Package Travel Regulations: Your Essential Guide

• Package Travel Regulations: The Scope
• Understanding Package Roles: The Organiser and the Retailer
• Changes and Cancellations
• Insolvency Protection
• Information Requirements for Packages: What to Tell Travellers
• Linked Travel Arrangements
• Information Requirements for LTAs: What to Tell Travellers
• Package Travel Regulations: Penalties for Non-Compliance
• The UK Government’s PTR Consultation: Key Themes
• Understanding the 2018 Package Travel and Linked Travel Arrangements Regulations
• Package Travel Regulations Glossary of Terms

The Package Travel and Linked Travel Arrangements Regulations 2018, also known as the Package Travel Regulations (PTRs), are the consumer protection laws for the sale of holiday packages and related travel services. The PTRs ensure UK travellers are legally and financially protected when purchasing combined travel services.

If you're looking to make sense of the PTRs, you're in the right place. We've simplified the rules into bite-sized pieces to help you understand your obligations.

Let's start with the legislation's scope. The 2018 PTRs apply to the sale of packages and linked arrangements (LTAs). Under the PTRs, a traveller can be anyone (including a business traveller), making the definition wider than a ‘consumer’ in other consumer legislation.

What is the definition of a package holiday?

A package holiday is the combination of two or more different types of travel services as part of the same trip. There are four types of travel services:

• Carriage of passengers (flights, trains and coaches)
• Accommodation (only if it's not part of the carriage of passengers, e.g., a sleeper train that gets the traveller from A to B doesn't constitute a package)
• Motor vehicle hire (cars and motorcycles)
• Any other tourist service (these are services that are not part of the carriage of passengers, accommodation or motor vehicle hire, but they make up a significant part of the package, e.g., guided tours)

When a single service, like a hotel stay, is combined with another tourist service, it only becomes a package if the tourist service meets one of two criteria:

• It's an essential feature: The service is advertised as the main reason for the trip (such as a spa or golfing trip).
• It accounts for a significant proportion of the combination's value: As a rule of thumb, the tourist service should account for 25% or more of the package's value. While ‘value’ usually means the purchase price, regulators look at the intrinsic value to prevent price manipulation.

What about on-site facilities?

A common question for hoteliers is whether access to on-site facilities, such as gyms and pools, counts as ‘another tourist service’. This is determined on a case-by-case basis:

• Intrinsic facilities: If access to a gym or pool is included in the room rate, it's considered an intrinsic part of the accommodation, and therefore doesn't create a package.
• Additional services: If a facility, such as an on-site spa, charges an additional fee and is open to the general public, it's more likely to be viewed as a separate travel service. If this service is booked alongside the room and meets the significance criteria outlined above, the booking may be classified as a package.

Services that are intrinsically part of another travel service shouldn't be considered as separate travel services (e.g., the transport of luggage provided during the carriage of passengers).

How packages are formed

The way holidays are sold has changed significantly, rendering the previous package holiday definition (a combination of two or more travel services) outdated. For example, dynamic packaging, where travellers put together their own holidays, is now common. The 2018 PTRs have a broad scope to cover these more modern ways to purchase package holidays.

There are six ways travel services combine to make a package:

• Single contract: When travel services are combined by one trader and sold under a single contract (also includes bespoke custom packages by travel agents)
• Sold in a single booking process: When a traveller has selected two or more travel services from the same point of sale (a retail premises, telephone or website), then pays for the services in the same booking process.
• Sold in an inclusive/total price: When travel services for the same trip are sold at an inclusive price (e.g., when a travel agent puts together a range of travel services for the same trip under different contracts, but sells it to the traveller for a total price).
• Sold as a ‘package’: If a combination of travel services is advertised/sold using the term ‘package’ or a similar term (e.g., ‘all-inclusive’), it’s classed as a package.
• Contract allows subsequent choice: When a trader sells a product that allows travellers to pick and choose the services after they've agreed to the contract, it also counts as a package (e.g., packages that allow travellers to choose their accommodation and a meal at a restaurant post-purchase).
• Sold through a linked online booking process: If a traveller is directed from one travel site to another and the first trader shares the customer's name, payment details and email address with the second trader (as long as the second booking happens within 24 hours), it's classed as a package.

