Package Travel Directive: The view from the EU

Following a turbulent decade for the travel industry, UK and EU lawmakers are looking to strengthen and clarify the existing regulations around package travel and linked travel arrangements – maintaining the balance between robust consumer protection and avoiding undue burdens on the industry.

Background

Although aiming to enhance consumer protection, the EU’s Package Travel Directive (2015/2302) has caused confusion, especially regarding package definitions and linked travel arrangements (LTA). The collapse of Thomas Cook highlighted gaps in insolvency protection in some markets and raised concerns about the administrative burden on smaller operators, The COVID-19 pandemic further underscored the need for reform.

UK Package Travel Regulation Reforms

In 2023, the UK government began considering reforms to the 2018 Package Travel Regulations (PTR). The Department for Business and Trade (DBT) issued a call for evidence in September 2023 to gather feedback on potential reforms.

DBT has now published its consultation on possible reforms to the PTR. The government wants the reforms to:

• Give consumers appropriate protections
• Support growth in the travel sector
• Maintain trust in the travel sector
• Enable some flexibility for business in deciding how to secure consumer protections

EU reforms

Conversely, the proposed reforms to the Package Travel Directive (PTD) aim to “strengthen consumer protection at all times, including during major crises, while enhancing the internal market's functionality in the package travel sector.” The EU's focus on robust customer protections has often contrasted with the UK's approach.

The European Commission (EC) undertook a review in 2023, which resulted in proposed amendments and adoption by the European Council of a mandate for interinstitutional negotiations.

A draft report released in February 2025 has not been well received by market stakeholders. The European Travel Agent and Tour Operators Association (ECTAA) has noted that it is staggering and disconnected.

Key areas of change

While the UK and EU share common focus areas, their approaches differ.

Both agree that a clearer definition of a package and the elimination of confusion surrounding LTA  are needed. In the UK, proposals include excluding all domestic packages, and potentially deregulating LTA or broadening the definition of a package to include them.

In the EU, the EC has proposed expanding the definition of a package to include bookings involving multiple travel services, provided personal data is transferred between traders. Additionally, bookings of different travel services for the same trip within 3 hours should always be considered packages. The same applies if a trader invites a traveller to book additional services before completing the first booking or if further bookings occur within 24 hours of the first contract. The European Parliament (EP) suggested amending this to include bookings made within a 72-hour window, citing operational concerns. The ECTAA disagrees with both proposals, arguing that they would create uncertainty for organisers and customers.

The extended definition of a package aims to incorporate the existing definition of LTA. For situations outside the new definition, customers must be informed that they do not have the protections afforded by the PTD. The EC's proposals suggest that when an LTA is formed, the burden is on the customer to document this with screenshots or similar evidence and inform the initial provider. This process is unnecessarily burdensome, and the obligation should not fall on the traveller.

Regarding insolvency protection, the EC has proposed clarifying that vouchers and outstanding refunds must be covered. Member states would be required to monitor insolvency arrangements and may introduce a backup fund, which organisers would finance.

A new proposal in this area in the EU involves introducing a 25% limit on pre-payments. However, deviations are possible if more than 25% needs to be paid to a supplier at the time of booking. For example, if an organiser must pay an airline 40% of the package price when booking, they can take a 40% deposit. The EP proposed going further by introducing a trusted account to hold and secure consumers' pre-payments until the package starts. The ECTAA argued that it places an additional burden on organisers who already protect customers’ money against insolvency, and suggested expanding the prepayment safeguard across all travel services rather than singling out tour operators. It is doubtful that the UK will pursue such a policy, but will focus instead on introducing more flexibility around how insolvency protection is delivered.

On the subject of customer information and cancellation rights, the EU emphasises ensuring customers are provided with clear information regarding their rights and are promptly advised if their package changes. It has also been proposed that customers could cancel packages without fees in extraordinary circumstances, such as severe disruption at departure points or en route to the destination. The EP proposed tightening the language to prevent confusion surrounding cancellations due to personal circumstances.

The EU has also proposed new rules for vouchers, requiring them to be offered as an alternative to cash refunds with a 12-month validity period (extendable by written agreement). The EP proposes allowing vouchers to be transferable once without a fee, aiming to prevent fraud while offering consumers flexibility. At the expiry of the validity period, a cash refund must be paid without the need for a request.

Under the EU proposals, tour operators would be entitled to claim refunds from suppliers within seven days of cancellation, supporting their obligation to refund customers within 14 days. However, the proposals do not indicate how this would be enforced. The UK is considering similar reforms. Tour operators need to review their contracts with suppliers to ensure these rights are included.

Finally, the EC has suggested more vigorous enforcement of the directive with penalties for non-compliance. The EP proposes specific provisions for fines and mandatory dispute resolution mechanisms for customer complaints.

Next steps

The EP is expected to vote on amendments by mid-2025. These reforms will undergo negotiation between the European Commission, Council, and Parliament before final adoption, likely in early 2026.

The UK’s legislative process is expected to proceed more quickly.

Conclusion

The proposed reforms in the UK and EU aim to enhance consumer protection while providing businesses with the flexibility to thrive in a post-pandemic environment. While the EU focuses on robust consumer safeguards, the UK emphasises deregulation and a more flexible approach. For businesses operating across both markets, staying informed and adapting to these changes will be essential to maintaining consumer trust and staying competitive in the evolving travel sector.

Alexandra is a Senior Associate specialising in travel law and cross-border liability claims, writing here on behalf of the Cross-Border Subject Matter Group. This article was recently featured in the ABTA Travel Law Today Spring 2025 edition. If you'd like to learn more about our travel sector offering or discuss how these developments may affect your business, please get in touch.