www.tourismlaw.pt The Package Travel Act and the Covid19 pandemic Jonas Thyberg Member of the Swedish Bar Association, Partner at Konrad Advokater International Journal of Tourism, Travel and Hospitality Law PRE-PRINT
The Package Travel Act and the Covid19 pandemic Jonas Thyberg 1 1. Introduction On August 1, 2018, a new Package Travel Act (PTA) entered into force in Sweden. 2 The act replaced the previous Package Travel Act from 1994 . The new act 3 implements the Package Travel Directive of 2015 (PTD). Since the legislation only 4 had been in force for just over a year and since the act only covered packages purchased as from August 1, 2018, the PTA had not yet been applied in that many cases when Covid19 hit the world in the beginning of 2020. The outbreak of Covid19 thus put the new legislation to a test. In this contribution I will present a short overview of some of the provisions of the PTA and analyze the case law in Sweden regarding the Covid19 pandemic. In Sweden, almost all disputes between a consumer and an organizer or travel agent, is tried by the National Board for Consumer Complaints , only a very few 5 cases are settled by courts. The following analysis is therefore based on a review of cases settled by the National Board for Consumer Complaints. 2. The Package Travel legislation Member states have had national package travel acts since the early 1990’s when the frst Package Travel Directive was implemented. The legislation was adopted in 6 order to remove disincentive to consumers in one member state from buying packages in another member state and obstacles to the freedom to provide services in respect of packages and distortions of competition amongst operators established in diferent Member States, which was a result of the diferent national legislations in force at the time. Another objective of the directive was that buying package travels generally involved the expenditure of substantial amounts of money Member of the Swedish Bar Association, Partner at Konrad Advokater 1 Paketreselag (2018:1217) (Package Travel Act 2018) 2 Lag (1992:1672) om paketresor (Package Travel Act 1994) 3 Directive (EU) 2015/2302 of the European Parliament and of the Council of 25 November 2015 on 4 package travel and linked travel arrangements, amending Regulation (EC) No 2006/2004 and Directive 2011/83/EU of the European Parliament and of the Council and repealing Council Directive 90/314/EEC Allmänna Reklamationsnämnden, www.arn.se 5 Council Directive of 13 June 1990 on package travel, package holidays and package tours (90/314/ 6 EEC)
in advance and that the services was supplied in a state other than that in which the consumer was resident. 2.1 The Swedish Act on Package Travel According to the PTA the organizer has far-reaching responsibilities in relation to the traveler. In short; it is the responsibility of the organizer to secure that the traveler receives exactly the travel services purchased in accordance with the package travel contract. Any deviation from or alteration to the contract gives rise to certain rights for the traveler, i.e. right to price reduction and/or damages or a right to terminate the contract. The organiser is responsible for all services that is a part of the package, regardless of if the service is provided by the organizer himself or a service provider. The act distinguishes between changes pre departure and changes or shortcomings after the start of the package. Below, some of the provisions of the PTA that has been put into focus by the pandemic will be analyzed. 2.2 Cancellation by the traveler due to unavoidable and extraordinary circumstances According to Article 3(12) of the PTD, ”unavoidable and extraordinary circumstances” (UEC) means a situation beyond the control of the party who invokes such a situation and the consequences of which could not have been avoided even if all reasonable measures had been taken. According to the recitals (recital 31), signifcant risks to human health such as the outbreak of a serious disease at the travel destination is a situation which may be classifed as an UEC. The Swedish act does not include a defnition of UEC, since the legislator did not fnd this necessary . 7 According to Chapter 3 Section 1 of the PTA, the traveler has the right to terminate the package travel contract before the start of the package. If the traveler terminates the contract, the organizer has the right to a reasonable cancellation fee, provided this is specifed in the package travel contract. The organiser is however not entitled to a cancellation fee if the package is signifcantly afected by unavoidable and extraordinary circumstances at the destination or its immediate vicinity or the transport of the traveler to the destination. This section implements Articles 12.1 and 12.2 of the PTD. During the spread of Covid19 in the spring of 2020, countries imposed diferent restrictions to reduce the further spread of the virus. Restrictions such as lock down, quarantine, closed borders, curfews etc. was decided by the national authorities, Prop. 2017/18:225, page 45-46 7
often with very short notice. The competent authorities in most states further decided to issue travel advices against travel to other countries. The travel advices and restrictions imposed, resulted in mass cancellation of packages that were to take place during the spring and early summer of 2020. Packages were cancelled by the travelers, due to fear of catching the virus, or by organisers that were not able to perform the package due to restrictions. For many of the cancelled packages, question arose whether the traveler was entitled to a refund or not. The organisers often claimed that the traveler was not entitled to a refund, since the Covid19-pandemic was out of the organiser’s control. Since the packages often were cancelled close to departure, the organisers were not entitled refunds from the diferent service providers, i.e. airlines, hotels etc. It became clear that there are no legislations that imposes obligations for service providers to refund the price paid when a service is cancelled due to UEC. In many cases the organisers therefore charged the traveler with a cancellation fee when the package was cancelled by the traveler. In Sweden, as in most other countries, the National Board for Consumer Complaints (ARN) received many complaints where the traveler claimed reimbursement of the total price paid for a package that had been cancelled due to the pandemic. In June 2020, ARN tried a few selected pilot cases. In these cases, the board consisted of three judges together with two represents from the industry and two representatives from the consumer agency. In the decisions ARN laid down the principles on how the cases should be tried. 