The 2018 PTRs create a legal distinction between the entities involved in a travel transaction: the organiser and the retailer.

Let's define these two entities:

• The organiser is the trader who combines and then sells packages
• The retailer is a trader (other than the organiser) who sells packages combined by an organiser.

Travellers may be in contact with organisers or retailers when purchasing travel services.

When things go wrong: Addressing a lack of conformity

In the simplest terms, ‘lack of conformity’ is when a travel service isn't delivered as it was promised in the contract, and it's the organiser's responsibility to fix it. Regulation 15 explains that, in some cases, it might not be possible.

However, if the organiser can't address the lack of conformity, and it substantially affects the performance of the package, the traveller is entitled to terminate the contract (without a termination fee). The traveller will also be entitled to an appropriate price reduction and, in some cases, compensation.

If the organiser doesn't remedy the problem within a reasonable time frame, the traveller may request reimbursement for the necessary expenses (unless it's impossible to address the issue). Travellers must inform the organiser without delay – failure to do so may be taken into account when calculating price reductions or compensation, where letting the organiser know would have avoided/reduced the damage.

If a package includes return travel and a failure to meet the contract terms isn't resolved, the organiser must arrange equivalent return transport. However, this obligation doesn't apply if the failure is caused by the reasons listed here:

Travellers won't be entitled to compensation for damages if the organiser proves the lack of conformity is:

• Attributable to the traveller
• Attributable to unavoidable or unforeseeable actions of a third party not connected to the travel services in the package
• Due to unavoidable or extraordinary circumstances

Non-material damage can also be covered with compensation, including loss of trip enjoyment due to service issues.

When the trip can't go ahead as planned

If a major part of the holiday becomes unavailable after the trip has already started, organisers have legal duties to keep the trip on track or bring the traveller home.

Alternative plans

If a significant part of the package can't be delivered, the organiser must offer the traveller alternative arrangements. These alternatives:

• Must be provided at no additional cost to the traveller
• Must be of the same or higher quality than the original booking
• Must give the traveller a partial refund if the only alternative is of a lower standard

The traveller also has the right to reject these alternative arrangements if they aren't comparable to what they originally booked, or if the refund they're offered for the lower-quality experience isn't fair. If they reject the alternative plans for good reason, they are entitled to a refund and potentially additional compensation.

Repatriation

If the organiser can't find a suitable alternative, or if the traveller validly rejects unsuitable alternative arrangements, the organiser must get them home. If it's impossible to get the traveller home in a timely fashion due to unavoidable or extraordinary circumstances, the organiser must pay the cost of the traveller's accommodation, capped at three nights per traveller.

Providing assistance to travellers

Under regulation 18, you're required to provide appropriate assistance without delay. You're required to provide:

• Information: Details on health services, local authorities and consular assistance.
• Logistics: Helping with distance communications and finding alternative travel arrangements.

The organiser can charge a fee only if the difficulty was intentionally caused by the traveller or due to negligence, and the fee mustn't exceed the costs incurred by the business.

The traveller may also treat the retailers as the point of contact for messages, complaints and claims relating to their package, as the retailer sold it on behalf of the organiser.

A core aspect of the PTRs is how changes and cancellations are managed. The regulations set clear boundaries on when prices and itineraries can be altered and what happens if a booking is cancelled. In this section, we break down the procedures for transferring packages, price changes, package characteristic changes and contract termination:

What happens if the traveller wants to transfer the package to another traveller?

Travellers have the right to transfer their package to another person, provided the new traveller meets the necessary conditions for the holiday. The traveller must give the organiser at least seven days before the start of the package, and the original traveller and the new traveller have joint liability for the outstanding balance (and any fees associated with the transfer). However, the organiser must give the travellers evidence of these costs.

