Comment: The (New) Law of Unintended Consequences

Kurt Janson, Tourism Alliance director, says the new Package Travel and Linked Travel Arrangements Regulations have unintended consequences.

The new Package Travel and Linked Travel Arrangements Regulations 2018 came into force on July 1.

The purpose of this new legislation is to update and amend the old package travel regulations so that they better take into account how people purchase holiday products in the age of the internet.

To do this, the main focus was to bring dynamic packaging into the scope of the legislation so that people who put together their own packages on travel websites receive the same level of protection when heading overseas on holiday as those who purchased traditional packages put together by travel agents and tour operators.

This was a laudable aim. When Monarch when into bankruptcy last year, triggering the UK’s largest post war repatriation, it was found that more than 80% of the people stranded overseas were not actually covered by the existing legislation.

Hence, any efforts to ensure that the two principal protections of the Package Travel Regulations – that customers are repatriated and that redress for the non-performance of any component of a package takes place in the country of purchase – are available to as many consumers as possible can only be a good thing.

Provides protection

The new legislation also attempts to provide protection, albeit at a lower level, to people who buy a secondary product on the basis of a referral from the supplier of one holiday component.

So, a customer who buys a flight from companies such as Ryanair and easyJet has some protection when, after booking, they are invited to purchase a hotel or a hire car from their preferred supplier.

Again, providing some protection when businesses are working together to supply overseas holiday products to customers should be welcomed.

However, in trying to develop legislation that covers these situations, we have ended up with poor legislation that has some significant detrimental impacts on the UK’s domestic tourism industry.

Unintended consequence

The unintended consequence is that hotels in the UK which provide services other than just accommodation are now caught up in the legislation.

So, a hotel that provides services such as a restaurant, a spa or golf course is now deemed to be selling package holidays.

What’s more, because the legislation covers dynamic packaging, it doesn’t matter whether the holiday sells something like a ‘romantic weekend break’ which includes accommodation, a meal for two, roses and champagne or whether the customer simply rings up and say ‘ I’d like a room for Friday night and can you book me a table in the restaurant for 8pm when I arrive’ – these are both deemed to be package holidays which require the hotel to be bonded and provide the reams of information required by the new legislation.

To make things worse, the Linked Travel Arrangement component of the new legislation provides significant problems for small domestic businesses as well.

A B&B operator who tells customers that if they tell the local pub that they are staying there, they will get 10% off a meal, or that the local historic house will give them two-for-one tickets or that they have an agreement with the local golf club that people staying there can play on their course are now deemed to be selling Linked Travel Arrangements.

Even the mere act of recommending which pub customers should go to, or suggesting a good local attraction can be deemed to be a Linked Travel Arrangement requiring the B&B owner to have Insolvency Protection.

And non-compliance with the new legislation is a criminal offence.

So, what will happen is that small local businesses will stop working together to provide good value deals for customers or trying to improve their holiday experience – the result being that legislation introduced to improve customers’ holidays overseas will make their holidays at home worse.