This article was written on March 23 and updated on April 9
The tourism sector is one of the most affected sectors by the corona virus at the moment. Hotels, bars, restaurants, airlines, tour operators and travel agencies have to cancel their services in great numbers. Every country where the Coronavirus struck is announcing lockdown measures. Ski resorts are closed, hotels no longer allowed to receive guests, meetings become impossible, events banned, etc.
The law protects travellers who booked a so-called package holiday. In principle, they will be fully reimbursed for their paid trip as soon as possible and in any case within 14 days after the cancellation. However, tour operators cannot fulfil this obligation in reality due to the large number of cancellations.
Crisis management by the government
The Belgian government issued a ministerial decree on the 19th of March 2020 to provide the travel sector with more financial breathing space. This measure is in addition to the support measures for entrepreneurs and the nuisance allowance by the Flanders Innovation & Entrepreneurship Agency. Tour operators can enjoy these measures when exceptional circumstances could jeopardise, in whole or in part, the proper functioning of the economy. The Coronavirus is a typical example of these exceptional circumstances. After all, the travel sector is severely affected by the large number of cancellations for package holidays.
On the 19th of March 2020 they decided that if a package holiday is cancelled due to the corona crisis, either by the tour operator or by the traveller, the tour operator is entitled to give him a voucher worth the amount paid instead of a refund.
In order to apply this arrangement, this voucher must meet 4 conditions:
- the voucher represents the full value of the amount paid by the traveller;
- the delivery of the voucher is free of charge;
- the voucher is valid for at least 1 year;
- the voucher explicitly states that it was delivered as a result of the Coronacrisis.
According to the decision, the traveller can’t refuse this voucher.
Time will tell
So, are you as a tour operator saved by this measure and can you oblige travellers to accept such a voucher?
Unfortunately we are not so sure of this… The measure is temporary and limited to what is strictly necessary. It came into effect on the 20th of March 2020 and will apply for a renewable period of 3 months. Of course, it concerns current travel contracts and will apply immediately. As a result the general economic interest prevails over the legal certainty the traveller and the tour operator had at the conclusion of the package holiday.
The only question is whether this decision also covers package holidays cancelled before the 20th of as a result of the coronavirus (and there will be many of them already). In principle, the measure can’t be applied retroactively. So it is questionable whether these travellers are obliged to accept the voucher and consequently denied the right to claim a full refund. The measure does not go into this, so the verdict must be left to the courts.
In addition, please note that the scope of the measure is up for debate. It says that package holidays can be cancelled during this 3 month period by offering a voucher. Does this mean that cancellations can only be made for package holidays that are carried out during this period? Or is it also applicable to package holidays that need to be carried out after this period, but are already cancelled by the tour operator? Circumstances can vary sufficiently in these cases. In view of the strictly necessary nature of the measure, it would only concern package holidays that have to be carried out during this period. However, it’s clear that this could be a source of discussion.
The European Commission has already reacted to the Belgian measure. It holds the opinion that travellers should have the choice between a voucher or a refund. All other decisions are not in line with the European regulations that aim for strong consumer protection and oblige Member States to guarantee the reimbursement of package holidays.
In the meantime, the Belgian government has taken note of this and amended its decision.
Concretely, the regulation is now as follows:
- In addition to reimbursement, as a tour operator you can offer a voucher that is valid for at least 1 year;
- The traveller is then free to use this voucher for a new package holiday. For the tour operator the voucher is regarded as a means of payment (So you can’t oblige the traveller to exclusively use the voucher and write out that voucher for 1 specific trip);
- From the moment you have offered the voucher to the traveller, he has 1 year to ask for a refund if he doesn’t want to use the voucher;
- In the event of a reimbursement request, the tour operator has a period of 6 months to refund the total amount.
However, the effect in time has not been changed so the scope of the measure is still up for debate.
Notwithstanding this regulation and the question of its temporal effect, we still can conclude that the Ministerial Decree is in conflict with the mandatory payment term in the Package Travel Directive and the Package Travel Act, so that this regulation should be considered null and void. In principle the traveler must always have the option to choose between a voucher scheme or a refund within the legally stipulated period.
Linked travel arrangements or travel services excluded
Keep in mind that this measure only applies to package holidays as defined by law. A package holiday is not the same as a linked travel arrangement. It’s easy to confuse the one with the other. So you have to look at the specific manner in which the ‘travel product’ was sold. The same applies for the sale of a travel service linked with a limited tourism service.
If it’s not a package holiday, you are not obliged to offer a voucher. In that case, please consult the general terms and conditions and any force majeure clauses. If this is not arranged contractually, we refer you to our article ‘The coronavirus and force majeure’.
The government has legitimately taken a Corona measure by allowing tour operators to offer their travellers a voucher instead of a refund. However, this measure raises a number of questions as to its correct application. Pay attention to when the agreement was terminated, what the date of the holiday is and whether you are actually talking about a package holiday.
Would you like to have a concrete legal reflex when handling your cancellations? Feel free to contact Roeland via email@example.com.