Package Travel and Linked Travel Arrangements (Amendment) Regulations 2026

Baroness Lloyd of Effra Excerpts

Tuesday 21st April 2026 Lords Chamber

Moved by

[Baroness Lloyd of Effra]

That the draft Regulations laid before the House on 2 March be approved.

Relevant document: 55th Report from the Secondary Legislation Scrutiny Committee

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Innovation and Technology (Baroness Lloyd of Effra) (Lab)]

My Lords, I welcome the chance to explain why these regulations are important, why an update to the current framework is necessary and how our approach safeguards holidaymakers while helping the travel industry to prosper.

Travel is central to everyday life for millions across the United Kingdom. For many households, a holiday is the biggest non-essential purchase they will make each year. Holidays support well-being and create precious shared moments for family and friends, as well as offering opportunities to discover new places, food and culture in the UK and abroad. The sector is also a major contributor to the economy, accounting for around £58 billion of UK output and supporting more than 1 million jobs.

Package holidays are a substantial part of that picture. In 2022 the UK package holiday market was worth around £11 billion, spanning high street agents, airlines, accommodation providers and small tourism firms across the country. Each year roughly 15 million to 20 million people in the UK take a package holiday, often choosing that option for its convenience and the additional protections it provides. The package travel regulations sit at the heart of those consumer protections, and these amendments are designed to help businesses to succeed while protecting holidaymakers. Put simply, the regulations are there to ensure that the package travel market functions properly. They reassure consumers, who often pay well in advance, sometimes many months before travelling, and they give traders a clear set of rules within which to operate. In practice, the framework provides insolvency protection if a firm fails, requires clear pre-contract information, sets out who is responsible when things do not go to plan and limits unexpected price increases after a booking is made.

These protections are valued by travellers and reputable operators alike, but they are effective only when they are clear, well understood and proportionate. Experience has shown that some parts of the current regime are not delivering as intended—they can be confusing for consumers and unnecessarily complicated for businesses. Following extensive engagement with industry, consumer bodies and other stakeholders, the Government have identified a set of targeted, practical reforms that will better serve both travellers and traders.

First, we will abolish the current category of linked travel arrangements. At present, LTAs sit somewhere between a package and a simple stand-alone booking and require businesses to put insolvency protection in place. However, the evidence is clear that this category is not meeting its original aim. Too often, consumers cannot tell whether protections apply and businesses are left uncertain about the precise obligations they must meet. That lack of clarity helps nobody. It can weaken confidence, drive up disputes and create avoidable costs, particularly for smaller operators.

Under these reforms, where a consumer makes bookings that in practical terms look and feel like a package—for example, purchasing multiple travel services through the same trader during a single visit—they will receive package protections. This will bring consumer protections in line with how people reasonably understand their booking. Alongside that, we will ease requirements for businesses that do no more than facilitate a customer to make a second booking within 24 hours. That means, for instance, that domestic tourism businesses can signpost customers to one another without automatically triggering wider regulatory obligations, supporting partnership and growth, while consumers remain protected by wider consumer law.

Secondly, reflecting the complex web of relationships involved in delivering a package holiday, we will make new provision to bring greater certainty about refunds and redress where organisers rely on third-party suppliers. Where services are cancelled, organisers will be entitled to receive funds from those third parties within 14 days, aligning organisers’ refund rights with those of consumers. We will also clarify the rules governing organisers’ ability to seek redress from third parties so that financial risk is shared more fairly across the supply chain.

For consumers, removing the confusing linked travel arrangements category and setting out more clearly when package protections apply will make the rules easier to navigate. Greater clarity reduces uncertainty and disputes, helps people book with confidence and reinforces trust in the market. When consumers are treated fairly, they are more likely to return, supporting growth and, in turn, the wider economy.

Consistent, high-quality protections encourage people to book with confidence, which in turn supports demand and rewards those businesses that comply with the rules. For businesses that sell packages, these proposals simplify compliance by removing unnecessary complications. At the same time, strengthening clarity around redress from third-party suppliers means that costs and liabilities can sit more appropriately with those responsible for failures. That will support better planning, healthier cash flow and more effective collaboration across the sector. Subject to parliamentary approval, the regulations will come into force in April 2027, giving the sector almost a year to prepare for and implement the new arrangements.

