EU Council Adopts Revised Package Travel Directive to Boost Traveler Protection

Photo source: European Parliament

The European Council recently adopted its position on the revised Package Travel Directive, aiming to enhance traveler protection and address gaps identified following major events such as the Thomas Cook bankruptcy in 2019 and the COVID-19 pandemic.

The updated directive clarifies several aspects of the 2015 legislation, particularly focusing on refunds, insolvency protection, and the use of vouchers.

According to he Council, in light of the growing complexities in the travel industry and heightened consumer concerns, the revision seeks to safeguard travelers by reinforcing their rights and streamlining the obligations of package organisers.

The Council’s mandate offers important updates on key areas, from the scope of “packages” to cancellation policies, ensuring that travelers have more clarity and security when booking package tours.

Strengthening traveler rights

Package travel remains a popular choice for consumers, offering a combined selection of services such as flights, accommodation, and transfers in a single booking. However, these packages can become complicated when unforeseen circumstances like natural disasters or pandemics lead to cancellations or changes.

The revised directive addresses the protection of travelers in such instances by enforcing clearer rules for organisers.

For example, the revision allows travellers to cancel their packages without penalty if extraordinary circumstances arise, such as a natural disaster or epidemic, at either the departure or destination location.

Refunds and vouchers: A modern approach

The revised directive also brings new provisions regarding refunds and vouchers.

If a package is cancelled, travellers must receive a refund within two weeks of cancellation — an obligation that organisers can meet by receiving refunds from service providers like airlines and hotels within seven days. The measure is designed to reduce delays in processing customer refunds, which have been a significant concern in recent years.

While some travel organisers may offer vouchers instead of refunds, the new rules mandate that vouchers be automatically refundable and covered by insolvency protection. Organisers must also provide clear information to travellers on the benefits and limitations of these vouchers before they are accepted.

Limiting upfront payments

The revised directive also limits how much travellers can pay in advance.

Under the new rules, upfront payments cannot exceed 25 percent of the package price, except in exceptional cases where full payment is required to secure certain services, such as flight tickets.

Furthermore, package organisers will no longer be able to request the total payment more than 28 days before the departure date, providing consumers with more time to manage their bookings and budgets.

The Council’s position

The Council’s position supports the main objectives of the European Commission’s proposed revisions, but it introduces several clarifications to ensure legal certainty.

For instance, the definition of a “package” has been refined to distinguish it more clearly from “linked travel arrangements” (LTAs), which are not covered by the directive. This distinction aims to reduce ambiguity for businesses and consumers alike.

The mandate also ensures that if travelers purchase an additional service, such as a car rental or transfer, when booking a package, they will be clearly informed whether or not the new service forms part of the original package.

Enhancing insolvency protection

A key aspect of the revised directive is the strengthened insolvency protection for travellers. The mandate requires that in the event of a package organiser’s insolvency, travellers will be informed that they are entitled to a refund within nine months of the insolvency date. Member states can choose to shorten this period. This provision aims to ensure that consumers are better protected against financial loss when organisers go bankrupt.

With the Council’s position now formally adopted, the next step is negotiations with the European Parliament. These discussions will begin once the Parliament has adopted its position on the proposed revisions.

The update to the Package Travel Directive is part of a broader “Passenger Mobility Package” put forward by the European Commission in November 2023. The package includes a variety of proposals designed to strengthen passenger rights and improve the overall travel experience, particularly in the context of increasingly complex travel arrangements.