© 2011 itsa Ltd on behalf of the Trading Standards Institute.
Recognise what is meant by a package holiday and their specific legal requirements including brochure descriptions
This guidance is for England, Scotland and Wales
This guidance explains the types of holiday and holiday businesses to which the Package Travel, Package Holidays and Package Tours Regulations 1992 apply, with particular reference to financial security arrangements. The Regulations cover package holidays, and it is important to understand the definition of a package holiday in determining whether or not you are caught by the legislation.
The Regulations also cover other aspects of the package holiday business such as advertising, brochures, contracts, surcharges and compensation.
In the guide
What is a package holiday?
The Regulations define a 'package' as follows:
- the holiday must cover a period of at least 24 hours or involve overnight accommodation
- the holiday must consist of a combination of at least two of the following components:
- transport (for example, flights, trains, coaches and ferries - free transfers from the airport to a hotel would not be included)
- accommodation (this should be significant - it would include a berth on a cruise ship but not on a cross-channel ferry)
- other tourist services that form a significant proportion of the package (for example, car hire)
- the holiday must be sold at an inclusive price
This definition may include holidays that the average member of the public would not think of as a 'package'. For example, many people would think of a package holiday as involving a trip of a few days or more abroad, but a British holiday could also count, as long as the above conditions are fulfilled. A cruise would also come under the Regulations.
Pre-arranged selected (such as typical packages from holiday brochures) and tailor-made packages are both covered by the Regulations, provided the combination of components are organised prior to completion of the contract. This could mean you selecting the holiday for the consumer where there is no suitable holiday found in a brochure or the customer selecting the components - for example, the method of travel and the hotel. Both are covered by the Regulations. Note: it may be possible to offer this service without it necessarily being a package, as long as the consumer is fully aware of this fact.
It is becoming more common to offer holidays that are not packages. They may seem to be the same, as they include flights and accommodation, but care must be taken in how they are described to consumers who will not have the benefit of the package travel law. A holiday will not necessarily be a package if it is made quite clear there are two separate contracts, one with the airline and one with the accommodation provider.
If the consumer picks out the different parts of the holiday and you arrange two or more of the parts, it is still considered as a package.
What constitutes 'other tourist services'?
If the provision of services (such as car hire, entertainment or sports facilities) is restricted to those who have paid for them in advance in the cost of their holiday, or if these services are a feature of the holiday, they are classed as other tourist services. However, if an additional charge is made for the use of the facilities during the holiday, so that their use is optional, it is unlikely that they could be considered other tourist services. For example, if the use of the hotel swimming pool is available to all who stay there, it is not a feature unique to that holiday. However, if swimming tuition is included in the price of the holiday, it is a component of the package.
Who needs to arrange security?
The Regulations state that, if you are the 'other party' to a contract with a customer, providing them with a holiday that is classed as a package, you must provide evidence of the arrangements you have made (to secure money to refund customers should you be unable to complete the contract). The other party can be the organiser, the retailer or both. Bonding can be arranged via a specialised insurance policy or via trade associations such as ABTA, AITO, etc.
What is our responsibility?
As the other party to the contract, you are liable for the proper performance of the whole package holiday. This means that you have a responsibility for all individual components when put together and sold as a package.
Who is an organiser?
An organiser is defined as the person who 'otherwise than occasionally' organises package holidays and sells them, or offers them for sale, either through a retailer or themselves. The term 'occasionally' is not defined by the Regulations, but if a package is arranged on a regular basis, even if not frequently (for example, only once a year) the person making the arrangements is an organiser.
Who is a retailer?
A retailer is the person who sells, or offers for sale, package holidays put together by the organiser (this may be the same person).
The Package Travel, Package Holidays and Package Tours Regulations 1992 is just one piece of legislation trading standards services enforce that affects your business.
The Consumer Protection from Unfair Trading Regulations 2008 creates offences regarding misleading actions and omissions, which includes price indications, facilities and accommodation. Penalties for breaches of the legislation can include a £5,000 fine, or if taken to the Crown Court, a prison sentence of up to two years. Injunctive action under the Enterprise Act 2002 may also be taken by the trading standards service. See 'Consumer protection from unfair trading'.
Other civil legislation also applies, including the Supply of Goods and Services Act 1982 and the Unfair Terms in Consumer Contracts Regulations 1999.
The Office of Fair Trading published Guidance on unfair terms in package travel contracts, which is available via the OFT website.
This information is intended for guidance; only the courts can give an authoritative interpretation of the law. Any legislation referred to, while still current, may have been amended from the form in which it was originally enacted. Please contact us for further information.
Last reviewed/updated: February 2013
© 2014 itsa Ltd on behalf of the Trading Standards Institute.