Since 1st July the travel industry has experienced one of the biggest changes in its’ history. On that day the Package Travel Directive (PTD) became law.This new law means that independent travel agencies can no longer put together tailor-made holidays for their clients unless they are willing to also take the financial risk of one or more of the suppliers failing.
Some of the larger travel agencies will probably accept the risk and build that into their business models.
Others will be unwilling to do so and will lose a significant amount of business as a result.
The solution to many will be to use Tour Operators that can put together a tailor-made package on their behalf. The benefit to them is that creating such a package is greatly simplified. The disadvantage is that there are only a few Tour Operators set up correctly to offer this service therefore limiting competition.
Agents such as travel franchise operator, Explorer Travel, that intend to offer a mixture of both will be the winners. Explorer has already started to create packages through third-party Tour Operators but also continues to create a percentage of tailor-made packages in-house.
“It is a calculated risk. Where the suppliers are well established and financially strong, there is little risk and we will continue to sell those from in-house. When we are using not such well-established suppliers, we will outsource to a Tour Operator to take the risk for us.” Steve Wood, Founder and owner of Explorer Travel.”
The true effect of PTD on the UK travel industry will only really be known over the forthcoming months.”
