Package law reform proposals released

Package law reform proposals released

The long-awaited overhaul of the 1990 EU package travel directive is unveiled today to reflect a move towards customised packages booked online.

The update is essentially about bringing the directive into the digital age, according to the European Commission

It means that an additional 120 million consumers who buy 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,” the Commission said.

“Businesses will also benefit as the Commission is scrapping outdated information requirements such as the need to reprint brochures and making sure that national insolvency protection schemes are recognised across borders.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

•.      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 travel businesses the reform is designed to 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.

EU justice commissioner Viviane Reding said: “In the 1990s, most Europeans picked out a pre-arranged package deal from a brochure and booked it at their local travel agent.

“Since then, European legislation has helped millions of people enjoy stress-free holidays. But times have changed and we need to update the rules to keep pace with a changing market.

“EU package travel rules need to be fit for the digital age and meet consumers' expectations.

“Today we are boosting protection for millions of consumers booking customised travel arrangements. The EU is acting to provide a safety net and peace of mind for holiday makers if something goes wrong.”

Antonio Tajani, commissioner responsible for industry and enterprises, added: "Tourism is an important source of growth for our economy, representing today some 1.8 million businesses and approximately 9.7 million jobs, while employing a significant proportion of our young people.

"If tourists feel safe purchasing and using travel services in package format – for example when buying a flight and arranging car hire or accommodation all via the same provider - the industry will growth even further and faster.

“This is the main goal of today's proposal: to support all travel packages both on- and off-line while ensuring a balanced set of rights for travellers."

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