CBI explores the impact of the new EU Package Travel Directive
On the 17th of April, CBI teamed up with representatives from European and developing country tourism companies and sector organisations for a focus group on the new EU Package Travel Directive (PTD). Together the group explored the impact this new directive will have on suppliers from developing countries. The PTD will come into power the 1st of July 2018.
The Package Travel Directive was first introduced in 1990 as a Europe-wide consumer protection legislation. Back then, the legislation covered about 98% of all holidays. As a consequence of online sales and new business models, this figure has nowadays dropped to less than 50%. Hence a new directive was needed and crafted.
The directive means great news for consumers. They will enjoy benefits such as extended rights to terminate travel agreements, more transparent sales and advertising information, and clearer rules and regulations with regards to refunds, repatriation, and alternative offers in case of changes made by the travel organiser.
On the other hand, the new directive may have less favourable consequences for non-European travel organisers from developing countries. When they direct their services to the European consumer, their offer and business will have to be compliant with the new directive. This means among other things that suppliers might need types of liability insurance and insolvency protection - which in the worst case might not (yet) be available in their countries.
In two break-out sessions the panel discussed possible solutions on how developing countries can best adapt and be successful on the European market. Three options for local suppliers and destination managements companies (DMCs) to better brace themselves for the impact of the PTD stood out. The first option is to seek intensified partnerships with European DMCs/retailers. Secondly, there is the possibility to establish a fully owned European business entity. Lastly, companies could consider selling their services via specialised online platforms.
To better inform companies in developing countries about the consequences of the Package Travel Directive, CBI will later this year publish a market intelligence study that will provide an comprehensive overview of the most important rules and regulations, as well as tips on how to be successful on the European market in the new situation.
Photo: Focus group participants at the Netherlands Enterprise Agency headquarters (RVO)