The way people book their holidays has changed radically over the years, with more and more consumers using online booking services offered by different online operators. This is why the European Commission felt that a 1990 EU law which offers protection to consumers who purchase a pre-arranged holiday package is outdated and requires a revamp.
The current Package Travel Directive makes provision for a number of rights enjoyed by consumers who purchase a travel package. These range from the right to all necessary information about the holiday before signing the contract to the right to alternative arrangements, at no extra cost, should the organiser be unable to provide all the important parts of the package.
These rights are currently enjoyed by travellers who purchase pre-arranged combin-ations of travel services. Such services have been defined by the Court of Justice of the EU as referring to a combination of tourist services by a “bricks and mortar” travel agency where the consumer enters into a contract with his/her travel agent and pays an inclusive price.
Whether the scope of the Directive extends to packages which are combined by different retailers or multiple traders, and where the seller is acting as a mere intermediary or where customised combinations of travel services are sold online, is still very much a grey area.
The main aim of the proposed European Commission amendments is to extend the current protection covering traditional, pre-arranged packages to the more modern combinations of travel services. A combin-ation that includes all services in one contract, or where all services are sold at an inclusive price, will be considered as a customised package.
This will be the case irrespective of whether such a combination is sold online or offline and of the fact that the consumer gets to choose the different components of the package himself rather than purchasing a pre-arranged package. Similarly, the consumer rights granted by the package directive will be guaranteed when he/she purchases two or more services from multiple suppliers under separate contracts but where the consumer’s name or personal details are transferred directly between the traders, or where an inclusive or total price is charged.
This would be the case, for example, where a travel search website of an online travel agent allows the consumer to search for flights and hotels at the same time and sells both, each with a different trader, at an all-inclusive price. In such cases, the main trader will be considered as an organiser and will shoulder all the liability.
Independent travel arrangements, where a consumer purchases a travel service such as a flight, accommodation or car rental as a stand-alone product, will still remain outside the scope of the Package Travel Directive.
Provision will also be made under the new rules for other customised travel arrangements. These would include situations such as when a consumer purchases an airline ticket from a website and then is invited to “click through” when that is confirmed to the site of another trader to procure a further travel service such as hotel accommodation or car hire. In such cases, each individual service provider is responsible for the proper performance of the separate contracts. But the retailer facilitating the travel arrangements must provide clear information about this and must also provide the right to a refund of pre-payments or, in cases when the traveller has already departed on vacation, a right to repatriation in the eventuality that one of the service providers goes bankrupt.
In addition to their rights under the improved Directive, package travellers will continue to benefit from the rights under EU passenger rights laws relating to air, train, maritime, bus and coach transport. This will mean that package travellers will be able to invoke rights against both the carrier and the organiser.
However, compensation received from one of these parties will be taken into account when claiming compensation from the other party. The proposed amendments also seek to ensure consistency between the package travel legislation and rules applying to carriers. For instance, the proposed amendments clarify that in cases when it is impossible to repatriate travellers due to unavoidable and extraordinary circumstances, such as during the ash cloud crisis, organisers of packages are obliged to pay for the continued accommodation of travellers at the destination, but only for a maximum of three nights.
A number of amendments being made to the current package travel will also benefit entrepreneurs.
For example, the Commission is proposing to scrap the requirement for operators to reprint brochures every time a detail changes. The new directive will also create a level playing field for businesses operating across Europe selling equivalent travel products, irrespective of whether they are offering such services online or offline.
The ball is now in the court of the European Parliament and the Council. The ambiguous application of rules undoubtedly gives rise to legal uncertainty for both consumers and businesses. It is imperative that the estimated 120 million consumers who annually purchase customised travel arrangements are clearly aware of what their rights are should something go wrong, while travel services operators are clearly made aware of the circumstances in which consumers can invoke such rights.
Mariosa Vella Cardona is a freelance legal consultant specialising in European law, competition law, consumer law and intellectual property law.