2.2.1 Burden of proof ARN stated that the burden of proof, in cases where the package had been cancelled by the traveler, rests with the traveler. The traveler thus shall prove that there were UEC at the destination and that the circumstances signifcantly afected the destination or the transport to the destination. The industry initially claimed that, for a traveler to have the right to cancel a trip without cancellation fee, there had to be a negative travel advice from the Swedish Ministry for Foreign Afairs. Even if there was a negative travel advice, the traveler also had to show that the travel advice would be afecting the destination at the time on which the trip was scheduled to take place. In this regard ARN noted that neither the PTA, nor the PTD included a reference to travel advices from the government. Therefore, ARN stated that even if there is not a negative travel advice, the traveler may refer to other sources to prove that the situation at the destination is of such character that it must be considered to exist an UEC. As a result hereof, ARN has accepted articles from Swedish and foreign newspapers as proof of the situation at
the destination. Further, ARN has accepted statements and recommendations from authorities in Sweden and at the destination, that has been referred to by travelers. For example, in one case ARN based its decision on, among other things, a recommendation from the US Foreign Ministry against travel for American citizens to the destination in question, which was referred to by a Swedish consumer. ARN further noted that, in line with the normal principles for the burden of proof in litigation, if a party claims a fact and the other party does not contest this fact, the frst party does not have to prove it. Thus, if a traveler, uncontested, claims that there was a major spread of Covid 19 at the destination, ARN has considered it to be a fact in the case, without any further proof. A number of claims by travelers has therefore been approved by ARN, without any actual proof for UEC at the destination. 2.2.2 Extraordinary circumstance On March 5, 2020, the European Commission published a document on the guidance of the interpretation of PTD in connection with Covid-19 . In the guidelines 8 the European Commission states that ”[s]ignifcant risks to human health, such as the outbreak of a serious disease like the COVID-19 at the travel destination or its immediate vicinity usually qualify as such unavoidable and extraordinary circumstances.” However, it must be born in mind that such guidelines from the European Commission regarding the interpretation of EU legislation is not legally binding. It merely refects the views of the Commission’s Directorate-General for Justice and Consumers. On February 11, 2020, the Swedish foreign department issued an advice against all travels to the Hubei province in China and an advice against non-essential travel to the Zhejiang province in China. On March 6 an advice against non-essential travel to nine regions in Northern Italy was published. Four days later the advice against travel to parts of Italy was extended to all of Italy. Finally, on March 14, an advice against non-essential travel during the period until April 15, to all countries was adopted. The latter travel advice has been extended at several times since then. With regard to the question of whether the pandemic constituted an extraordinary circumstance, ARN states, i.a. in the light of the Commission's statement and information from WHO and from the Swedish Public Health Agency, that the Information on the Package Travel Directive in connection with the Covid-19. The document was 8 frst published on March 5, 2020. A revised version was published on March 19, 2020.
pandemic must be regarded as an extraordinary circumstance within the meaning of the Package Travel Act. 2.2.3 Unavoidable circumstance In order for a traveler to have the right to cancel a package without cancellation fee, the traveler shall prove that the situation is not only extraordinary, but also unavoidable. Since a worldwide pandemic lies outside of the control of both the traveler and the organizer, ARN established that the pandemic as a rule should be considered unavoidable within the meaning of the PTA. In doing so, the board notes that for bookings made before the pandemic was known, the pandemic has in most cases been unavoidable. There has been nothing that a traveler could do to avoid the efects of the pandemic. However, ARN thereafter notes that each case must be evaluated according to the specifcs of that case. ARN states that a circumstance that is known can not constitute an unavoidable circumstance within the meaning of the act. If a circumstance is known at the time of the booking, the traveler always has a choice not to book or to book a trip to another destination which is not afected. A traveler that books a trip to a destination, knowing that there is a wide spread of Covid19 or that the Ministry for Foreign Afairs’ advices against travels to that destination, should thus not have the right to cancel the trip without cancellation fee. 2.2.4 Signifcantly afecting the performance of the package In order for a traveler to cancel a package due to UEC, the traveler also must prove that the UEC signifcantly afects the performance of the package, i.e. that the impact of the pandemic signifcantly afects the specifc destination to which the traveler has bought a package or the transport to that destination. In one ARN case, the traveler had bought a trip to Japan. The traveler canceled the trip due to the pandemic and claimed a right to refund of the total price paid. The traveler referred to information in newspapers that several hundred citizens of Japan had been infected and that at the time of cancellation a cruise ship outside Japan was quarantined due to infection on board. The traveler also referred to recommendations from Japanese authorities to avoid large groups and that the schools in Japan had been closed. ARN found that the traveler referred to the situation in the country of Japan but did not address the situation in specifc places in Japan that the traveler should visit. In light hereof and since the traveler did not invoke any evidence in support of his claims, the board concluded that the traveler had not proved that she had a right to cancellation free of charge. Many cases have concerned the right to cancel a package since the traveler had to be quarantined on arrival at the destination. ARN has stated that the fact that travelers are quarantined means a very sharp restriction of travelers' freedom, since
