Six members of the European Council of Ministers, which signed off a new Package Travel Directive last week, broke ranks immediately by issuing a statement insisting: “We cannot support this proposal.”
The ministers from Ireland, Belgium, the Netherlands, Estonia, Slovakia and Malta described the directive as “complicated”, expressed “strong doubts” that it could be enforced and warned it “risks stifling innovation and hindering competitiveness”.
Christoph Klenner (pictured), secretary general of the European Technology and Travel Services Association (Ettsa), described the statement as highly unusual, saying: “I’ve not seen this happen in 10 years. They are not happy with the process.”
Ettsa issued a statement on behalf of online travel agents Expedia, eBookers, Orbitz, eDreams, Go Voyages, Lastminute.com and Opodo, and technology companies Amadeus, Travelport and Sabre. It warned of “massive consumer confusion” and suggested the directive could be “impossible to implement and comply with”.
Klenner predicted the plan to impose financial protection on click-through bookings or ‘linked travel arrangements’ (LTAs) between sites would lead “many traders to stop offering” them.
“LTAs cover situations where online companies have a marketing agreement,” he said. “Say you confirm a booking on an airline site. If the airline works with an OTA, it offers you hotel options. When you click on an offer, you’re sent to a separate site. Your dates and destination are already entered, so you don’t need to start again. That would be a linked travel arrangement.
“We don’t have a problem that these will be subject to legal requirements. Tour operators suggest it’s our intention to dodge the rules, but that is untrue. The problem is with compliance.”
The second trader involved in a click‑through agreement would be aware of linked bookings, he said, but the first would not – consumers might click through and not book anything. “The [first] trader will have to reconcile which customers make [second] bookings,” said Klenner. “It could force traders to exchange passenger details. It will be cost-prohibitive for many companies to comply.”
At the same time, the directive defines click-through bookings that transfer passengers’ names, email addresses and payment details as packages.
Klenner said the proposals could mean OTAs divulging “competitively sensitive information” because airlines would need to know the conversion rates. Most carriers use more than one OTA for hotel content and Klenner said: “It would give airlines a huge competitive advantage.”
He argued the directive risks breaches of data-protection rules and raises “competition law concerns”. But he said: “It’s not too late to address. What is important is how EU member states interpret the text.
“The text says if a second travel service is offered in a targeted manner it gives rise to an LTA. What does ‘in a targeted manner’ mean? It’s much too vague. If two traders exchange customer data, it should be an LTA.”
Klenner described it as “bizarre” that Google ads would fall outside the directive, saying: “Google will be able to serve any kind of ad [on a travel site] without being subject to the rules, whereas if two companies have an agreement and serve an ad, they will be subject to the rules. It seems the EC has given Google a competitive advantage.”
The directive is due to come into force by late 2017.