To conclude, the package travel regulations support a relationship that is both complex and essential, between holidaymakers and the businesses that serve them. Consumers depend on firms to deliver trips that are frequently paid for long before departure and businesses depend on consumer confidence to invest and grow. These regulations make the relationship work by setting out clear rights and duties for both sides. The amendments preserve the central bargain: strong and trusted protections for consumers, alongside a regime that is practical, workable and proportionate for businesses. The reforms demonstrate the Government’s determination to uphold strong consumer protections while stripping away unnecessary red tape, helping travel businesses flourish and supporting growth in every part of the UK. I beg to move.

[Viscount Thurso (LD)]

My Lords, I declare my interests as president of the Tourism Society of the United Kingdom, and all the other things I am involved in within the hospitality industry—none of which now, sadly, is remunerated. I congratulate the Minister on underlining the importance of the hospitality and tourism industry to the United Kingdom. Certainly, I believe that it is one of our great growth industries and has tremendous potential for the future.

We are supportive of these proposals, which are broadly very sensible. The travel industry and the whole way in which people book their holidays have changed dramatically in my working lifetime and particularly over the last 15 or 20 years. The 2018 regulations were an attempt to corral some of the worst practices that were going on, with the development of the internet in particular. That they have been reviewed and considered and these proposals have been brought forward is indeed welcome. Getting rid of the two types of linked package, type A and type B, with type A going into the full package and type B disappearing, will be very welcome to many SMEs in particular. Frankly, my own little business in Scotland, that was probably in B, will be a beneficiary of that.

I have spoken to as many people in the industry as I can, and there is broadly a great welcome. I ask the Minister to keep a close eye on the implementation. I am glad that the year has gone in to give people time to make the necessary changes. There are some concerns about costs. The cost to business over 10 years, which is estimated at £98 million but offset by gains of £117 million, falls on slightly different people, so there are winners and losers in this. Broadly speaking, that is not a huge factor, but I think we should keep an eye on where the costs are just to make sure that we have got that right. I ask the Minister to continue to consult with the industry, both on the implementation of these regulations and what might be done to improve them in future. With that, I welcome their introduction.

[Lord Sharpe of Epsom (Con)]

My Lords, I follow the noble Viscount in agreeing that the consultation needs to be ongoing, and I will come back to that theme in a second. It is important that the Government reduce the administrative burden as well as protecting consumers, and this legislation attempts to do so. The Government say that the purpose of the package travel framework is to give consumers appropriate protections while also supporting growth, innovation and collaboration in the travel sector.

Therefore, there are parts of this instrument that we support. The removal of the confusing linked travel arrangements category and the clarification of rights around redress from third parties respond to genuine problems. The Government say that the present framework creates confusion for consumers and unnecessary complexity for businesses, and that stronger, clearer rules can support confidence and demand. But the real question for the House is whether the Government have listened carefully enough to what businesses told them in the consultation—a point I will come back to.

The Government’s own consultation response says:

“Stakeholders consistently highlighted the disproportionate compensatory obligations the regulations place on travel operators … especially in relation to being the compensator of last resort”.


It also records concern about the interaction between ATOL and the package travel regulations for firms selling both flight and non-flight products.

First, on domestic packages, the Government found that 65% of respondents supported exempting UK-only packages without passenger transport from the regulations. Accommodation providers and leisure businesses said the current rules can discourage them from offering simple bundled products. Some said the legal and insurance responsibilities attached to packaging up a stay with an activity or voucher act as a deterrent, especially for smaller operators, but the Government have ultimately decided not to proceed.

My first question to the Minister is this: if the Government accept that many domestic tourism businesses are being discouraged from innovating, what practical alternative are they offering those firms today? If they will not legislate in this area, how exactly will they help smaller domestic operators to bring new products to market?

