.

Disruption cover

Travel agents and travel organisers who arrange a package for a customer already have a responsibility under the existing regulations to ensure their customer receives their holiday, and if that can’t happen, they will have to offer a refund out of their own pocket.

Travel Disruption cover is designed to protect the agent against this type of loss by covering the costs of delays, curtailment, and even abandonment, as a result of major disruption.

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