A leading authority on travel law in Germany has proposed the German government use its presidency of the EU to modify consumers’ rights to refunds on package holidays to reduce the burden of Covid cancellations.
Professor Ernst Führich called for reform of the EU Package Travel Directive (PTD) to make consumers pay 50% of the costs of cancellation.
Führich, a retired judge and professor of travel law, advised the German government on the regulations to comply with the EU Package Travel Directives of 1990 and 2018.
He wrote an open letter to the German Federal Minister of Justice and Consumer Protection Christine Lambrecht last month suggesting travellers bear 50% of the cancellation costs due to a pandemic, arguing that consumers know “the health risks [when] booking international package tours”.
The professor noted that, at present, tour operators “alone must bear all financial risk” while consumers are fully protected despite having “their eyes open at the time of the Corona pandemic”.
He said the PTD requirement on travel organisers to refund consumers within 14 days had led to “collapse in the German but also international tourism industry”.
The entitlement to a refund is laid out in the PTD on which the UK, German and all EU member state package-travel regulations are based.
This entitles a customer to terminate a package holiday contract with a full refund “in the event of unavoidable and extraordinary circumstances occurring at the place of destination or its immediate vicinity and significantly affecting the performance of the package or . . . the carriage of passengers to the destination”.
The European Commission declared Covid-19 an “unavoidable and extraordinary circumstance” early in the pandemic.
Führich proposes Germany use its current EU presidency to initiate reform of the directive, which is due for review by 2021. Germany took over the presidency on July 1 until the end of the year.
In his letter, the professor wrote: “I propose the package traveller pays half . . . when cancelling the travel contract due to a worldwide pandemic.
“Tour operators are endangered in their existence by exempting their customers from any costs. This is especially true for small and medium-sized businesses.
“Travellers know the health risks under which they book package tours. Those who take this risk should pay 50% of the cancellation fee due.”
He noted “the courts of EU member states will have to examine whether the package travel law can answer the many legal questions raised” and argued: “Since further pandemics are to be expected, I propose to adapt the PTD to the consequences and experiences [of] the Covid 19 pandemic.”
Führich insisted: “This regulation does not appear to be appropriate with regard to the economic consequences . . . caused by a worldwide pandemic.
“Tour operators have provided considerable advance services, distribution via stationary and digital travel agents and with service providers such as airlines and accommodation companies. These travel companies are extremely endangered due to a lack of liquidity and missing repayments by service providers.
“On the other hand, the traveller knows today under which health risks he books national and international package tours.
“It seems unreasonable . . . to let the risks of a pandemic be borne by the operator alone. It is also not appropriate to indirectly burden the taxpayer with government financial security measures in order to secure more or less expensive recreational trips by people willing to travel.
“I therefore suggest that, in the event the package traveller withdraws [cancels] before the start of the trip for reasons of a worldwide pandemic, the traveller should contribute to the tour operator’s advance costs by halving the contractually due cancellation compensation.”