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11 March 2021 | The European Commission has published an assessment of the implementation of current Package Travel Directive. Full document available here. This is a necessary first step prior to any changes to existing arrangements. Given the effective failure of financial protection mechanisms during 2020, and the uncertainty related to cancellation rights, industry continue to push for short-term direction from the EC to help restore both business and consumer confidence.

European package travel regulation was introduced in 1990 to protect consumers. In practice, it also suppresses innovation and causes market confusion. Much of the growth in retail travel took place outside the scope of the 1990 directive. Its successor came into force in July 2018 (PTD2) and includes welcome modernisation: no more should brochures be reprinted if prices change, electronic updates will suffice; compliance in one EU state is sufficient to sell to consumers in another; the addition of an ancillary service may not necessarily constitute a package. It also introduced the concept of a ‘linked travel arrangement’ that can give rise to several liability, and may therefore deter collaboration within the supply chain.

What you need to know

  • PTD2 enables more cross-border selling
  • ‘Linked Travel Arrangements’ create liability for third-party performance
  • Not all travel service combinations give rise to a package

ETOA’s policy objectives

  • More value-adding with increased consumer choice across borders
  • Increased business awareness of opportunity and risk
  • Appropriate sector-specific protection for consumers

What we are doing

  • Participation in European Commission’s expert stakeholder group on PTD2
  • Ad hoc consultation and seminars
  • Research and reports

To succeed, European tourism needs a regulatory framework that encourages innovation and value-adding. As for tax, the higher the compliance load, the more it will happen elsewhere. While insolvency protection is desirable, what degree of sector-specific protection is necessary? How will the success of the new directive be judged? There has been extensive development of general consumer protection, through legislation, insurance and credit card protection. The EU’s 2004 air passenger regulation provided for compensation in the event of denied boarding, cancellation or long delay. The case for special protection for packages that do not include a significant travel component remains unproven.