This new Directive came into force on the 31st December 2016, bringing it up to date with new developments in the travel market. However Member States do not have to switch to it until January 2018 and it will be applicable from the 1st July 2018 onwards.
This new Directive will extend protection of the 1990 Package Travel Directive. Both Directives gives customers the right to hold the package organiser responsible for things that go wrong on holiday, even if the actual services are delivered by the other suppliers.
The new Directive extends the concept of “package” and is relevant to three difference sorts of travel combinations:
1.Pre-arranged packages – this is where a tour operator make up at least two of the elements to a ready-made holiday such as accommodation, transport, car rental etc. for the customer.
2.Customised packages – this is where the customer selects the relevant components from a single business either online or offline.
3.Linked travel arrangements – this is where the customer books one travel service on one website and is then invited to book another service through a targeted link or similar, the customer can only avail of this arrangement if the second booking is made within 24 hours of the first booking.
RESPONSIBILITIES OF THE TOUR OPERATOR
The new Directive ensures that the tour operator is responsible for the following:
1.If any of the travel services are significantly altered or before departure, the customer is able to cancel the holiday and receive a full refund from the tour operator.
2.If any of the services that form the package are not delivered properly, the tour operator has to make arrangements for suitable alternatives or resolve any problems. However if the problems cannot be resolved and are substantial, the customer has the right to demand to be taken home early at no extra cost.
3.If the holiday is not provided as described for example a 3 star hotel rather than a 5 star hotel that was booked, the customer is entitled to a price drop of the holiday and compensation from the organiser.
4.If there are extraordinary and unavoidable circumstances for example the ash cloud that grounded flights in 2010 then the tour operator has an obligation to pay for extended accommodation for a period of up to three days if the customer is unable to return home. At present it is still unclear whether the tour operator must pay for any further extended accommodation after the three days, if the customer is unable to return home at the end of their holiday.
BENEFITS FOR THE CONSUMER
The new Directive aims to reduce damage to consumers by around €430 million by implementing the following rights:
- Foreseeable prices: The introduction of an 8% cap for possible price increases by the organiser, anything in excess of this, means the holiday can be cancelled by the consumer free of charge.
- Clearer information: The consumer must have a clear understanding of the holiday booked to include information on the holiday and the protection they benefit from under holiday rules.
- More cancellation rights: as discussed above under the responsibilities of the Tour Operator.
- Transparent accountability for booking errors: Tour Operators will be clearly liable for booking errors in relation to packages and travel linked arrangements.
- Certainty of money back or repatriation: If a Tour Operator goes bankrupt, the guarantee of money back or repatriation can under certain terms and conditions extend to linked travel arrangements.
- Explanation on necessary consumer rights: If the Consumer is any type of difficulty, i.e. where health assistance is required, the Tour Operator must help the Consumer.
- Palpable liable party: In all EU Member States the Tour Operator is clearly liable if anything goes wrong and so has to handle the problem.
BENEFITS FOR THE TOUR OPERATOR
The new Directive brings certain benefits to the Tour Operators trading in the tourism sector, such as business trips arranged by business travel management companies will no longer be included under the new Directive and there will be a significant drop in compliance costs. However the main improvements include the following:
- Easier cross-border transactions: The EU Member States have similar rules across the competing travel products.
- Clarification of insolvency protection: The EU Member States have a structured cooperation mechanism which clearly recognises insolvency schemes across all Member States.
- Significant reduction in administration: Due to the level playing field there is less of an administrative burden. Further there will be no a requirement of information based exclusively on travel brochures, this will eliminate the need to reprint brochures.
- Regulatory savings to be gained: Tour Operators will only be the need to comply with one set of regulations and so there will be no need to incur the costs of understanding the local rules in each Member State and liaising with the regulator in each Member State.
- Greater negotiating power: By Tour Operators bringing all their business to one Member State, it gives them more negotiating power with the regulator of the Member State together with the bond and insurance providers for that market.
This new Directive has a divided view from the Tourism industry, with the European Tour Operators Association (Etoa) stating “A single market for tourism services is still a long way off.”