it means that people are being isolated. A quarantine limits travelers' freedom to move around at the destination. For most trips, a quarantine of 14 days would mean that the quarantine would last throughout the trip and the travel experience would thus be essentially completely diferent from what the traveler had reason to expect. Travelers has thus had the right to cancel free of charge if it was obvious before departure that they would have to be quarantined on arrival at the destination. For many trips that were to take place during the spring of 2020, travelers wanted to cancel as soon as it became clear that there was an ongoing pandemic, regardless of if there was an outbreak at the destination or not. A vast majority of travelers were afraid and thus did not want to travel. This was especially the case for many travelers that belonged to risk groups. ARN has in several decisions noted that the traveler must prove that there is a risk for the traveler’s health to cancel a package free of charge. In its information, the Commission also states that a “subjective feeling of fear would not be sufcient”. The industry has claimed that, in order for travelers to have a right to cancel a package without paying a cancellation fee, the traveler must show that the destination was afected by the pandemic during the period in which the trip was to take place. As conditions changed rapidly during this period and restrictions and travel advice were issued, changed or amended with short notice, the industry claimed that it was not possible to determine how the destination was afected until very close to departure. The industry therefore claimed that it was not possible to cancel a package without cancellation fee prior to 14 days before departure. Cancellations that were made earlier, was thus subject to to the companies' cancellation rules in accordance with the organiser’s ordinary terms and conditions. ARN states in one case that the advice from the Ministry of Foreign Afairs against travel to the northern parts of Italy per se was valid until further notice and thus included the destination at the time of the trip. However, it was, according to ARN, obvious that a travel advice from the Ministry of Foreign Afairs that is not limited in time, at some point will cease. It was therefore not considered reasonable that a consumer could cancel a package with a planned departure too far in advance without paying a cancellation fee. As in the event of a cancellation well in advance, it is not possible to say with any great degree of certainty that there will be a valid dissuasion at the time of departure. In the case, the traveler had canceled more than one month before the planned departure. According to ARN, it was too long before departure and the traveler had to pay a cancellation fee. ARN has not taken a position on exactly how long a time that would be considered reasonable, but the Swedish Consumer Agency has claimed that fourteen days is too short a time and that a reasonable time should at least be three weeks before departure.
2.2.5 At what time should the assessment be made? During the period from the end of February until mid-March, the spread of infection increased rapidly around the world and on March 11, the World Health Organisation (WHO) classifed Covid19 as a pandemic. This led to a mass cancellation during the frst weeks of March of package tours that were to take place during the spring. As mentioned above, on March 14, the Ministry of Foreign Afairs published an advice against non-essential travel to all countries. After the advice was issued on the evening of March 14, the Swedish Consumer Agency published a press release in which they informed consumers that those consumers who had canceled their package close before the Ministry of Foreign Afairs' advice should also be entitled to a refund of the total price paid for the package. The industry opposed this statement and argued that only such circumstances that existed or were known at the time of the cancellation could be considered, when assessing of there was a right to cancel a package free of charge. ARN has tried a large number of cases where cancellation took place before March 14 and where travelers claimed that they had the right to cancel free of charge, often by referral to the press release of the Consumer Agency. In its decisions, ARN has clearly stated that only such circumstances that were known at the time of the cancellation may be considered. Subsequent circumstances, which were not known at the time of cancellation, are not relevant to the assessment. In connection herewith, ARN has clarifed that the UEC do not have to exist at the time of cancellation, but it must be known by that time, and it must be obvious that the UEC would signifcantly afect the performance of the package at the time of the performance of the package. 2.2.6 The traveler's personal circumstances In the above-mentioned opinion of the Commission on the interpretation of the PTD, the Commissions gives examples on situation where a traveler has a right to cancel without cancellation fee. According to one of these examples a traveler should have the right to cancel without cancellation fee ”[i]f you or an accompanying family member have a medical condition for which exposure to the COVID-19 is particularly dangerous […] if the risk of contamination with COVID-19 at the travel destination or its immediate vicinity is declared high by the competent authorities when such increased risk signifcantly afects the performance of the package for the traveler(s). Such case may also be covered by your travel insurance.” The Swedish Consumer Agency also issued a press release stating that people who belonged to risk groups should have the right to cancel a package without
cancellation fee in those situations. In a number of ARN-cases, travelers have referred to high age or risk group afliation as a basis for cancellation. However, ARN has noted that “the fact that travelers belong to a so-called risk group does not mean that these travelers easier fall ill than other travelers, but that those travelers risk having more severe symptoms than others in the event of an illness. The fact that the travelers belong to a risk group can therefore for that reason alone not mean that the travelers have the right to cancel the trip at no extra cost." 2.2.7 The cancellation fee must be reasonable In cases where ARN has concluded that the traveler has not proved that there were UEC signifcantly afecting the destination at the time when the package was to take place, ARN notes that a traveler always has a right to cancel a package before departure and that the organizer in those cases has the right to charge a cancellation fee if he has reserved this right in the contract and the cancellation fee is reasonable. In these cases, ARN has therefore examined whether the organiser’s cancellation rules may be considered reasonable. To the extent the traveler has not objected to the reasonableness of the fee, the examination has usually consisted of a decision that the fee, in view of how long before departure the cancellation was made, may be considered reasonable. 