Package travel reform and the UK: pioneering divergence in a closely aligned market or following in the shadow of the EU? Christopher Deacon1 I. Introduction. – II. UK proposals for reform. – III. EU proposals for reform. – IV. An overarching concern. – V. Should the PTRs continue to apply to UK-only package holidays? – VI. How should Linked Travel Arrangements (LTAs) be regulated? – VII. What should the government do about insolvency protection and insurance for holiday bookings? – VIII. How should ‘other tourist services’ be dealt with when forming part of a package? – IX. An opportunity for the UK to evolve without straying too far from the EU’s shadow. This article examines the United Kingdom’s proposed reforms to its package travel regime following implementation of Directive (EU) 2015/2302 via the Package Travel and Linked Travel Arrangements Regulations 2018, now assimilated EU law. Against the backdrop of parallel but distinct reform initiatives in the EU, it analyses how the UK government’s 2025 consultation and subsequent response signal both continuity and potential divergence from the EU framework, particularly regarding the scope of package travel legislation and the treatment of Linked Travel Arrangements (LTAs). Key UK proposals include abolishing LTAs by absorbing Type A LTAs into the definition of a package, removing Type B LTAs, retaining protections for domesticonly packages, and leaving the definition of “other tourist services” unchanged, while seeking to improve thirdparty redress mechanisms and reconsider aspects of insolvency protection and insurance requirements. The article contrasts these developments with the EU’s crisisdriven proposals, which focus on refunds, voluntary vouchers, insolvency protection and a narrowed but retained concept of LTAs. It argues that the UK’s move to subsume LTAs into the package definition constitutes a relatively bold simplification that may enhance consumer clarity and extend Regulation 15 lackofconformity protections, including for serious personal injury, to a wider range of holidays, while raising questions about regulatory alignment for operators active in both markets and the future trajectory of UK–EU convergence in package travel law. 1 Partner, Stewarts.
Keywords: Package travel; Linked Travel Arrangements (LTAs); UK package travel reform; Package Travel and Linked Travel Arrangements Regulations 2018; Directive (EU) 2015/2302; consumer protection; lack of conformity; serious personal injury; insolvency protection; travel organisers; thirdparty redress; vouchers and refunds; unavoidable and extraordinary circumstances; UK–EU regulatory divergence; Department for Business and Trade (DBT) I. INTRODUCTION As the package travel industry recovered from the Covid-19 pandemic, legislators in both the UK and EU turned their minds to package travel reform following the implementation of Directive (EU) 2015/2302, which came into force in July 2018 and was implemented in the UK via the Package Travel and Linked Travel Arrangements Regulations 2018 (“the 2018 Regulations”). While the EU’s emphasis was on ensuring the industry could respond in future times of crisis, notably regarding consumer ability to receive timely and effective refunds of monies paid where travel services could not proceed, the UK’s proposals for reform extend to the fundamental scope of package travel legislation. The UK’s 2018 Regulations are assimilated EU law, being derived from the EU’s second directive on package travel. Therefore, while there is an overlap in the intentions of each legislator, the UK can now make its own journey when reforming the UK’s position on package travel regulation. Following a consultation during the summer of 2025, on 02 December the UK government announced plans to amend the UK’s package travel legislation in a way that would “retain the key safeguards of consumer protections that underpin the regulations while making the most of the opportunity to reform the framework, so that it supports the sector’s growth and provides greater choice for consumers.”2 Key proposals include removing Linked Travel Arrangements (LTAs) and absorbing them into the definition of a package holiday. While the UK government has bold legislative intent to reform key aspects of the 2018 Regulations, it remains to be seen how far the final iteration of the updated regulations will go. To what extent might we ultimately see pioneering divergence given the reality of the close alignment in the UK and EU’s travel 2 Department for Business & Trade, UK Government response to ‘Package travel – updated the framework 2025’ consultation, 02 December 2025: https://www.gov.uk/government/consultations/package-travel-legislationconsultation-on-proposed-amendments/outcome/government-response-to-package-travel-updating-theframework-2025-consultation 2 CHRISTOPHER DEACON
