EU travel businesses need to tighten their Ts and Cs


Céline Moguen, a lawyer with travel trade specialisms at Artington Legal, is advising all European businesses in the travel and tourism industry to plan a review of their terms and conditions of booking when the new regulation is implemented.

On 28 May 2015, the EU Council backed the new Package Travel Directive, which will extend the consumer protection currently enjoyed by holidaymakers on package holidays.

EU residents booking a combination of travel services (such as flights, car hire and accommodation) online with an organisation targeting EU consumers, will have enhanced rights from the date the new rules are implemented.

In a recent interview, German EPP member Birgit Collin-Langen, responsible for steering the new rules through Parliament said: “In long and difficult talks, we managed to strengthen the rights of travellers substantially, especially, and for the first time, with regard to online bookings, which are growing fast. At the same time, we also took account of the interests of small and medium-sized enterprises”.

Background

The implementation of the 1990 EU Package Travel Directive has created important and much needed rights for European travellers purchasing package holidays.

Some of the existing provisions have however become out-dated or were unclear and have created unnecessary burdens, such as providing lengthy information in brochures, generating additional costs for cross-border activities.

More significantly, since the directive’s implementation, the development of the Internet has radically changed the way in which consumers organise their holidays and their expectations, especially when customising a combination of travel services.

In recent years, numerous online platforms have emerged such as Expedia, Opodo, e-dreams, LastMinute.com, Booking.com, Tripadvisor, Airbnb etc. These have all disrupted the traditional travel market and more developments are to be expected. Consequently, the EU has attempted to make the new regulations as future proof as possible in order to ensure that they will not be obsolete soon after their adoption.

Who does this apply to?

The definition of package holidays is extended to the following combinations of travel:

  • pre-arranged packages (already covered by the current legislation). These are ready-made holidays from a tour operator made up of at least 2 elements: transport, accommodation or other services, e.g. car rental;
  • customised packages (currently not clearly covered by the regulation). These correspond to a selection of components by the traveller, bought from a single business online or offline; and
  • linked travel arrangements is another category which has emerged and covers when the consumer, having booked one travel service on one website, is invited to book another service through a targeted link or similar. The new rules offers some protection in this situation but only for circumtances when the provider of the first service goes bankrupt, i.e. providing a money-back guarantee and repatriation where appropriate.

Note that if the traveller’s name, payment details and email address are transferred between traders within 24 hours of the original sale being concluded, these purchases should be considered part of a package and therefore fully protected by the new regulation

Packages and linked travel arrangements that cover a period of less than 24 hours and which do not include accommodation are still excluded from the regulation.

Key changes

The new rules will strengthen holidaymakers’ rights by providing the right to termination in case of additional price increases exceeding eight per cent.

Travellers will also benefit from safeguarding measures in case of unavoidable and extraordinary circumstances, in which case the organiser should bear the costs for continued accommodation not exceeding three nights. MEPs pushed hard on that matter to increase this number to five nights, but member states refused. Parliament’s negotiators inserted an additional clause specifying that the three-night rule applies unless another, future EU law entitles the traveller to more nights, so as not to preclude any further agreements on passenger rights.

Pre-contractual information will have to make clear to consumers that they are buying a package holiday and the rights that this confers. This includes the right to transfer it to another person.

Customers will now have a right to cancel the package before it starts, by paying a reasonable cancellation fee.

Information must be provided that includes the name of at least one party responsible for the performance of the package and an emergency number. MEPs added a duty to give travellers approximate departure and return times and an indication of the type of any possible extra costs.

The new directive will also establish common EU-wide rules for packages on pre-contractual information, compulsory content of package travel contracts, price changes, termination rights and travellers’ rights when something goes wrong.

There will also be new provisions for mutual recognition of insolvency protection arranged by each Member States.

Next steps

If your business provides any external services as part of a package or as linked travel arrangements, directly or indirectly, you will need to have your terms and conditions updated within 6 months of the implementation of the new regulation, probably in 2017.

Feel free to contact Céline for further information – celine.moguen@artington.com or call her on +44 (0) 7780 724475.

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