2.2.8 Refund of the total price paid by the traveler If a traveler is entitled to a refund for a package that has been cancelled by the organiser or cancelled by the traveler due to UEC, the PTA states that the organizer must refund without undue delay and within 14 days at the latest. Due to the large number of packages that were canceled during the spring and early summer and for which the travelers were entitled to refunds, it was often not possible for organisers to refund within the prescribed period. For most travel services the organiser receives the payment from the traveler just to forward it to the supplier of the services. For an organiser to refund, it must frst receive a refund from the service provider. Many suppliers, especially airlines, did not refund the payments at all or did so after several months. In many cases suppliers issued vouchers to the organiser instead of refunding payments. Many organisers therefore lacked the means to refund the travelers within 14 days. ARN has received a large number of reports concerning cases where the package was canceled and where the organiser had informed the traveler that the traveler would receive a refund, but that the refund would take some time. ARN has rejected most of these cases. As justifcation for this, ARN has stated that the board shall resolve disputes between consumers and traders. Since the organizer in these cases has confrmed that the traveler is entitled to a full refund, there is no dispute in these cases. Since there is no dispute ARN does not have the authority to try these cases.
In many member states the organisers issued vouchers to travelers instead of refunding money. This was often the only way for organisers to refund at all or to avoid bankruptcy. During this period, it was also a widespread practice among suppliers, especially airlines, to issue vouchers instead of refunds. Some member states adopted new or revised legislation giving organisers (and suppliers of travel services) the right to issue vouchers instead of refunds. The Commission published on May 13, a recommendation on vouchers. In this recommendation it is noted that an organizer may ofer the traveler a voucher, but the traveler should always have the right to a reimbursement in money if he or she does not accept a voucher. In Sweden the question on reimbursement through vouchers never was a big issue. The industry did not see vouchers as a solution, just a way to push the problem forward. Some of the larger organizers ofered the travelers vouchers, but in those cases that the travelers refused a voucher, they were ofered reimbursement in money instead, even if they were not able to refund within the prescribed time limit. Since this was not an issue in Sweden, there are not that many cases dealing with vouchers. In some cases, where the organizer only ofered vouchers, ARN has noted that this is not compatible with the PTA, and thus obligated the organizer to refund in money instead. In one of the few cases regarding cancellation of a package tried by a Swedish court, the court has concluded that a traveler who does not receive a refund within the 14 days stipulated by the PTA, is entitled to interest on the capital amount for the period from 14 days after the cancellation or notice of canceled package and until a refund is made . 9 3. Performance of the package According to the PTA the organiser is responsible towards the traveler for the proper performance of the package. This responsibility also applies to services to be performed by a party other than the organizer. If, after the start of the package a signifcant proportion of the package can not be performed, the organizer shall ofer suitable alternative arrangements at no extra cost. Any other nonconformities in the package shall be remedied, unless it is not possible, or a remedy should entail disproportionate costs. The traveler is entitled to a price reduction for nonconformities in the package, unless the nonconformity is attributable to the traveler. The traveler also has a right to terminate the contract if the nonconformity is signifcant and the organizer does not remedy. A traveler further has the right to compensation for damage unless the the City Court of Gothenburg, case number T 6809-20. 9
nonconformity was attributable to the traveler or is unconnected with the performance of the package. Nor is the traveler entitled to compensation if the nonconformity is attributable to UEC. The provisions implement Articles 13 and 14 of the PTD. In connection with the spread of the pandemic, national and local restrictions of various kinds were implemented. Several countries decided for example on entry ban or quarantine upon entry. As mentioned above, on March 14, the Swedish Ministry of Foreign Afairs issued a recommendation against travel to the whole world. However, at no time during the pandemic has the Ministry of Foreign Afairs decided to advise all Swedish citizens to return to Sweden. As a general rule, a recommendation from the Ministry of Foreign Afairs means that a traveler has the right to cancel a package trip before departure free of charge. Correspondingly, an organizer has the right to cancel a trip before departure if the Ministry of Foreign Afairs advises against it. For travelers who are already at the destination, however, there is no right to terminate the agreement due to the Foreign Ministry's advice. 3.1 Packages cancelled by the organiser At the time of the advice against all travel by the Swedish Ministry of Foreign Afairs, many travelers were already on or on their way to the destination. In many of these cases, organizers decided to cancel the rest of the packages and bring the travelers home. According to the PTA, there is then a nonconformity in relation to the package travel contract, since the entire trip has not been provided. In most of these cases, travelers have been considered to be entitled to a price reduction for those parts of the trip that could not be provided. ARN initially laid down the principle that the right to price reduction for nonconformities is strict, and the cause of the nonconformity is of no relevance. Price reduction has normally been decided as a daily share of the total price of the trip. A traveler who bought a package of seven days, but was brought home after four days, has thus been awarded a price reduction corresponding to 3/7 of the total price pf the package for the three days not received. The industry has claimed that the price reduction should not be based on the entire price of the package. Instead, the price reduction should be based on the price paid for services that have not been received or have not been received in accordance with the package travel contract. If the organizer has provided return travel free of charge, the traveler has received the transport to and from the destination in accordance with the contract and the price deduction should then be based only on the parts of the package that were not provided, i.e. accommodation and any other arrangements at the destination. According to ARN, the nonconformity of the package in these cases was so intrusive that the price
