Package holidays and linked travel arrangements

What is a package holiday?

Package holidays are defined under The Package Travel and Linked Travel Arrangements Regulations 2018 (the Regulations). They can involve any type of vacation (eg a city break, beach holiday or ski trip). 

Package holidays involve a package of multiple services being provided by the same service provider (eg a travel agent, tour operator or online package service) and must:

• last for at least 24 hours or involve overnight accommodation

• involve at least 2 types of the following travel services:

  • transport (eg flights, trains, buses or ferries)

  • accommodation (eg hotels, holiday cottages or berths on cruise ships)

  • vehicle rentals (eg of cars, motorcycles or caravans)

  • tourist services (eg theme park tickets, tours, passes or rental of sporting equipment) that form a significant part of the holiday (ie because of value or because it is an essential part of the trip), and

• regarding the purchase, the travel service provider:

  • asks customers to pay one price through a single payment for the holiday

  • allows customers to choose a combination of services (eg flights and accommodation) before paying for them

  • charges customers an inclusive or total price for all services

  • advertises and/or sells the travel services to customers as a package or on similar terms, or

  • sells customers one travel service and then passes customer details (eg names and payment details) on to another business through which they book another travel service (eg accommodation or car hire) within 24 hours

Generally speaking, if a holiday looks like a package deal it likely is a package holiday. However, if a holiday doesn’t meet the requirements for a package holiday, it may still be considered a linked travel arrangement.

What is a linked travel arrangement?

A linked travel arrangement (LTA) is similar to a package holiday in that it refers to multiple travel services. However, the way in which LTAs are sold is different from package holidays. 

An LTA must involve a combination of at least 2 of the travel services:

• transport (eg flights, trains, buses or ferries)

• accommodation (eg hotels, holiday cottages or berths on cruise ships)

• vehicle rentals (eg of cars, motorcycles or caravans)

• tourist services (eg theme park tickets, tours, passes or rental of sporting equipment) that form a significant part of the holiday (ie because of value or because it is an essential part of the trip)

A holiday is considered to be an LTA if a travel service provider sells it to customers by:

• arranging a separate selection and payment for each travel service during a single visit to the travel service provider’s website, shop or point of sale. In other words, customers have separate contracts with individual travel service providers, or

• arranging for customers to make bookings for one travel service (eg flights) and then arranging for customers to be offered (in a targeted manner, eg through email) other travel services from other traders (eg accommodation), which customers book within 24 hours

The travel service provider where the first purchase is made is known as the LTA facilitator.

How do I know what type of holiday I’m booking?

The travel service provider should inform customers about the type of holiday they’re booking. This means that they should confirm whether a holiday booking is a package holiday or a linked travel arrangement.

Any customer who books a package holiday must be told that they have certain legal rights under the Regulations. A link to the Regulations should also be provided. 

For any customer who books an LTA, the LTA facilitator must tell the customer:

• that they will not benefit from any rights that exclusively apply to package holidays

• that each travel service provider is responsible for the performance of the service they provide (in accordance with the customer’s contract)

• that insolvency protection is in place if the LTA facilitator becomes insolvent, and

• where they can read the Regulations (eg through the travel service provider’s terms and conditions)

Rights when purchasing package holidays or linked travel arrangements

A package holiday involves a contract between the consumer and the travel service provider. The contract terms are included in the booking itinerary, information within the brochure, and anything else provided when booking. An LTA involves several contracts between the consumer and various service providers. 

Different rights apply to package holidays versus LTAs. In a nutshell, package holidays offer greater protection to customers than LTAs.

Rights held when purchasing package holidays

Package holidays offer financial and legal protection to customers.