When can organisers change package prices?

Organisers can only change package prices if they've outlined that they can do so in the travel contract for the following reasons:

• Increase in transport costs (e.g., fuel and other power sources)
• Changes in taxes and fees by third parties not involved in the package (e.g., tourist taxes)
• Changes in exchange rates

In the same vein, the contract must allow for price reductions if the same factors lead to cost reductions for the organiser. The organiser can only change the price if they notify the traveller no less than 20 days before the start of the package, and they explain why the change is necessary.

Travellers can terminate the contract without a fee if price increases are over 8% of the original package price.

What happens if the characteristics of a package change?

Organiser can't change the terms of the contract before the package starts (except for price, in line with the section above), except for insignificant changes communicated to the traveller.

If organisers have to:

• Significantly change the main characteristics of the package
• Can't fulfil travellers' special requirements they've previously accepted
• Increases the price by over 8%

The organiser must promptly inform the traveller and offer the option to terminate the contract without incurring a termination fee. This must be done in writing in a clear manner, and the traveller must be given a reasonable time frame to respond. If the traveller doesn't respond, the contract is terminated, and the organiser must refund all payments no later than 14 days after the contract ends.

What happens if the traveller terminates the contract?

Travellers can terminate contracts at any time before the package starts, but they may be required to pay a termination fee (taking expected cost savings and income from selling the travel services to another traveller into account, as well as third-party costs that don’t need to be paid).

However, in some cases, organisers might not be able to give the travel service to another traveller, and a refund might not be justified.

Organisers can impose standardised termination fees in the contract, but they must provide clear justification for the termination fee if the traveller requests it. If the traveller terminates the contract, the organiser must refund the payment (minus any applicable termination fee) within 14 days.

What are ‘unavoidable and extraordinary circumstances’?

‘Unavoidable and extraordinary circumstances’ are situations beyond the control of the party relying on them – they couldn't have been avoided even with all the reasonable measures in place.

While the Foreign, Commonwealth and Development Office (FCDO) office advice is used as a rule of thumb, organisers should also consider the traveller's specific circumstances.

What if the organiser terminates the contract?

Organisers can terminate contracts in some circumstances. When they do, they must give the traveller a full refund. This may happen when:

• A threshold for a minimum number of travellers hasn't been reached: This number must be stated in the contract, and the organiser must let the travellers know within the period outlined in the contract.
• Unavoidable and extraordinary circumstances: The organiser can't fulfil the contract due to unavoidable and extraordinary circumstances and must inform the traveller as soon as possible.

Building trust with your travellers is vital, and the PTRs ensure that trust is backed by robust financial guarantees. The rules around insolvency protection exist to protect your customers, no matter what happens to your company.

What are the requirements for insolvency protection?

Regulation 19 explains that, as an organiser, you are legally required to secure insolvency protection that, in the event of insolvency, ensures all customer money is refunded and, where relevant, customers are repatriated. These arrangements must cover all reasonably foreseeable costs:

• Refunds: Money the traveller paid for services not fulfilled. This must account for the full timeline of funds held, from initial deposits to final balances.
• Repatriation: Estimated costs to bring travellers home in the event of insolvency while they are abroad, including any necessary accommodation costs while they wait to be brought home.

The insolvency protection put in place must:

• Become available as soon as the travel services aren't being performed fully, or it's clear they won't be performed
• Be free of charge to the traveller, ensuring their repatriation is funded
• Be processed without undue delay
• Must apply regardless of the traveller's place of residence, point of departure or where the package was sold

Insolvency protection can also facilitate the continuation of the package rather than a refund, allowing the holiday to go ahead.

Should organisers take out SFI or SAFI?

Some organisers take out supplier failure insurance (SFI) or scheduled airline failure insurance (SAFI) to cover the refunds to travellers in the event of supplier failure. However, this doesn't remove the organiser's obligation to arrange insolvency cover.

What insolvency protection is required for flight packages?

Organisers selling package holidays with flights must have insolvency protection through ATOL.

