120 million travellers could have improved consumer rights when booking holidays in future, under European Commission proposals to extend package holiday protection.

Currently consumers booking package holidays have certain rights when things go wrong under the 1990 Package Travel Directive. (See our Cheap Package Holidays guide for help slashing costs.)

But with more and more people booking holidays online through different operators, holidaymakers are not always sure of their protection if something goes wrong.

So the European Commission is proposing to update EU rules to get rid of grey areas and to make it clear when you're covered and when you're not.

What exactly is it proposing?

At present the rules say a package holiday, bundled in advance by an organiser and consisting of at least two of the following; transport such as flights, accommodation and other tourist services such as car rental, are covered by the 1990 directive.

But the European Commission wants to extend this protection to include "customised packages". These include where two or more services are purchased from the same supplier on one website, or at the same high street travel agent under one contract, but where the consumer is free to choose the different components.

Martin Lewis
Get Our Free Money Tips Email!

Another example of a customised package would be where a travel search website sells you a hotel and flights, each with a different trader, at an all-inclusive price.

The European Commission says it's too early to say when these proposals may come into force.

What protection's on offer now?

The current 1990 directive states:

  • The price of the trip cannot be changed later than 20 days before departure, and before that, only in very limited situations.
  • Travellers may cancel the contract and get their money back if any essential elements of the travel package are changed.
  • Travellers can get a refund and compensation if the trader responsible for the holiday cancels the package before departure.
  • If important parts of the package can't be provided after departure, then alternative arrangements have to be made, at no extra cost, so travellers can continue their holiday.
  • If the trader responsible goes bankrupt, advance payments will be refunded. If the trip has started, travellers will be returned home.

UK protection

UK passengers booking a package holiday already have a number of consumer rights under the UK Government's Air Travel Organisers' Licensing (Atol) scheme.

Last year, Atol extended protection to holidaymakers who book DIY holidays including flights and accommodation from the same company, if their airline or tour operator goes bust.

Previously Atol only offered financial protection for those booking a holiday via an Atol-licensed travel agent where the elements were part of a formal package, and in some cases, flight-only bookings via a tour operator (see the Atol travel protection scheme extended MSE News story).