COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESMENT Accompanying the document on package travel and assisted travel arrangements, amending Regulation (EC) No 2006/2004l and Directive 2011/83/EU and repealing Council Directive 90/314/EEC
Date: 2013-07-09
Institutions: European Commission
Subjects: carriage of passengers, consumer information, contractual liability, financial solvency, hotel industry, travel agency, vehicle rental













EUR-Lex - 52013SC0263 - EN











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52013SC0263

COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESMENT Accompanying the document on package travel and assisted travel arrangements, amending Regulation (EC) No 2006/2004l and Directive 2011/83/EU and repealing Council Directive 90/314/EEC /* SWD/2013/0263 final */









Contents
1........... Introduction.. 2
1.1........ Policy context 2
1.2........ Organisation and
timing. 2
1.3........ Different categories
of travel products- definitions. 3
1.3.1..... Consultation and
expertise. 4
1.4........ Consultation of the
Impact Assessment Board. 6
1.5........ Specific
characteristics of the package travel and the legal framework in place. 6
2........... Problem definition.. 8
2.1........ Context of the problem
definition- changes in the travel market 8
2.1.1..... The EU travel market 8
2.2........ The travel market has
outgrown the existing legislation – an introduction to the problems in the
existing package travel market 10
2.3........ Key problems faced by
businesses. 11
2.3.1..... Absence of a level
playing field. 11
2.3.2..... Unnecessary/unjustified
compliance costs. 12
2.3.3..... Legal discrepancies
between the Member States leading to additional costs and obstacles to
cross-border trade. 14
2.4........ Key problems faced by
consumers. 17
2.4.1..... Consumer detriment
suffered by users of combined travel arrangements. 17
2.4.2..... Specific problems  of
consumers detriment stemming from unclear and outdated rules  18
2.5........ Baseline scenario. 20
2.6........ Does the Union have
the right to act?. 20
3........... Policy objectives. 21
4........... Policy options. 22
4.1........ Identified policy
options. 22
4.2........ Discarded policy
options. 26
4.2.1..... Option 8 “Travel
Directive”. 26
5........... Assessment of Impacts. 27
5.1........ Assessment of Option 2 - Guidelines and Better Enforcement of Existing Legislation (PO2) 27
5.2........ Assessment of Option 3
– Introduction of a "Package Travel Label" (PO3A) and/ or "This
is not a package" disclaimer (PO3 B)- add-on option to other policy
options. 28
5.2.1..... Sub-option A: Package
Travel Label 28
5.2.2..... Sub-option B: "This
is not a package" disclaimer. 29
5.3........ Assessment of Option 4
– Repeal of the Directive. 30
5.4........ Assessment of Option 5
– Modernisation of the Directive and coverage of "one trader"
packages (PO5) 32
5.5 Assessment of
Option 6 - Graduated approach- modernisation of the Directive and coverage of
both "one trader" and "multi trader" packages while
applying a lighter regime to "multi-trader" assisted travel
arrangements (PO6) 38
5.6........ Assessment of Option 7
- Modernisation of the Directive and coverage of both "one trader"
packages and "multi-trader" travel arrangements (PO7) 41
6........... Comparative assessment of
policy options. 42
6.1........ Preferred Policy
option. 46
7. Monitoring and evaluation.. 46
ANNEX 1. 48
The main requirements of the Package Travel Directive.. 48
1........... Information
requirements. 48
2........... Binding prices. 50
3........... Right to transfer
the package. 50
4........... Cancellation or
change of contract terms. 50
5........... The organiser's
responsibility and complaint handling. 50
6........... Insolvency
protection. 51
ANNEX 2. 52
1........... Problem
definition-data tables and graphs. 52
2........... Estimation of the
travel market segments. 59
Estimation of
the pre-arranged packages segment 60
Estimation of
the combined travel arrangements segment 61
Estimation of
the market segments. 61
Estimation of
the total volume of the market 62
Business trips. 62
3........... Overview of applicable
legislation and rights. 64
4........... Gaps in the current
legal framework for packages. 65
ANNEX 3. 67
Scope and definitions. 67
1.1........ Definition of
"package". 67
1.2........ Definition of
"consumer". 70
1.3........ Definitions of
"retailer" and "organiser". 71
Information requirements. 71
Requirements for
the brochure. 71
How to provide
the required information. 72
Last minute
bookings. 72
Lack of sanctions
for non-compliance with the information requirements. 72
Contract changes before the departure.. 73
Price revisions. 73
Significant
alterations of essential terms before departure. 73
Significant
price alterations. 74
Cancellations
of the contract before departure. 74
Cancellations
before departure on the ground that there are too few participants. 75
Cancellations
before departure due to force majeure. 75
Transfer of the
package before departure. 76
Alterations of the contract after departure.. 76
Cancellations
after departure due to force majeure. 76
Interplay with
the APR Regulation. 77
Problems related to performance, liability and obligation of the
professional parties. 78
Who is the responsible party?. 78
Compensation for damages. 78
Type of
liability. 79
Conditions for
liability. 79
Notifications. 79
Timing of repayment.. 80
Insolvency protection.. 80
Prescription periods. 81
ANNEX 4. 82
1........... Introduction. 82
2........... Proposed
legislative measures in option 5 - Modernisation of the Directive and coverage
of "one trader" packages (PO5) 82
2.2.1..... Including other (modern)
channels of marketing communication. 85
2.4.2..... Liability for the proper
performance of the contract 90
2.4.3..... Responsibility for
providing prompt assistance if the consumer is in difficulty (for other reasons
than the organiser's improper performance) 91
2.4.5..... Obligation to provide
alternative arrangements. 92
2.4.6..... Insolvency protection. 93
3........... Proposed
legislative measures in option 6 - Graduated approach- modernisation of the
Directive and coverage of both "one trader" and "multi
trader" packages while applying a lighter regime to
"multi-trader" assisted travel arrangements (PO6) 95
4........... Proposed
legislative measures in option 7 – Modernisation of the Directive and full
coverage of both "one trader" packages and "multi-trader"
travel arrangements (PO7) 97
ANNEX 5. 98
Detailed
assessment of policy options. 98
2.1.2..... Compliance costs for
businesses. 107
2.1.3..... Administrative costs for
businesses. 108
2.1.4..... Impact on SMEs. 108
2.1.5..... Impact on consumers and
households. 108
2.1.6..... Impact on public
authorities. 108
3.1.4..... Impact on consumers. 110
ANNEX 6. 153
ANNEX7. 158
1.     
