In the guide
This guidance is for England, Scotland & Wales
Legislation defines what a package holiday is, and outlines the responsibilities and obligations of holiday organisers, suppliers and retailers with regard to holiday descriptions, prices and financial security arrangements. It also covers aspects of the package-holiday industry relating to advertising, brochure content, contract requirements, surcharges, compensation, etc.
The Package Travel, Package Holidays and Package Tours Regulations 1992 state that a 'package holiday' is one that:
The Regulations apply to all holidays that meet the above criteria and relate to British and foreign holidays as well as holidays on cruise ships etc. They apply to 'off-the-peg' holidays provided as one complete package as well as tailor-made packages where two or more relevant holiday components are combined from separate sources into a holiday package and paid for as one complete contract.
A combination of relevant holiday components may not be a package holiday under the legislation if the retailer books them for the consumer but each component is subject to separate contracts payable to individual suppliers. For example, if airline seats, transfer to the resort and hotel accommodation are arranged by the retailer but are paid for in three separate payments this would not be a package holiday. It is important that in these circumstances the holiday supplier ensures the consumer is aware that the combination of holiday components is not a package holiday and that the consumer will not be able to benefit from the requirements and safeguards provided in the legislation.
This guidance refers to package holiday 'organisers', 'retailers' and 'suppliers', all of which have to ensure that they comply with the various responsibilities and requirements placed on them by the legislation:
Consumers must not be given any misleading information regarding:
If an organiser or retailer supplies misleading information they will be liable to compensate the consumer for any loss suffered as a consequence.
Package holidays offered in brochures must include all of the following information, where relevant:
The above information must be published in a legible, comprehensible and accurate manner.
Details provided in brochures are deemed to be contract conditions unless the consumer is informed of any change before the contract is made or there is agreement with the consumer that some particulars in the brochure do not form part of the contract. This does not apply to information provided regarding the arrangements for security of money paid over and for the repatriation of the consumer in the case of insolvency.
It is an offence for organisers to publish brochures that do not comply with the above requirements and retailers must not make brochures available to consumers that they know, or have reasonable cause to believe, do not comply with these requirements.
The consumer must be provided with the following information before he agrees to take the holiday:
The above information must be given in writing or in some other appropriate form.
It is an offence if the holiday supplier does not provide the consumer with the above information.
Before they take their holiday consumers must be provided with the following information:
It is an offence if the supplier does not provide the consumer with the above information in good time before the start of his journey, either in writing or other appropriate form.
Package holiday contracts must contain the following information where applicable:
Package holiday contracts must contain all the information above (where applicable). If any of the information is missing the consumer can cancel the contract.
The consumer must be informed in writing or other appropriate form of all the terms of the holiday contract before he accepts it (unless it is impractical to do so due to lack of time between the holiday being booked and the departure date). In all cases the consumer must, at some point, be given a written copy of the contract terms.
Transfer of bookings
If the consumer is unable to take his holiday he may transfer it to another eligible person as long as reasonable notice is given to the holiday supplier.
When a holiday is transferred the original and new consumer are both legally liable for the cost of the holiday and both are responsible for ensuring that the holiday and any additional costs arising from the transfer are paid for.
Holiday suppliers cannot vary the price of the holiday except for changes in:
In these circumstances the holiday contract must state precisely how the revised price is to be calculated.
Holiday suppliers must not apply price increases to holidays:
Significant alterations or cancellations of holidays
If an organiser makes a significant alteration to a holiday before the departure date they must notify the consumer as quickly as possible. This is required so that the consumer is given enough time to decide if he still wants to take the holiday, accepting the alterations made and any effect on the price. The consumer must inform the organiser or the retailer of his decision as soon as possible.
If a consumer decides not to take a holiday because of a significant alteration made, or where it has been cancelled by the organiser before the departure date, he is entitled to one of the following:
In appropriate cases the consumer is also entitled to be compensated by the organiser where they are unable to provide the agreed holiday. There are exceptions to this, however, if either:
Significant proportion of services not provided
Where, after departure, significant holiday services are not able to be provided, the organiser must make suitable alternative arrangements at no extra cost to the consumer and, where appropriate, compensate the consumer for the difference in services provided.
If it is not possible to make acceptable alternative arrangements the organiser must provide the consumer with equivalent transport back to the place of departure or to another agreeable place; the consumer must be compensated as appropriate.
