EC proposals on modernisation of the Package Travel Directive

Author: Multilysis Services Limited
Date: 2013-12-17
What will the reforms bring and how will they affect travellers?
 
Once and if such reforms take place, their impact on frequent or not-so-frequent travellers and holiday-makers is undeniable as it will offer travellers/consumers a higher level of protection, numerous rights and importantly an increased feeling of certainty and clarity with regards their various on-line travel packages and arrangements.
 
The increased use of technology as well as the fast-moving rhythms of the 21st century have led most people to prefer or simply to resort to on-line shopping for most things including their holidays. But when booking combinations of on-line packages for vacations so many hide behind the scenes such as travel agents, tour operators, airlines, cruise lines etc., to the extent that admittedly there lays an ambiguity as to the rights, liabilities or even who falls under the scope of the European Package Travel Directive?
 
The proposed reforms aim to clarify the above and the proposed action aims to ensure that travellers are better informed about the services they are buying and granted with clearer remedies in the event that something goes wrong.
 
Essentially the reforms are all about bringing the Directive into the digital age. The massive increase in the use of the internet has led travellers to prefer combining their travel arrangements rather selecting ready-made packages out of a brochure. The main aim of the proposed reforms is to extend the current protection for traditional pre-arranged packages to the so-called DIY packages. This is achieved by expanding the definition of “package” as well as introducing the concept of “assisted travel arrangements” to cover not only traditional pre-arranged combinations of travel services but also individual travel services provided under separate contracts if they fulfil certain requirements. In addition to extending and improving the existing protection to customised packages, the Directive intends to bring new benefits to consumers and businesses.
 
 
What are the main reforms and how will they affect travellers?
 
1. Definition of “package” and “assisted travel arrangements (ATA)”:
 
The reforms intend to expand the definition of “package” and introduce the concept of “assisted travel arrangements”.
 
Example of the expanded definition of “package” covered by the revised Directive: A consumer visits a travel agent’s website where he books airline tickets, hotel and a car, all provided by different traders which are then sold for all-inclusive price. 
 
Example of an ATA: a traveller buys an airline ticket from a website and after the booking is confirmed, he is invited to click on a link leading to another trader’s website in order to book a hotel or rent a car. Thus, the traveller concludes contracts with separate individual service-providers. In such cases, only the individual service-providers are liable for the performance of the travel services concerned.
 
2. Price changes to the package before start of a package:
 
The price changes will be limited to 10% of the original price of the package and the traders who wish to adjust prices will be required to apply discounts to travellers in equivalent circumstances.
 
3. Improved cancellation rights:
 
The revised Directive gives the traveller the flexibility to cancel the contract at any time before the start of a package and pay the organiser a reasonable compensation. This provision will give the traveller the opportunity to cancel his flights without the fear of losing all money paid. In addition, in case of extraordinary unavoidable circumstances such as warfare or a natural disaster or similar serious situations, the traveller may terminate the contract before departure without paying any compensation.
 
4. Duties of organisers and retailers:
 
An “Organiser” would be defined as a trader who combines and sells or offers packages and is responsible for the performance of the package. A “Retailer” would be defined as a trader other than the organiser, who sells or offers for sale packages or provides assisted travel arrangements. By defining those two the Directive will clarify who is responsible for the performance of each service.
 
5. Better information on liability:
 
The travellers are to be informed in a simple and understandable language that the organiser will be responsible for the proper performance of the package that is to say for all included services. The retailer on the other hand, will be responsible for the provision of pre-contractual information and for any booking errors. This way the situation where the traveller is referred by one party to the other (retailer or the organiser), neither of whom is taking the responsibility, is avoided.
 
6. Better redress:
 
Remedies will be available to travellers in case the travel service has not been performed as agreed and reasonably expected. Travellers can also claim compensation for any “immaterial damage” suffered because of a lack of conformity. An example might be a compensation award for a ruined holiday resulting from food poisoning in the booked hotel. In this case, the traveller might be able to claim compensation not only for physical pain, but also for loss of enjoyment of holiday.
 
 
7. A single contact point if something goes wrong:
 
Although no longer liable for the performance of the package, retailers (travel agent) will act as contact points.  Consumers will be able to address messages, complaints or claims directly to retailers, who for many travellers are the first point of contact through which they have bought their holiday, who will then address them to the organiser.
 
8. Protection in case of airline insolvency:
 
The reform will extend the right to refund and repatriation to travellers who booked their travel on-line in case of airline insolvency. It is an important reform having regard to how many air-carriers around Europe have become victims of the financial crisis. A good example is the situation, created last year when Hungary’s Malev Airlines went bankrupt, stranding passengers across Europe.
 
It is expected that businesses will also benefit, as the new Directive is abolishing out-dated requirements to reprint brochures, thereby saving tour operators and travel agents an estimated €390 million per year and making sure that national insolvency protection schemes are recognised across borders.
 
 
Impact on Cyprus
 
Inevitably the new Directive will most definitely afford more confidence to travellers, providing them with a sense of security and fundamentally a sense of buoyance whilst planning and on-line booking their holidays, helping them in the long run to enjoy stress-free vacations, which is essentially the main aim of any holiday. Travellers will thus be indirectly encouraged to trust the on-line services for booking such holiday packages, customizing them to their liking, without the underlying fear that once and if something goes wrong, they will not be in a clear position to contact that “single” person who will be held liable and will in fact give them the assistance, guidance and/or compensation owed. As the above will have such effect, travelling and tourism can only be positively affected and expected to flourish, all around Europe, including Cyprus. Supporting, enhancing and encouraging the tourism industry can contribute significantly to the economic growth of any country, particularly now in light of the present financial crisis which has adversely affected the whole world. The proposed European Directive is in our opinion a smooth way of introducing more growth in the tourism industry and boosting the economy of the whole European zone, increasing at the same time money flow amongst European countries.
 
As aforementioned, countries such as Cyprus, which is undoubtedly a beautiful holiday spot, a favoured-by-many destination, as well as a huge tourist attraction, is at the same time heavily reliant on the said industry, unlike other countries which enjoy higher growth and development in a vast field of other industries and thus the proposed Directive can only positively affect our island.
For more information on EC proposals on modernisation of the Package Travel Directive.

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