industries? Will the UK boldly follow through with its proposed reforms or continue to follow in the shadow of the EU, with UK-based travel operators who also conduct business in the EU (and vice versa) keen to see as unified a system as possible maintained? This article focuses on the UK government’s 2025 consultation and response, and the importance of maintaining consumer protections, notably in relation to the regime imposing liability for lack of conformity on tour operators, which importantly extends to claims for serious personal injury. II. UK PROPOSALS FOR REFORM The UK implemented the last package travel directive through the Package Travel and Linked Travel Arrangements Regulations 2018, which remained in force following Brexit. Reform of the 2018 Regulations has, however, been in the gaze of successive governments, with the Conservatives launching a call for evidence in 2023 and (following its victory in the July 2024 UK general election) the Labour government’s Department for Business and Trade (DBT) issuing a formal consultation, which closed on 30 June 2025. As summarised on the DBT’s website, the UK’s consultation included proposals in relation to: • reforming the domestic package market to exempt domestic (UK) holidays that do not contain a booked travel element from the regulations • reforming linked travel arrangements (LTAs) by either removing or simplifying the definition of LTAs • examining the case for setting a time limit for third parties to provide redress to organisers where the third party has contributed to the event but has not already provided redress directly to the consumer – this is to respond to difficulties some package organisers have in exercising their right to recoup refund monies from suppliers • further technical changes to make clearer what services are within the scope of the regulations, and to reform measures around insolvency protection On 02 December 2025, the DBT published its response to the consultation, with plans to abolish the concept of LTAs, absorbing type A into the definition of a package and removing type B LTAs entirely3. In addition, the UK’s DBT 3 See further below as to the definition of LTAs and for details on the proposed reforms. 3 PACKAGE TRAVEL REFORM AND THE UK
proposes an update to third-party redress provisions with the aim of helping travel organisers to recover costs paid to a consumer from the supplier of services more effectively. The UK has abandoned plans to exclude domestic-only package holidays from the protections provided by the regulations and, along with provisions relating to insolvency protection and insurance requirements, will leave the definition of ‘other tourist services’ unchanged. III. EU PROPOSALS FOR REFORM At a similar time to the UK’s 2023 call for evidence, on 29 November 2023 the European Commission proposed various amendments to the package travel directive. The EU’s proposals are said to have a closer link to the Covid-19 pandemic and the way in which the industry responds to consumer needs in a time of crisis, with the European Commission identifying the following areas of focus: • rules on voluntary vouchers and clarifications or additional rules on refunds where packages are cancelled due to unavoidable and extraordinary circumstances, including with regard to insolvency protection • guidance or additional provisions on the national insolvency protection systems, plus the potential creation of an EU insolvency back-up fund • the potential creation of a special fund/special funds at national or Union level to cover refunds in times of crisis without requiring the insolvency of the relevant package organiser • a possible limitation of pre-payments to be made by package travellers, reducing the need for insolvency protection, and avoiding/limiting the risk for travellers of having to wait for refunds, in particular, in times of crisis • recommendations or rules on refunds from providers of travel services (e.g. airlines) to package organisers • possible alternatives to the current rules on linked travel arrangements if similar guarantees can be provided in a simpler way, e.g., through certain rules on intermediaries and insolvency protection requirements for certain service providers. The EU’s proposed reforms were approved by the European Parliament during a first reading in September 2025. 4 CHRISTOPHER DEACON
IV. AN OVER-ARCHING CONCERN There can be no doubt that the EU legislators and the CJEU have an acute focus on ensuring a high degree of consumer protection in this area of the law. While this must be balanced with a regime that facilitates innovation and the ability of the travel industry to adapt and survive, any attempts at divergence in the UK must ensure the highest level of consumer protection. Any changes made to the 2018 Regulations must not introduce additional layers of complexity. There is already a lack of understanding as to some aspects of the 2018 Regulations amongst consumers, and any amendments must look to improve transparency and consumer trust in the industry, not take it backwards. Encouragingly, such an approach is reflected in the UK government’s proposals for reform. For example, the widened definition of a package holiday will provide enhanced protections for individuals who sustain a life-changing injury while travelling overseas or in the UK for holidays or business, which the package