Cowboys reined in by new legislation

Comment by Jeremy Skidmore (www.jeremyskidmore.com)

The crooks in the travel industry have been served notice by some surprisingly straightforward government guidance on what constitutes a package holiday.

Most official documents are mind-numbingly boring and incomprehensible, but the guidance from the Department for Business Enterprise and Regulatory Reform (BERR) is actually quite readable.

The point of the document is to ensure that companies which offer packages also offer protection, and to ensure that holidaymakers know exactly what they are buying.

It is crucial, because it now means that the Civil Aviation Authority (CAA) can start clamping down on companies that appear to offer packages, but don’t actually have any financial protection in case anything goes wrong.

For years, the CAA has been a toothless tiger having to watch frustrated on the sidelines as many companies flouted the laws. It knew that taking any action against operator x would be fruitless, as they would simply hire lawyers to argue at length that their holidays did not constitute a package, for some obscure reason or other.

Talks have already begun between the CAA and travel companies who are, shall we say, bending the rules a little. Most will tread water for a while before eventually holding up their hands and complying.

But a small minority are, frankly, crooked and will do anything to avoid offering protection. The CAA would prefer to ‘jaw jaw’ rather than ‘war war’, because court cases are costly. But a high profile case that the CAA wins and ends up costing a travel firm a lot of money would also serve as a warning to others.

The guidance makes it clear that a company is still offering a package if it submits separate accounts for different components of a holiday. So that old chestnut of using separate invoices won’t wash.

And a dynamic package – whatever that is these days – is still a package.

However, there are a couple of grey areas for those who want to look for them, take on the CAA and try their luck in front of a judge.

The onus is on retailers and organisers to give information about financial protection. If someone is buying a package but is told that it is not a package, that’s a serious legal breach. Monitoring that on line is quite straightforward, as companies will have to make clear statements on their websites, but how do you know what is said in a shop between customer and seller?

Also, if a company sells a flight online and then directs the customer to a linked site (possibly all owned by the same firm), where he is sold accommodation to go with it, does that constitute a package?

Nothing’s perfect, but this should go a long way to getting rid of the inconsistencies in the industry.

Also, companies that are currently flouting the rules may voluntarily wish to get their house in order. If they get sued by a client who gets injured in resort and a judge looks at the new guidelines and rules they are liable for providing protection, the resulting claim could ruin the company.