On the Beach and ABTA disagree
Everyone knows that the travel industry is hurting more than most because of Covid-19 and one of the more contentious issues that has emerged is whether or not tour operators should refund travellers going to destinations where the FCO has advised against non-essential travel.
ABTA’s line on this is that all their members are obliged to give refunds if the travellers wish to cancel. However On the Beach have come out strongly against this view. In a statement issued over the weekend their CEO Simon Cooper had this to say:
“Contrary to common misconceptions, ABTA is an industry body, of which membership for travel businesses is not mandatory. It is not a regulator or a lawmaker. Industry practice, mainly driven by ABTA’s historic guidance, has been to treat the Foreign & Commonwealth Office (FCO) as a trigger for full cancellation and refund rights for customers. Industry practice is, by its definition, ‘the usual thing that is done in a particular situation’, but it is not law, and it is something which can and should change and evolve over time and should certainly change in response to this highly unusual situation.”
He went on to say:
“The legal position is set out in Regulation 12(7) of the Package Travel Regulations (PTRs). The legal position is very clear that FCO advice does not automatically trigger Reg 12(7). The ‘unavoidable and extraordinary’ circumstances must be present at the destination or in its immediate vicinity and also, for that particular holiday/booking, significantly affect the performance of the package or the carriage of customers to the destination. Whether the circumstances in question ‘significantly affect’ the package must be assessed on a case by case basis, which is the approach that OTB is taking.”
What has prompted this approach is that for many of the packages organised by On the Beach the accommodation is still available and the flights are still going – meaning that if refunds are made then OTB may have to pick up whole or part of the cost because their suppliers, understandably, will not refund them. They do however commit to making refunds of accommodation and transfer costs, and airline costs, if the airlines reimburse OTB.
In time, cases will reach court where the interpretation of Reg. 12(7) and its application to the current set of circumstances will have to be decided. Given that the Regulation is derived from the EU Directive on Package Travel then one straw in the wind is Para. 35 of the Preamble which states:
“They [Travellers] should also have the right to terminate the package travel contract without paying any termination fee where unavoidable and extraordinary circumstances will significantly affect the performance of the package. This may cover for example warfare, other serious security problems such as terrorism, significant risks to human health such as the outbreak of a serious disease at the travel destination, or natural disasters such as floods, earthquakes or weather conditions which make it impossible to travel safely to the destination as agreed in the package travel contract.”
What is meant by significantly affecting the performance of the package? – Having to wear a face mask in the hotel: having to socially distance; not having buffet service? What is the destination? – A particular resort or the Canaries or Spain? Has there been an outbreak of a serious disease in the immediate vicinity of the destination? In due course some unfortunate judge will have to decide this.