travel directive and UK Regulations have always captured through the liability regime that makes the tour operator responsible for a lack of conformity in the performance of the services forming part of the package holiday contract. V. SHOULD THE PTRS CONTINUE TO APPLY TO UK-ONLY PACKAGE HOLIDAYS? The UK government was considering exempting domestic package holidays that do not include the transport of passengers from the regulations, on the basis that this might have encouraged businesses to offer more choice and more costeffective domestic packages to customers. This issue does not arise in the context of the EU’s reforms as it would undermine the whole purpose of EU directives and the integrity of the internal market. Summarising the response to its 2025 consultation, the UK government recognises businesses would have liked to see domestic only package holidays without a travel element removed from the scope of the regulations. However, the consultation response concluded that this proposal should be rejected. Notable concerns include the ability of consumers to obtain refunds in the event of insolvency of the travel organiser and the fact that an organiser may still be liable under other legislation (notably the Consumer Rights Act 2015, which requires consumer services to be provided with reasonable care and skill). The 5 PACKAGE TRAVEL REFORM AND THE UK
DBT also considers it too complex to draft legislation in a way that captures the various ways in which the travel element of a domestic only package is provided, extending not just to transport at the start and end of a trip, but also to travel/ transport during the package holiday. The proposal to remove some UK-only domestic package holidays from the protections offered by the package travel regulations notably gave rise to the following concerns: • Research published in November 2024 by the UK DBT and conducted on its behalf by Verian demonstrated that consumers are prepared to pay a premium for package holidays due to the protections provided by the package travel regulations4, including an additional premium of £106 for a domestic package holiday. Removing domestic package holidays from the scope of these protections would have disadvantaged consumers, reduced choice, increased costs and removed insolvency protections and protections that ensure the proper performance of travel services. • The creation of two separate regimes for domestic and international travel would have resulted in increased confusion for consumers. UK-only package holidays can be equally and sometimes more expensive than international travel, with similar issues arising if things go wrong. There is a strong argument, therefore, that they should not be subject to different regulations or responsibilities on the part of the package organiser. To further support its position following the consultation, the UK government cites research from Which? that consumers believe the same problems can arise in the UK as abroad, reiterating that a package organiser’s responsibility to the consumer should not vary depending on the holiday location5. • Removing some UK-only domestic package holidays would have disproportionately affected certain sections of society, including those with lower incomes, senior citizens and those with disabilities who may need or want to avoid international travel6. Legislative reform should ensure fairness and inclusion for all travellers, not take the industry a step backwards 4 https://assets.publishing.service.gov.uk/media/67e69c1337baea91c58c9ffa/Package_Travel_-_Updating_ the_Framework_-_Consumer_Research_Report.pdf 5 “It’s all so confusing, why is nothing simple”: Consumer difficulty navigating the complicated landscape of holiday protections - Which? https://www.which.co.uk/policy-and-insight/article/consumer-difficultynavigating-the-complicated-landscape-of-holiday-protections-anXu65o9DZ1P 6 Research conducted by the UK’s DFT in 2024 showed that people with some health problems or disabilities are more likely to choose to holiday in the UK, either through a package holiday or an LTA, but are less likely to travel overall: Research into the Package Travel and Linked Travel Arrangements Regulations 2018 (PTRs) – a discrete choice experiment, Table 9, p.25 6 CHRISTOPHER DEACON
when there is already so much more that needs to be done, for example on accessible air travel. While the UK government’s consultation proposed that consumers may benefit from increased choice because of reduced regulatory burdens, if the domestic only package reform were to be taken forward then consumers would lose the extra protections provided by the package travel regulations and be forced to rely on general consumer law protections if the scope were narrowed to overseas package holidays only. The UK government’s response neatly summarises one of the fundamental aspects of consumer protection under the regulations, noting: “Moreover, where consumers have paid a single trader for the delivery of multiple services, they are likely to expect, and it is arguably equitable, that the trader will be liable for delivering those