Introduction
1.1.   Policy
context
The
travel market plays a central role in the European economy of today. It
significantly contributes to prosperity and growth within the single market.
Travel and tourism represent  7.8% of the EU GDP, supporting 18 million jobs,
and their contribution into it is expected to increase to 8.1% by 2021.[1] The European
Union remains the world's No 1 tourist destination, with 384.8 million
international arrivals in 2011.[2]

A
key task for the European Union is to create a modern legal framework that
offers the best possible conditions for the travel market to grow further, for
the benefit of both businesses and 500 million consumers in Europe. This
regulatory framework must provide sufficient protection for consumers so that
they can confidently buy their holidays anywhere in the Union. At the same
time, a level playing field for travel businesses must be ensured to increase
competition in the market. The adoption of the Package Travel Directive (PTD)[3]
in 1990 made a significant contribution to the development of a single market
for an important part of the travel market, and created important guarantees
for European travellers. 
The
PTD applies to pre-arranged packages, typically consisting of transport and
accommodation (and/or other significant tourism services) sold together:[4]Nowadays,
an increasing number of consumers, in addition to buying pre-arranged packages
at their travel agent's, put together their trips themselves according to their
own needs based however on specific offers coming from one or more,
commercially linked, traders. The applicability of the Directive to all these
new travel products has become uncertain; in particular to those products sold
on-line, while some are clearly not covered by the current scope of the
Directive.

A
modernisation of the PTD has repeatedly been asked for by the industry as well
as consumer organisations. The revision of the PTD is also explicitly envisaged
in the European Consumer Agenda[5] and is
mentioned in Annex II to the Single Market Act II.[6]
1.2.   Organisation
and timing
Lead
DG: DG JUST. DG JUST liaised with relevant services through the Impact
Assessment Steering Group (IASG), which was first convened in June 2009 and met
twice afterwards (March 2010 and July 2012): The following services
participated in the group: DG ENTR, DG MARKT, DG SANCO, DG CNECT, DG MOVE, DG
TRADE, DG BUDG, the SG and the SJ. The legislative proposal is included in the
2012 Agenda Planning and Commission Work Programme (CWP), with reference
2010/JUST/273. 
1.3.   Different
categories of travel products- definitions
Independent travel arrangements - a travel
service, such as a flight, accommodation or car rental that is purchased as a
stand-alone product, i.e. purchased separately and not offered in combination
with other tourist services, even if the traveller uses several travel services
for the same trip or holiday. 
Pre-arranged package - a combination of travel
services bundled in advance by an organiser and consisting of at least two of
the following services: (1) carriage of passengers, (2) accommodation and (3)
other tourist services not ancillary to passenger transport or accommodation
and accounting for a significant proportion of the package (e.g. car rental). 
Combined travel arrangements[7] -
combinations of travel services where at least two of the above mentioned
services, such as flights, hotel stays or car rental, are purchased for a
single trip or holiday either from the same supplier or from suppliers that use
assisted booking processes and where the buyer can put together the relevant
travel services according to his preferences (tailor-made). Combined travel
arrangements are, contrary to pre-arranged packages, dynamic by nature and can
be divided into two main sub-categories:
"One-trader
packages": Consumers can customise the content of the trip or holiday
according to their needs on one website or at one high street travel agent,
while being free throughout the booking process to choose separate travel
components. These travel arrangements are put together by one trader (including
at the request of the traveller) and are offered or sold in a manner that is
typical for packages, e.g.:
offered,
sold, or charged at an inclusive price,
sold within
the same booking process, 
covered by
one contract, or
advertised or
sold under the term "package" or under a similar term;
"Multi-trader"
travel arrangements:
"Multi-trader
packages": the difference between a "multi-trader package" and a
"one-trader package" is that a "multi-trader package" is
put together by several traders and the arrangement has at least one of the
characteristics that are typical for packages, as indicated above under
"one-trader packages", or when the traveller's name or particulars
needed to conclude a booking transaction are transferred between the traders at
the latest when the booking of the first service is confirmed;
"Multi-trader
assisted travel arrangements": are combinations of travel services where
one trader facilitates in a targeted manner the procurement of travel services
from another trader, during a single visit of a point of sale or through linked
online booking processes. In such cases consumers conclude separate contracts
with the relevant service providers and no elements typical for a package
(see above) are present. 
See
also annex 8 for a glossary of abbreviations used in the text.
Figure
1 Distinction between combined travel arrangements and pre-arranged packages
   || Pre-arranged packages: Pre-packaged arrangements by tour operators Little flexibility as to the dates and prices; multiple choices but limited customisation ability 
   || Combined travel arrangements: Packaging is done by the customer in real-time on basis of available components; Enhanced customisation ability of the customer; Real-time availability and real-time booking; 
Source:
E-Business Watch, ICT and e-Business in the Tourism Industry, Sector Report No .8/2006
1.3.1.      Consultation
and expertise
In
the first public consultation in 2008, the Commission received more than 80
contributions to its 2007 working document from all relevant parties (business
stakeholders, consumer organisations, lawyers, academics and 14 MS). In January
2009, it launched the "Consumer Detriment[8] Study in the area of
Dynamic Packages" (Consumer Detriment Study). The study covered 17 EU
countries and was based on interviews with a sample of 500 consumers. Against
this background, the Commission initiated the formal impact assessment process
in June 2009. The consultation dialogue and evidence gathering was carried out
with the assistance of an external contractor, the Risk & Policy Analysts
(RPA) in consortium with London Economics and You Gov.
