INTERNATIONAL JOURNAL OF TOURISM, TRAVEL AND HOSPITALITY LAW protected.52 The same problem arose in a business-to-business context, where organisers received a voucher as reimbursement for prepaid services from carriers, which later become insolvent.53 This position was reiterated by the CJEU in case C-540/21 emphasising that the COVID-19 pandemic exposed package travel organisers to an increased risk of insolvency which was not covered by the insurance taken out under the (current version of) Package Travel Directive, and that this risk may affect the right of the travellers to a refund of any payments made for a package.54 In response to the problems that have emerged in practice, the Commission proposed the extension of insolvency protection to vouchers (Article 17(1) of the Proposal) which seems to be a logical consequence of the newly proposed provision on vouchers. Moreover, the Proposal also aims at increasing the role of the Member States regarding insolvency issues. Thus, Member States should supervise the insolvency protection arrangements of organisers, monitor the market in this regard and may also offer back-up protection in case of insolvency to travellers. However, in order to prevent illegal state aid, the latter activity is only allowed under strict conditions (Article 17(3) of the proposed Directive). The Proposal also introduces a more specific deadline for refunds in the event of cancellation of the package due to the insolvency of a travel organiser (Article 17(6) of the proposed Directive), and – which is particularly interesting as it broadens the scope of the Directive – empowers Member States to broaden the protection offered by the Directive so as to oblige retailers to take out insolvency protection, where this is justified in light of the risk exposure of travellers (Article 17(7) of the proposed Directive). Right of redress and refund rights of organisers Traditionally, the Package Travel Directive only refers to the relationship between travel organisers and travellers and only partially deals with retailers. However, during the COVID-19 pandemic, it has become clear that the burden imposed on the organisers by the Package Travel Directive aiming to protect travellers’ rights is not the same for all organisers across Europe. Namely, it is up to domestic law of each Member State to define the relationship between a travel organiser and a service provider as well as to determine who of them bears the risk of unavoidable and extraordinary circumstances at the end of the chain traveller-organiser-service provider. Since those rules differ between Member States, not every package travel 52 Recital 14 of the Recommendation. 53 Ibid. 54 Para. 56 of the Judgment.
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