Package Travel Regulations
When you are organising Group Travel it is essential you are aware of the Package Travel Reguations. These regulations are in place to protect both the Group Travel Organiser (GTO) and the customers, and apply to anyone, not just a Company, who organises packages ‘occasionally’. Note that this does not mean the same thing as ‘infrequently’. If you organise travel/tours for groups of any kind on a regular basis, you will almost certainly be bound by the law, and you will certainly be bound by it if you organise in any way in a professional capacity. Professional Tour Operators, Schools, Universities, Sports Teams, Clubs and Associations must all work within the law as laid down by the Package Travel, Package Holidays and Package Tours Regulations
1. What is “a package"? Under the Regulations, a package is defined as a pre-arranged combination of at least two of the following elements: transport, accommodation and other tourist services not ancillary to transport or accommodation and accounting for a significant proportion of the package (e.g. an admission charge to a museum, theatre tickets, or a guided tour), which are sold or offered for sale at an inclusive price and when the excursion lasts for more than 24 hours. Therefore to be a 'package' it must:
a) Be sold or offered for sale
b) Be pre-arranged
c) Be over 24 hours or include an overnight stay
d) Include a minimum of two of the three elements of:
Transport
Accommodation
Other tourist services accounting for a significant proportion
of the package (e.g. a guided tour or admission to an attraction)
To constitute a package, it is necessary for all the criteria to be fulfilled. In other words, a day trip that included an entrance fee to an attraction is not a package for the purpose of the Regulations, but if it was a two day tour, it would be.
2. If you do offer packages, the regulations require you to provide financial security against insolvency and to comply, you can provide it a number of different ways:
Individual Insurance - All GTS Tour Packages are insured through IPP - International Passenger Protection
A scheme which provides for an individual insurance policy, issued to each passenger who books with you, that covers financial failure. The scheme offers a simple solution ensuring all customer payments are 100% protected.
Bonding
The operator raises an irrevocable guarantee for a specific sum of money, enough to cover any potential claims and usually a percentage of the tour operating turnover, which is lodged with a bonding authority that administers any failure and distributes the funds fairly. The bond would typically be issued by a bank, but also might be provided by a specialist bond insurer. The drawback for GTO’s is that you would need to be a member of one of the Government approved bonding authorities, who include ABTA, AITO and CPT, so this method is more suited to professional operators than voluntary GTOs.
Trust Account
This must hold any monies you receive for a package and can only be passed on to suppliers when the holiday is completed. Banks or solicitors can organise trust accounts. There is also the Travel Trust Association which acts as a trade body but also operates a trust account system that is auditable and transparent. Some law firms also operate schemes with minimal outlay and administration. The main drawback is that organisers would need to be able to fund any prepayments required as the clients money cannot be released prior to the date of return. Some suppliers might be willing to provide limited credit terms if they see evidence of a trust account scheme in place. The Regulations also allow for some pre-payments from those deemed to be organising ‘not in the course of business’.
Working with GTS Tours - You are always 100% protected. GTS works with IPP London to ensure all payments are protected
You can obtain more information about the Package Travel Regulations by contacting:
Trading Standards Officers – they enforce the Regulations.
The Department of Trade and Industry – can give general guidance on the Regulations and produce a set of guidance notes for organisers and retailers. The DTI’s address is:
Consumer & Competition Policy 6A
Department of Trade and Industry,
Room 570, 1 Victoria Street,
London SW1H 0ET