In
October 2009, a second public consultation was published, consisting of five
on-line questionnaires targeted at different stakeholders (consumers, consumer
organisations, businesses, industry associations and MS authorities). The
Commission received 161 contributions from a wide range of respondents. 89% of
MS authorities, 70% of business associations, 64% of businesses and 96% of
consumer organisations supported a revision of the Directive.[9]
A
full-day Member States' workshop was organised on 27 October 2009 to discuss
problems and policy options. 16 Member States and one EEA State attended it[10]. 
The
Commission also set up a subgroup within the framework of the European Consumer
Consultative Group (ECCG) comprising representatives of consumer
organisations.  It adopted its opinion on 21 April 2010[11].
A
one-day stakeholders' workshop was organised on 22 April 2010 to discuss the
impacts of the identified policy options. Almost 100 stakeholders took part in
it[12].
More
than 15 interviews with key industry representatives were conducted from
September 2009 to October 2010. 
In
March 2012 the Commission outsourced to an external contractor, TNS European
Behaviour Studies Consortium, a study to test a Package Travel Label and
consumer behaviour when purchasing dynamic packages. The results of this study
contribute to the assessment of policy option 3.
In
June 2012 the Commission organised a workshop for Member States and a
stakeholders' conference to further discuss the revision process and the main
pending issues, as well as to present the results of the behavioural study[13]. 
It can be concluded that stakeholders (including
Member States authorities):
·       
are
in favour of clarifying and updating the Directive to address new market
developments; 
·       
are
mostly in favour of extending the scope of the Directive to cover combined
packages as well as streamlining and modernising the information requirements; 
·       
are
divided as to which party should be liable for the proper performance of the
contract and for assisting a consumer in difficulty; 
·       
are
strongly against setting up a pan-European insolvency fund and support instead
flexibility for Member States to decide what kind of insolvency scheme they set
up, as long as there is mutual recognition of the different schemes across the
EU;
·       
 are
also divided on the idea of introducing a Package Travel Label. Some consumer
organisations and businesses originally strongly supported it, provided there
are strict and clear rules for its use. On the other hand, some consumer
organisations argued that more labels might confuse consumers. After seeing the
results of the study (see assessment of policy option 3), most stakeholders
have shown scepticism.
Furthermore,
the vast majority[14] stated that
it is important to further harmonise EU rules on the scope, definitions,
information requirements, liabilities of the professional parties and contract
changes.
Furthermore, the revision has also been requested from or been supported by the
co-legislators and the EESC.[15]
1.4.   Consultation
of the Impact Assessment Board
The IA report was examined
by the Commission's Impact Assessment Board (IAB) on 21st November 2012.
The IAB evaluated the IA report positively and considered the assessment to be
thorough. The IAB recommended several aspects to be improved, in particular by
providing a more complete overview of Member States' legal framework,
simplifying presentation of options, improving coherence of options and
specific objectives as well as including more stakeholders' views. All these
recommendations have been addressed. For instance, the existing legal framework
was presented in more detail in this report and Annex 2, presentation of
options was simplified and only the assessment of retained sub-options was kept
in the main report, specific objectives were reformulated to make them more
measurable, more stakeholders views were added to the main report and the
annexes. 
1.5.    Specific characteristics of the package travel and the legal
framework in place 
Travel
services are to some extent regulated at EU level in sector-specific
legislation e.g. in the transport sector, where different regulations safeguard
passengers rights[16]
depending on the mode of transport (e.g. travel by ship, bus, rail or air).
Travel services are also covered by horizontal EU consumer protection
legislation such as the Unfair Contract Terms Directive[17],
the Unfair Commercial Practices Directive[18] and the Consumer
Rights Directive[19],
as well as the contract law of the Member States.[20]
Travel services also fall within the scope of the Services Directive[21] and, when
provided online, of the E-Commerce Directive[22]. 
When
purchasing travel products (e.g. accommodation, transport and car rental),
consumers are protected against unfair, i.e. misleading or aggressive marketing
practices. Traders must always display the full price of the product including
any unavoidable charges such as local fees, taxes and handling fees. The
advertising of travel products may not be misleading and may not, in particular,
contain false information or omit important information to entice consumers to
purchase a travel product they would not have bought otherwise.
For
online purchases of travel products, sellers must give detailed information,
including their contact details and a description of the main characteristics
of the product. They cannot use pre-ticked boxes to induce consumers to buy
additional services[23].
Furthermore, contracts for travel products must not contain unfair terms. For
example, the seller may not impose terms which the consumer had no real
opportunity to read before signing the contract.
The
passenger rights regulations lay down specific rights for travellers in
relation to carriers with regard to transport services, but not in relation to
the actual combination of different tourist services.
Although
as summarised above, some horizontal consumer protection rules apply to package
travel contracts as well, they do not regulate specific aspects associated with
them, thus leaving important gaps for consumers. These gaps include specific
information obligations, such as on the travel itinerary, the definition of
liability in the event of problems in the performance of the included services
and mandatory insolvency protection requirements.. A detailed overview of
legislation and rights applicable to different travel services and a table
showing legal gaps in the area of packages are included in Annex 2.
Package
travel contracts normally represent a rather complex and atypical contractual
relationship:
·       
the
customer expects to be able to rely on one single interlocutor who guarantees
the overall quality of the package;
·       
a
package normally involves several service providers (separate sub-contractors
providing different travel services, e.g. hotel accommodation, charter flights,
car rental and excursions);
·       
the
customer does not have a contract with the individual service providers and is
often not even aware of the identity of all the involved service providers, who
may  be often based abroad and not share his/her language;
·       
a
problem with one travel service has often consequences for other services
included in the package;
·       
pre-payments
are very common, thus exposing the customer to a financial risk;
·       
the
packages often involve travelling considerable distances and travellers can be
at  risk of being stranded far away from their place of residence if the
organiser goes bankrupt; 
·       
there
is a commercial link between different service providers and the organiser of
the package.
