On 19th March the European Commission announced that it is relaxing the PTRs in order to help travel operators retain working capital. A copy of the European Commission’s note is available here – https://ec.europa.eu/info/sites/info/files/coronavirus_info_ptd_19.3.2020.pdf.
The Commission’s guidance states “Having regard to the strains on liquidity of tour operators because of missing new bookings coupled with reimbursement claims, travellers should consider accepting that their package tour is postponed to a later point in time. Having regard to the current uncertainty to make travel plans, that could be done by means of a credit note (so-called “voucher”). However, the traveller should have the possibility to ask for a full refund if, eventually, he or she does not make use of the voucher. Moreover, it should be ensured that the voucher is covered by appropriate insolvency protection.”
The Commission’s guidance gives travel operators the right to provide credit notes / vouchers instead of a full refund. However, the purpose of this change is reduce immediate cash-flow concerns for travel operators rather than removing the obligation to ever pay refunds for package holidays which are cancelled as a result of the coronavirus outbreak. It is important to note that the Commission’s guidance provides that customers will still have the right to get a refund at the later date if they don’t use the voucher and the travel operator is still required to maintain the insolvency protection which is required under the PTRs.
It is not yet known whether the UK will apply the same relaxation to the PTRs. Whilst there have been indications that similar measures will be applied, there has not yet been an official announcement. Despite this it appears that some travel operators in the UK have already issued policies stating that customers will be given a voucher or credit note or directing them to claim from their travel insurance provider. These policies are not compliant with the PTRs and as a result the travel operators could face claims from customers. However, the travel operators may have taken a commercial decision to accept the risk of such claims in order to retain the cash within their businesses at this crucial stage.
One way in which travel operators can seek to keep cash in their business rather than paying customer refunds is to get customers to accept vouchers by offering incentives such as discounts, priority booking, upgrades or added extras.