Online agents ‘may exploit vagueness’ of proposed PTD to evade package liability. Lee Hayhurst reports from Travolution sister site Travel Weekly’s latest business breakfast
Reform of the law governing package travel sales in Europe may prompt online travel firms to radically change their business models to avoid being caught by the regulations.
Lawyers on a Travel Weekly Business Breakfast panel agreed attempts to circumnavigate the new Package Travel Directive would be fraught with danger.
However, there was recognition that terms used in the draft proposals were imprecise enough to be open to interpretation by firms seeking to operate outside the law.
But Abta head of legal and member services, Simon Bunce (pictured), said the industry had a duty to offer customers protection, particularly when taking money upfront.
“This is a piece of consumer protection legislation for the next 20 years, so the vagueness in the definitions is actually something the European Court [of Justice] is going to use to its benefit to catch business models we haven’t even thought of yet,” he said.
“With online travel agents it’s not a one-way street. This is not saying you are now going down this road. This is a sign for them to look at their business model and decide whether they want to go down that road or do their business in a wholly different way.
“If you just sell accommodation you are still completely outside of this. And if you just sell flights you are still completely outside.
“This isn’t saying to every single travel supplier you are now going to be regulated out of existence. This is saying now is the time to look at your business and decide what you want to be doing with it for the next 20 years.”
Leading industry lawyer Peter Stewart, partner at Field Fisher Waterhouse, said it was clear Flight-Plus sales would be considered a package and this would have a significant impact on the activities of all OTAs.
“Every company which has hitherto not had to accept the liabilities of a package is going to have to change fundamentally how they deal with their customers and how they look at their relationship with their suppliers and how they fund what they do with their customers,” he said.
Stewart identified two possible routes for firms wanting to evade the regulations.
The first was linked to the use of the term “combination of travel products”. Stewart said this would be only for the brave firm to pursue because it would put it very much at odds with everyone else. “Combination must mean something. It cannot just mean a coincidence of things which happen,” he said.
The other route would be to look at what is meant by the “same booking process” and to construct a system so separate contracts are made even in the same customer visit. But he added: “That becomes very cumbersome, it’s not very consumer-friendly and you’d have to project forward to see if it would be a viable business model.”
Mike Bowers, group legal director at Tui Travel, said there was a question about the technicalities of how online click‑through sales take place and whether they are caught.
But he said: “This will be a piece of consumer protection legislation. The European Court of Justice will take an interpretation that is the widest possible for the benefit of the consumer, so it would be extremely dangerous to assume a narrow interpretation.”