Guide
Running a package travel business
How to comply with ATOL licensing and Package Travel Regulations 2018 when selling package holidays. Covers ATOL application, bonding requirements, consumer cancellation rights, and complaints handling.
If you sell air package holidays or flights to UK consumers, you likely need an ATOL licence from the Civil Aviation Authority. If you sell package travel (even without flights), the Package Travel Regulations 2018 apply.
Selling ATOL-licensable travel without a licence is a criminal offence. Consumers also have strong cancellation rights under the Package Travel Regulations.
Understanding ATOL licensing
Do you need an ATOL?
Yes, if you:
- Sell flights as part of a package holiday
- Act as a tour operator selling air packages
- Sell flight accommodation (seat-only sales in some cases)
You may not need ATOL if:
- You only sell packages without flights
- You act purely as an agent for an ATOL holder
- Your packages use surface transport only (coach, rail)
Standard ATOL requirements
Most established travel businesses apply for a Standard ATOL.
Meeting the bond requirement
Your bond protects consumers if your business fails. Options include:
- Bank bond: Letter of credit from your bank
- Insurance bond: From approved insurers
- Trust account: Customer money held in trust
See the bond requirements above for minimum amounts.
Small Business ATOL
For smaller operators starting out in the travel industry.
Is Small Business ATOL right for you?
Advantages:
- Lower application fee (see requirements above)
- Annual APC payments instead of monthly/quarterly
- Simpler application process
Restrictions:
- Passenger and revenue limits apply for minimum 3 years (see above)
- Cannot upgrade to Standard ATOL within 3 years
ATOL reporting requirements
Regular reporting is required to maintain your licence.
Accountable Person training
Every ATOL holder needs a trained Accountable Person.
Package Travel Regulations 2018
These regulations apply to all package travel, not just air packages.
What counts as a package?
A package combines at least 2 of these travel services:
- Transport
- Accommodation
- Vehicle hire (24+ hours)
- Other significant visitor service (over 25% of cost)
Within 24 hours - services must be purchased together or through a linked booking process.
Consumer cancellation rights
Consumers have strong cancellation rights under PTR 2018.
Setting cancellation fees
Your cancellation fees must be:
- Reasonable and reflect your actual losses
- Justifiable if challenged
- Clear in your terms and conditions
Most operators use a tiered structure with increasing fees as departure approaches. Your fee structure should reflect your actual costs and liabilities at each stage.
Handling complaints
You need clear processes for handling customer complaints.
ABTA and AITO membership
Membership provides access to alternative dispute resolution (ADR) and can build customer confidence.
Note: Using ABTA arbitration means customers cannot later take you to court on the same issue.