Package Travel Directive Proposals Released
Last week, the European Commission released its proposals for updating the 1990 Package Travel Directive.
Whilst the current directive has guaranteed comprehensive protection to consumers booking pre-arranged package holidays that involve combinations of, for example flights, hotels or car rentals, it does not explicitly cover packages that are combined at the consumer’s request.
The aim of the revised Directive is to extend the current protection for traditional, pre-arranged packages to new combinations of travel services. If those new combinations of travel services feature the characteristics associated with packages, the consumer is protected under the new rules.
For buyers of traditional and customised packages, today’s proposal will bring:
- stricter controls on price surcharges (with a 10% cap on price increases) and a requirement to pass on price reductions in equivalent circumstances
- improved cancellation rights: Consumers will enjoy more flexibility by being able to terminate the contract before leaving home and paying the organiser a reasonable compensation. They will also be able to cancel the contract, free of charge, before departure in the event of natural disasters, civil unrest, or similar serious situations at the destination that would affect the holiday, when, e.g. the embassies give negative travel advices.
- better information on liability: in a plain and intelligible language consumers will need to be informed that the organiser is responsible for the proper performance of all included services – whereas today diverging national rules concerning the responsible party (organiser, retailer or both) lead to a situation where organisers and retailers refer the consumer to the other party, neither of them taking responsibility.
- better redress: in addition to price reductions in case a travel service has not been performed as it should have been, consumers can also claim compensation for any ‘immaterial damage’ suffered, in particular in case of a spoilt holiday
- a single contact point if something goes wrong: Consumers will be able to address complaints or claims directly to the retailer (travel agent) from whom they bought their holiday.
For buyers of other customised travel arrangements, today’s proposal entails:
- a right to get their money back and be repatriated, if needed, in case the seller, the carrier or any other relevant service provider goes bankrupt while they are on holiday,
- better information about who is liable for the performance of each service.
For businesses today’s proposal will cut red tape and compliance costs by:
- creating a level playing field between different operators,
- abolishing outdated requirements to reprint brochures, thereby saving tour operators and travel agents an estimated €390 million per year,
- excluding managed business travel from the Directive, which is expected to lead to savings of up to € 76 million per year
- providing EU-wide rules on information, liability and mutual recognition of national insolvency protection schemes, thus facilitating cross-border trade.
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