Holidaymakers should be given vouchers for MORE than the original cost of travel cancelled due to coronavirus, European Commission demands
- EC said travellers should be encouraged to accept vouchers rather than refunds
- People with cancelled travel bookings are legally entitled to a speedy refund
- But this is not happening due to the dire financial situation businesses are in
- Here’s how to help people impacted by Covid-19
Holidaymakers should be given vouchers for more than the original cost of travel cancelled due to coronavirus to encourage them not to ask for a cash refund, the European Commission has said.
Disappointed travellers are legally entitled to a speedy refund which has not been happening due to the dire financial circumstances businesses are finding themselves in.
Instead, many are being offered vouchers, which people have a right to refuse.
Travel agents and flight companies owing money to holidaymakers after their trips were cancelled due to the coronavirus pandemic should consider offering vouchers for more than the original cost, European officials have said (Stock image)
The European Commission said today that holidaymakers understandably want their money back because families are suffering as much as tourist businesses and airlines.
In addition, they were right to be cautious about accepting vouchers as by time they were allowed to travel again, the agents or airlines might have gone bust and cease to exist.
The EC says the offer of vouchers should be made a more attractive option so disappointed holidaymakers might accept them rather than cash. One way of doing this would be to enhance their value and offer a higher amount than the money owed.
In a report issued today, the EC says: ‘The COVID-19 pandemic has resulted in national travel bans as well as warnings or restrictions at borders. This has led to a vast number of cancellations and many citizens being unable to travel.
‘The current unprecedented worldwide travel restrictions have caused almost a standstill of travel in Europe and many other parts of the world. This is having a serious impact on carriers, organisers of package tours and providers of other tourism services as part of package tours.
‘At the same time, many passengers and travellers have been affected by the economic impact of the crisis and have seen their income reduced as a result of the curtailment of economic activities which impacts the prospects of both employers and employees.’
Travel and tourism sectors in the EU report a reduction of bookings in the range of 60% to 90% compared to the same period last year and refund requests from travellers due to cancellations far exceed the level of new bookings.
According to preliminary estimates of the European Travel Agents’ and Tour Operators’ Association (ECTAA), the COVID-19 pandemic may cause a loss of EUR 30 billion (minus 60%) in the first quarter of 2020 and EUR 46 billion (minus 90%) in the second quarter, compared to expected turnover based on previous years.
The EC says cash flow is a problem for all, with no indication yet as to when or if things will improve as more and more countries introduce 14-day quarantine plans for international travellers.
Travel and tourism sectors in the EU report a reduction of bookings in the range of 60% to 90% compared to the same period last year and refund requests from travellers due to cancellations far exceed the level of new bookings
Offering alternatives to people who have had their holidays or flights cancelled is therefore not an option. Legislation says the full cost of the ticket is due within seven days following the passenger’s request in the cases of air, sea and inland waterways transport, 14 days after the offer has been made or the request has been received for bus and coach transport and one month after the request in the case of rail transport.
Today’s EC travel report says: ‘Making vouchers more attractive, as an alternative to reimbursement in money, would increase their acceptance by passengers and travellers. This would help to ease the liquidity problems of carriers and organisers and could ultimately lead to better protection of the interests of passengers and travellers.
‘To that end, vouchers should be protected against insolvency of the carrier or of the organiser. Such protection could be set up by the private or the public sector and should be sufficiently effective and robust. ‘
Vouchers should last for a longer period than the norm, suggested to be one year, and if not used, could still be cashed in. Their use should also be made more flexible ie they could be used for other services provided within the same group.
‘In order to make vouchers more attractive, organisers and carriers could consider issuing vouchers with a higher value than the amount of any payments made for the
package travel or transport service originally booked, for example through an additional lump sum or additional service elements,’ says the Commission.
The amount should also be protected by a new guarantee scheme.