Financial protection means that customers are protected in case the travel services provider goes out of business. This protects customers by:

• enabling them to receive a refund, if they have yet to travel and the service provider has gone out of business, and

• minimising any disruption to their holiday, if this has already started (eg arranging return transportation if the package includes return transport, arranging refunds for any part of the holiday that could not go ahead and helping customers get refunds)

Legal protection means that the service provider is responsible for ensuring that customers get the holiday they paid for. This means that if any part of the holiday doesn’t meet the customer’s expectations, it is the travel service provider’s responsibility to address this. For example, by resolving the issue, offering an alternative or providing a full or partial refund. In certain situations, customers may even be able to claim compensation. 

For more information, see the Association of British Travel Agents (ABTA)’s website.

Rights held when purchasing linked travel arrangements

LTAs only offer financial protection to customers. The financial protection for LTAs is lower than the financial protection offered for package holidays and only provides some coverage if the LTA facilitator goes out of business. This protects customers by: 

• arranging a refund for the travel service the customer couldn’t receive because the LTA facilitator went out of business, and

• covering the costs of transporting the customer to their return destination (if their trip includes return transport), if the LTA facilitator was responsible for providing a transport service

Because there is no legal protection covering the entire LTA, any issues or complaints about the individual services must be directed to the individual service providers themselves. For example, issues with delayed flights must be directly addressed with the service provider who arranged the flights (eg the airline) while issues with accommodation must be addressed with the service provider who arranged the accommodation (eg the hotel).

Consumer rights when booking holidays

Anyone who purchases a package holiday or LTA in the UK has consumer rights under the Consumer Rights Act 2015. For example, customers can expect that:

• the service provider (or multiple providers for LTAs) has used reasonable care and skill in preparing the services

• the holiday matches the advertised description (eg if it says the hotel is within walking distance to the beach, then the distance to the beach must be reasonable)

• the standard of the facilities are consistent with the price and the location (eg a budget-priced holiday would not have to meet the same standards as a luxury-priced holiday, but you can still expect basic levels of hygiene)

Even online purchases are covered, as long as they are from a UK-based and operated website. A website is most likely based in the UK if it has been approved by, and carries the logo of, a relevant regulatory body like the ABTA or the Association of Independent Tour Operators (AITO).

ATOL protection for holidays

If a package holiday includes flights, customers are protected by the Air Travel Organiser’s License (ATOL) scheme. ATOL protection protects consumers in the event that a travel service provider experiences financial difficulties (including if it goes out of business).

As LTAs are not package holidays, they are not required to offer ATOL protection. However, LTAs may include ATOL-protected elements (eg an ATOL-protected flight). A customer should be informed whether a flight is ATOL-protected before making a booking. 

All businesses that are part of the ATOL scheme must pay into a pot. This pot is used to refund customers who lose their holidays or to bring them home in the event that the business providing their flight closes down.

For more information on ATOL protection, see the Civil Aviation Authority’s (CAA) website.

What happens if something goes wrong with my holiday?

Various things can go wrong while you’re on your holiday or even before you have left home for your holiday, but all is not lost. If something goes wrong with your trip, the recourse options depend on the type of holiday you’ve booked.

What are my rights if my package holiday is cancelled?

If your package holiday is cancelled before your holiday, you are entitled to a full refund. You may also be able to claim compensation (more on this below) unless the cancellation was due to:

• unavoidable and extraordinary circumstances (eg a natural disaster) that have a significant effect on your holiday (eg war) or on your getting there (eg ash clouds from a volcano erupting), or

• insufficient people having booked the trip

If your package holiday is cancelled because there aren’t sufficient bookings, the service provider must tell you this beforehand and provide sufficient notice. You should receive your refund within 14 days of the cancellation.

Can I cancel my package holiday if I’m unable or unwilling to go?

You can generally cancel your package holiday at any time before the holiday starts. You will, however, typically have to pay a cancellation fee, which should be set out in the travel service provider’s terms and conditions. Cancellation fees are likely to be higher the closer to the departure date you cancel.

