New European package travel laws ‘damaging’ to OTAs, warns ETTSA

New European package travel laws ‘damaging’ to OTAs, warns ETTSA

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Holiday sales through online travel agents will be brought within the Package Travel Regulations under a new Package Travel Directive (PTD) agreed in principle by the European Council of Ministers.

The Council agreed a “general approach” on reform of the directive at a meeting on Thursday and confirmed: “The revised directive will extend the current protection for traditional pre-arranged packages to combinations of separate travel services . . . sold online.”

The European Technology and Travel Services Association (ETTSA), which represents leading OTAs including Expedia, warned the directive would be “damaging”.

Christoph Klenner, secretary-general of ETTSA, said: “It tries to shoehorn any type of arrangement between online traders into a framework designed for traditional tour operators in the 1990s.”

Associations representing more traditional travel businesses also expressed concerns.

Travel association Abta said: “Changes suggested by the Council put at risk the objectives set by the Commission when they launched proposals for modernising the PTD.”

The European Travel Agents’ and Tour Operators’ Association (ECTAA) warned the directive would “be harmful to the entire travel industry and especially to travel agents and tour operators”.

And the European hospitality association Hotrec expressed concern, saying the directive would be “damaging”.

Yet the Council insisted: “An overwhelming majority of EU tour operators and travel agents . . . are set to greatly benefit from the reform.”

The proposed directive would bring most UK Flight-Plus bookings within the definition of a package holiday.

It would also introduce a new category of protected booking, an assisted travel arrangement (ATA), for ‘click-through’ sales between websites – for example, where a consumer books a flight and then receives an offer of accommodation with a link to a separate booking site.

These arrangements would require consumer financial protection, although they would not form a package.

Klenner described the ATA proposals as “unworkable” while insisting ETTSA has no problem with proposals to extend the regulatory definition of a package to what is now considered ‘dynamic packaging.’

He said the directive “is worse than it was” when the EC published the original draft of a new PTD in July 2013.

Abta, which has lobbied for click-through sales to be brought within the directive, argued: “The Council changes fail to adequately capture linked online sales.”

Hotrec said: “The text is simply not workable. It would indirectly and unintentionally prohibit many promotional offers for early and late standalone hotel bookings . . . and would transform into packages many hotel services currently not considered as such.”

ECTAA said: “Package travel organisers and traders will be overburdened by rules which have not been properly assessed and do not apply to all traders offering travel services.”

The Council insisted the directive would “cut red tape and reduce the average cost of offering packages.”

It added: “Removing obstacles to cross-border trade will open up more opportunities for businesses, particularly SMEs, to expand activities across borders.”

The directive will now go to ‘trilogue negotiations’ between the Council, European Parliament and European Commission to arrive at a final format.

The European Parliament agreed a revised draft in March, though the Parliament has changed following elections in May.

The Council of Ministers only began examining the text in October but said it aims to conclude the reform “as soon as possible”.

The new directive is expected to come into force in the UK by 2017.

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