The UK travel trade is bracing for a regulatory overhaul that will reshape how agency bookings are classified and strengthen tour operators' ability to reclaim funds from suppliers. The Package Travel and Linked Travel Arrangements (Amendment) Regulations 2026, laid before Parliament in April, will scrap linked travel arrangements (LTAs) as a distinct category from 6 April 2027. Contracts signed before that date remain under the current rules, but the short implementation window is forcing travel companies to reassess booking systems, sales procedures, and supplier agreements.
Type A LTAs become packages
The most significant shift for travel retailers concerns what the industry 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 Department for Business and Trade, in its response to the consultation on updating the package travel framework, confirmed that these transactions will now fall within the definition of a package. The move aims to simplify the rules while giving travellers full package protections. ABTA, in its guidance to members, illustrates the impact with a typical high-street scenario: a customer books a flight, then during the same visit decides to add a separate car hire booking. Today, that may qualify as an LTA; from 6 April 2027, it becomes a package even though each component was selected and paid for independently.
The implications extend beyond physical agencies. Online travel agencies, call centres, and app-based sellers must scrutinise the sequence of bookings and how additional services are offered or selected. For retailers, becoming the organiser of a package brings responsibility for the performance of the package, prescribed information requirements, cancellation and refund obligations, and the need to secure appropriate insolvency protection. Agents that have built their processes around the package/LTA distinction will need to re-evaluate where their transactions land under the new rules.
Type B LTAs scrapped
The government is taking a different approach to Type B LTAs, which currently arise when a traveller buys one travel service and is then directed to another business, where a second service is purchased within 24 hours. From April, these transactions will no longer be LTAs. The decision follows years of concern that LTAs were rarely used, difficult to enforce, and confusing for consumers about the level of protection available.
The removal of Type B LTAs also affects businesses beyond traditional tour operators and agencies. Small accommodation providers, for instance, may recommend a local attraction or activity provider 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 ease. ABTA has advised members to remove existing LTA statements from websites and literature once the amendments take effect, and to review whether financial protection arranged specifically for such transactions remains necessary.
Stronger supplier refund rights for operators
For tour operators, another part of the legislation may prove just as consequential. 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, as 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 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 regulations, it can recover those costs from the supplier that caused the failure. This is a significant shift for operators like TUI, Jet2holidays, and easyJet holidays, which have long argued that they were left exposed when suppliers such as airlines or hotel groups collapsed or failed to deliver services.
The changes come at a time when the travel industry is increasingly focused on resilience and consumer protection. As governments worldwide treat tourism as a core economic policy, the UK's move to simplify package rules and strengthen operator rights is likely to be watched closely by other markets. For agents, the message is clear: the distinction between packages and LTAs is disappearing, and those who fail to adapt may find themselves with unexpected organiser responsibilities.
ABTA has urged members to review their booking processes and documentation well before the April 2027 deadline. The association's guidance highlights that the changes will affect not only traditional high-street agencies but also online retailers and call centres. As the industry prepares for this shift, the focus will be on ensuring that systems and contracts are updated to reflect the new reality. The rise of AI-driven booking tools adds another layer of complexity, as automated processes may inadvertently create package combinations that trigger organiser duties.
For travel professionals, the message is clear: the regulatory landscape is changing, and proactive adaptation is essential. The abolition of LTAs marks a fundamental shift in how the UK treats multi-service bookings, and the strengthened supplier refund rights will give operators a more robust legal footing when things go wrong. As the industry navigates this transition, the focus will be on ensuring that both consumer protections and business interests are balanced in the new framework.