deduction should be based on the total price of the package. In one of these cases, the organizer has chosen not to follow ARN’s decision, and the traveler has therefore sued the organizer in court. The case has not yet been settled. In some cases, the package has been aborted by the organizer almost immediately upon arrival at the destination. Amongst these cases there are a large number of cases concerning golf trips where the traveler on arrival or the day after arrival received information that the golf courses were closed and ski trips where the traveler on arrival or the day after arrival received information that the ski systems were closed. In these cases, the entire purpose of the trip has been considered to have failed and the passengers have been entitled to a price reduction corresponding to the total price of the package. In another case, the traveler had booked a 14-day trip to Mauritius. Departure took place shortly before the Ministry of Foreign Afairs advice against non-essential travel. The day after arrival at the destination, the organizer canceled the trip and brought the travelers home. As the travelers only received two out of 14 days of the trip and as the days received mostly consisted of transport, the traveler was not considered to have had any exchange of the trip and ARN decided that the organizer should refund 100%. The size of the price deduction has been determined to an amount corresponding to the number of days that the traveler has not received at the destination. To the extent that the cancellation of the package has resulted in arrangements at the destination, e.g. excursions or meals, not being provided, the organizer also has been obliged to reimburse the cost of the arrangement. The price for such travel services has accordingly been excluded when ARN has calculated the total price of the package. According to the PTA, the carrier has no obligation to pay damages if a trip is canceled due to UEC. In several cases, ARN has accordingly confrmed that in these cases the traveler is only entitled to a price reduction and claims for damages have been rejected. 3.2 Packages cancelled by traveler after the start of the package Many packages that started before the advice against non-essential travel and before the pandemic started, was cancelled by travelers due to the uncertainty as to whether the package could be continued or not or because of a fear of catching the virus. In one case the travelers had bought a package to Tanzania which among other things included a climbing of Kilimanjaro. On March 19, when the travelers were on their way up the mountain, the organizer contacted them to inform about the Covid19 situation. At this contact, the organizer was clear that, at that time, there was no uncertainty regarding the continuation of the journey. The organiser
contacted the travelers in order to make sure that they were aware of the situation, since there was little or no coverage for cell phones at the places that the travelers had visited so far. The travelers chose to cancel the trip and return to Sweden. At home they claimed compensation for the parts of the package that were not performed. ARN did not fnd that the travelers had shown that, at the time of their cancellation, it was clear that the package tour would not be carried out in accordance with the contract, especially since the organiser explicitly had told the travelers that the rest of the package would be performed in accordance with the contract. ARN therefore rejected the request for a price reduction. There are also many cases where travelers had booked trips to Australia and New Zealand. Upon arrival at the destination, they were informed that the two countries would close down or impose quarantine upon entry. In these cases, the travelers have had to prove that the organizer could not carry out the rest of the trip to be entitled to a price reduction. Many countries have introduced quarantine in diferent ways. In several decisions from ARN, quarantine has been considered to result in the travelers being entitled to a price reduction. In one case the travelers had booked a trip to the Canary Islands. During fve of the seven days of the trip, the travelers were quarantined at the hotel. During that time, they did not have access to either pool or the sea. The travelers were not allowed to stay outside the hotel area or visit restaurants. ARN found that the quality of the trip had deteriorated due to the restrictions, but that the traveler had received accommodation and meals in accordance with the package travel contract. ARN therefore decided that a reasonable price reduction was 33% of the total price of the package. In a similar case, ARN considered that a reasonable price reduction for a four-day quarantine at the hotel on a seven-day trip to Gran Canarias justifed a price reduction of approximately 25 % of the total price for the package. A lot of countries closed its borders for all travelers or travelers from certain countries. A group of travelers had booked a package trip from Copenhagen to Miami. The day after arriving in Miami, the United States closed its borders. The return journey was canceled by the airline fve days after arrival. Due to this, the travelers canceled the rest of the trip and booked return fights themselves when they got the information regarding the cancelled fight. The organizer, who did not know that the travelers had booked return fights by themselves, rebooked the cancelled fight. The traveler demanded a price reduction corresponding to the nine days that they did not receive at the destination. The travelers claimed that they should have used the nine days to move around and explore the destination. Since they could not explore the destination due to the restrictions in place, they claimed that the purpose of the trip was not fulflled, and that the organiser therefore could not perform the package in accordance with the contract. According to ARN, the
