REVISION OF THE PACKAGE TRAVEL DIRECTIVE

On 28 May 2015 the EU Council backed the new Package Travel Directive, bringing it up to date with the developments in the travel market. Following publication in the EU's Official Journal in the autumn 2015, Member States will have two years to implement the new rules and traders a further period of 6 months to adapt to the new rules.

Scope of the Directive

The rules will extend protection of the 1990 EU Package Travel Directive to cover not only traditional package holidays, but also give clear protection to 120 million consumers who book other forms of combined travel, e.g. a self-chosen combination on a website of a flight plus hotel or car rental. There will always be protection where travel services are advertised as a package or where they are offered at a total or inclusive price.

The proposed legislation broadens the concept of ‘package’ and now will apply to 3 different sorts of travel combinations:

1. pre-arranged packages - ready-made holidays from a tour operator made up of at least 2 elements: transport, accommodation or other services, e.g. car rental;
2. customised packages - selection of components by the traveller and bought from a single business online or offline;
3. linked travel arrangements - if the consumer, after having booked one travel service on one website, is invited to book another service through a targeted link or similar, the new rules offer some protection– provided that the second booking is made within 24 hours.

 Benefits for Consumers

 The new Directive is expected to reduce damages to consumers by about €430 million a year, due to the following reinforced rights:

• New information requirements for travellers: they must include understandable information on the package and the protection they benefit from under package holiday rules.
• More predictable prices: establishment of a 8% threshold for price increase by the trader, beyond which the traveller has the right to cancel their holiday free of charge.
• Stronger cancellation rights: assurance of free cancellation before departure in case of natural disasters, war, or other serious situations at the destination. Package travellers will also be able to cancel their holiday for any reason by paying a reasonable cancellation fee.
• Clear identification of the liable party: the organiser of the package in all EU Member States has to deal with the problem if something goes wrong.
• Clear liability for booking errors: traders will be made explicitly liable for booking errors in relation to packages and linked travel arrangements.
• Clarification on essential consumer rights: the organiser is required to assist travellers in difficulty, for example in case of need of health assistance.
• Guarantees of money-back and repatriation: if the package organiser goes bankrupt, these guarantees will be extended to linked travel arrangements.

Benefits for Businesses

The new Directive will reduce the administrative burden on businesses and bring down compliance costs for traders from €11 to €8 per package sold. The main advantages for market operators consist in:

• A level playing field: the same rules will apply for businesses across the EU selling competing travel products. The new harmonized approach will result in easier cross-border transactions.
• Mutual recognition of insolvency protection: insolvency schemes would be recognised across the EU. At this regard, a structured cooperation mechanism between the Member States will be put in place.
• Business trips arranged by business travel management companies will no longer be included under the rules: this avoids overregulation, while ensuring that small and micro-businesses making travel arrangements will still be protected.
• Modernised information requirements no longer based exclusively on travel brochures: the fact that traders will not have to reprint brochures is expected to save traders €390 million per year.
• Less administrative burden, easier cross-border transactions and legal certainty will at the same time benefit businesses.