What insolvency protection for non-flight packages is allowed under the PTRs?

Bonding

Regulations 20 and 21 outline that bonds must be issued by an approved body (ABTA or ABTOT) to ensure the bond meets insolvency requirements. Please note that bank guarantees don't comply with the regulations.

Approved bodies monitor trade activity and manage the bond to make sure travellers are refunded. Bonds have a maximum term of 18 months, and the required sum is calculated as follows:

• The bond must cover the maximum amount of customer payments you expect to hold at any one time or 25% of your total annual package turnover – whichever is smaller.
• If the approved body has a reserve fund or insurance, the bond requirement reduces to 10% of the payments or the maximum amount of payments the organiser expects to have at any one time that are yet to be performed – whichever is smaller.
• For packages which may involve repatriation,  the bonds must also include a reasonable sum that the organiser might be expected to cover.

Insurance

Regulation 22 outlines that organisers can take out one or more insurance policies that pay travellers directly in the event of insolvency. The insurance must be held by a UK, Channel Islands, or Isle of Man authorised insurer, and organisers should ensure the policies are not voided due to negligence or a breach of conditions.

Insurance policies can be written so that an Approved Body administers claims for the insurer and manages repatriation arrangements for affected travellers.

Trust account

Funds held in a trust account are ring-fenced. Regulation 23 outlines that the independent trustee is authorised to release these funds to the organiser only when they receive evidence that the package has been fulfilled or the traveller has been refunded. Funds may also be released if the traveller has cancelled the booking and funds have been forfeited as cancellation fees.

The organiser pays the trust's operating costs. This includes the cost of administering claims in the event of insolvency. But costs must be a drain on the trust, as travellers must be reimbursed in full.

If the package includes carriage of passengers, the organiser must be insured to repatriate travellers (and where necessary, provide accommodation) and pay the travellers directly in the event of insolvency.

Can organisers combine a trust account with insurance?

Organisers may combine a trust account with insurance. Under this hybrid model, the trust is only required to hold funds for liabilities not already secured by insurance. Please note that this insurance is in addition to the insurance the organiser requires to cover repatriation costs. Any insurance policies must be with UK, Channel Islands or Isle of Man authorised insurers.

The PTRs (specifically regulations 5 and 6) place heavy emphasis on organisers being transparent with travellers, and providing them with the correct information about their trip is essential.

Who is responsible for providing trip information to customers?

When a retailer sells a package, the retailer and the organiser must be sure that travellers receive the required information before and after the sale. When an organiser sells a package, they must provide the information to the traveller. In this section, we'll call the party responsible ‘the operator'.

Before the sale

Schedule 1

Before selling the package, the operator must provide travellers with the following information:

• Main package characteristics
• Total price of the package
• Organiser's name and details
• Cancellation policy information

This pre-contractual information, also known as Schedule 1, is binding and cannot be altered without the traveller's consent.

Schedule 2

The information above must be provided, along with a standard information form outlining the protection package offered by travel holidays. However, the forms vary depending on how they're sold.

For example, operators selling via a website that uses hyperlinks use Schedule 2 forms.

Schedule 3

When hyperlinks aren't valuable, or the package is agreed over the phone, operators use Schedule 3 forms.

Linked online booking processes

For packages formed through linked online booking processes, both traders must provide the relevant Schedule 1 information for their specific services, while the initiating trader must also provide the Schedule 4 form.

After the sale

Once the sale is completed, Regulation 7 requires the operator to give the traveller a copy/confirmation of the contract. If the operator is selling face-to-face, they must provide a paper copy if asked. For sales made off-premises, the contract should be on paper or in a durable medium that the traveller agrees to.

The contract must include trip details (Schedule 1), with additional information listed in Schedule 5. This includes information on the company in charge of insolvency protection and its contact details.

Linked online booking processes

For a linked online booking, the second trader must let the first trader know when the sale is complete, and share the necessary details to allow the first trader to complete the Schedule 5 requirements. Well before the trip starts, the operator must also provide the traveller with receipts, vouchers and tickets, as well as clear departure times, check-in and arrival information and transport connection details.

