Package Travel and Linked Travel Arrangements (Amendment) Regulations 2026

Lord Sharpe of Epsom Excerpts

Tuesday 21st April 2026 Lords Chamber

[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 ---

To conclude, I think we all agree that this is a very important sector, and that the package travel amendments being made today will bring simplification so that more holidays can be taken by consumers. These reforms will strengthen the sector, ensuring that consumers continue to benefit from strong protections, as well as clarifying obligations, easing burdens on business and, in turn, supporting a healthy and thriving economy.

[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.