The European Commission has rejected a German government scheme to replace cash refunds to consumers for cancelled holidays with vouchers.
German travel industry leaders called for the government to follow the lead of other EU member states and sanction a voucher scheme to replace cash refunds anyway.
The German government approved the voucher scheme in early April, agreeing a holiday-voucher expiry date of December 31, 2021, and agreed to guarantee insolvency protection for bookings converted to vouchers.
Thomas Bareiss, state secretary in the German economics ministry, defended the decision against criticism by consumer groups, saying: “The vouchers are a good compromise in this difficult situation.”
He insisted: “No customer should lose their money.”
However, the government sought approval from Brussels for the scheme and confirmation it would not be viewed as breaching the EU Package Travel Directive which requires consumers receive cash refunds within 14 days of cancellation of a package booking.
In the meantime, German travel organisers have offered customers financial incentives to accept the vouchers in place of cash refunds.
Now EU Commissioner for Justice Didier Reynders has said he does not support the German plan as vouchers should be voluntarily accepted by consumers.
This is despite the commissioner twice advising member states to find “flexible solutions” to demands for refunds, saying consumers “should consider accepting a voucher” during the Covid-19 crisis.
German travel industry association the DRV called the decision “a defeat for the German government and a heavy blow for the industry”.
The German government urged changes to EU consumer regulations in a conference of EU tourism ministers on Monday.
Bareiss warned travel companies risk “huge funding shortages” due to the volume of refund claims and called for changes to the rules at national level.
But on Tuesday, EU commissioner for transport Adina Valean told the transport committee of the European Parliament: “Travellers should retain their right to ask for a refund.”
Valean affirmed the EC does not wish to change consumers’ rights and said: “The vouchers need to be more attractive.”
A DRV survey last week suggested two out of three of the association’s members are at risk of insolvency and four out of five have applied for state financial help.
DRV president Norbert Fiebig warned: “The majority of travel agencies and tour operators will not survive this threat.”
The German government has already defied the EC on air passenger rights, suspending the requirement for airlines to refund customers for cancellations due to coronavirus.
The government ruled in early April that: “Direct repayments [by airlines] be made only in cases of hardship. In all other cases, customers shall receive vouchers valid until 31 December 2021. Customers not redeeming the voucher by that date shall then receive a refund.”
EU Regulation 261 on air passenger rights requires airlines pay refunds on cancellations within seven days.
