EU to extend travel protection to customers who book direct

Millions set to benefit from new holiday directive

Millions of travellers who book flights and hotels online are to receive financial protection if their holiday goes wrong, The Independent can reveal today.

The European Commission is to extend rules covering cancellations and insolvencies for package holidays to DIY travellers who book direct.

The European commissioner for consumer affairs, Meglena Kuneva, will announce the change to the Package Holiday Directive in Brussels later this month. She hopes to finalise the plans next year.

At present, package holidaymakers are protected if a trip is cancelled or a tour operator or airline goes bust, but travellers putting together "dynamic packages" by booking separate flights, hotel and car hire are not covered, except for delays or cancellations to flights within Europe or on EU airlines.

Brussels has not decided exactly who will be covered by the changes. However they would certainly cover consumers booking several different components from a single website. They are intended to plug gaps in cover arising from the growth of the internet, which travellers have been using to book trips rather than visit a high street travel agent. Many travellers are unaware that they are not covered if something goes wrong.

The problems were exposed last September when XL Airlines collapsed, stranding 85,000 travellers. Holidaymakers protected by the Atol bond were rescued free of charge, but DIY travellers had to pay to return home.

Last year, only 39 per cent of the 45 million foreign holidays taken by Britons were packages, leaving 27 million holidays without automatic protection.

Ms Kuneva said: "Before, the Package Travel Directive was good because one agency arranged a package for you – travel, hotels, entertainment – and you were covered for the flight, hotel, everything. But now, more than half of travellers are doing it themselves and they are not covered under the directive for insolvency, dissatisfaction, complaints; you get nothing. We will expand the directive so if you make a package on your own, you have the same rights, or almost the same rights, as if your package is arranged by a professional company."

The move is likely to add to the cost of some holidays.

Abta, which represents traditional travel agents, welcomed the move. Sean Tipton, a spokesman, said: "If somebody is buying something that is not legally a package, then in our view that needs to be protected by law.

"Package holidays operators have had to provide financial protection for 17 years now, and travel agents have had to carry that cost, while new companies coming into the market in the last 10 years have not had to pay that."

He added: "We would like to go further and see the airlines have financial protection." Currently, passengers who book flights direct are only covered for insolvency if they pay more than £100 on a credit card or buy insurance.