for imposing a clear obligation on travel providers to ensure consumers are aware of when an LTA has been created and what protections are offered; this is a change which could be implemented in both the UK and EU. A perhaps bold but straightforward move would be to legislate so that LTAs are incorporated in their entirety into the definition of a package under Regulation 2, eliminating confusion for both consumers and providers. This would also extend the package travel protections for lack of conformity under Regulation 15, demonstrating the UK’s confidence to diverge and lead the way in providing a high degree of consumer protection for both insolvency and liability issues to a wider range of holiday types and bookings. WHAT SHOULD THE GOVERNMENT DO ABOUT INSOLVENCY PROTECTION AND INSURANCE FOR HOLIDAY BOOKINGS? Under the current regulations, organisers are required to arrange insolvency protection for consumers through bonds, insurance or setting up a trust account (with insurance in place for repatriation). The UK government is exploring the possibility of making the provision of insolvency protection more flexible for travel organisers by allowing them to combine arrangements, with a mix of trust and insurance or trust and bonding. It is also considering replacing the territorial restrictions on insurance cover for organisers, as policies must currently be held with an insurer authorised in the UK, the Channel Islands or the Isle of Man. To maintain a high degree of confidence in the package travel industry, any amendments to the insolvency protection regime under the package travel regulations must ensure robust, watertight protections for consumers. Consumers should not be forced to rely on alternative legislation, such as the protections under the UK’s Consumer Credit Act 1974, which may have varying efficacy and may also be subject to future amendment6. Businesses can be allowed more flexibility in how they meet their insolvency obligations, provided there is no detriment to consumers. However, the proposal to relax territorial restrictions on insurance cover could introduce unforeseen risks to consumers and businesses in relation to enforcement and jurisdictional issues in the context of disputes and data protection. 6 The UK government consulted on reform to the Consumer Credit Act 1974 from 19 May to 21 July 2025, with the second phase of its reform/consultation expected to touch on consumer credit protection offered by section 75 of the 1974 Act. 7 PACKAGE TRAVEL REFORM AND THE UK: PIONEERING DIVERGENCE
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