14 Apr

Customer information obligations – the fallout from COVID-19

The following article was written by Joanna Kolatsis, Director of ABTA Partner Themis Advisory for the spring edition of Travel Law Today, which can be downloaded here.  Joanna will also be speaking on the same topic at ABTA's upcoming virtual Travel Law seminar on 19 May 2021, visit abta.com/abtaevents to find out more and register. Early bird discounts are available until 7 May.

The COVID-19 pandemic created the Package Travel and Linked Travel Arrangement Regulations 2018 (PTR) first real challenge since their inception. The industry was familiar with the application of the regulations in normal trading conditions, but the pandemic turned their practical application on its head overnight.

What is crucial to remember is that the regulations have not changed but we have been forced to rethink the way in which we deliver information to travellers. Customers are reassessing the way in which they book travel and are seeking more detailed information before they book.

The PTR information obligations are listed under Part 2, and more specifically, Regulations 4,5,6 and 7, along with Schedules to the PTR, which detail the information to be provided to travellers prior to booking, key rights and the minimum requirements for the package travel contract itself. In practical terms, the pandemic means it is no longer a case of providing the standard information about a trip and watching travellers walk off into the sunset. Travel now comes with several conditions, at least for the foreseeable future, and customers must be made aware of them.

Foreseeable travel conditions considered at the time of writing

  • Travel restrictions/prohibitions – are there any restrictions in place preventing travel, is there an FCDO advisory against all non-essential travel, and does the customer have a legally permitted reason to travel? What are the implications for the customer if they choose to travel irrespective of this? Bear in mind that it’s not illegal to book travel, but it may be illegal to physically travel until restrictions are lifted.
  • Declaration to travel – the customer will have to provide a mandatory Declaration to Travel form (from 8 March 2021). This will require the customer to declare their reasons for travel and they may incur a fine if not truthful.
  • Pre-departure testing – does the destination require a negative PCR (or equivalent) test prior to travel and what
  • are the criteria?
  • Destination testing – does the destination require further testing on arrival?
  • Quarantine – are there quarantine requirements on arrival in the destination? (See below).
  • Destination restrictions – there may be local restrictions in place including mandatory masks, curfews and restricted operation of certain services.
  • Return requirements – as well as potential quarantine, are there other formalities? Currently Passenger Locator Forms are required for all travellers returning to the UK.
  • Travel insurance – does the customer have suitable travel insurance cover for the anticipated risks, including non-refundable cancellation costs and medical treatment?

Where a customer makes a booking and, due to a change in restrictions or requirements, they wish to cancel or amend their booking, there are further obligations to consider. These are laid down in Part 3 of the PTR – changes to the package travel contract before the start of the package. These include the right to transfer the package to another traveller, alteration of the contract price or terms, termination of the package contract by the traveller or the organiser and refunds in the event of termination.

Broad guidance for assessing cancellation or amendment rights

  • FCDO advising against travel – if an advisory is in place at the time of the scheduled departure, you can offer an alternative. If this is not accepted, the customer is usually entitled to a full refund.
  • If the destination will not accept UK arrivals – the trip cannot go ahead and this would be considered an unavoidable and extraordinary circumstance under the PTR because the tour operator is unable to provide the travel arrangements. The customer would be entitled to a full refund (however, no compensation is due in this scenario).
  • Destination quarantine – this would be considered a significant change to the holiday, triggering a right to a full refund.
  • No FCDO advisory in place and no ban on UK arrivals – you must still assess whether the trip can go ahead as planned. This may be due to local restrictions in place affecting the customer’s trip or reduced local services. If any of these issues represent a significant affect or change to the package, this could trigger the right to a full refund. This should be assessed on a case-by-case basis.
  • UK Government guidance – the general travel legal point of view is that the PTR cancellation rights do not apply to general government guidance not to travel, and no refund is due if the tour operator is able to provide the services contracted. The customer can only cancel in accordance with the cancellation terms and charges applicable and they should be encouraged to check whether their travel insurance provides cover.
  • UK legal lockdowns – the consensus here is that this is a frustration of contract issue (please see below). A refund is due to the customer but tour operators can retain expenses/costs incurred.
  • UK quarantine on return – this does not trigger a right to a refund or cancellation if the trip can still go ahead as planned and the services can be provided. If a customer chooses to cancel (and not accept any alternatives offered), full cancellation terms will apply.
  • COVID-related issues – if a customer fails a test or contracts COVID-19, this does not trigger a right to a refund under the PTR and the customer should speak to their travel insurer.
  • Frustration – the Competition and Markets Authority (CMA) is of the view that frustration of contract can apply where the PTR do not. Frustration can apply if something occurs after the contract is entered into that makes it impossible (or potentially illegal) to continue. It only applies where the regulations do not have specific provisions in place eg for cancellations or significant changes. The CMA believes that lockdowns are captured. If frustration does apply, the contract comes to an end and a refund should be provided to the customer. However, if the tour operator has incurred costs that it cannot recover it should be entitled to deduct these costs from any refund due.

It goes without saying that failure to comply with your obligations under the PTR could lead to enforcement action. Consumer groups and the CMA are taking an active interest in travel companies due to the pandemic and it’s important to remain diligent.