2.     
Problem definition
The Package Travel Directive has worked well
throughout the years creating its own market. However, with the increasing
trend towards on-line travel purchases, its scope has become unclear and
outdated. As a consequence, businesses across the Internal Market are no longer
competing on an equal footing and are facing obstacles to expand their
operation cross-border. Its outdated scope is a source of significant detriment
for consumers who often purchase unprotected travels under the impression that
they are protected. Other outdated and unclear provisions of the current
Directive generate unnecessary costs for businesses and consumers.
2.1.   Context of
the problem definition- changes in the travel market 
2.1.1.      The EU travel
market
The
EU travel market comprises approximately 90,000 tour operators and travel
agencies.[24] It is
estimated that 80% of them sell packages (72,000 businesses).[25] SMEs
constitute 99% of these businesses, of which micro enterprises represent 92%.
In the EU there are also 200,000 hotels[26] (99% SMEs,
73% of which are micro enterprises), 13,000 car rentals[27] (99% SMEs, out of which
94% are micro enterprises), 300 airlines (50% large and 50% medium sized
businesses) and 58,000 businesses operating in the transport sector other than
airlines and car rentals (99% SMEs, about 90% micro enterprises).[28]  
2.1.2.       Development
of Internet distribution
Almost
70% of EU citizens use the Internet at least once a week. More than half of the
Internet users are "regular users" surfing the Internet every day or
almost every day. 73% of EU households had access to the internet in 2011, with
the Netherlands posting the highest access rate (94%) and Bulgaria the lowest (45%)[29]. Together with the growing number of Internet
users, the travel market has significantly shifted on-line. Gross online travel
bookings across Europe account for 35% of the total bookings in 2011, now
measuring €83.6 billion compared to €238 billion for the entire (on- and
off-line) market, having increased by 21% since 2006.[30]Travel services are the
most popular category purchased on-line. Stand-alone air tickets account for
more than 50% of the total online sales value of travel services, followed by
stand-alone hotel bookings (19%) and packages (14%)[31]. 
2.1.3.      Different
categories of trips
Estimates
based on the Consumer Detriment Study and Eurostat (tourism database)[32] indicate
that, out of a total number of trips of about 580 million every year in the EU
(excluding short domestic trips which are s generally not purchased as a
package), there are 500 million holidays and 80 million business trips. For
holidays, pre-arranged packages currently account for about 23% of the total
market volume (i.e. about 118 million trips), combined travel arrangements for
another 23% (i.e. also about 118 million trips, of which 87 million are “one
trader” packages and 31 million are "multi trader" travel arrangements
(50% of which are "multi-trader" packages and 50% are
"multi-trader" travel arrangements) and independent travel
arrangements for 54% of the travel market volume (i.e. roughly 277 million
trips).[33] Combined
travel arrangements are on the rise[34]: data shows
that 23% of EU citizens buy them every year but the figures are substantially
above average for Ireland (46%), Sweden (44%), Italy (36%) and Slovenia (42%)[35] (see also
Annex 2 Figure 5).
Figure
2 Holiday travel market- different categories of holiday trips
Concerning
business trips, 80%-85% (64-68 million) of trips are arranged by travel
management companies (TMCs)[36]. Taking into
account the specificities of such trips, it is considered that most business
travellers do not use pre-arranged packages, but rather prefer more customised
solutions, better tailor-made to the needs of their work-related journey[37]. Therefore,
out of the 80 million business trips carried out annually in the EU, it is
assumed that around 24 million trips are combined travel arrangements (out of
which 16 million are "one trader" packages organised by TMCs), while
independent travel arrangements have been estimated at around 56 million trips
(out of which 50 million trips are booked  by TMCs).[38]
Table
2
Market of Business- different categories of business trips
 Business trips Market segment || % share || Number of business trips (millions) || Number of business trips arranged by TMCs (millions) || Number of business trips NOT arranged by TMCs (millions 
 "One-trader" packages   || 22% || 18 || 16 || 2 
 "Multi-trader"  travel arrangements || 8%   || 6 || 0 || 6 
 Independent travel arrangements || 70% || 56 || 50 || 6 
 TOTAL || 100% || 80 || 66 ||   
2.2.   The travel
market has outgrown the existing legislation – an introduction to the problems
in the existing package travel market
The
main underlying drivers of the problems related to the Package Travel Directive
are its outdated scope and the presence of outdated and unclear provisions. 
2.2.1.      The outdated
and unclear scope of the Directive
The
current Directive refers to "pre-arranged" combinations of travel
services and does, therefore, not explicitly cover packages which are combined
at the consumer's request. Still, in the Club Tour-Case[39], the Court of Justice
of the European Union clarified that the combination of tourist services by a
"bricks and mortar" travel agency at the specific request of the
consumer falls within the scope of the Directive if the consumer pays an
inclusive price and there is a contract between the consumer and a travel
agent,. However, the practical impact of this ruling has led to litigation at
national level, and failed to provide full clarity on the applicability of the
package travel legislation. See Annex 3 for details how the term package is
interpreted in different Member States.
In
particular, it remains unclear whether, in the light of that ruling, the
current Directive also applies to "one-trader" packages sold on-line,
whereas "multi-trader" packages and "multi-trader" assisted
travel arrangements are clearly outside of its scope.  This is the case even
though at least "one-trader" packages and "multi-trader"
packages have similar characteristics and are competing for the same customers.

The figure
below illustrates the scope of the Directive in relation to different travel
arrangements. 
