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European package travel Directive: watch out, it will be a hard blow!

Conference during the IFTM Top Résa

Tourism professionals may not all be alerted yet, but the new Directive on package travel will fundamentally change many things on how to sell travel services and the way to carry a relationship with consumers.

Rédigé par C.E. translated by Joséphine Foucher le Vendredi 2 Octobre 2015

Photo European flag European Commission
Photo European flag European Commission
This is a major topic for the tourism industry.

Yet, the conference around the new European package travel Directive, that was organized under SETO’s professional encounters event, Xchange, did not rouse huge crowds at the IFTM Top Résa.

“This text will determine the legal fate of the sector in the years to come,” reminded Michel de Blust, General Secretary of ECTAA.

- Obligation of reinforced pre-contractual information
- Possibility of cancellations, free of charge, in the event of extraordinary circumstances.
- Obligation to inform clients on whether or not they enter within the scope of a package…
Here are some examples of the changes that tourism professionals should be expecting.

New provisions that will also be at a cost, warns Valérie Boned, Assistant Secretary General of the SNAV. “The implementation of the text will take time and investment.”

“We are faced with a reform that is more of a threat than good news,” summarizes Jurgen Bachmann, SETO’s Secretary General.

Text expected to be released late 2015, early 2016

“We will become experts in cancellations more than experts in sales,” worries Claire Chanteau, Legal Officer at Voyageurs du Monde.

But now the train is in motion and cannot be stopped.

The text, that passed all of the steps of the European authorities, will once again be presented to the European Parlement in mid-October - a “formality,” specifies Valérie Boned - before the release of the text late 2015, or early 2016.

From this date, the member States will have 24 months to transpose the text into national law.

Another 6 months will be added to ensure its compliance.

However, the provisions could evolve.

A 3 year review clause enables the Commission to look over the specificities of internet in order to study, particularly, the consequences of the “click through” and make new propositions if deemed necessary.

Here are some of the points to remember:

Dynamic Packages

The new European package travel Directive broadens the scope of what is considered as a package by including dynamic packages.

Dynamic packages, that combine different services offered by the same provider, now enter within the realm of the new Directive.

Click Through

The directive also defines some online travel services called “click through” as travel packages.

The “Click through” involves products purchased from separate traders through linked online booking processes where the traveler’s name, email and details along with the electronic address needed to conclude a booking transaction are transferred between the traders in less than 24 hours after the first service is confirmed.

It is a shame that this definition does not include all the “Click through” combinations, which may allow some players to find loopholes to escape the legislation.

“Assisted travel arrangements”

The new Directive makes out another category of online travel services.

They are the “assisted travel arrangements” that are not considered as packages.

They benefit from less restrictive regulatory obligations.

The “assisted travel arrangements” do not share the same level of pre-contractual information obligation, nor the same level of liability, nor the same level of financial guarantee.

Only the first link in the chain of services will have to protect itself from the risk of insolvency.

“Assisted travel arrangement” means a combination of at least two different types of travel services sold separately, within a timeframe of 24 hours, with no data transfer.

Exclusion of Business Travel from the Directive

The sale of business trips, when they are concluded under a framework contract between the traveler’s employer and a trader specializing in the arrangement of business travel, is excluded from the scope of the Directive.

Extraordinary circumstances and cancelations

Another change touches the definition of extraordinary circumstances (war, serious security problems, such as terrorism, major risks for human health, such as the rise of a dangerous illness in the place of destination, natural disasters such as flooding, earthquakes.)

Consumers will have the possibility to cancel, at no charge, before departure in the event of such exceptional circumstances.

If they occur during the trip, the organizer will be obligated to provide assistance (accommodation, meals) with comparable services, for up to 3 days maximum.

Financial guarantee

The Directive anticipates a system of mutual recognition of financial guarantees for the members States.

Non-member States who will want to offer their services in one of the member States of the European Union will have to show proof of protection against their own insolvency.

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