You may also be able to transfer your package holiday to someone else (eg a family member or friend) for a fee, provided they meet all necessary conditions for the holiday (eg age restrictions). To transfer your package holiday, you should write to the travel service provider at least 7 days before the holiday starts, providing the other person’s details. The travel service provider should tell you how much transferring the booking will cost. This should be a reasonable amount and cannot be more than it costs them to make the transfer.

The package holiday price has increased. Can I cancel?

If, after you booked your package holiday, the price increases by more than 8% you can cancel it without paying a fee. The travel service provider must tell you about the price increase at least 20 days before the package holiday starts and explain why this is happening. Generally, the price of a package holiday can only increase because of:

• transport costs increasing due to increases in fuel prices

• changes to taxes or fees charged by third parties (eg tourist taxes)

• exchange rates affecting the cost of the package holiday

Bear in mind that the cost of a package holiday can only be increased if the travel service provider’s terms and conditions allow this.

The package holiday has changed. Can I cancel?

If your holiday package is subject to significant changes after you booked it, you are entitled to: 

• cancel the holiday (without paying a cancellation fee) and get a full refund, or

• accept the alternative holiday

You may also be entitled to compensation.

Significant changes include things like changes to the main parts of the holiday (eg moving you to a different resort than the one originally booked) or the service provider not meeting special requests agreed upon in your contract (eg a ground floor room that is wheelchair-accessible). 

What are my rights if my package holiday wasn’t what I expected?

If you go on your package holiday and something goes wrong or isn’t as expected, report this to your travel service provider as soon as possible. You are entitled to receive compensation for:

• loss of value - if the holiday was of lower value than the one you booked (eg you paid for deluxe rooms but were housed in standard rooms). You can claim back the difference in value if the issue wasn’t addressed while you were on holiday

• out-of-pocket expenses - if you had to spend more money because of issues with the holiday (eg you paid for a hotel within walking distance of the beach but had to pay for a bus). You will need receipts for the expenses 

• loss of enjoyment - if something goes wrong that causes you distress or disappointment (eg if the hotel pool is closed for the duration of the trip)

• failure to provide large parts of the services you booked - eg if your package included a 3-day jungle excursion that was cancelled without a replacement being organised, or 

• personal injury - you’ll need to seek specialist legal advice if you were injured on your holiday

You cannot claim compensation if:

• the holiday matched the package you booked but you didn’t enjoy it

• the issue was outside of the travel service provider’s control (eg bad weather), or

• you already received compensation (eg your hotel compensated you during your stay)

If you experience issues with airlines or your flight (eg delays or cancellations) you may be entitled to refunds, compensation or alternative arrangements. For more information, read Airline disputes.

I’m having issues with my linked travel arrangement. What can I do?

If you experience issues with any linked travel arrangement you’ve made, it may be harder to get refunds or compensation as you’ll have different contracts with different service providers. If any service providers are based abroad, you may also not have the same rights as you do in the UK (eg your consumer rights may not apply).

If you experience any problems with your LTA holiday, you should report these to the relevant business as soon as possible. As a general rule, you should accept reasonable alternatives and keep receipts for expenses.

If any of the service providers are based in the European Union, you can get help from the UK International Consumer Centre.

Claiming compensation related to package holidays and LTAs

To claim compensation for a package holiday, write to the customer services department of the travel service provider you used. If you made linked travel arrangements, write directly to the relevant business (eg the hotel if you had issues with your hotel). Include all relevant information, such as:

• your details

• your booking reference

• a clear explanation of the problem(s) you experienced

• any evidence (eg photos) you have

• copies of receipts

• the amount of compensation you’re requesting

If you’re unhappy with the business’ response, depending on your specific circumstances you may be able to make:

• a section 75 claim against your bank (if the total cost was over £100 and you paid by credit card)

• an ATOL claim

• a travel insurance claim

• an ABTA complaint against the business (if they’re an ABTA member)

• a claim in the small claims court in England, Wales or Scotland (but this may be time-consuming and expensive) 

Package holidays and LTAs can be confusing, so do not hesitate to Ask a lawyer if you have any questions or concerns.