Package travel and linked travel arrangements: the new European Directive
On 31 December last year the new European Union Directive on package travel and linked travel arrangements entered into force (Directive 2015/2032 EU, of 25 November 2015) and following its incorporation into Spanish law, it will significantly amend the legal framework of travelers’ rights as consumers when they contract specific package travel services. The changes deriving from the new Directive will need to be adapted to the Spanish legal framework by 1 January 2018, and shall be applicable from 1 July 2018.
This article highlights the Directive’s main innovations which will need to be included in new Spanish regulations.
- Amplification of new package holiday travel services.
Compared to current laws designed for pre-arranged package holidays, the new Directive explicitly extends its application to travelers contracting package holidays through new business models, or according to new contracting habits, especially in respect of the possibilities offered by Internet. To this end three models of package travel services have been defined (albeit acquired on or off line):
- Pre-arranged package: set up in advance by the tour operator prior to any contact with the traveler, and subject to the regulation if the package includes at least two travel services (transport, accommodation or others, such as vehicle rental).
- Customized travel package: when two or more travel services are organized based on components selected by the traveler and purchased from a single travel agent in a single contract.
- Linked travel arrangements: some provisions are established for those cases where having booked one travel service, the consumer is invited to book at least one additional travel service with another service provider for that same trip, provided that the booking is made within 24 hours. The examples cited by the European Commission include links on the provider’s website, a targeted link to a web on which another provider offers another linked travel service if the consumer contracts the service within a specified term.
- “Travelers” and “consumers”
The Directive plans to protect customers considered to be “consumers”, but also business travelers (including members of liberal professions, or self-employed or other natural persons) although only insofar as they do not organize their travel on the basis of a general agreement for organizing business travel. Therefore the Directive uses the term “travelers”
- Stronger protection for travelers
- New requirements have been established in respect of pre-contractual, contractual and pre travel information provided to travelers regarding the data provided and the manner in which it is conveyed (emphasizing that such information should be clearly, comprehensibly and prominently communicated to the traveler).
The European Commission highlights the need to modernize information requirements which are no longer exclusively based on printed brochures, which can lead to savings to businesses of 390 million euros per year in reprinting brochures.
- The Directive establishes a limit of 8 % on possible price increases applicable by the service provider prior to initiating the travel, above which amount the traveler will be entitled to cancel the contract without incurring any penalty.
- It provides further support to the traveler’s ability to cancel considering:
– The right to cancel the contract at any time prior to initiating the travel, in exchange for payment of an appropriate and justifiable penalty (in addition to the traveler’s right to transfer the travel package to another traveler).
– The right to cancel the package travel contract without any penalty when unavoidable or extraordinary circumstances arise that significantly affect the performance of the package (warfare, terrorism, significant risks to human health or natural disasters or weather conditions which make it impossible to travel safely to the destination).
- It identifies the travel organizer as responsible for correct execution of all the travel services in respect of the traveler (even when those services are provided by a third party); and each Member State shall determine in its domestic regulations whether or not the retailer is also liable for execution of said services.
- It clarifies liability in respect of booking errors, with traders held liable for errors due to technical faults in the booking system both in respect of packages and linked travel arrangements when they have accepted organization of the booking.
- It regulates guarantees required of the organizers established in each Member State so that travelers’ payments are refunded if the services have not been provided due to the package organizer going bankrupt.
And these guarantees may be extended in certain conditions to traders providing linked travel arrangements, when these failed to be provided due to the trader’s insolvency.
All traders operating in the tourist sector should keep a close eye on the reforms implemented in respect of domestic legislation on package travel as the provisions of the new Directive will need to be incorporated by the end of 2017 at the latest.
Garrigues Tourism and Hotels Department