Secondly, on insolvency protection, the Government say that trust providers supported allowing organisers to combine trust protection with bonding and that 57% of respondents said that greater flexibility would help businesses meet their obligations, but the same response also makes it clear that industry fears piecemeal reform. Businesses warned that more flexibility without clearer trust account rules, stronger insurance obligations and better oversight could actually weaken protection and widen the gap between regulatory intent and industrial reality. My second question to the Minister is: what work is the department doing to address the broader structural problems that businesses have identified on insolvency protection, rather than leaving them unresolved, and what timetable is there for that work?

Thirdly, on redress and refunds from third parties, the move to create a 14-day period for refunds of cancelled services and clarify that there is a right to redress is welcome, as far as it goes. However, there are ongoing difficulties with enforceability, especially against overseas suppliers, so my third question is: what use is a strengthened right to redress if a small or medium-sized organiser still cannot enforce it effectively against a supplier overseas, and what support enforcement mechanisms will the Government put in place?

Fourthly, on other tourist services, the consultation exposed a real problem for many smaller businesses. The Government found that 55% of respondents wanted the “significant proportion” test removed. This test is used to decide whether an added tourist service, such as an excursion, spa treatment or event ticket, is valuable enough compared with the rest of the booking to make the whole arrangement a regulated package holiday. A modest add-on can become a significant proportion simply because the room rate is low, drawing smaller firms into regulation more easily than larger ones selling the same product. So my fourth question is: what further work will the department do with industry to produce a clearer and fairer test for other tourist services, particularly for smaller operators who say the present rules can work against them?

There is a further concern that we feel Ministers have not properly answered. Under the Government’s approach, firms may no longer be fully in control of when they are selling a package. The industry’s concern is that package status could be triggered not by a deliberate commercial decision of the operator but by the behaviour of the consumer during a single online journey. That matters because full package status brings with it major legal obligations including insolvency protection, organiser liability, refund obligations and, of course, wider compliance costs. The gateway concepts on which this reform depends—the “single visit” and “facilitates”—remain undefined in legislation. Businesses are being asked to accept materially greater liability, while the key terms determining when that liability arises are still unclear.

That lack of clarity creates a risk of unintended package organisers. Hotels offering add-ons, airlines selling accommodation or car hire through third-party plug-ins, and banks, supermarkets or white-label distributors that host travel products may all find themselves pulled into package organiser status without ever having consciously chosen to enter that market. The Government say that these reforms will make the rules clearer for consumers and support compliant businesses, but many in the industry fear the opposite: that it will mean more uncertainty for firms, more complexity in compliance systems and more scope for accidental liability. Can the Minister confirm that her department will publish statutory or regulatory guidance defining “single visit” and “facilitates” before any commencement date takes effect, so that operators at least have legal certainty about the scope of the new package definition?

There is one final question that I feel obliged to ask, because the Act under which this regulation is being made, namely the Retained EU Law (Revocation and Reform) Act 2023, actually expires in June this year. What replaces it? That is a question which my noble friend Lord Moylan asked during a debate on a transport SI recently, and to which the Government have yet to provide a satisfactory answer. Could the Minister have another go now, please?

We will not oppose these regulations today. However, I hope that the Minister can answer the questions I have raised.

[Baroness Lloyd of Effra (Lab)]

My Lords, I thank noble Lords for their contributions to this debate on the Package Travel and Linked Travel Arrangements (Amendment) Regulations 2026, and for underlining the importance of the sector. I also thank the noble Viscount, Lord Thurso, and the noble Lord, Lord Sharpe, for welcoming the measures we are putting forward today to simplify the rules. We will keep a close eye on implementation.

--- Later in debate ---

[Lord Sharpe of Epsom (Con)]

I welcome the Minister’s commitment to talk to the industry more about these regulations, but can she commit to listening to what they have to say? The reason I mention that is that the option to absorb LTA(A) into the package definition was never presented to the industry as a specific, serious or preferred option—the closest it came was as one of four multiple-choice questions. It is very important that the industry be listened to when it is airing its concerns, particularly about single visit and facilitation. I ask that of the Minister, and I apologise for delaying her.

[Baroness Lloyd of Effra (Lab)]

Yes, we will.

Motion agreed.