services.” VI. HOW SHOULD LINKED TRAVEL ARRANGEMENTS (LTAS) BE REGULATED? LTAs are formed when a combination of two or more types of travel services is linked, but sold separately under different contracts. The current definition of an LTA is complex, making it difficult for consumers to understand when they have purchased an LTA: • Type A LTAs involve the selection and payment of two or more services for the same trip, under separate contracts with individual providers, upon a single contact with a point of sale. • Type B LTAs involve the separate selection and payment of two or more travel services for the same trip through targeted linked booking processes within 24 hours without transferring the traveller’s payment details. When provided with a definition of an LTA, over 73% of respondents said that they still found the difference between an LTA and a package holiday confusing or that they did not understand at all.7 Even when further explanation was given, 46% of consumers still did not properly understand the protections. The nature and extent of consumer protections under LTAs are also complex. Consumers may mistakenly believe they are well-protected; however, unlike 7 Chartered Trading Standards Institute (CTSI) “Wish you were clear” poll, p.5 7 PACKAGE TRAVEL REFORM AND THE UK
package holidays, LTAs only provide insolvency protections. This confusion extends to travel organisers themselves, as evidence suggests that organisers may not realise that they have created an LTA, or the obligations they owe to/ protections enjoyed by consumers under an LTA. LTAs do not benefit from the Regulation 15 protections that apply to package holidays. Regulation 15 holds the package holiday organiser responsible for any lack of conformity during the performance of a travel service forming part of the package. As things stand, consumers of LTAs are at risk of having to rely on alternative means of redress should a problem arise, notably in any claim for personal injury damages following an incident while on holiday. The UK government’s consultation notes that LTAs are confusing, rarely used and challenging to enforce, a position that garnered resounding agreement across industry stakeholders responding to the consultation: 83% of respondents wanted to see fundamental reforms to LTAs. The DBT concluded that: “…LTAs are complicated, poorly understood, and pose significant challenges for both consumers and the travel industry. A key concern was that consumers often believe they have protections that do not exist under LTA arrangements (LTAs – unlike packages – do not impose liability for performance of the holiday on the organisers). This position was echoed in respect to accountability when problems arose, with ambiguity over “responsibility for delivery of services and the resolution of complaints, particularly where multiple providers are involved” creating confusion for traders. Additionally, there was a perception that LTAs are not actively offered as a product, but instead result from specific sales practices employed by traders. Those actively selling them tended to be larger businesses, such as airlines, who tended to engage with Type Bs.” In a significant win for consumers and a major step towards simplification for the package travel industry, the UK government proposes to legislate as follows: • Type A LTAs will be absorbed into the definition of a package. The proposed reform means that a wider range of holidays will benefit from the Regulation 15 liability provisions for lack of conformity, notably providing certainty to victims of serious injury that occurs during the provision of services forming part of a package holiday. • Type B LTAs will be removed entirely. With the EU also contemplating reforms to LTAs, there is broad consensus that the definition must be simplified. However, there is now likely to be increased divergence between the UK and EU. While the EU also proposes 8 CHRISTOPHER DEACON
that the definition of what constitutes a ‘package’ is extended to include the purchase of at least two services from separate traders if the purchases are made through a linked online booking process, it does not propose to go as far as removing the concept of a LTA entirely. The definition of LTAs in the EU would be narrowed so that it only applies to any combination of different services that do not meet the definition of a package where: “following the payment of a first travel service to a trader – the consumer would, at this trader’s invitation, purchase an additional type of travel service from a third trader at the latest 24 hours following the confirmation of the first contract” thereby retaining a form of Type B LTA in the EU. In view of the complexity of the definitions and the confusion this causes to consumers, the UK’s proposed approach to reform of LTAs is to be welcomed, providing a clearer and simpler regime for consumer protection and the way in which the travel industry bundles and sells package holidays. This might be deemed a bold move, but it is a straightforward one; by legislating to incorporate LTAs into the definition of a package, the UK is taking a big step in eliminating confusion for both consumers and providers. The proposal 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 liability and insolvency issues to a wider range of holidays and travel bookings. For the EU, where the concept of LTAs looks likely to remain, there is an argument 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. VII. 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 consulted on 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 had also considered replacing the territorial restrictions on insurance cover for organisers, as policies must 9 PACKAGE TRAVEL REFORM AND THE UK