Figure 3
Scope of the Directive 
2.2.2.      Outdated and
unclear provisions of the Directive
Several
provisions of the Directive lack clarity (for instance, provisions on the
liability, contract changes) and some provisions are outdated (for example, the
rules regarding information requirements or lack of termination rights for
consumers). See annex 3 for further details.
In
a nutshell, most of the problems with the current legislation can be
categorised into two main groups: 
Business problem, i.e. absence of a level
playing field, unjustified compliance costs and obstacles to cross-border trade
within the Internal Market (see Chapter 2.3), as well as
Consumer
problems, i.e. detriment suffered by consumers (see Chapter 2.4). 
2.3.   Key problems
faced by businesses 
2.3.1.    Absence
of a level playing field
The
described changes in the market have led to a situation where the market
players covered by the PTD are at a competitive disadvantage compared with
those which are not covered or, at least, do not consider themselves to be
covered, although both are competing for the same customers and although the
combinations they sell can include exactly the same components. 
Consumers
are often unaware that different protection applies to such competing products
(i.e. pre-arranged as opposed to "one trader" or "multi
traders" packages). However, businesses selling such competing products
are subject to different obligations and thus bear different costs. In
particular, the average cost of businesses for complying with the PTD
requirements has been estimated at €10.5-€12.5 per package. When considering
160 million holiday packages currently covered by the Directive[40], aggregate
annual compliance costs amount to about 1.7 – 2 € billion. 
The
breakdown of costs for complying with the PTD is provided in Annex 5, section
1.1.1.
Such
average cost accounts for about 1.4%-1.6% of the average price of a
pre-arranged package (777€[41]). Even if it
is small, this percentage contributes to the difference in the average price as
compared with combined travel arrangements (741€[42]). It can be argued that
this difference in price, to a large extent, reflects an unjustified difference
in regulatory treatment among traders selling competing products in the same
market segments. 
Box 1 Example of differences
in the market playing field 
Happy Flight, an airline, sells online a ticket
to Malaga to a consumer in Finland. In the booking process Happy Flight offers
hotel accommodation through the website of a business partner which has a
similar website layout. After selecting the flight and the hotel, the consumer
is charged for the two services at one inclusive price. In parallel, Happy
Holidays, a Finnish tour operator, sells a pre-arranged package consisting of
exactly the same flight and accommodation in the same hotel. To sell this
package, Happy Holidays has to provide insolvency protection and comply with
the information requirements of the PTD. Additionally, he will be liable for
the proper performance of all the services included in the package. This costs
him on average €10.5-€12.5 per package. Happy Flight, which in fact offers the
same travel services but presents them differently, does not incur such costs.
2.3.2.    Unnecessary/unjustified
compliance costs 
With
the development of the Internet and other changes in the market, some of the
above mentioned compliance costs do not seem justified: 
·       
Outdated
information requirements
According
to the current rules, if an organiser provides consumers with a public
brochure, it must contain prices and other information, for instance about the
itinerary, the meal plan, the destination and the means, characteristics and
categories of transport. The particulars in the brochure are, as a general
rule, binding on the organiser/retailer, including prices. These rules have led
to businesses complaining that, in order to minimise litigation risks, they do
reprint the brochures in case of changes in prices, accommodation, etc., which
costs them around €400 million annually.[43] This
gives an amount of approximately 2.5€ per package, when divided by the number
of packages covered by the Directive.[44] In today's
Internet world, the continued need for  specific printed information seems less
justified than 23 years ago.
·       
Unjustified
costs for package travel organisers in case of delays, cancellations, force
majeure events and accidents related to transport due to insufficient redress
mechanisms
Where transport is included in the package, in
most cases, both the package organiser and transport carriers are obliged to
provide compensation and assistance in case of delays, cancellations or
accidents to passengers under EU rules on passenger rights. Thus, consumers may
in many situations choose whom to turn to: the carrier or the organiser. This
situation where several parties (i.e. transport provider and a package travel
organiser) are obliged to provide assistance and possibly pay compensation for
the same situation (e.g. cancellation or delays), might lead to unjustified
cost for certain organisers (double compensation paid to travellers).  
·       
Lack
of coherence with EU passenger rights rules - unlimited liability in case of
force-majeure events
Currently there are no limitations to the
organiser's liability to provide alternative arrangements for the continuation
of the package in case of events which prevent the consumer from returning home
according to the planned schedule. This is clearly a burdensome rule for
businesses and, due to its unlimited character, difficult to insure against.
For example, ECTAA estimated that, during the 2010 volcanic ash crisis, tour
operators had to provide care and assistance to the stranded passengers,
including their repatriation, for an overall cost of € 380 million.[45]
The EU rules on passenger rights provide for a limitation of the carrier's duty
to provide accommodation for cancelled/delayed trips in the case of bus and
maritime transport and a similar limitation is foreseen, also for force majeure
events, in the review of APR[46]. 
The PTD rules lack a similar limitation to the
organisers' liability to provide alternative arrangements for the continuation
of the package, which would seem particularly appropriate in long lasting force
majeure events.
·       
Duplication
of protection for business trips
The
current PTD protects "consumers" purchasing packages. However, the
definition of "consumer" encompasses anyone taking the package,
thereby including business trips and granting full protection also to business
travellers purchasing a package (B2B contracts). 
It is considered burdensome and unnecessary that
the protection applies also to travellers going on business trips organised by
specialised Travel Management Companies (TMCs)[47]. This cost amounts to € 10.5 – €
12.5 per package leading to a total of € 30-114 million[48] annually for the
industry. Business
travellers have specific demands, they know exactly when and where they have to
go and give specific instructions to their travel agencies.  Also, the contracts
are usually rather long-term ones, concluded between the agency and the
travellers' employer,  are usually very detailed and address the handling of
possible disputes or problems.  For these reasons, business travellers are far
less exposed to problems which might occur during their journey and have no
personal financial risk or damage. In practice, business trips organised by
TMCs, even if not covered by the directive, provide a similar level of
protection as under the PTD.
