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Commission acts to improve consumer rights for 120 million holiday makers

Edition Internationale (Europe)

As the summer season kicks off, the European Commission is taking action to improve protection for holiday makers by modernising EU rules on package holidays.

Rédigé par le Lundi 17 Mars 2014

The 1990 EU Directive on package travel has served as the bedrock for the protection offered to EU holidaymakers.

It guarantees comprehensive protection to consumers booking pre-arranged package holidays which involve combinations of, for example, flights, hotels, or car rentals.

The protection includes the right to receive all necessary information before signing the contract, making sure that a party is liable for the performance of all services in the package and the reassurance of repatriation in case a tour operator goes bust.

The reform responds to a fundamental transformation of the travel market: Citizens are increasingly taking a more active role in tailoring their holidays to their specific requirements, notably by using the internet to combine travel arrangements rather than choosing from ready-made packages out of a brochure.

Today's rules are difficult to apply in the internet age where consumers are increasingly booking customised packages online (either from one trader or several commercially linked traders) – which leaves buyers uncertain if they can count on protection and traders unclear of their obligations.

Therefore, today's update of the 1990 rules is essentially about bringing the Package Travel Directive into the digital age. It means that an additional 120 million consumers who buy these customised travel arrangements will also be protected by the directive.

The reform further bolsters protection for consumers by increasing transparency and strengthening protection in case something goes wrong.

Fundamental transformation of the travel market

Businesses will also benefit as the Commission is scrapping outdated information requirements such as the need to reprint brochures and making sure that national insolvency protection schemes are recognised across borders.

In addition to extending existing protection to customised packages, the reform brings new benefits for consumers and businesses.

For buyers of traditional and customised packages, today’s proposal will bring:

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.

The organiser is responsible for the proper performance of all included services

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.

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