Disagreement over whether OTAs will be caught in new package laws

Abta has confirmed its belief that European Commission proposals to revise the Package Travel Directive would extend the definition of a package holiday to many UK bookings currently defined as Flight-Plus.

This would extend the liabilities of traditional tour operators to major online travel agents (OTAs) and to high-street retailers selling holidays as ‘organisers’ rather than as agents.

However, the European Technology and Travel Services Association (Ettsa), which includes leading OTAs as members, said it does not share Abta’s interpretation.

The prospect of such an extension provoked a split in Abta’s ranks at the end of last year and saw a small group of members set up a separate lobbying organisation, the Association of Travel Agents.

The revised directive, published earlier this month, proposes two new categories of booking involving combinations of services: ‘customised packages’ and ‘assisted travel arrangements’.

The former would be a package, with all the associated liabilities, the latter a kind of modified Flight-Plus booking offering financial protection.

Simon Bunce, Abta head of legal services, told Travel Weekly: “Most OTAs operate a shopping basket model and that would fall firmly in the definition of a customised package, not an assisted travel arrangement.”

He said: “The EC appears to have looked at Flight-Plus and recognised there are some attractions to a model that provides financial protection, but does not place such onerous obligations on the seller.

“But when it comes to a package, the EC has gone a long way further into travel agents’ business than Flight Plus.”

However, Ettsa secretary general Christoph Klenner said: “We find it hard to get behind Abta’s interpretation that the PTD proposal would consider flight-plus a package.”

The Flight-Plus Atol licence introduced last year extended consumer financial protection to so-called ‘dynamic packages’ without other liabilities.

Some industry experts have suggested the proposals are unclear. Association of Atol Companies legal adviser Alan Bowen said this week: “The directive has not been well written. The dynamic packagers have got away with it.”

Klenner agreed, saying: “The PTD proposal is poorly drafted and presents a completely arbitrary definition of a package. It invites interpretation.”

But Bunce said: “I think it is pretty clear.”

The revisions are likely to be finalised next year and come into force in the UK in 2016.

Abta was due to send out a briefing to members today and launch a consultation of members next week.

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