“Recommending” a supplier, did you know it can make you 100% liable?
by David Weston
Chairman of the Bed & Breakfast Association
When it comes to recommending a supplier, as our members already know but other readers may not be aware, you need to be careful now when “recommending” a specific supplier to your guests, or when “adding value” to your stays (by including another element). The former may make you 100% legally liable for that supplier, and the latter may now be illegal unless you have protected your guests’ payments (for example, by taking out insolvency protection or arranging a financial “bond”).
In July 2018 the Package Travel regulations (PTRs) were completely revised. Originally dating from 1992 and designed to protect holidaymakers travelling abroad from the risk of their tour operator going bust, the PTRs are now much wider and do affect B&Bs in certain circumstances. We and many industry bodies (especially the Tourism Alliance, of which we are members) tried vigorously over the last couple of years to persuade the Government to modify the UK regulations from the EU directive they are based on – but to no avail. So we are left with a ridiculously disproportionate set of laws that will no doubt be “honoured more in the breach than the observance”. We regret that these laws now bind us – but as your trade association, it is our duty to inform you that this is now the law of the UK.
Penalties for “adding value”:
If you “add value”, by combining another element with a stay at your B&B – for example, by adding a local green fee to make a golfing break – that may create a “package”, which means that you (as the package “organiser”) must have insolvency insurance, a client “escrow” account or be “bonded” like a tour operator. Selling a package without such protection can make an organiser liable to criminal prosecution (yes, criminal).
The Government has been telling our industry that a priority should be to “add value” to innovate our product and increase our sector’s productivity – yet the PTRs actively discourage adding value.
Penalties for “recommending a supplier”:
If you “recommend” a particular supplier – for example, a local pub or restaurant – the PTRs may make you 100% liable for that supplier’s performance, as if you were providing it yourself. Briefly, that doesn’t apply to a mere list of local pubs in your guest information pack, but it may well apply if you have negotiated a special offer for your guests at a particular pub (for instance).
If you are a member of the Association, you will find new and detailed guidance documents on both the above issues on our member pages, which explain the full details of the PTRs and how they will affect your business.
If you are not yet a member, simply join us, then login to our member pages using your member password to view the full guidance documents on this and on many other rules and regulations. It pays to be aware of the risks you may be taking, and how to minimize them!
Besides informing you of the law as it stands, we are of course continuously lobbying the Governments in Westminster and Edinburgh, the EU and regulators to cut red tape where possible, and make the rules fairer, simpler, more practical and less onerous for small businesses. A never-ending challenge!
The Bed & Breakfast Association is the UK trade association for B&B, guest house and independent hotel owners, and exists to inform, support & represent owners. Membership costs £60 a year. The Association is a non-profit organization with no shareholders, dedicated solely to the interests of its members.