The first point to consider is whether the Covid-19 coronavirus is considered an unavoidable and extraordinary circumstance (UEC).

This will depend on the advice being given by various governments relating to the coronavirus. If the UK Foreign Office (FCO) advises against travel to a particular country due to coronavirus, then it will be considered a UEC.

If the change in FCO advice means that customers can no longer travel to their chosen destination, where the customer has booked a package holiday, under the Package Travel Regulations (PTRs), customers are entitled to cancel their holiday and receive a full refund of monies paid if they are due to travel imminently*.

However, my advice to agents or package organisers would be to offer the following options first:

• Offer a delayed departure date to the customer, although whether this is feasible will depend on the destination. It’s also worth bearing in mind that we have no idea how long this epidemic is going to continue, so this may not be a feasible option.
• A better option may be to offer customers an alternative destination where there aren’t the same restrictions. If the alternative is of a lower standard or value, though, customers are entitled to a price reduction.
• If the customer is not prepared to accept either option, then they should be allowed to cancel the holiday and given a full refund. No compensation is payable to the customer since it’s a UEC. Refunds should be made within 14 days of the cancellation date.

Package organisers may also be affected where the governments of other countries place restrictions on who can travel there. This is a change of government advice/entry requirements for a destination. If this means that certain customers no longer meet the entry requirement for their booked destination, there is an argument that this falls within the scope of UEC and customers have an automatic right to cancel their booking. However, this is a grey area and arguments can be made either way. For example, where a tour operators booking conditions state that entry requirements for the destination are the customer’s own responsibility, you could argue that customers are liable for any failure to meet such entry requirements, and as such do not have the right to free cancellation. 

*What defines “imminent”?

It’s difficult to place a timescale on this, but I would recommend reviewing the situation on a three- or four-week rolling basis. If customers wish to cancel their trip and it’s more than four weeks away, for example, if the organiser believes there is a realistic prospect of the package going ahead on the basis that the FCO advice may change again to allow for travel, they don’t have to offer free cancellation. If customers still insist on cancelling their trip, package organisers can impose their standard cancellation charges. However, this is a commercial decision to make for package organisers, and some package organisers are offering more generous cancellation terms. 

Lastly – we have a really tricky ongoing situation with the hotel in Tenerife, where customers are currently being held in quarantine. What does this mean for package organisers? I’ve reviewed the PTRs and actually the obligations on package organisers in these circumstances are limited. 

My reasoning for this is that even though customers are being quarantined, they are still being provided with the services (being the hotel), and the organiser is still able to provide the customer’s return flight home.

If the customer is unable to fly home on their return date, this is not due to any fault on the part of the organiser or due to the organiser’s failure to provide the flight home. As such, the organiser is not under an obligation to pay for a replacement flight home for the customer – and should direct customers to their travel insurance (and travel insurance should cover this!).

Organisers have an obligation to provide prompt assistance in these circumstances – but this does not extend to paying for a return flight as the organiser is still able to provide the customer’s return flight as per the package travel contract. 

Farina Azam is partner and travel lead at Kemp Little.