Package changes

It's good practice to let travellers know of any permitted changes to the package promptly, as well as reminding them of key dates and deadlines.

Linked Travel Arrangements (LTAs) are one of the most misunderstood parts of the regulations. This section clears up the confusion by helping you identify if your business offers travel services that fit into the LTA definition:

What are Linked Travel Arrangements (LTAs)?

Linked Travel Arrangements (LTAs) are combinations of travel services with looser commercial connections than standard travel packages. The trader facilitates the combination of travel services, but the ties between the entities involved dont fully constitute a package. As a result, LTAs are subject to a different, more limited level of regulation compared to packages.

Unlike a package, there is no requirement that the facilitator be liable for the performance of all travel services within the LTA. While insolvency protection for LTAs is mandatory, its more limited than the protection required for packages.

Is my offering a package or an LTA?

First, you must determine if the combination youre selling falls under a package. If it doesnt, it may be classified as an LTA if it fits the following characteristics:

• At least two different travel services are purchased for the same trip
• The purchase doesnt amount to a package
• The traveller has separate contracts with service providers
• The trader facilitates the sale using one of the methods described below (A or B)

LTA A

When a trader facilitates the separate selection and separate payment of travel services for the same trip through a single point of sale during a single visit or contact.

LTA B

When a trader facilitates, in a targeted manner, the procurement of an additional service from another trader, the contract with the second trader must be completed at least 24 hours after the confirmation of the first booking.

How are LTAs protected from insolvency?

LTAs don't offer the same level of insolvency protection as packages. The insolvency requirements are:

• ‍Refunds: The facilitator must provide insolvency cover for the refund of payments received from the travellers (only to the extent that a service not performed is a direct result of the facilitators insolvency). If an LTA facilitator receives customer money for an additional travel service but becomes insolvent before passing it on, insolvency protection must cover that additional travel service.‍
• Repatriation: This is only required where the LTA facilitator is also responsible for the carriage of travellers (e.g. coach operators).

Do all LTAs need insolvency protection under the PTRs?

Yes – all LTAs require insolvency protection using one of the same options available for non-flight packages (bonding, insurance or trust accounts).

However, if a travel service that should get insolvency protection is already covered by ATOL, that travel service doesnt need to be covered using one of the insolvency options mentioned above.

If travel providers facilitate an LTA, they must be clear with travellers that they aren't purchasing a package holiday. It's important to explain that only the individual service providers are responsible for their specific parts of the trip. This information, along with details of insolvency protection, needs to be presented clearly.

Using standard information forms

There are several standard information forms to help operators meet the information requirements of the PTRs. These are the following:

• ‍Schedule 6: For LTA Type A, where the facilitator is a carrier selling a return ticket, such as an airline‍
• Schedule 7: For LTA Type A, where the facilitator isn't a carrier selling a return ticket‍
• Schedule 8: For LTA Type A, where the contract is completed face-to-face‍
• Schedule 9: For LTA Type B, where the facilitator is a carrier selling a return ticket‍
• Schedule 10: For LTA Type B, where the facilitator isn't a carrier selling a return ticket

A trader who facilitates an LTA that doesn't align with any of the forms above can amend one of these forms to ensure they're providing travellers with accurate information.

Understanding the consequences of PTR non-compliance is just as important as understanding the regulations themselves. This section outlines the penalties you face if obligations aren't met:

When can a trader face criminal prosecution under the PTRs?

The Package Travel and Linked Travel Arrangements Regulations 2018 establish specific criminal offences for non-compliance. Traders may face criminal prosecution for the following breaches:

• Failure to provide the required information before contracts are made
• Failure to provide a contract, confirmation or the prescribed information
• Failure to secure compliant insolvency cover
• Failure to secure compliant insolvency cover or give the necessary pre-contractual information for LTAs
• Making false statements to gain access to money held in an insolvency trust account

These regulations are enforced by the Civil Aviation Authority (CAA), local authority trading standard departments in Great Britain and the Department for the Economy in Northern Ireland.

