November 2015 saw the adoption of the new European Package Travel Directive – “the PTD” The UK has until January 1 2018 to incorporate the PTD into UK legislation and it will be applicable from July 1 2018, repealing the current Package Travel, Package Holidays and Package Tours Regulations 1992 (as amended).

The PTD widens the definition of a ‘package’ holiday with the result that more holidays will be within the scope of the PTD.  This is likely to increase the number of claims presented to tour operators based on the traditional slip or holiday illness type claim as it is reported that an extra 120 million consumers Europe wide will be covered.  

In addition to this increase in claims, there are likely to be more issues for tour operators as one of the important changes is to the cancellation rights of a consumer. The PTD recognises that people often book holidays in advance, and there can be unforeseen circumstances that happen post booking but prior to departure that would make travel unadvisable.

Article 12 of the PTD provides that a consumer can cancel before departure and crucially for no fee, 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 which significantly affect the carriage of passengers to the destination.”

This is wider than current legislation. It would clearly cover a natural disaster but it will be open to interpretation and is likely to give rise to legal claims (by tour operators when a consumer has cancelled) to test the scope of the right to cancel the contract. The tour operator presently decides what is a significant situation.  Under the PTD, that decision will be the consumers.

For example, how proximate does the “unavoidable and extraordinary circumstance” have to be – if there is a communicable disease in a town does that entitle a consumer to cancel their holiday to a geographically different part of a country; how immediate is immediate and is it measured in distance or time?

It is for the consumer to exercise the right to cancel and it will be interesting to see how tour operators respond. Potentially, tour operators are likely to face more instances where consumers cancel their travel plans; some will be entirely reasonable, for example an act of terrorism in the city they were planning to visit or travel through, others may be more spurious.

The upshot is likely to be that tour operators will end up with capacity at destinations that they previously thought were fully booked.  Tour operators may be able to insure against such circumstances and may find it prudent to check their contracts with their hotel suppliers to see if they too have a “get out clause” if the consumer pleads the right to a free cancellation against the tour operator.  The contract with the consumer will require thorough review to make sure the new requirements in the PTD are dealt with.  

A consultation on implementing the PTD into UK legislation is due in 2016 – this may iron out some of the potential issues.