The new Package Travel Directive - Separating the myths from reality!

I read the other day what must be the non-story of the week, or is it? It comes via the TTG, where the newly formed Association of Travel Agents (a breakaway group from ABTA), voiced concerns over the TTG's revelation that the EU Commission introduced a radical plan to scrap the Package Travel Directive!

Within the article there was much fear and concern expressed for the removal of this law, as it would remove 'Consumer Protection'.  However, whenever the travel industry talk about 'Consumer Protection', they generally only talk about 'Financial Protection' - that kind of protection does not apply to what happens if you become ill or injured, or the hotel is closed or you don't receive your travel documents and so on. The Package Travel Directive does not only offer financial protection but also protection for the whole of your holiday if it goes wrong!

I started this piece by saying that it was a 'non-story', why? Because the article suggests that this 'new development' only came about in January 2013 - I have news for the great assembled - it formed part of the now infamous Stakeholder gathering in Brussels 2010!

In the Consultative document it stated that one of the options available was the:

'Repeal of the Directive & More Effective Self-Regulation'

The advisory stated that:

'This option entails a repeal of the current PTD and the adoption of self-regulation by the industry. Self Regulation would include specific information requirements and clarification on the liability for proper performance of the travel contract.

This option takes account of the fact that there are a number of poieces of legislation which could apply to the package travel market, as well as industry codes of conduct which may already ensure a certain degree of Consumer protection and industry competitiveness. Self regulation by industry may also be more suited for adapting quickly to changes in the market'

So as you can see, this revelation is not really a revelation at all!

I was one of the panel invited to speak at that conference and it was clear that very few bodies, Consumers or Travel, wanted to see the PTD repealed, if anything, all sectors wanted to see it strengthened and create a level playing field.

The article suggests that there has been a painful progress in the publication of the new PTD, but with respect, that is true with all proposed Directives and Regulation since the economic crash in 2008. It is clear that on a wide variety of platforms, the EU Commission and EU Parliament while wanting to see a progress for the benefit of its citizens, have taken a cautious approach on such ambitions until the worst of the crisis is behind us!

Another contradiction can be found in the notion of repealing this important Consumer Protection. If it were the case that 'difficulties' were found in creating a new Directive because of the complexities of the market, why then are air passenger rights being strengthened along with a host of other areas? It's quite simple, a repeal of the PTD would be highly illogical and somewhat contrary to the stated aims of the Lisbon Treaty:

  1. Article 2E - This provides competancy to the EU to 'support, coordinate or supplement actions' in support of Member States to support Tourism;
  2. Title XXI - Article 176B - The EU will complement tourism by promoting competitiveness, encouraging a favourable environment and promoting good practice;
  3. Article 38, Charter of Fundamental Rights of the European Union (attached to the Treaty) - 'Union policies shall ensure a high level of consumer protection'.

Does repeal, of one of the most important pieces of Consumer Protection, seem a sensible idea?

A repeal in my view would create an imbalance in the operation of the single market, which is not just for the benefit of industry, but also should provide a benefit to EU citizens; is it being suggested that Consumers should suffer inequality of treatment in the single market over the desires of an industry?

In 2010 the rationale for repealing the Directive was that there were already sufficient laws in place to protect Consumers, primarily through the Unfair Commercial Practices Directive (implemented as the Unfair Trading Regulations in the UK). Since the arrival of that law, enforcement has been poor but in fairness, enforcement has had to contend with a poorly resourced and under-funded Trading Standards/OFT (is that deliberate I wonder?); it is no surprise that it has not benefitted holidaymakers and it was certainly not drafted with them in mind!

So let's play the scenario that the PTD is repealed, what would happen to the market? We suggest that:

  1. Consumers would be opened to unfettered and irresponsible sales;
  2. Anyone could set up a travel company and we would see the rise of the 'here today, gone tomorrow agency';
  3. Consumers would find it virtually impossible to pursue cases of illness, accident, injury or any other contractual claim - who would they claim from with the myriad of contracts that they would be expected to sort out?
  4. Consumers would be exposed to a wide variety of commercial practices & contracts that, without proper enforcement, see them suffer with a financial and personal detriment;
  5. Consumers would find that a greater number of sales would be affected outside the EU and away from the so-called 'self'regulated' protections;
  6. Travel Companies would be pitted against one another, each trying to outdo or outsmart the other - price wars would seem tame by comparison;
  7. We would see travel companies collapse on a wider scale than we see today;
  8. Standards in hotels or other leisure accommodation would fall as the result of repeal of the PTD - the years of effort and hard work would be lost;
  9. Travel Associations would be swamped by the 'self-regulatory' complaints and would have difficulty in finding a fair mediated solution for Consumers against the pressures of representing their members.

The wild-west would truely be upon us and the stated aim of the European Union to make tourism one of the great industries would lie in tatters.

The TTG article suggests that the difficulty is due to the fact that the civil servants of the EU cannot find a suitable solution on how to regulate so-called DIY holidays.  

It is no secret that we have long held that the vast majority of so-called DIY holidays are in fact Package Holidays and therefore come under the obligations and protections of the PTD.  Please tell me what the difference is between choosing a holiday from a hard copy brochure and buying online - I'll answer that, there isn't one?

We have made many contributions to this debate and provided suggestions on how to resolve the problem.  I have no problem with any company that wants to make money, and if they want to sell so-called DIY holidays, then any new PTD should place a requirement on such companies to set out notices very clearly for Consumers, as to the effect of making such a purchase (similar to cigarette packet warnings):

  1. The notice should appear on the front page of a website;
  2. It should occupy a prominent position;
  3. It should be of a minimum size and type-face and colour;
  4. It should be repeated throughout the booking process;
  5. It should be presented to the Consumer at the point of purchase as a pop-up box;
  6. The suggested text should read - "Warning!  If you book this holiday and become ill, you are not protected by the Package Travel Directive" (Where the word illness appears, replace it for, accident, name changes, hotel not available, injury, sexual assault, kids clubs problems, poor quality food - this list is not exhaustive);
  7. The Commission should promote a media campaign throughout the EU to advise Consumers of the differences in buying a DIY product over a Package Holiday product.

If we used these suggestions as a minimum, then this could potentially resolve the problem.  

Companies would have the choice:

  1. Sell a Package Holiday with FULL Consumer protections, or
  2. Sell Component or DIY Holidays with CLEAR WARNINGS that you have no protections.

Now what could possibly be the problem with that?

We could all then concentrate on improving/refining the current Directive for the benefit of all.

I really look forward to the publication of the new Directive and I can assure everyone, our Consumer reports will be published throughout the process and we will be making our representations to the EU Parliament to defend the Consumer position!

Tags: Package Travel Regulations Package Travel Directive Lisbon Treaty Charter on Fundamental Freedoms of the European Union DIY Holidays Package Holidays Holiday Complaints ATA TTG ABTA EU Commission EU Parliament

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