IRISH TRAVELLERS who arrange their own holiday packages using combinations of flights, hotel and car rentals will enjoy greater consumer protection under new measures to be unveiled by the European Commission today.
The commission plans to extend the financial protection that applies to traditional package holidays in the event of something going wrong to so-called “dynamic packages” arranged by the consumer.
Almost half of Irish travellers arrange their own dynamic packages by, for example, booking flights on an airline website and then booking a car rental from a partner company linked from the same website.
However, dynamic packages are not currently covered by the protections in the EU’s package travel directive dating from 1990.
Under the proposals, the same requirements as currently apply to traditional packages – to provide consumers with information, liability for sub-standard services and protection against insolvency – would apply to the elements of a dynamic holiday package.
Travel agents selling traditional packages have long complained that they are unfairly disadvantaged because they are subject to stringent regulations that do not apply to airlines and other providers of online dynamic packages. The recent spate of airlines going bust has also heightened concern about the lack of consumer protection in the event of insolvency.
The consultation paper to be published by the commission today proposes that basic insolvency protection, such as the right to a refund or to cancel without a penalty, should apply to standalone airline tickets and dynamic packages and not just traditional holiday packages.
“We need tough protection that gives all consumers booking a package holiday the peace of mind they deserve, and we need a level playing field so businesses compete on equal term,” said EU consumer commissioner Meglena Kuneva.
“I am particularly concerned about the issue of insolvency. Anyone who saw the TV pictures of thousands of holidaymakers stranded at airports after bankruptcies from Sky Europe to XL, Futura and Zoom, knows that now is the right time to ask tough questions about extending basic insolvency protection to consumers across the board.”
Research carried out for the commission shows that two-thirds of EU consumers mistakenly believe they are legally protected when they book dynamic packages. The average loss to the consumer when a dynamic package goes wrong is estimated at almost €600.
The internet has revolutionised the travel industry and a majority of EU consumers now organise their holidays themselves rather than buy packages. The online travel sector did not exist at the time the EU package travel directive was introduced and largely falls outside its ambit.
In 1997, for example, 98 per cent of passengers travelling from the UK were protected by the directive, but by 2005 this figure had fallen to less than 50 per cent.
Between 2005 and 2008, 29 airlines went bankrupt, and the effect on holidaymakers varied depending on whether tickets were bought as part of a package.
The commission plans to consult with consumers and the travel industry up to February before introducing measures next year.