Knowledge Platform

‘Inclusive Price’

Again, ‘inclusive price’ is not defined in the PTD. However, to add to the confusion the current PTD does state that the submission of separate accounts for different components shall not cause arrangements to be other than a package. This does not necessarily mean however that where separate accounts are submitted, a package will nevertheless be formed in all circumstances – since each case is to be looked at on its own facts. 

What constitutes an ‘inclusive price’ is even less straightforward, particularly when dealing with a tailor-made type arrangement. In English law, the definition of what is or isn’t an ‘inclusive price’ is highly fact sensitive and will very much depend on the business model adopted by the organiser.

Relevant considerations include:

 How will the ‘package’ be advertised? Will the consumer be able to tailor-make their holiday?

 How many contracts will be formed? Will there be one contract between the organiser and the consumer for the entire package? Will the consumer have separate contracts with each supplier?

 How will the consumer be invoiced? Will all payments be processed through the organiser? Will the consumer be issued with a single invoice or will separate invoices be provided by each supplier?

 How will the price of the package be calculated? Will the price be the sum of component parts or will the consumer be obtaining a ‘discount’ by purchasing all of the individual elements together? 

In an attempt to provide some clarity, the English courts have indicated that the overarching question of fact that needs to be resolved (on a case by case basis) is “whether the services are being sold or offered for sale as components of a combination or whether they are being sold or offered for sale separately but at the same time” (paragraph 26 ABTA v CAA). If they are being sold separately but at the same time, then in all likelihood, a package for the purposes of the PTD will not be formed.

When answering that question the interdependency of the price of each component on the booking of the other component at the same time is relevant. In order for there to be a package, there must generally be a “relationship between the component parts of the package…such as to mean that the consumer is buying and paying for them as a whole; the sale or offer for sale of one component part is in some way connected with or dependent on the sale or offer for sale of the others”.