ABTA has welcomed the government's response to the Package Travel Regulations (PTRs) consultation, saying it is "pleased the government recognises the regulations generally work well".
However, AITO said it is "naturally disappointed" by the response to reform plans, slamming the proposals as "limited to minor tweaks that fall far short of what is needed".
The Department for Business and Trade (DBT) confirmed the approval and publication of the consultation outcome this morning, having received 113 responses from a "wide range of interested parties".
In its report, the government said the Package Travel and Linked Travel Arrangements Regulations 2018 "work well on the whole but would benefit from specific targeted improvements".
It outlined two proposed changes to the regulation of linked travel arrangements (LTAs), which it said is "seen as a burdensome and confusing requirement of the regulations".
Most notably, it plans to remove LTA Type B entirely, which it said would allow small businesses to refer customers to local activity providers without triggering package regulations while maintaining standard consumer protections.
It also outlined plans to absorb LTA Type A into package definition, which would provide full package protections when consumers make a booking in circumstances similar to current Type As. The DBT said this would simplify business compliance arrangements and provide for enhanced consumer protections.
The report also confirmed a decision to maintain financial protection for domestic packages.
Luke Petherbridge, ABTA director of public affairs, pointed to "Covid and some major failures" to highlight the government's assessment the regulations "generally work well".
He added: "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."
Petherbridge added that ABTA "also welcomes the government's commitment to explore other concerns raised during this consultation process".
The Association of Bonded Travel Organisers Trust (ABTOT) also welcomed the report.
"ABTOT wholeheartedly supports the decision to maintain financial protection for domestic packages as well as to extend the definition of a package by incorporating type A LTA sales and abolishing type B LTAs," it said in a statement.
ABTOT membership director Samantha Bradbury said: "Clarity and understanding is key for both industry and consumer confidence, as well as enforcement."
But Christina Brazier, AITO head of industry affairs, said the "failure to deliver substantive reform" will have "real and damaging consequences" for small and medium-sized enterprise (SME) tour operators in particular.
"Our members will continue to take the hit and face crippling costs for events outside of their control, effectively remaining the ‘insurer of last resort’," she said.
She highlighted that during the Heathrow power outage in March, one AITO member was "left £20,000 out of pocket for doing the right thing by their customers".
"Such costs are unsustainable for SMEs and highlight the pressing need for real change," added Brazier.
However, she said AITO "recognises the constraints of the current legislative framework and notes the government's acknowledgement of the more fundamental issues that require further review".
She added: "We welcome their commitment to explore these areas further and urge them to confirm clear timescales for progressing this work."
Sami Doyle, chief executive of insurance specialist TMU Management, described the government's response as "constructive" but highlighted how it doesn't address two core issues: the absence of a single unified regulator and the problem of double coverage created by financial protection on one side and chargebacks on the other.
"While it does not resolve the biggest systemic challenges, it avoids introducing unnecessary complexity and makes several pragmatic changes that should strengthen the regime if implemented with care," he said.
"I welcome the decision not to push ahead with complex multi-layer protection models involving combinations of trusts, bonds and similar mechanisms. These would have introduced significant operational hurdles for many businesses."
He said bringing Type A LTAs into the package travel regulations will mainly affect airlines, OTAs and travel technology providers.
"These businesses will need clear guidance to ensure consumer protection is strengthened without discouraging technical innovation," he continued.
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