Here are two of many ways.
1. Place the new background on a layer below the picture layer.
2. On the picture layer select the people, invert and delete the selection. The deleted portion is replaced by transparency, revealing the new background.
Alternatively, you can use the Eraser tool to remove the old background.
method 2 - if your PSE version supports Layer Masks.
1. Set the Foreground/Background color chips to their default black/white values.
2. Place the new background on a layer below the picture layer.
3. Add a Layer Mask to the picture layer.
4. Select the people, invert the select, and fill the mask with black, revealing the new background.
This method has an advantage over the first in that you can fine-tune the result in case your selection was not precise. Activate the Brush tool and paint with black to reveal the background, with white to reveal the people. You can type "X" while painting to toggle between black and white.