Friday, 29 May 2015

EU holiday protection rules threaten problems

Will Europe’s proposed new package holiday rules make it more or less likely that you’ll get your money back – or get home as planned – if a travel company goes bust? Will they be easier to understand or even more labyrinthine than at present? 

The revised Package Travel Directive, which could take effect in 2017, is designed to reflect radical changes in the way we book our trips since the original was drawn up some 25 years ago. The most dramatic of those changes have been the rise of low cost airlines and the advent of online booking.

One key problem created by these changes has been the increasing tendency among consumers to book a flight online and click through to add accommodation or car hire – usually provided by a separate operator. They may think they are buying packages, which are covered by the package travel rules – but often they are not. 

The proposed new rules – which are almost certain to be implemented in full by the British Government, do not appear to go far enough to end this confusing state of affairs. It comes down again to the definition of a package.   A “click though” will be regarded as a package if the airline transfers details including the passenger’s name and email address to the hotel booking or car rental company. However, it’s not though that many airlines do provide such information – and if they do now, the rule will be mighty easy to circumvent.  As one expert observer notes, Brussels has “ended up with something which is more confusing to the consumer because most people won’t be covered and in any case the conditions which make it a package won’t be visible to them”.

But the change that is causing most anxiety is that governing the jurisdiction under which holidaymakers will now be protected. At present, if you book a holiday in the UK you are covered by the Civil Aviation Authority’s ATOL (air travel organisers) scheme if your package includes a flight. That means the CAA will organise refunds if you have yet to travel and alternative transport home if you’re abroad when the collapse happens. If the holiday includes train or sea travel the CAA won’t be involved but you will still be sorted out in the UK.

The EU now proposes cover should be provided under the protection regime in country where the tour operator is based. Consider what this means: a UK tour company might elect to be based somewhere else in the EU – most likely because it’s cheaper to operate there - so you could be fighting for your money back anywhere from Lithuania to Spain.  And what about firms that take all their bookings via the internet? How easy will it be even to discover where they are based?

I foresee trouble.