Representative ImageThe UK travel trade is heading towards a significant regulatory change next spring, with new Package Travel Regulations set to alter how some agency bookings are classified and give tour operators stronger rights to recover refunds from suppliers. From 6 April 2027, amendments to the Package Travel and Linked Travel Arrangements Regulations will abolish linked travel arrangements, or LTAs, as a separate regulatory category. Some transactions currently treated as LTAs will instead become packages, potentially bringing more travel retailers within the responsibilities of a package organiser.
The changes are contained in the Package Travel and Linked Travel Arrangements (Amendment) Regulations 2026, made in April following the government's review of the existing framework. Contracts entered into before 6 April 2027 will continue to be governed by the current rules. For travel companies, that leaves a relatively short implementation period. Booking systems, sales procedures, customer documentation and supplier contracts may all require attention — and for some agents, the changes could alter the legal character of transactions they handle every day.
When separate bookings become a package
Perhaps the most consequential change for travel retailers concerns what the industry currently calls Type A LTAs. Under the existing regime, an LTA can arise when a traveller buys two or more different travel services for the same trip during a single visit or contact with a point of sale, but selects and pays for those services separately. That distinction disappears next April.
The government's response to its consultation on updating the package travel framework confirmed that these transactions would be brought within the definition of a package. The Department for Business and Trade said the move would simplify the rules while giving travellers full package protections. The implications are clearest at the point of sale.
ABTA, in its guidance to members on the forthcoming PTR changes, uses the example of a traveller who walks into an agency and books a flight, then decides during the same visit to make a separate car hire booking. Today, that transaction may qualify as an LTA. From 6 April 2027, it could be a package even though the traveller selected and paid for each component separately. The same issue extends beyond the high street. Online travel agencies, call centres and businesses selling through apps will need to examine the sequence of a booking and how additional services are offered or selected.
For retailers, this is more than a change in terminology. Becoming the organiser of a package can bring responsibility for the performance of the package, prescribed information requirements, cancellation and refund obligations and the need to ensure appropriate insolvency protection.
Agents that have built booking processes around the distinction between packages and LTAs will therefore need to establish where those transactions land under the new rules.
Type B LTAs are being scrapped
The government is taking a different approach to the second form of linked travel arrangement. A Type B LTA can currently arise when a traveller buys one travel service and is then directed to another business, where a second travel service is purchased within 24 hours. From April, these transactions will no longer be LTAs.
The decision follows years of concern about whether consumers — and parts of the industry — understood what an LTA actually meant. When the Department for Business and Trade launched its consultation on proposed changes to package travel legislation, it acknowledged evidence that LTAs were rarely used, difficult to enforce and capable of creating confusion over the level of protection available to travellers.
Removing Type B LTAs also has implications beyond traditional tour operators and agencies. Small accommodation businesses, for instance, may want to recommend a local attraction, activity provider or other tourism business to a guest. Under the amended regime, those referrals will no longer create an LTA simply because the customer subsequently makes another booking.
For businesses currently selling Type B LTAs, the compliance burden should fall. ABTA has advised members that existing LTA statements will need to be removed from websites and literature once the amendments take effect. Companies that have arranged financial protection specifically for such transactions should also review whether it remains necessary.
A stronger hand for operators chasing supplier refunds
For tour operators, another part of the legislation may prove just as significant. The pandemic exposed a long-standing weakness in the package travel model: organisers can be required to return money to customers even when their own funds remain tied up with airlines, hotels and other suppliers. During the disruption of 2020, that mismatch became a severe cash-flow problem. Operators faced statutory obligations towards customers while attempting to recover substantial sums from businesses further along the supply chain. The government is now tightening the rules governing that relationship.
Its explanatory memorandum accompanying the 2026 amendment regulations notes uncertainty over whether the existing Regulation 29 provided organisers with a statutory right to redress or merely allowed them to seek it. The new wording is designed to put that right on firmer ground. Under the amended regime, where a third-party supplier has agreed to provide a travel service within a package and cancels or fails to perform all or part of it, that supplier will generally be required to refund payments made by the organiser or relevant retailer within 14 days.
The legislation also makes an organiser's right of redress explicit. Where an organiser has had to pay compensation, provide a price reduction or meet another obligation under the PTRs because of circumstances to which a third party contributed, it can pursue that party for redress through civil proceedings. For operators managing large and international supplier networks, the provision could carry considerable commercial weight. It creates a clearer statutory route for recovering money, but it does not make supplier contracts any less important.
Payment terms, cancellation provisions and refund mechanisms with airlines, bed banks, hotels, destination management companies and activity providers will still determine how efficiently money moves through the chain when disruption strikes. Operators now have another reason to revisit those agreements before April.
Government stopped short of wider reform
The final legislation is narrower than some in the industry might have expected when the government began reviewing the regulations. The Department for Business and Trade's 2025 consultation considered a broader set of reforms, including changes to insolvency protection, the treatment of domestic packages and other tourist services, as well as the future of LTAs.
One proposal would have removed certain UK-only packages without passenger transport from the PTR framework. The government ultimately decided not to proceed with it. That matters for domestic tourism businesses. Hotels and other UK operators packaging accommodation with activities or additional tourism services cannot assume the wider package regime is being dismantled simply because LTAs are disappearing.
The changes also leave the ATOL framework intact. Flight-inclusive packages that fall within the scheme will continue to be subject to ATOL requirements administered by the Civil Aviation Authority alongside the obligations created by package travel law. In other words, this is targeted reform rather than wholesale deregulation.
April deadline puts booking journeys under scrutiny
The immediate challenge for travel businesses is to work out how the new definitions interact with the way they actually sell. That exercise needs to go beyond a review of terms and conditions.
A retailer may describe itself as an agent selling individual travel services, but the sequence in which those products are offered and purchased could determine whether the resulting transaction becomes a package. For larger businesses, that means mapping customer journeys across branches, websites, apps and call centres — and checking whether technology platforms classify the resulting bookings correctly. Training will matter too. Front-line staff accustomed to treating separately selected services as individual transactions will need to understand when adding another component changes the regulatory position.
Technology providers serving the travel industry have their own work ahead. Reservation platforms and booking engines may need to adjust workflows, disclosures and compliance triggers so businesses are not relying on classifications designed around rules that cease to apply next April.
ABTA said in its 20 August update on the PTR changes that government guidance was being prepared, with publication expected around September, and that it was feeding industry views into that process. That guidance will be closely watched, particularly by agents trying to establish precisely where their existing booking models sit under the revised definition of a package.
There is also a transition issue. Bookings made before 6 April 2027 remain subject to the existing regulations, while contracts entered into from that date will fall under the amended framework. Depending on booking lead times, businesses could therefore find themselves managing obligations under both regimes simultaneously.
The government set out to simplify a part of travel law that had become difficult for businesses to administer and harder still for consumers to distinguish. Abolishing LTAs achieves part of that aim. Yet simplification comes with a trade-off: some transactions that previously sat in a lighter regulatory category will move squarely into package territory.
For the trade, the months ahead are less about learning a new acronym than understanding what happens at the point of sale.
By the time the new rules take effect, travel companies will need to know which bookings make them an organiser, whether the right financial protection is in place and how quickly they can recover money when a supplier cancels. The legislation is settled. The next stage is implementation — and the industry's attention will now turn to the detailed government guidance expected ahead of the April deadline.