travelers had not proven that the organizer could not complete the trip and the claim was rejected. In doing so, ARN stated, among other things, that the trip did not include any arrangements at the destination. In another case, a traveler had bought a package that included a fight to Singapore and a 14-day cruise in Asia, with visits to China and Japan. Upon arrival in Singapore, travelers were informed that the route had changed due to the pandemic and that the last part of the cruise, which would include Hong Kong and Japan, would be replaced by the Philippines and Singapore. The travelers cancelled the cruise and claimed that the visits to Hong Kong and Japan were the whole purpose of the package. ARN stated that ten of the fourteen days of the cruise would be carried out in accordance with the package travel contract and that the organizer had ofered equivalent arrangements instead of the destinations that could not be visited. The traveler's claim for a refund of the total price paid for the package was therefore rejected. In yet another case, a traveler had booked a package that included a longer trip in Central America which, among other things, included a bus trip between Mexico and Costa Rica. The package started before the advice against non-essential travel on March 14. On March 15, it was announced that the borders between Mexico and Costa Rica would be closed. The travelers canceled the trip and arranged a fight home. The travelers demanded a price reduction corresponding to the price of the bus trip. ARN considered that since the passengers would not be granted entry due to the closed border, they could not participate in the bus travel. According to ARN the organizer therefore was unable to perform that part of the package and the traveler was granted the demanded price reduction. In cases where travelers that were already at the destination or on their way to the destination at the time of the advice against all non-essential travel, cancelled packages and arranged for return fights, ARN has stated that the travel advice in itself does not give a traveler the right to cancel the rest of the package and get a price reduction. Only in situations where it was clear that the organizer would not be able to carry out the rest of the package in accordance with the contract and did not ofer equivalent alternative arrangements, travelers have been entitled to a price reduction. In some decisions, the board has placed fairly high burden of proof on travelers to prove alleged circumstances. 3.3 Obligation to arrange for alternative transport and accommodation Chapter 4 section 4 and 5 of the PTA stipulates that if a traveler can not be returned to the place of departure, the organizer shall arrange for alternative transport. The organizer is further responsible for the costs for accommodation until such alternative transport can take place. The provisions implement Article 13.7 of the PTD.
For many packages, the pandemic has led to changes when it comes to transportation back to the place of departure. Many airlines completely shut down operations and canceled all fights. This often happened at short notice. Organisers have to a large extent arranged new transports, which in many cases has led to large extra costs. Travelers who have arranged home trips themselves have received compensation in cases where the organiser explicitly told the traveler to arrange a return trip themselves or where the organizer said that they could not arrange a return trip, has been considered by ARN to be entitled to compensation from the organiser. In cases where the original return fight was not canceled at the time when a new return fight was booked, either by the traveler himself or by the organiser at the request of the traveler, the organiser has been considered responsible for the cost only in situations where the traveler has been able to prove that the organiser would not be able to carry out the rest of the package in accordance with the package travel contract. In these cases, it has not been considered relevant whether the original return fight was canceled by the airline at a later point, as this was not known by the traveler at the time when the journey was canceled. In one case the travelers had booked a 20-day package to Brazil, Argentina, Peru and Colombia. The package was canceled after 13 days by the organiser, when the travelers were placed in quarantine in Peru and thus could not continue the package. The organiser arranged a fight from Peru to Paris. The organizer informed the travelers that, upon arrival in Paris, he would arrange a fight to Stockholm. The travelers claimed that they on several occasions had tried to get the organiser's help in Paris but did not get any help. The travelers therefore paid for accommodation in Paris and arranged their own fight home. ARN considered that it was clear that the organiser did not intend to complete the trip. The travelers were therefore considered entitled to a reasonable price deduction for the days that the travelers did not receive at the destination as well as compensation for the costs of the excursions that the traveler did not receive. ARN further found that the organizer had a responsibility to arrange a return trip to the place of departure, but that they only arranged a fight to Paris. The traveler was therefore entitled to compensation for the airline tickets they had purchased from Paris to Stockholm themselves. 3.4 Assistance to travelers in difculty An organizer has a responsibility to provide assistance to travelers who sufers difculties, regardless of the nature and cause of the difculties . According to this 10 provision travelers who have been stranded at destinations are entitled to assistance from the organiser, for example help to get in touch with the Swedish embassy, health care or local authorities and to fnd a new transport home. The provisions of the PTA and the law are quite clear and does not leave much room for interpretation. PTA Chapter 4 section 12, which implement Article 16 of the PTD. 10
