As the deadline for the Package Travel Directive (PTD) fast approaches on 1 July, Rajeev Shaunak, head of travel & tourism at accountancy firm MHA MacIntyre Hudson, shares ten top tips to ensure compliance.
The new package travel regulations will be the biggest change to the system since the regulations were first implemented 25 years ago. Many travel companies are underprepared and the timeframe is tight. Travel businesses not adhering to the PTD’s conditions from 1 July 2018 will be breaking the law.
Agents should ensure their IT systems and terms and conditions meet the regulation requirements, and take note of the following 10 considerations to avoid breaching the rules:
1. Decide what sort of business to be. Retailers can continue to sell packages sold by other principals but flight plus sales will almost always now be packages.
2. Learn what constitutes a package; there are six different definitions and the new concept of a Linked Travel Arrangement (LTA) which may also require financial protection.
3. Learn new pre-sales requirements. All customers buying a package or LTA must be told exactly what they are buying, their rights and provided a link to the new regulations. How can you give this information over the phone or face to face?
4. If you need one, consider how and at what cost you will apply for your ATOL licence. For first time licence holders, a financial bond will be required and you will need to appoint an ATOL reporting accountant (ARA). Ask your accountant now if they’re an ARA and seek their advice on your application.
5. Take advice on the need for public liability insurance and make sure your cover is sufficient.
6. Make sure you have conditions of sale. Consumers are becoming more litigious and you need conditions that protect your interests as well as theirs.
7. If you plan to sell LTAs you must have financial protection in place but it can’t be an ATOL licence. Some businesses may need to arrange a bond, take out insurance or set up an independent trust account.
8. If you sell products created by overseas suppliers and defined as a package, check the overseas company has adequate financial protection in place; if they don’t and cease trading, you will be responsible for refunding customers’ money.
9. Watch out for changes being proposed by the CAA, expected in a month’s time. Some changes could go beyond requirements of the PTD.
10. Get a copy of new guidance notes due to be issued with the new regulations. The government promises they will clarify many unanswered questions that exist at present. Whether they do or not remains to be seen.
