New holiday law will force many online travel agents to deliver better service

Ten million British travellers each year stand to benefit from a change in EU rules to extend package holiday protection.

Europe’s Package Travel Directive takes effect in the UK from 1 July.

Buyers of traditional package holidays — flights and accommodation put together by companies such as TUI, Thomas Cook and Jet2 Holidays — will continue to enjoy excellent consumer protection.

If the firm goes bust, the purchaser is guaranteed a full refund or, if they are already abroad, to be brought home. They also benefit from additional legal protection, such as the right to money back if bad weather or industrial action means some or all of the holiday cannot be provided.

The new EU rules extend protection for holidays where the customer chooses travel services from different suppliers via a single website, call centre or shop.

The principle is: “If it looks like a package, it should come with package-holiday cover.”

At present around 10 million “flight plus” holidays a year are sold by online travel agents such as On The Beach and Loveholidays.com. From the buyer's perspective it is a “one-stop shop”, with a single payment for flight, accommodation, car rental, etc. But online agents typically avoid responsibility if anything goes wrong by stipulating that each element of the holiday creates a separate contract between the buyer and the supplier of that product.

From 1 July, buyers of such holidays will enjoy the same cover as a package holidaymaker, with the vendor obliged to sort out any problems that arise.

The consumer minister, Andrew Griffiths, said: “These new rules mean that internet explorers can book their holidays online, secure in the knowledge they will be compensated in the same way as someone who booked their holidays through a travel agent if something does go wrong.”

But the new rules also create a separate category, the “Linked Travel Arrangement”, where the customer buys elements at the same time but selects and pays for each service separately. Consumer protection is much weaker, with no obligation to deliver the holiday as booked.

There is concern that some online travel agents will simply move to this model in order to avoid the higher compliance costs the new rules involve.

Mark Tanzer, chief executive of ABTA, the travel association, said: “Whether your trip is covered by these regulations or not will depend on what and how you booked, so it is very important you check with your travel company.

“Consumers not booking with an ABTA Member will have to rely on UK Trading Standards if they are concerned a company they are dealing with is not providing the correct protection for travel arrangements.”

Under the European directive, “traders should be required to state clearly and prominently whether they are offering a package or a linked travel arrangement, and provide information on the corresponding level of protection, before the traveller agrees to pay”.

UK businesses have complained about how little time they have to make the necessary changes. The European Commission issued the directive in 2015, but it has taken the British government nearly two-and-a-half years to transpose the new rules into national law.

The government said: “We appreciate the concerns expressed by respondents that a short timeframe for industry to comply with the new Regulations may be difficult and costly to businesses.

“Government is committed to working closely with trade associations, businesses and enforcement bodies, to assist as far as possible with the implementation of the Regulations.”

Holidays booked before the extended protection comes into force on 1 July 2018 are not covered by the new rules. On and after that date, holidays worldwide sold by UK companies should be protected.