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 would have needed to 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 amendment8. Businesses might be permitted more flexibility in how they meet their insolvency obligations, provided there was no detriment to consumers. However, the proposal to relax territorial restrictions on insurance cover could have introduced unforeseen risks to consumers and businesses in relation to enforcement and jurisdictional issues in the context of disputes and data protection. Responding to its consultation, the UK government recognises that there are “bigger picture” issues at play relating to tour operators being perceived as the insurer of last resort and the dual regimes for insolvency protection when a travel operator has both flight and non-flight based aspects to their business. Given the complexity, the UK government concluded that the reform required falls outside of the scope of reform to the package travel regulations, and that it would “continue to explore these areas, working with industry to better understand what is needed”. Compulsory liability insurance for tour operators The broader concern that tour operators are not currently required to have compulsory liability insurance has not gained any traction in the UK government’s response or proposed reforms. Consumer groups have highlighted how this creates a significant risk for consumers, particularly where a tour operator is underinsured or uninsured for liability for serious injury. As this author noted in the Association of Personal Injury’s PI Focus (2021), the public needs to be protected from the risks of tour operator insolvency through public liability insurance: When Thomas Cook collapsed in September 2019, many holidaymakers who had sustained injuries while on a package holiday with the tour operator were surprised to learn that it did not have public liability insurance to cover their claims. 8 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. 10 CHRISTOPHER DEACON
Thomas Cook largely self-insured its liability to pay compensation to customers. It only held liability insurance for cases of the utmost severity where the damages would run into several million pounds. This means that the vast majority of customers bringing a claim against Thomas Cook at the time of its collapse (or thereafter) will likely never receive full (if any) compensation. This includes financial losses those customers may endure on a lifelong basis as a result of a serious injury while on holiday. In early 2020, the National Audit Office warned that the UK taxpayer may be required to step in once again if there was another large-scale tour operator failure along the lines of Thomas Cook. This is because the ATOL Air Travel Trust Fund was left depleted after paying out £481m due to Thomas Cook’s failure and the UK government indicated it would guarantee payments if the ATOL fund is unable to make them. There is already pressure from within the travel industry to reform the ATOL scheme. Tour operators should be legally required to have a minimum level of liability insurance in place to cover claims made by customers who are seriously injured or impacted by a fatal accident on a package holiday. Compulsory insurance will build and maintain consumer confidence in the package travel industry when it is most needed. It would shift the burden of financial failure from consumers and taxpayers to tour operators and the insurance market, and ensure consumers have an effective means of redress if the worst comes to pass. If the UK and EU were to legally mandate that high levels of liability insurance be obtained, there is potential for the package travel regulations/ directive to better protect both consumers and operators involved in potential claims from consumers who have been seriously injured or involved in a fatal accident, with an effective means of redress being available to consumers even if the tour operator becomes insolvent. Regrettably, the UK government has not taken this opportunity to be even bolder in its approach to reform. While it is set to tighten the requirements for financial protection of consumer monies in the event of insolvency, like the UK, the EU does not intend to go as far as a compulsory insurance to meet liability for lack of conformity that results in serious personal injury to travellers. 11 PACKAGE TRAVEL REFORM AND THE UK
