How does Europe help if something goes wrong on my holiday? With more than one billion holiday trips in the EU every year, Europeans keep travelling, especially during the ‘best weeks of the year’, with half of all Europeans going on at least one trip in summertime.
EU rules from 1990 protect European consumers booking pre-arranged package holidays. For example, holidaymakers will always get home even if a tour operator goes bust. Also, consumers get their money back if the tour operator’s insolvency occurs before their departure. In the 1990s, most Europeans picked a pre-arranged package deal from a brochure and booked it at their local travel agent. But times have changed. Thanks to the internet, more and more people customise their holidays.
For example, they might book travel and a hotel from the same operator, or rent a car via the website where they booked their flight. Around 23 per cent of holidaymakers book traditional package holidays, while 20 per cent now opt for ‘new packages’ by picking and choosing the components for their trip online.
Today, it is unclear how many consumers are actually protected by the existing rules of the package travel directive when going on holiday. This means that holidaymakers are often not sure what level of protection they can expect if something goes wrong. We need to update the rules to keep pace with a changing market.
"Today, it is unclear how many consumers are actually protected by the existing rules of the package travel directive when going on holiday"
Last month, in the European parliament, the internal market and consumer protection committee (IMCO) backed the European commission’s proposal modernising EU rules on package holidays. For the proposal to become law, parliament and the council of ministers will have to agree on the final text of the directive. MEPs are expected to vote on the proposal later this month.
What will change with the new rules? Under the new rules, the package travel directive will enter the digital age. Holidaymakers who buy customised travel arrangements will be better protected, especially when buying online. New rules will extend the current protection for traditional package holidays, including the rules on pre-contractual information, liability and insolvency protection (refund of pre-payments and repatriation of stranded travellers), to the large majority of the estimated 120 million consumers who buy customised travel arrangements every year. Furthermore, the reform will increase transparency about the kind of travel product people are buying.
An example of where the rules will be clearer is price increases. The commission proposed a 10 per cent absolute cap on price increases. The IMCO committee insists that organisers of package holidays should be able to ask for a price increase only if their costs increase by more than three per cent and, where the price increase exceeds eight per cent, holidaymakers should have the right to terminate the contract. Moreover, the reform will make clearer which party is liable if something goes wrong.
Travellers will also enjoy additional cancellation rights, for example, in case of unavoidable and extraordinary circumstances at the destination, as well as better redress. For the first time, consumers will indeed be able to claim EU-wide compensation for any ‘immaterial damage’ suffered, particularly in case of a spoilt holiday.
For a looser combination of travel services, the so-called assisted or linked travel arrangements, which are often purchased from linked websites, the commission proposed a reduced level of protection. Holidaymakers booking such arrangements would be informed that they are not buying a package, but would get their money back if they decide to cancel their booking. Also, if they are stranded at their holiday destination, these holidaymakers would be repatriated in case the seller, the carrier or any other service provider goes bankrupt.
What will change for businesses? Businesses will benefit as the new rules will do away with unnecessary red tape, and will create a level playing field. The new directive will reduce the discrepancies between national rules and will make sure that national insolvency protection schemes are recognised across borders. Outdated information requirements such as the need to reprint brochures will be scrapped. Overall, responsibilities of retailers and travel organisers will be clearer.
With the new package travel directive, holidaymakers can enjoy their holidays to the full as they will know what they are buying and what their rights are.