What are the penalties for these offences?

There are no custodial penalties for those convicted of these criminal offences, only fines with no maximum limit on what can be imposed in England and Wales.

What are the rules around civil enforcement?

Outside of criminal prosecution, the rights and obligations within the 2018 PTRs are enforced primarily on a civil basis. Part 8 of the Enterprise Act 2002 also applies to these regulations – enforcers under the act can seek enforcement orders against traders who harm the collective interest of consumers.

The UK government recently published its long-awaited response to its PTR consultation. Here are the key themes identified in the consultation:

Simplifying LTAs

The current LTA framework is viewed by many as too complex. The government wants to streamline it by doing the following:

• Absorbing type A into the definition of a package ensures travellers get full protection and simplifies compliance for agents.#Getting rid of type B entirely to allow small businesses to refer guests to local activity providers without accidentally triggering the PTRs.
• Getting rid of type B entirely to allow small businesses to refer guests to local activity providers without accidentally triggering the PTRs.

Changes to Regulation 29

A big win for travel organisers is the proposed reforms to Regulation 29. This would mean establishing a 14-day period for the refund of cancelled services and clarifying that the regulations mean the ‘right to redress’ vs. the ‘right to seek redress’.

The travel industry response

Several travel industry bodies welcomed the government's response. ABTA's Director of Public Affairs, Luke Petherbridge, said: "ABTA is pleased that the Government's response recognises that the Regulations generally work well. This has been shown through COVID and some major failures. During the review process, we have consistently argued that there is no need for a major overhaul that would place increased burdens on travel companies. We support the intention to improve clarity around certain definitions and around the rights of travel companies to seek redress from suppliers when arrangements change.

"ABTA also welcomes the Government's commitment to explore other concerns raised during this consultation process. We look forward to engaging constructively on these topics, which we believe could contribute positively to the government's growth agenda," he said.

When will the Package Travel Regulations reforms happen?

By June 2026, the legislation is expected to be passed in Parliament and then rolled out in the autumn.

Aside from avoiding costly penalties, compliance with the 2018 PTRs is about building trust with your customers. While you can read the PTRs in full on the UK government's dedicated legislation website, know that you don't have to navigate the regulations alone.

TMU Management offers solutions to help you meet your PTR obligations. We deliver intelligent embedded insurance solutions that protect and strengthen your travel business, embedding confidence across your entire value chain.

Get in touch today to discuss your travel business insurance needs.

Regulatory compliance starts with understanding the terms the regulations use. We’ve summarised the core terms used in this PTR guide to help you better understand your obligations:

• ATOL: The insolvency protection scheme for organisers selling flight-inclusive package holidays.
• Bonding: A method of insolvency protection where a bond is issued by an approved body (ABTA or ABTOT) to guarantee refunds or repatriation.
• Insurance: In the context of the PTRs, this is the policy held by an organiser with an authorised insurer to pay travellers in the event of insolvency.
• CAA: The Civil Aviation Authority – the independent regulator for UK aviation.
• FCDO: The Foreign, Commonwealth and Development Office. Their advice is often used by the travel industry as a rule of thumb for determining what counts as ‘unavoidable and extraordinary circumstances’.
• Independent Trustee: An authorised third party who manages a trust account. They ensure customer funds are ring-fenced, only releasing the money to the organiser once they receive evidence of package fulfilment or a traveller refund.
• Linked Travel Arrangement: A combination of travel services with looser commercial connections than a package.
• Organiser: The trader who combines and sells packages and is responsible for the performance of the package and securing the relevant insolvency protection.
• Package Holidays: A combination of two or more different types of travel services for the same trip, sold under a single contract, for a total price or within a single booking process.
• Retailer: A trader who sells packages combined by an organiser.
• Traveller: Anyone who purchases a package or LTA.
• Trust Account: A method of insolvency protection where customer funds are ring-fenced by independent trustees.