Overall, the Swedish organisers seem to have fulflled their obligations in this aspect and to my knowledge there are only a few cases on regarding this matter at ARN. 4. Travel Guarantees Act The frst Travel Guarantee Act was introduced in Sweden in the late 1960s. The Travel Guarantee Act in force at the time of implementation of the PTD was adopted in 1972. According to this act, a traveler who purchased a package that was canceled or not completed was entitled to compensation from the travel guarantee provided by the organiser. The traveler was entitled to compensation regardless of the cause of the cancelled package. Thus, according to this act travelers have previously been able to receive compensation from the travel guarantee for trips canceled due to war situations (for example Egypt 2012), the ash cloud in 2010, bad weather or airline failure. With the introduction of the new Travel Guarantee Act, the possibilities of maintaining this further scope were discussed. However, the discussions ended up in a wording in accordance with the PTD and compensation is thus now only possible to the extent that a trip has been canceled due to the insolvency of the organiser. 4.1 Travel guarantee According to Article 17 of the PTD, Member States shall ensure that organisers established in their territory provide security for the refund of all payments made by or on behalf of travelers insofar as the relevant services are not performed because of the organiser's insolvency. If transport is included in the package travel contract, organisers shall also provide security for the travelers' repatriation. In Sweden, this obligation has been implemented by the Travel Guarantee Act (2018:1218). Section 6 of the Act stipulates that the travel guarantee for a package shall ensure that the payments made for the package are paid back to the traveler to the extent that the package travel contract is not performed due to the organiser's insolvency. If a passenger transport is included in the package, the travel guarantee must also ensure home transport, and accommodation if necessary while waiting for the home transport, to the extent that the passenger transport is not performed due to the organiser's insolvency. In the spring of 2020, many trips were canceled due to the pandemic. Since travel companies basically lost all their operations and since the Package Travel Act required a refund within 14 days, many of the Swedish organisers sufered economically. As there is no legislation that imposes an obligation on travel service providers to refund in the event of cancellation due to UEC, this meant that most travel companies faced a very difcult fnancial situation. Reimbursement in
accordance with the provisions of the Package Travel Act was thus not possible for most companies, as they lacked funds. Many travelers therefore requested compensation from the travel guarantees furnished by the organiser. During the spring, two major travel companies were further subjected to reconstruction, which prompted a number of their customers to turn to Kammarkollegiet, which is the authority responsible for travel guarantees in Sweden. However, the Authority was quickly able to establish that the right to compensation from a company's travel guarantee presupposed that the trip was canceled due to the company's insolvency or that a travel service included in the package trip was not provided due to the company's insolvency. It is thus the reason for the canceled trip that is decisive for whether there is a right to compensation or not. In most cases, the trips that were canceled during the spring and summer of 2020, were cancelled due to Covid 19. This meant that the travelers were not entitled to compensation from the travel guarantee. It did not matter if the company was declared bankrupt after the trip was canceled or if a company initiated reconstruction after this point, as it did not afect the reason for the canceled trip. During the summer of 2020, Kammarkollegiet conducted an investigation on behalf of the government to analyze whether vouchers could be considered covered by the travel guarantee scheme and, if so, under what conditions. The authority stated in its report dated 2020-08-31 that vouchers and other credits were not covered by the travel guarantee. Only to the extent that a package was canceled, and the traveler booked a new trip or if a traveler after receiving a voucher used this to book a new package, travelers were entitled to compensation if the organizer went bankrupt and the package was canceled. 5. Conclusions There are still many disputes between travel companies and travelers due to Covid19, that yet have not been settled. The interpretation of the provisions of the PTA will thus be further clarifed through national cases and by the ECJ. Based on the case law so far one can assess that the liabilities of the organiser is very farreaching and that there is no possibility in the PTA for ARN or the courts to make a milder assessment due to the fact that this is an extreme situation completely outside of the control of the organiser. The organiser is subject to responsibilities in diferent situations, often regardless of whether the situation could have been foreseen or prevented by the organiser or not. The outbreak of Covid19 caused governments all over the world to introduce diferent measures, including travel restrictions, closed borders and quarantine. The pandemic has caused almost a standstill of travel, and has thus had a serious
impact on package travel organisers. In particular the obligation to refund the total price paid for a package cancelled due to UEC has led to liquidity problems for organisers. Many travel companies have been forced to cease its operations or even fle for bankruptcy or initiate reconstruction proceedings during the past year and a half. There are no legislations in place that obligates the providers of travel services, such as airlines, cruise companies or hotels, to refund payments in case the traveler cancel a trip due to UEC. This means that organisers often have an obligation to refund to the traveler, without getting any refunds or only receives vouchers from the service providers. Unprecedented situations like the Covid19 pandemic was not foreseen by the legislators when the PTD was adopted. In recital 40 of the PTD there is a reference to highly remote risks. It states that highly remote risks shall not be taken into account when determining the travel guarantee, since this would disproportionately afect the costs for the protection. Since the outbreak of a highly contagious disease is completely outside the control of travel companies, a similar proportionality should be introduced for the organisers responsibilities to refund in case of cancelled packages. This could be achieved for example by the introduction of legislation that stipulates that service providers have to refund in the case of cancellation due to UEC or provisions for extreme situations that obligates the organiser to refund only if and to the extent the organiser receives refunds from the service provider. Further there should be a possibility for the organiser to refund through vouchers, in those cases where the service provider refunds the organiser by vouchers instead of money. The Commission has announced that a deeper analysis of the PTD will be carried out. The result will be presented by 2022. Hopefully this analysis will include an analysis on the disproportionality between the obligations of organisers on the one hand and service providers such as airlines on the other.