Business
trips arranged by TMCs account for 80%-85% of all business trips in the EU
However, especially micro and small enterprises often do not have specific
contractual agreements with specialised TMCs and hence procure their travel
arrangements in a similar way as an average consumer would do.
2.3.3.    Legal
discrepancies between the Member States leading to additional costs and
obstacles to cross-border trade
The
current Directive is based on minimum harmonisation, and this has resulted in
legal discrepancies between Member States. This fragmentation generates
additional compliance costs for businesses wishing to trade cross-border as
recently signalled in the performance checks of the internal market in the
tourism sector carried out in 2012[49]. Businesses
that trade across borders have to pay about € 375 to research information about
the Member State in which they want to get active. They also have to bear
recurring costs of adapting their information materials to the requirements of
different Member States. Taking into account the average number of EU companies
which make cross-border sales, this translates into about additional €2 per
package out of which €1.7 is a one-off cost[50]. The overall baseline
administrative burden associated with cross-border trade has been estimated at
€ 26 million (out of which €21m are one-off costs for researching Member
States' differing national legal requirements and legal advice; €5.1m are
recurring annual administrative costs). 
 Administrative costs associated with cross-border trade   || €2 per package 
 Total costs for export-oriented businesses || €12.5-€14.5 
The
Eurobarometer study has shown that more than 70% of EU retailers,
including (but not limited to) the travel industry, would be interested in
making cross-border sales if laws regulating consumer transactions were the
same across the EU and half of retailers that made cross-border sales would be
interested in selling their products in more than ten Member States.[51] One third of
businesses stated in the public consultation that their level of cross-border trade
would increase if the rules regarding package travel were to be harmonised
across the EU. This could be one of the reasons explaining the current low
amount of cross-border sales by travel agents and tour operators (less than 10%
according to 2009 data).
The
following examples of legal discrepancies in the package travel sector are
particularly likely to cause barriers to cross-border trade:
·       
Divergent
insolvency protection schemes and lack of mutual recognition
Under the Directive, the organiser/retailer
must provide sufficient evidence of security for the refund of all money paid
over and the repatriation of the consumer in the event of insolvency[52]. The
Directive does not set out any explicit requirement for the actual method of
insolvency protection as long as it is effective[53]. As
a result, there are diverging methods of insolvency protection in the Member
States, e.g. insurance policies, bank guarantees, national insolvency funds or
a combination of these methods. This, combined with the lack of explicit rules
on mutual recognition, have resulted in a situation where some retailers or
organisers who are trading cross-border had to pay several times for insolvency
protection which they had already secured in their Member State of
establishment[54].
More
than 58% of enterprises consider the variety of insolvency schemes as an
important obstacle to cross-border trade and ask for increased harmonisation.
Even though the performance checks of the internal market for the tourism
sector carried out in 2012 showed that a number of Member States recognise the
protection awarded by funds established in other Member States[55], a
systematic mutual recognition in the sector-specific legislation is sometimes
missing. 
Some Member States
also appear to impose national insurance and guarantee obligations on
cross-border service providers legally established in other Member States in
order for them to access and exercise their activity occasionally in their
territory[56]. 
This
situation is detrimental to the Internal Market and can block competition among
these insolvency protection providers. It can also cause that businesses have
to insure themselves locally while they may obtain a better price somewhere
else. 
Data
provided by a large EU tour operator show that among Member States (even
belonging to the same geographical area) differences in the average insolvency
protection cost per package can be very significant[57].  
·       
Divergent
information requirements[58]
Some
Member States introduced additional information requirements to be included in
the brochure or contract. There are also stricter formal requirements in some
Member States with regard to the method of providing information, e.g. the
requirement that information must be in writing. 
As
a result, traders who want to produce common brochures for several Member
States have to check the specific information requirements applicable in the
different Member States concerned. A majority of stakeholders (82% of MS'
authorities, 67% of businesses and 59% of consumer organisations) stated in the
public consultation that differences in information requirements across the EU
are a problem.[59] 
Box 2 Example of cross-border
obstacles related to information requirements
Sunny summer, a package travel organiser based
in Luxembourg, wants to expand his business into the French speaking part of Belgium. He wants to send out brochures to consumers in Belgium. However, he learns that he
cannot use the same brochures, as in Belgium the brochure must also provide
information concerning financial security in the event of insolvency.
Therefore, in order to avoid any risk of litigation, he reprints the brochures
especially for the Belgian market.
·       
Different
scope of the protection rules[60]
Member
States have different rules and practices in relation to the scope of
protection under the PTD (e.g. trips of less than 24 hours, occasionally
organised trips or certain types of combined travel arrangements[61]). Businesses
wishing to sell cross-border hence have to carry out careful legal checks to
verify which rules apply on every national market. 
79%
of enterprises consider the different scope of the protection rules as an
important obstacle to cross-border trade. Moreover, almost 80% of business
stakeholders and MS authorities asked for harmonisation of the PTD scope and
definitions.[62]
·       
Different
national rules concerning liability and obligations of the contractual parties[63]
The
current Directive uses the wording "organizer and/ or retailer" and
thereby does not designate one particular party as being responsible[64]. This
wording was apparently chosen to leave the choice to the Member States. At
present, France is the only Member States where the liability rests with the
retailer and different sorts of joint liability exists in Belgium, Bulgaria,
Cyprus, Denmark,  Greece, Hungary, Luxembourg, Lithuania, Malta, Portugal,
Romania, Slovakia and Sweden.[65]
This
has led to diverging national rules in relation to who is liable towards the
consumer: the retailer, the organiser or both. More than 80% of enterprises
consider the different national rules concerning liabilities as an important
obstacle to cross border trade and 70% is of opinion that this aspect requires
harmonisation across the EU.[66] 
Box  3 Example of cross-border
obstacles related to different rules on liability
Voyage, a travel agency based in Strasbourg,   France, sells package holidays organised by ZX travels. Under French law, it
is Voyage who is liable for the proper performance of the package. On the
German side of the border, the travel agency Reisen is selling the same types
of packages organised by ZX travels. However, under German
law, Reisen is not liable for the proper performance of the package, as this
liability lies with ZX travels. Such discrepancies in liability rules
discourage both travel agencies to sell cross border, as this would cause
additional costs and would require changes to their business models.  
