Making sense of the new EU Package Travel Directive

Confused by the new EU Package Travel Directive? Not sure what it means for you? Hopefully this overview from Sophie Arrowsmith, a solicitor at travel law specialists Hamlins LLP, will help make sense of it all.

What is it?
The travel market has changed dramatically since the original adoption of the current Package Travel Directive. Increased use of the internet to research and book travel means it is now more common for travellers to book their flights and hotels etc. separately, rather than as a package. The new Directive (2015/2302) is EU legislation which aims to clarify and modernise the scope of travellers’ protection by amending current EU consumer protection laws and repealing the current Package Travel Directive.
As well as travellers, the new Directive will affect all travel organisers and retailers of travel services.

What does it change?
The new Directive applies the same rules for packages and assisted travel arrangements across the EU, providing certainty to traders and travellers about their rights and obligations irrespective of the national law applicable to the contract. The new Directive extends the protection of Package Travel rules to all consumers who purchase travel services for the same trip or holiday. This can be done as:

– Pre-arranged packages: the traditional ready-made holidays from a tour operator made up of at least two travel service elements: transport, accommodation or other services, e.g. car rental.

– Traveller customised packages: the traveller makes the selection of travel service components, then purchases them from a single business.

– Linked travel arrangements: occurs where a traveller who has booked one travel service online (e.g. a flight) is invited to book another travel service (car, hotel etc.) through a targeted link, and makes that second booking within 24 hours.

Business trips arranged by business travel management companies will no longer be included under the Package Travel rules.

This increasing of the types of travel arrangements for which retailers and operators have responsibility to consumer travellers will increase the numbers of holidays caught. Additionally, the new Directive increases those travellers’ rights including:

– Before travellers enter into any contractual commitments, travel organisers and retailers must clearly inform each traveller it is buying a package and that doing so affords the traveller certain rights under the new Directive.

– Traders will be explicitly liable for booking errors.

– Travellers will be able to cancel a booking with no termination fee ‘in the event of unavoidable and extraordinary circumstances’ in ‘its immediate vicinity’. If this happens whilst the traveller is on the holiday, the travel organisers and retailers bear the costs for continued accommodation not exceeding three nights.

– The organiser or retailer must inform the traveller of their rights and who is responsible if something goes wrong with the holiday.

– The retailer may be fully liable if something goes wrong with the holiday.

– Travel organisers and retailers must give travellers approximate departure and return times and an indication of the nature of any possible extra costs.

– Travellers have the right to termination in the event additional price increases exceed 8%.

What will the impact be for agents and operators?
It is obvious these measures will increase the risk and cost to travel retailers and operators. However, costs may be saved in some areas as a result of the new Directive. The modernisation of pre-contract information requirements means provision of the requisite information is no longer based exclusively on travel brochures and traders will no longer have to reprint brochures in the event of a change of information. Also, the new Directive purports to reduce the administrative burden and compliance costs and strengthen mutual recognition of insolvency protection.

From a commercial perspective, the application of the same rules across the EU reduces obstacles to cross-border trade for travel organisers and retailers wishing to operate EU-wide, aiming to provide a level playing-field in the travel market.

What should travel operators do?
Understandably, there is some concern these new rules are very open to interpretation, and travel organisers and retailers could face an increased number of cancellations.

The Directive will apply from 1 July 2018. As holidays tend to be booked six months to a year in advance, and advertised even earlier, travel organisers and retailers should start preparing for compliance with their new obligations now. This includes:

– Keeping fully up to date with guidance on the new Directive issued by the government and industry bodies such as ABTA.

– Reviewing the pre-contractual information travel organisers and retailers provide travellers to ensure all requisite information is provided.

– Review internal procedures for handling cancellations and terminations, and the provision of information to travellers.

– Seeking advice regarding appropriate insurance to cover new risks.