Contact Estoril Higher Institute for Tourism and Hotel Studies carlos.torres@eshte.pt www.tourismlaw.pt IJTTHL Celebrating five years of the first publication Vincenzo Franceschelli, On Tourism Law | Quest for general principles, https://files.tourismlaw.pt/On-Tourism-Law-Quest-for-generalprinciples/ Alejandro Corral Sastre, A new Administrative Law for a new Tourism: now or never, https://files.tourismlaw.pt/A-new-AdministrativeLaw-for-a-new-Tourism-by-Alejandro-Corral-Sastre-/ Jonas Thyberg, The Package Travel Act and the Covid19 pandemic, https://files.tourismlaw.pt/The-Package-Travel-Act-and-the-Covid19pandemic-by-Jonas-Thyberg/ Caterina del Federico, The use of artificial intelligence in the travel and hospitality industry. Civil liability profiles, https://files.tourismlaw.pt/The-use-of-artificial-intelligence-in-the-travel-and-hospitalityindustry.--Civil-liability-profiles "We are celebrating the 500 anniversary of the discovery of the Magellan strait with two online publications. On October 21, the launch of Derecho del Turismo en Las Américas brought together colleagues from all Latin American countries. On the same day, the Collective Commentary about the New Package Travel Directive, with colleagues from the then 28 Member States. More recently, Competition Law in Tourism and Tourism Law in Europe are publications demonstrating this group's dynamism. The pandemic has not broken the bonds that have united and unite us. Here we are again here in Lisbon, more numerous and more motivated than ever, to consecrate what will be the voice of our group: The new international journal of Tourism Law, The International Journal of Tourism, Travel and Hospitality Law.” • Vincenzo Franceschelli, The Lisbon Group and International Tourism Law Five years after the first international publication (The New Package Travel Directive, October 2017) at the ESHTE | INATEL International Conference in October 2022, bringing together 50 speakers from 27 countries, a new project was announced: The International Journal of Tourism, Travel and Hospitality Law (IJTTHL). IJTTHL brings together several universities and is published both in print and online. The central part will be in English but will have an IberoAmerican chapter, and the texts are immediately available through Pre-Print. Monika Jurkova, Liability of online platforms in the tourism sector, https:// files.tourismlaw.pt/Liability-of-online-platforms-in-tourism-sector-Monika-Jurkova/ Francesco Torchia, Tourism enterprise and cultural heritage protection, as a legal instrument for valorization of the territory and of the person, https:// files.tourismlaw.pt/Tourism-Enterprise-and-Cultural-Heritage-protection,-as-a-legal-for-valorization-of-the-Territory-and-ofthe-Person-by-Francesco-Torchia/ Valérie Augros, Holiday lettings in France: tips and tricks, https://files.tourismlaw.pt/ Holidays-lettings-in-France---Tips-and-tricks-by-V.-Augros/ Sarah Prager, Competition law: online travel agents and airlines, https:// files.tourismlaw.pt/Sarah-Prager,--Competition-Law---OTAs-and-airlines/ Andrej Micovic, Legal Tech and Online Dispute Resolution, https://files.tourismlaw.pt/ Microsoft-Word---A.-Micovic---Legal-Tech-and-ODR-in-Tourism./ Pilar Juana Garcia Saura, The inspection of tourist accommodation by Public Administrations: problems with the use of the robot inspector (web spider) and the responsibility of collaborative platforms, https://files.tourismlaw.pt/Collaborativeplatforms-in-accommodation-by-Pilar-Saura/ Michael Wukoschitz, A Wicked Deed’s Curse – Will X v Kuoni change the Organiser’s Liability?, https://files.tourismlaw.pt/Will-X-v-Kuoni-change-the-organisers-liability,---M.-Wukoschitz/ Bertold Bär-Bouyssiere, Sustainability and Article 101(1) TFEU, Exploring (almost) virgin territory, https://files.tourismlaw.pt/Sustainability-considerations-and-Article-101-TFEU/ Tatjana Josipović, Modernisation of information requirements for consumers on online tourism services market, https://files.tourismlaw.pt/Modernisation-of--informationrequirements-for-consumers-on-online-tourism-services-market-by-Tatjana-Josipovic/ Matija Damjan, The new online platform rules and the accommodation booking services, https://files.tourismlaw.pt/The-new-online-platform-rules-and-the-accommodation-bookingservices-by-Matija-Damjan/ Ilie Dumitru, EU legislation and contractual relationship between the travel package organizer and the air carrier in case of charter flights. Liability for cancelled and delayed charter flights, https://files.tourismlaw.pt/EU-legislation-and-contractualrelationship-between-the-travel-package-organizer-and-the-air-carrier-in-case-of-charter-flights.-Liability-for-cancelled-anddelayed-charter-flights-by-Ilie-Dumitru-IJTTHL-PRE-PRINT/ João Almeida Vidal, Arbitration and tourism: a field to explore, https:// files.tourismlaw.pt/Arbitration-and-tourism--a-field-to-explore-by-Joao-Vidal/
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