2.4.    
Key
problems faced by consumers
2.4.1.    Consumer
detriment suffered by users of combined travel arrangements
An
increasing number of holidays booked by consumers are not protected as they
fall outside the scope of the PTD[67]. 
The
Consumer Detriment Study confirmed that problems concerning combined travel
arrangements happen more often and are on average more detrimental than
problems concerning pre-arranged packages. The main conclusions are:
·       
Problems
are more likely to arise if the package was purchased using the Internet; 
·       
The
likelihood of receiving assistance is much lower (40%) when the consumer is
redirected between websites (e.g. purchasing "multi-trader" travel
arrangements) rather than when making a purchase on a single website (60%);
·       
The
incidence of problems for combined travel arrangements (8.2%) is much higher
than for pre-arranged packages (3.1%) and independent travel arrangements
(1.6%) and;
·       
Combined
travel arrangements cause more detriment than any other type of travel
arrangements. On average, the gross detriment per problem for pre-arranged
packages was estimated at €191 (i.e. 25% of the average costs of the package)
compared to   €593 for combined travel arrangements (i.e. 80% of the average
cost of such travel arrangements).
The
highest level of detriment was experienced in the UK, DE and FR (see Figures 7
and 8 in Annex 2). 
The
most common problems and the main source of detriment for consumers as
identified in the study are provisions of incorrect or incomplete information,
problems with transport delays or cancellations, as well as problems with
services not being provided or being of a lower standard than expected. 
The insolvency of an
organiser or a service provider can be particularly detrimental to consumers.
It is often difficult for consumers to understand whether combined travel
arrangements which they bought with the assistance of a trader are protected or
not. Indeed, 67% of consumers who bought combined travel arrangements through
an intermediary with billings by different companies wrongly believed that they
would receive a refund in case of bankruptcy of one of them. This confusion
could lead to significant detriment, particularly when consumers only realise
that they are not protected once their travel company has failed and are left
stranded abroad or unable to get their money back. For example, an estimated
1.4-2.2 million air passengers were impacted by an  airline insolvency between
2000 and 2010, of these, 12% were stranded away from home incurring the average
costs of over €796[68]. 
As
a whole, the Consumer Detriment Study estimated a yearly personal consumer
detriment for users of combined travel arrangements in the EU27 at
more than € 1 billion net (i.e. after compensation)[69]
compared to only € 159 million for pre-arranged packages. This comprises both
financial and non-financial detriment, including loss of time and moral damages
(see example in Box 3 below)[70].

Box 3 Examples of
consumer detriment
Margus,
an Estonian, booked a holiday in Rome (flight and four night accommodation)
from an Internet website enabling him to tailor his holidays by combining
different travel services. When he arrived at the hotel, he found out that the
bathroom had no water. He complained at the reception desk, but he was told
that the water problem could not be solved and no further rooms were available.
Margus then phoned the call centre of the on-line operator where he made the
booking, and was told that he had to solve this problem with the hotel himself.
He eventually had to leave and find another hotel. He hence lost 3 hours in
trying to solve the problem, €3 for phone calls and paid an additional €200 for
a room in another hotel. Had his holiday been a package travel covered by the
EU Directive, the organiser would have been liable to offer Margus assistance,
e.g. by providing him with an alternative room or hotel. 
Thomas,
a UK citizen, booked a flight to Thailand directly from the website of the XX
airline. After choosing the preferred flight, he was offered an attractive
hotel at a discount price, which he decided to purchase (assisted travel
arrangements). His friend James had in the meantime bought accommodation at
that same hotel and flight with that same airline via a pre-arranged  package
offered by the XY Leisure Group. While being in Thailand, the XX airline went
bankrupt and therefore their return flight was cancelled. However, James told
Thomas not to worry, as the XY Leisure Group holds an ATOL licence and would
have therefore taken care of repatriating them at no additional costs. However,
soon afterwards Thomas learnt that, as he had bought separate travel components
directly from the XX airline, he did not, contrary to James, enjoy bankruptcy
protection. As a consequence, he had to make his own travel arrangements to get
home, which cost him €700 on top of the cost for his original ticket. 
2.4.2.    Specific
problems  of consumers detriment stemming from unclear and outdated rules
As noted above, and although to a lesser extent
than the "unprotected" combined travel arrangements, also those
buying the "protected" pre-arranged packages suffer detriment. 
This
is due to the fact that some provisions of the Directive lack clarity, some are
outdated or do not meet the reasonable expectations of today's consumers,
whilst failing to take due account of legislative developments at EU level in
terms of increased consumer protection, for example thanks to passenger rights
rules now covering all transport modes.
·       
 Uncertainties
in relation to prices
Under the current PTD, businesses are allowed to revise the
price of the package due to certain increased costs, including increased fuel
prices or changes in the currency exchange rates, although it is possible for
businesses to hedge at least against the risk of currency fluctuations. There
is no cap for the possible price increase and as a consequence consumers lack
certainty in relation to the final price of their package. Consumers may cancel
the contract if the price change is significant. However the term
"significant change" is open to interpretation. Some Member States
have introduced more specific rules. For instance, Italy has introduced a 10%
cap, whereas Germany specifies that travellers may cancel the contract if the
price increase exceeds 5%. Moreover, while extra costs are practically always
passed on to consumers, the PTD does not specify that consumers are entitled to
a discount in the event of cost savings.  
