VisitBritain’s toolkit for suppliers says tour operators contract supplier product themselves or have it supplied by a wholesaler or a DMC, and that larger tour operators and online travel agents have product and contracting departments that select the suppliers they sell. VisitScotland describes the buyer as the person who sources and negotiates contracts to buy services from individual tourism suppliers.

What the contract covers

VisitBritain’s checklist for suppliers’ rate agreements includes:

• gross and net rates, the commission level and whether VAT is included

• the dates the rates are valid

• cancellation and amendment charges

• how either side can end the agreement

• child age ranges, free places and group conditions such as the rooming list deadline

• inclusions, minimum stays and block-out dates

• bedding configurations and payment terms

In VisitBritain’s example, a hotel has a £125 retail rate and the tour operator’s commission is 20%, or £25. The hotel either pays that commission after each sale or offers a net, or contract, rate of £100. A contract may also hold an allotment, or allocation, which VisitBritain describes as a pre-negotiated number of seats, rooms or vehicles held for sale.

What the rules say

Under the Package Travel Regulations, the organiser is liable to the traveller for the services in a package, whether it performs them itself or another provider does. For packages booked from 6 April 2027, a supplier that has agreed to provide a service in a package and then cancels or fails to perform it must refund the organiser within 14 days. Some organisers take out supplier failure insurance, but the government’s guidance says this does not replace the insolvency protection they need against their own failure.