VIII. HOW SHOULD ‘OTHER TOURIST SERVICES’ BE DEALT WITH WHEN FORMING PART OF A PACKAGE? Under the UK’s 2018 Regulations, for ‘other tourist services’ to form part of the package holiday they must account for a ‘significant proportion’ of the value of the package holiday or represent an ‘essential feature’. This is yet another area of consumer confusion, with the UK government recognising the definition causes ambiguity. Under the EU’s 2015 Directive, a ‘significant proportion’ is equal to or more than 25% of the value of the package. The UK did not originally adopt the 25% criterion, but has also now decided against diverging from the significant proportion requirement altogether, with plans for this to be retained. This is despite a compelling argument to legislate otherwise; 55% of those responding to the UK government’s consultation wanted the significant proportion criterion to be removed and 73% said it was not clear what forms an ‘essential feature’ of a package. As noted by The Forum of Complex Injury Solicitors (FOCIS) in its response to the 2025 consultation on package travel reform: Complexity and ambiguity in the law, including in contract terms, affects consumers’ ability to understanding their rights. In turn, this impacts public trust and confidence in the PTRs and also increases the likelihood of satellite disputes between the parties should a dispute occur. Other tourist services are as likely to cause harm as other elements of a package holiday and as such, the consumer ought to be afford protections and a means of redress under the PTRs. This is particularly important where a consumer has purchased a package holiday which includes services such as excursions, as the consumer may not have knowledge of the identity, credentials or insurance coverage of any local service providers contracted by the tour operator. If the term is not removed, it must be carefully reviewed and comprehensive amendments made to remove any ambiguity for both consumers and tour operators. The concept of ‘essential feature’ is no less ambiguous and open to a subjective interpretation. If the other tourist service in question has formed part of the tour operator’s marketing or has otherwise induced the consumer into making a booking, then it should be considered an essential feature by default. A tightened definition is required to avoid satellite factual disputes as to whether the travel services benefit from the package travel protections. Nevertheless, the UK government considers that the current definition provides “a measurable and consistent framework from which sale-based decisions can be made”. This appears to be an attempt to balance the reforms the UK will introduce between 12 CHRISTOPHER DEACON
consumer interests on the one hand and the travel industry’s approach to selling package holidays on the other. While the definition of package will be widened by reforms to LTAs, some holidays will still fall outside the scope of a package if the tour operator can show the significant proportion and/or essential feature requirements are not met. The UK government is against using the 25% value measure for the significant proportion criterion, even though it appreciates “a numeric metric is of use to travel providers building online packages” in the digital age. The EU’s current proposals for reform do not contemplate the definition of ‘other tourist services’, highlighting a further area where the UK could have taken the lead in boldly demonstrating a path to enhanced consumer protection and greater confidence in the package travel industry. IX. AN OPPORTUNITY FOR THE UK TO EVOLVE WITHOUT STRAYING TOO FAR FROM THE EU’S SHADOW Following the UK government’s response to the 2025 consultation and its proposals for legislative reform, the extent of potential future divergence from the EU directive is becoming clearer. The UK government has been bold in its recognition that the current complexities surrounding the 2018 Regulations and the concept of LTAs fashioned therein create confusion for consumers; such uncertainty only increases the risk of satellite disputes. To improve and maintain trust in the travel industry, as the legislators move to action in the UK and EU, the approach to reform must not create additional complexity or erode protections available to consumers. Instead, any changes should build on the safeguards of consumer protection that underpin the current regime, making it simpler for tour operators to outline and meet their obligations to customers, listening and responding to the concerns raised by stakeholders from the personal injury and consumer rights sectors. The UK government has responded to those concerns by proposals which demonstrate a tentative willingness to diverge and a commitment to put forward the necessary legislation by June 2026. But with the failure to engage on the issue of compulsory tour operator liability insurance and the definition of ‘other tourist services’, will the UK really stray too far from the shadow cast by the EU and its package travel directive in this important area of consumer protection? 13 PACKAGE TRAVEL REFORM AND THE UK
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