The change to FCO advice could potentially be good news. It takes away the uncertainty that is currently hanging over international travel with many travel companies and customers at the mercy of last-minute changes to entry requirements by countries worldwide. But more importantly, it strengthens claims made by customers on their travel insurance – and could put travel companies in a better position as a result.  

Do package organisers need to refund customers now that the FCO has advised against all but essential international travel for the next 30 days?

Generally speaking, when the FCO advises against all but essential travel to a particular destination, it would invoke a customer’s right to cancel under Reg. 12(7) of the Package Travel Regulations 2018. However, these are unprecedented times, and the FCO advice doesn’t relate to any particular destination, but all British citizens travelling worldwide, so there is an argument that normal rules shouldn’t apply. 

Reg 12(7) allows customers to cancel their trip without paying cancellation fees where there are “unavoidable and extraordinary circumstances” occurring at the destination or its immediate vicinity and affecting performance of the package or transport arrangements to the destination. Whether Reg 12(7) applies comes down to whether the package holiday can be performed as contracted – and this will depend on whether flights are still operating and hotels are still open, as well as any restrictions being placed on social contact at the destination.   

Where customers are due to travel within the next 30 days and wish to cancel their trip, my advice would be as follows: Push customers to make a claim on their travel insurance. Where customers purchased their travel insurance before coronavirus was an issue, their insurance policy should cover them now that they can no longer travel due to the FCO advice.

If customers do not have travel insurance, or if their insurer refuses to cover them: offer customers a deferred departure date – postponement is far preferable to a refund; If customers cannot make a claim on travel insurance and do not wish to accept a postponement, then consider whether customers have the right to a refund under Reg 12(7) – could you still perform the package as contracted? The answer to this will depend on individual bookings and destinations. 

What about customers whose holiday is more than 30 days away?

The current FCO advice only applies to people due to travel in the next 30 days and does not apply to people due to travel beyond this period. Provided the package can still be performed (including flights, hotels and all other contracted elements), then if a customer wishes to cancel their holiday, the organiser is entitled to enforce its standard cancellation charges. It’s unlikely travel insurance would cover the customer in these circumstances either. Some travel companies are allowing customers to defer their departure date due to the current circumstances and whilst this is a wise commercial decision (it will generate some goodwill with customers), there’s no legal obligation to do so. 

Farina Azam is commercial technology partner at Kemp Little