The Czech tourist industry will be transformed significantly by the EU Directive,

with client protection and scope of information they receive expanding to an unseen degree

Prague, 19 May 2016 – In response to the rapidly changing methods of tour package and travel services sales, the EU has enacted a new Directive that significantly boosts consumer protection and the provision of information about travel services to customers. In addition to the existing compulsory tour operator bankruptcy insurance, it extends protection to those clients who put their trip together combining various individual services. The Directive introduces a new term for such travel – linked travel arrangements. Furthermore, the new Directive also significantly tightens the obligation of various entities operating in the tourism industry to inform clients. 

The new Directive is to be transposed to the national legislation of EU member states by the end of 2017.  The main objective is a further expansion of client protection in tourism.  One of the most important requirements is the protection of money invested by clients into the purchase of travel services.  Today, tour operators must be insured against bankruptcy such that clients are provided full compensation for the package they purchased in the event of the tour operator’s bankruptcy.  “According to the new Directive, for example a ticket vendor that also brokers accommodation will be liable for damages in the event of its bankruptcy.  Essentially, the money invested will enjoy the same protection as has thus far been afforded to tour packages.  The main objective is to increase protection for consumers who put their vacations together themselves, combining various services,” explains Director of Insurance Administration at ERV Evropská pojišťovna Štěpán Landík.

Change in price and withdrawal from agreement
An organiser may only change the price of travel services in specific cases, which include a change in the price of carriage, exchange rate, taxes, or fees on travel services.  Any such change must be supported with a relevant calculation.  If the organiser failed to do this, a client would be entitled to a refund of the entire price of the trip fee-free.  If the change is made fewer than 20 days prior to departure, the client has that right automatically.  The same will apply if the price increases by more than 8% at any point.
The client will also be entitled to terminate the agreement free of a cancellation fee in the event that inevitable and extraordinary events occur at the destination or in its immediate vicinity that have a significant impact on the provision of services or on the carriage of persons to the destination.  These include a terrorist attack or a natural catastrophe.  “Clients will appreciate the possibility of transferring their travel agreement to someone else at least seven days prior to departure, for a reasonable fee,” adds Štěpán Landík. 

Broader liability of organisers and merchants
A tour operator or a tourist agent will have to take care if his clients should they encounter difficulties.  If it is impossible to carry clients home due to extraordinary circumstances, it will have to arrange accommodation for them, at its own expense, if possible in an equivalent category, for at least three days.
Implementing the European tourism directive into Czech law will be no easy task.  “In the upcoming months, it will be very important for entities in the Czech tourist industry to come to an agreement with state authorities on many fundamental issues.  In particular as concerns the practical specification of packages and linked travel arrangements and liability for them,” adds Štěpán Landík.  Another important point will be the specification of public-law sanctions for a breach of the rules.

Vlastimil Divoký
Marketing and Communications Manager
ERV Evropská pojišťovna