Package Travel Directive proposals welcomed by ABTA

ABTA is breathing a sigh of relief today after the publication of the EU reforms for the Package Travel Directive made it clear agents won’t be obliged to pick up any additional tour operator liabilities.

The reforms were also welcomed by TUI, which says a move to bring dynamically packaged travel by online travel agents and click-through arrangements from airline websites into the scheme will protect an additional 120 million travellers.

A statement released by the European Union said the Directive would be updated to make sure that the 23% of holidaymakers who book dynamically packaged holidays were protected.

It said: "Today’s rules either simply do not cover such arrangements, or do so only in an ambiguous manner, leaving consumers unsure of their rights and traders unclear of their obligations.

"As a result, in a recent survey, 67% of EU citizens mistakenly thought that they were protected when buying such travel arrangements when they were not.

"The aim of the reform is therefore to make sure that all those buying customised holidays are suitably protected, either as packages or as a new form of protected arrangement.

Commenting on the proposed revision, TUI Travel chief executive Peter Long said: "We believe that it is important that not only should customers have the same rights irrespective of how they book but that they should be clear and simple to avoid confusion.  This has not been the case to date, something we have made very clear both to the Commission and source market governments.  We now look forward to the revision proceeding through its next stages and becoming law."

ABTA said that it was pleased that under the reforms the rights of agents to act as agents had been protected.

It also welcomed a move to bring airline click-through arrangements into the scheme and welcomed the fact that managed business travel is to be excluded from the directive.

" There is still a long way to go in the reform process, and it is important to remember that travel businesses are unlikely to see any changes before 2016," said ABTA, but it said it was "very encouraged" that the Commission "has chosen not to add some specific burdensome responsibilities to the Directive."

These include a proposed cooling off period for holiday bookings as well as a possible extension of tour operator liabilities beyond the liabilities of airlines.

"As you would expect with a major reform of this nature, there are a number of important points outlined in the proposals that we will need to carefully review, seek clarity and consult further with our Members on, such as the concept of Assisted Travel Arrangements and definitions of a package holiday," it added.

"We will do this over the summer and then go back to the policymakers in Brussels in time for when the Parliament and Council begin their scrutiny and editing of the Directive in September. " 

In addition to extending existing protection to customised packages, the EU claimed the reform would bring new benefits for consumers and businesses including:

• 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