Liabilities for incomplete provision of holiday components
The holiday supplier is liable to the consumer for:
Compensation paid for any damages liable due to the failure to provide all booked services may be limited in the holiday contract in accordance with relevant international conventions; any such limitation must not be unreasonable. This limitation does not include personal injury claims.
The above liabilities must not be excluded by any term of the holiday contract.
Even if not in writing, there is a legal implication that all holiday contracts include terms that:
Security in the event of insolvency
Holiday suppliers must be able to provide evidence of security measures taken to enable the refund of money paid over and repatriation of holidaymakers in the event of insolvency. There are exceptions to this if:
If the above exceptions do not apply, the holiday supplier must demonstrate the security of consumers' prepayments and their ability to repatriate holidaymakers in the event of insolvency by, as a minimum, implementing one of the three types of measures prescribed by the Regulations. These measures are bonding, insurance or moneys held in trust.
It is an offence for holiday suppliers to not comply with the above requirements.
Holiday suppliers must take out a bond with a body approved by the Secretary of State of which the supplier is a member (ABTA for example). This bond must be sufficient to ensure that the consumer can be repaid for booked elements of holidays not provided in the event of the insolvency of any involved party.
Such bonds must not be capable of being held by the approved body for more than 18 months.
Bonds taken out by holiday suppliers must be sufficient to cover one of the following, whichever is the smaller:
Before a bond is taken out the holiday supplier must inform the approved body which of the above amounts they wish to be covered. The approved body must either agree that the amount is sufficient or else inform the supplier the amount they consider would be required to ensure obligations to consumers are sufficiently covered.
Where the approved body providing the bond has reserve funds or insurance the minimum amount provided by the bond may cover 10% of payments normally received by the holiday supplier from consumers in a year where this would be appropriate.
Holiday suppliers must have appropriate insurance with an authorised insurer that indemnifies consumers against the loss of money paid for holidays in the event of the insolvency of the supplier.
Holiday suppliers must ensure that holiday contracts contain a term stating that the consumer would acquire benefits from the insurance policy in the event of the insolvency of the supplier.
Money in trust
Holiday suppliers must ensure that all money paid by consumers for holidays is held in trust in the United Kingdom until the holiday has been completed or, if the holiday is cancelled by the consumer, money is repaid or forfeited, as appropriate.
It is an offence for holiday suppliers to obtain money from the trust under false pretences or for holiday suppliers to use money obtained from the trust for purposes for which the trust is not intended.
Contracts between traders and consumers such as package tours and holidays are also controlled by the Consumer Rights Act 2015 - please see 'The supply of services' for detailed information.
The Consumer Rights Act 2015 requires that services provided by traders to consumers should be performed in accordance with the contract, with reasonable care and skill, at a reasonable price, etc and provides consumers with remedies they can require from the trader if the service provided does not meet the terms of the contract - for example, a reduction in the price paid.
As a general rule, if something goes wrong with the supply of goods and services, consumers can claim their direct losses but they cannot claim compensation for distress and inconvenience. However, the law makes an exception for some types of contract, including contracts for holidays and package travel. Therefore, as the purpose of a holiday is usually to provide enjoyment and relaxation, a consumer may be able to claim compensation for inconvenience and distress, on top of a refund and any other losses, if things go wrong.
However, where specific legal requirements, such as those detailed in this document, impose stricter duties and requirements on traders they take precedence and must be complied with.
The maximum penalty for an offence under the Package Travel, Package Holidays and Package Tours Regulations 1992 is a fine.
The Enterprise Act 2002 creates the ability for enforcement bodies such as trading standards services to seek a court order preventing the failure to comply with the civil and criminal provisions of various pieces of consumer protection legislation, including the Consumer Rights Act 2015. Failure to comply with such a court order can lead to a maximum penalty of a fine and two years' imprisonment.
Last reviewed / updated: October 2016
This information is intended for guidance; only the courts can give an authoritative interpretation of the law.
The guide's 'Key legislation' links may only show the original version of the legislation, although some amending legislation is linked to separately where it is directly related to the content of a guide. Information on amendments to UK legislation can be found on each link's 'More Resources' tab; amendments to EU legislation are usually incorporated into the text.
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