Changes from report parliamentary committee draft to plenary report

There is nothing more enjoyable than a good holiday. For many Europeans, this means purchasing a travel package. Coming from a country that attracts visitors seeking sun and culture, and where the tourism sector employs a significant portion of the workforce, the Rapporteur can relate to this proposal to review the Package Travel Directive.

The Rapporteur would like to highlight that this proposal has an impact on about 10% of the tourism trips in the EU, valuing 20% of the money spent in the tourism. The decisions that co-legislators will take can therefore have a direct and positive impact on our citizens and protect holidaymakers from unexpected developments. We should also be aware of the many jobs at stake in the tourism industry around Europe.

Therefore, a balanced approach is needed, where by combining strong and effective consumer protection with the request to keep rules simple and understandable for businesses. The Rapporteur wants to protect travellers from insolvency, while keeping in mind the financial burden for the travel organisers to provide for this protection. In the view of the Rapporteur, the European Commission has put forward a good basis for the European Parliament’s work and the political negotiations to come.

To put our work in perspective, the Rapporteur reminds the two main reasons for the European Commission to propose this review of the existing Directive.

First, the bankruptcy of Thomas Cook’s German subsidiaries left around 140.000 travellers stranded abroad, who needed repatriation. The insolvency protection at that time was insufficient to cover the refunds of travellers who did pre-payments, but did not yet reach their destination.

Second, the COVID-19 pandemic that created a lot of legal uncertainty surrounding the travel restrictions imposed with significant consequences for both travellers and the tourism industry. It raised questions about what are the valid reasons for consumers to cancel a travel package if travel is restricted.

We should therefore not forget that both of these events gave rise to a resolution voted by this Parliament, which gave me guidance as rapporteur to work on this proposal.

In light of these elements, the Rapporteur aims to simplify the proposed definition in Article 3 of a package irrespective of whether separate contracts are concluded. By replacing the 3-hour requirement by a more general requirement for travel services bought within the same booking process, we make the Directive more implementable for providers. At the same time, we prolong the timeline for travel services bought upon invitation of the trader to 72 hours after the first agreement.

On prepayments, the Rapporteur keeps the limit of 25% of the total price introduced in Article 5a of the Commission proposal, but specifies more explicitly that this percentage could be higher to cover advance payments to ensure the organisation of the package, like flight tickets or other advance payments to service providers of the package travel organiser. Furthermore, the Rapporteur introduces the possibility for Member States to create a system of trusted accounts for keeping the down payments of travellers secure.

By adding a paragraph to Article 11, the Rapporteur strengthens the information position of the consumer, by requiring package travel organiser to immediately inform the traveller about changes to the package.

On the issue of unavoidable and extraordinary circumstances occurring in Article 12, the Rapporteur removes the place of the travellers’ residence, and makes it clearer that any of these events affecting the journey of the traveller should be relevant for a termination of the contract. Also, the Rapporteur specifies that obligatory quarantine requirements against the spread of contagious diseases are relevant factors and that official travel warning gives the traveller the right to terminate the contract and request a refund.

Article 12a introduced by the Commission on vouchers is amended for reasons of fraud protection, by introducing a limit on the transfer of vouchers to once free of charge, while providing the travel organiser of the necessary information on the transferee. Further transfers of vouchers should be possible, but for a reasonable administrative fee.

On the effectiveness and scope of insolvency protection in Article 17, the Rapporteur limits the aspects that should be taken into account for the coverage, by removing the element changes in the volume of sales. Also, the Rapporteur removes the possibility for Member States to require a second level of protection. Both with the intention not to hinder the package providers from offering these products by insolvency insurance costs, while balancing this interest with solid consumer protection and sufficient insurance. The Rapporteur also specifies that a confirmation of the booking and proof of payment to make sure that it is easy for travellers to request a refund.

On the designation of central contact points to facilitate administrative cooperation and supervision of organisers in Article 18, the Rapporteur introduces a requirement for the Commission to collect centrally information related to insolvency protection schemes and central contact points, and to make this information publicly available on its website.

The effectiveness all the consumer protection measures proposed in the Directive are only as strong as the potential enforcement of the rules. That is why the Rapporteur introduced several new elements in Articles 24, 25 and 26.

The first is the obligation to set up a complaint-handling mechanism on their website in relation to the rights and obligations in the Directive, with clear deadlines to answer to complaints of travellers. Organisers and retailers are required to keep the data necessary to assess the complaint for the entire period of the complaint-handling procedure and should be able to make this data available to national enforcement bodies.

Secondly, the Rapporteur introduces more detailed provisions for Member States laying down rules on penalties applicable to infringements of national provisions adopted pursuant to this Directive. The maximum amount of such fines shall be at least 4% of the trader’s annual turnover in the Member State or Member States concerned, or when no information on the trader’s annual turnover is available, a maximum fine of at least 2 million EUR.

Thirdly, the Rapporteur introduces a mandatory participation in alternative dispute resolution procedure for organisers, retailers, intermediaries and other actors falling within the scope of this Directive. The decisions resulting from those procedures shall be binding upon them, without prejudice to their right to access the judicial system.