We’ve all read plenty about how outdated the old package travel directive is in this (not so) new age of the internet; and we’ve all probably read a bit about what Europe is doing to bring the current legislation up to date. But have we thought about how the changes will impact on how travel companies will financially protect the ever-increasing numbers of holiday bookings caught by the new legislation?
We know that there will now be more packages than ever because of the expanded definition for what will soon constitute a ‘package’: traditional packages, flight-plus, click-through sales and linked travel arrangements. Essentially, any simultaneous purchase of separate “travel services” is likely to require financial protection. But what about the added dimension which is that some simultaneous purchases will cover contracts with more than one legal entity? Which entity will be liable to provide the financial protection? Or is it both? And in either scenario, how will each company identify its turnover for the purposes of assessing the protection needed?
That’s where travel trust services can come into play where traditional travel bonding and financial failure insurance policies may fail to assist. Because travel trust services catch the exact monies paid in respect of a package sale, it’s easy to confidently confirm that sales are protected. But for example, an insurance policy in favour of just one company can only ever cover half the story; and there is much scope for argument between multiple insurers or bond providers in the event that both are called upon to pay out following a financial failure.