Data sharing in travel sector could spur new liabilities for businesses under new UK package holiday laws

The plans concern the UK's implementation of the EU's 2015 Package Travel Directive (PTD), which broadened the definition of 'package' holidays and consumer protections enjoyed when booking such deals.

In its consultation paper (48-page / 457KB PDF), the government said that liabilities associated with 'package' holidays could arise in cases where different elements of a holiday are booked through different providers where there is an "exchange of data which enables the second provider to take payment".

In an example, it said: "After a traveller purchases a flight online, the confirmation webpage gives the traveller a link to book car hire. Upon following this link the traveller is able to book car hire without having to re-enter their credit card details. If the traveller purchased the car hire through the link within 24 hours of purchasing their flight a package would be created. This is because the traveller’s payments details will have been passed on by the airline."

The government explained what responsibilities organisers of 'package' holidays would be subject to under its proposals.

"The organiser is liable for the performance of all contracts making up the package, regardless of whether they are performed by third parties," it said. "The organiser is required to remedy any lack of conformity with the contract unless it is impossible to do so or costs would be disproportionate taking into account the lack of conformity and the value of the travel services affected. If the organiser is unable to address the problems then the traveller will be entitled to an appropriate price reduction, and compensation if appropriate."

In its consultation, the government explained that even where commercial tie-ups between businesses in the travel sector cannot be classed as providing for 'package' holidays, they could nevertheless qualify as 'linked travel arrangements' (LTA) and fall subject to regulation.

This includes where airlines spur customers to book hotels or car hire, for example, through links provided alongside online booking confirmations, it said. Where customers follow through with booking the additional services from such links the airline could be considered to be an LTA facilitator, the government said.

LTA facilitators will be obliged to put "insolvency protection" in place to refund customers the cost of the services they are unable to fulfil in the event they become insolvent. Those businesses would not be obliged to cover the cost of services unfulfilled by the third party travel sector companies they partner with, but they would be obliged to notify customers of the limitations of the cover on offer under disclosure obligations they would face.

The government clarified that the appearance of personalised adverts for hotels or car hire services on airline websites would not lead airlines to become LTA facilitators where customers act on those ads to book those additional services.

It said: "An example of an LTA would be where a traveller has purchased a return ticket to New York and when the booking was confirmed, she received an invitation to book a hotel room in New York through a link to a hotel booking site. As the traveller booked a hotel room on the linked website within 24 hours of purchasing their flight, an LTA was created."

"This means that if the airline became insolvent while the traveller was in New York, and the return flight cancelled as a result, their repatriation would be covered by insolvency protection that the airline would be obliged to have in place as an LTA facilitator. In addition, the airline would have to ensure that when the traveller receives the link for the hotel reservation they are clearly and prominently informed that the flight and hotel will not constitute a package, and the airline will not intervene if there any problems in relation to accommodation," it said.

Under the government's plans, the new UK laws would come into force on 1 July 2018 and would apply to "any sales made from the coming into force date". The government's consultation is open until 25 September.