Travel companies across Europe are being forced to flout Package Travel Directive (PTD) rules on consumer refunds or face financial ruin.
The governments of Italy, France, Belgium and Denmark have confirmed vouchers will suffice in place of cash refunds despite the PTD requiring consumers be refunded within 14 days, the German government is pressing the European Commission to sanction a relaxation of the rules and Abta has lobbied the UK government to do the same.
But tour operators and agents are in any case looking to replace refunds with vouchers or refund credit notes to stave off insolvency, with a leading industry lawyer in Germany reporting “no one is paying money”.
Leading UK industry lawyer Stephen Mason, senior counsel at Travlaw, said: “Refunds are due for cancelled holidays but nobody can afford to pay them and suppliers are not giving money back.”
He told an International Travel Law Network videoconference: “The advice we’re giving [industry] clients is not so much what the law says but solutions that might work in the real world regardless of whether it’s the strict letter of the PTD.”
Klaus Siebert, partner at law firm Engels-Siebert in Dusseldorf, said: “What happens now in Germany is that all tour operators and cruise companies offer credit refunds – future credits or vouchers – with different validities, from up to the end of the year to up to December 2021. Of course, consumer associations say this is not compliant and there needs to be payment in 14 days.
“The German travel association is discussing this with the government and the government has called on the EC to say ‘bring out guidelines’.”
Siebert said: “Italy, France, Belgium, Denmark and others have put in place a voucher solution. In Germany, that is not in place but all the actors in the market work with a sort of voucher solution. There is no one paying back [money].”
This is despite vouchers being outside the insolvency protection regime in Germany. Siebert said: “Credit refund notes or travel vouchers are definitely not backed [protected]. All travel vouchers already issued are not covered for insolvency risks.”
Micheal Wukoschitz, of CKW Lawyers in Vienna, said: “In Austria, it’s the same. All my clients try to offer vouchers to customers, sometimes with some add-on. But no traveller can be forced to accept such a voucher because of the PTD.
“Austrian travel associations are trying to get a solution like the Italian or Belgian system, but there is great opposition from consumer associations.”
The lawyers point out consumers are unlikely to recover money through the courts as legal systems across Europe are barely functioning.
Wukoschitz said: “All court hearings are cancelled or delayed. If a traveller filed a lawsuit it would take a lot of time.”
Mason agreed, saying: “The UK court system is not functioning.
“By the time consumers could enforce their rights, holidays may have started again.”