The UK government recently confirmed the introduction of a three-tier traffic light system to categorise countries by Covid risk ahead of the resumption of international travel from England.
Unfortunately, we do not yet know which countries will be placed in each category, although this is expected in early May.
We do, however, have a good indication as to what rules will be in place depending on whether a country is categorised "red", "amber" or "green".
Countries will be categorised based on Covid-19 risk, including levels of Covid vaccination and success of vaccination programmes.
The measures only govern the rules for returning to the UK; individual countries may have their own additional Covid border controls and measures travellers will need to comply with to enter.
The Global Travel Taskforce has confirmed the government will publish a green list, highlighting the countries with the lowest perceived Covid risk, but that still doesn’t mean your clients can just hop on a plane as they once did.
If your customer has a green country booked then, provided you can supply the services they have booked, the booking should continue as normal. Customers may not want to travel if they have to pay an additional fee for a PCR test but, as this does not trigger the right to a full refund under the Package Travel Regulations (PTRs), they will be subject to the normal cancellation charges as set out in your booking conditions should they wish to cancel for this reason.
The amber category is the most uncertain and certainly the trickiest for travel companies to deal with. However, as with the above, if it is just the case that the customer has to self-isolate upon their return to the UK and pay for a PCR test, this does not trigger the right to a full refund under the PTRs because it doesn’t affect your ability to provide the travel services. Therefore, if they choose to cancel for this reason, they would be subject to the cancellation charges as should be set out in your booking conditions, or otherwise advised to the customer.
The most challenging aspect is the fact that there is a higher risk in these countries and so the customer may be unwilling to take that risk. This would be a disinclination to travel, which does not trigger the right to a full refund under the PTRs. However, it is possible that the Competition and Markets Authority will take a different view here and, while the CMA guidance is not law, if they decided to take a stance and start court action on this issue there could be some battles ahead and so the industry should bear that in mind if they are refusing refunds.
The red category is also pretty straightforward, especially if the Foreign Office is advising against all but essential travel to these countries. While the PTRs do not specifically mention FCDO advice and so there are arguments as to whether this does trigger the right to a full refund in accordance with Regulation 13 of the PTRs, the general stance within the industry is to refund customers in full in these circumstances and it may even be a requirement if you’re a member of a particular industry body.
There will also be a "green watchlist", which will help travellers and businesses in the travel industry to identify countries most at risk of moving from green to amber. The government will also formally review the measures on the 28 June, 31 July and 1 October, but have stressed that they will not hesitate to change countries from green to amber or red if the risk level increases. Whether the watchlist will be in a published form remains to be seen.
The taskforce has also made recommendations in relation to customer confidence and clarity and will be introducing a new Covid-19 passenger charter that will set out consumer rights and responsibilities. The taskforce has said it will expect the travel industry to be "flexible" when it comes to consumer bookings, but we have no further details yet as to what will be included in this charter and how flexible the taskforce and government expect the industry to be.
The taskforce has confirmed the government will work with regulators across all modes of transport, including aviation. The government will be reforming the enforcement powers that the CAA has in respect of airlines that breach consumer rights and more detail of this is due to be published later this year. This is set to build on the CMA’s investigations on the practices of those operating within the industry, in particular their practices surrounding refunds.
If you are legally required to provide your customers with a full refund then, unless you have very favourable terms in place with your suppliers or your suppliers are rather understanding, it is likely to be the case that you would have difficulty recovering these costs from your suppliers. This would mean you would be out of pocket if you refunded these customers or you would be acting in breach of the PTRs by failing to refund.
It would be worth getting ahead of this now, if you have the time, so that you understand your potential risks here. Take a look at your existing supplier agreements and establish what the cancellation terms are. If you don’t have any written terms, consider speaking to your suppliers (if you have a good relationship with them) to discuss what will happen if you need to cancel in such circumstances.
Given that it appears Covid-19 will be around for the foreseeable future, we would also strongly recommend taking measures now to ensure that you have written contracts in place with all of your suppliers so that you have binding terms to rely on in future should you need to.
It is key to note that any amended booking conditions will only apply to future bookings and not bookings that have been made but are yet to take place. Bookings which have already been taken will be based on the booking conditions which you had in place at the time the contract was made. Alternatively, it could be helpful to have an FAQ section on your website that deals with the most likely questions you would be asked by customers in relation to this traffic light system.
Sophie Brazier is a trainee solicitor at specialist travel legal firm Travlaw.