Council adopts position on the revised package travel directive

The Council adopted its position (negotiating mandate) on a revised directive on package travel to make the protection of travellers more effective and to simplify certain aspects of the 2015 Directive.

The revised text aims to strengthen travellers’ rights and clarify the obligations of package organisers on issues such as refunds, insolvency protection or on the use of vouchers. Events like the Thomas Cook bankruptcy in 2019 and the COVID-19 pandemic had a significant impact on both the travel industry and travellers. These events brought to light the weaknesses in the business models and traveller protection mechanisms in the existing package travel directive.

The Council position clarifies the scope of the package travel directive by giving a better definition of ‘package’ and by leaving out the so-called ‘linked travel arrangements’ from the scope for the sake of legal certainty. It introduces an information obligation which travel companies have to comply with. It also extends the right of travellers to cancel packages without paying termination fees, sets the rules on the use of vouchers as an alternative to a refund, and strengthens the protection of travellers in case of insolvency of a travel organiser.

Reinforced traveller rights

Package travels are a popular choice for tourists. In package travels, the organiser combines different travel or touristic services such as flights, transfers, meals, accommodation, excursions, etc. They are bought both online and offline, and can be offered by tour operators, travel agencies, carriers, and other operators. The range of different products and operators (both organisers and service providers) that intervene in a package travel make it complicated for travellers to recover their payments when for example the package, or part of it, is cancelled in case of an unexpected situations like an epidemic, a war, or a natural disaster.

The bankruptcy of big package travel company, such as Thomas Cook in 2019, and the COVID-19 crisis made it clear that traveller protection in case of major unexpected events needed to be reinforced. In October 2023, the Commission submitted a revision of the 2015 package travel directive, with strengthened traveller protection. The measures suggested in the proposal include the following:

• Package organisers will have the right to a refund from service providers (airlines, hotels, transfer companies, etc.) within seven days of cancellation. This will enable them to refund their clients within two weeks, as imposed by the 2015 directive.
• Advance payments by travellers may not be more than 25% of the package price, except in justified circumstances (e.g. when the package organiser must pay the full flight-ticket price to the airline in advance) and organisers may not ask for the total payment any earlier than 28 days before the start of the package.
• If cancellation occurs, companies can offer travellers a voucher. Travellers should receive clear information on the characteristics and advantages of the voucher before accepting it, and they will retain the right to insist on a refund.
• Vouchers are automatically refundable and covered by insolvency protection.

Council's mandate

The Council’s negotiating mandate supports the main objectives of the Commission’s proposal but introduces some improvements by clarifying the scope of the 2015 directive and strengthening the protection and rights of travellers.

In particular, the Council’s mandate limits the scope of the directive by giving a clearer definition of ‘package travel’ and by leaving out the so-called ‘linked travel arrangements’ (LTAs) from the scope to improve legal certainty of the text.

The Council’s position enhances the protection of travellers who are invited to conclude an additional contract of a different type of travel service (e.g. car rental or a transfer) when buying it online. In these cases, the trader is required to inform the traveller by a clear, visible notice before the new contract is concluded that the second booking does (or does not) constitute a package.

The negotiating mandate also strengthens the rights of travellers when they decide to cancel the package due to extraordinary and unavoidable circumstances, in either the place of departure or the destination. In such cases, travellers should be able to cancel the package without paying a termination fee.

For vouchers, the Council’s position describes their amounts and the arrangements for their use in detail to make them more attractive and to harmonise the rules at EU level. Furthermore, member states must ensure that if a trader becomes insolvent, travellers should be informed that refunds will be provided, at the latest, nine months after the organiser’s insolvency. Member states may choose to make this period even shorter. The directive will also cover the publication of information about organisers that comply with their insolvency protection obligations.

Next steps

The negotiating mandate agreed today formalises the Council's negotiating position. It provides the Council presidency with a mandate for negotiations with the European Parliament, which will start as soon as the Parliament has adopted its position.

Background

On 29 November 2023, the Commission adopted a package of proposals (the ‘passenger mobility package’) to improve the experience of passengers and travellers by strengthening their rights. They included a revision of the regulations on passenger rights, a proposal on passenger rights in the context of multimodal journeys, and the revision of the 2015 package travel directive (Directive (EU) 2015/2302).

Tourism plays an important role in the global economy, directly and indirectly accounting for over 10% of global gross domestic product. Driven by rising incomes, falling travel-related costs and an increasing range of available tourism activities, the global number of tourists rose from 680 million in 2000 to over 1.5 billion in 2019. The European Union is the world’s main tourist destination, receiving approximately two-thirds of all international tourist arrivals in 2022. The tourism industry plays a key role in the EU economy, with some 2.3 million tourism businesses and 10.9 million people working in the industry in 2020.