·       
Uncertain
liability
Divergences
in national rules concerning who is the responsible party (organiser, retailer
or both) can be detrimental to the consumer as it can be unclear which party is
liable for the performance of the contract[71] and has to procure
insolvency protection, especially if the package holiday is purchased
cross-border or where the retailer and the organiser are
established in different Member States  or where the organiser is based
outside the EU (enforcement against a trader based outside the EU might be
difficult). It can lead
to situations where the organiser and the retailer refer the consumer to the
other party neither of them taking responsibility.
·       
Lack
of a right to termination
Consumers sometimes have a
legitimate need to cancel the contract before departure, which is not reflected
in the current PTD. For example, today, unless the organizer decided to cancel
the trip, consumers cannot unilaterally terminate the contract if they do not
wish to embark on a holiday in the event of a serious situation at the place of
destination such as a violent conflict, an ecological disaster or a dangerous and
contagious disease. Several Member States have introduced a general termination
right against compensation (for example BE, CZ, DE, DK, EE, EL, FI, HU, LT, LV,
PT, NO), whilst others allow for termination even without compensation in force
majeure events (for example in DK, FI)[72].
Therefore, the current rules are unclear, vary considerably across the EU and
are not always satisfactory for consumers.
·       
Uncertainty
as to the right to compensation for non-material damages
The Directive does not explicitly state that the
consumer has a right to compensation for non-material damage and, in
particular, that such compensation can arise from the loss of enjoyment which
the consumer has suffered because of improper performance of the travel
contract. However, this right was confirmed by the Court in the Simone
Leitner-case[73]. 
·       
Cumbersome
access to justice
European consumer associations have reported that a large
number of the complaints received are within the area of travel services. For
instance, data provided by the European Consumer Centres (ECCs) show that the
most frequent type of consumer complaint, out of the 552 cross-border
complaints related to the PTD in 2011, concerns packages not performed at all
or not in conformity with the booking. 
The current PTD does not set up any contact points for
complaints, minimum prescription periods or mechanisms for out of court dispute
resolutions, which have been criticized by and called for by various consumer
organisations/bodies, e.g. the ECCG opinion of 21 April 2010[74]. It
should be noted that following the adoption of the ADR/ODR proposal[75],
the PTD would benefit of an extension of ADR procedures in case of conflicts
between consumers and businesses. 
2.5.     Baseline
scenario
Without additional public intervention, the problems
identified (unfair competition, unnecessary compliance costs, obstacles to
cross-border trade, consumer detriment) would remain.
Member States might also take action at local level to
protect their citizens by extending their national legislation to cover more
types of travel arrangements. For example, the UK extended the bankruptcy
protection for "flight plus" travel arrangements in April 2012. This
will result in an increased regulatory fragmentation and additional obstacles
to cross-border trade.
As consumers get more Internet savvy, they are expected to
self-package or purchase combined travel arrangements falling outside the
protection of the PTD. As the result, unfair competition between different
market players would continue or even increase. 
The compliance costs for the industry might decrease along
with a lower number of travel arrangements subject to the PTD requirements.
However, the consumer detriment would increase as more consumers would be
travelling unprotected and buying travel arrangements under the wrong
perception that they are protected. 
Consumers and businesses would also continue to bear
unjustified costs related to outdated and unclear provisions of the Directive. 
2.6.    
Does
the Union have the right to act?
The legal basis for EU action is Article 114 of
the Treaty, which provides that "the European Parliament
and the Council shall […] adopt the measures for the approximation of the
provisions laid down by law, regulation or administrative action in Member
States which have as their object the establishment and functioning of the
Internal Market." Furthermore, Article 114 (3) specifies that "the
Commission, in its proposals envisaged in paragraph 1 concerning health,
safety, environmental protection and consumer protection, will take as a base a
high level of protection, taking account in particular of any new development
based on scientific facts." 
The proposal shall therefore eliminate internal
market fragmentation causing obstacles to cross-border trader and distortions
of competition, as well as enhance the protection of consumers, taking into
account new market developments. This objective cannot be sufficiently achieved
by the Member States, given the disparities between national legislations that
are the reason for internal market barriers and distortions of competition. If
the Member States addressed new market developments as well as regulatory gaps
and inconsistencies in EU law in an uncoordinated manner, this would create
even more fragmentation in the Internal Market and exacerbate the problem. Moreover,
there is currently no EU legislation that can replace the detailed regulations
of the existing Package Travel Directive.
3.      Policy objectives
In accordance with
Article 114 of the Treaty, the overall general objective is to contribute to
the better functioning of the Internal Market and achieve a high level of
consumer protection
.
 General objective 1 Improve the functioning of the Internal Market in the package travel sector. Related specific objectives ·          Ensure a more competitive and fairer level playing field for the businesses operating in the travel market; ·          Increase the cross-border offer of package travel services by reducing costs and obstacles to cross-border trade in the package travel market; ·          Reduce unjustified compliance costs for businesses in the package travel market. Operational objectives Reduce unnecessary cost related to the application of the Directive in the B2B segment ·          Reduce cost related to outdated information requirements ·          Lower the costs for companies by clarifying rules on liability between the involved professional parties ·          Reducing cost for organisers  related to double compensation under the PTD and passenger rights ·          Streamlining the interplay with passenger rights regulations and reduce costs for businesses by including limiting the liability of the organiser in force majeure events. ·          Decrease costs for businesses in connection with insolvency protection   || General objective 2 Achieve a high level of consumer protection in the package travel market Related specific objectives ·          Reduce consumer detriment and increase transparency for travellers who buy combinations of travel services currently not covered by the PTD by  addressing  new market developments; ·          Reduce consumer detriment stemming from unclear and outdated provisions. Operational objectives Increase transparency of information provided to consumers to ensure that they receive correct and complete information when purchasing packages   ·          Clarify rules on liability of the involved professional parties, so that consumers know who is the liable party if something goes wrong when going on a package holiday ·          Increase certainty in relation to the price of the package by providing a limitation of price increases, ·          Introduce a possibility for consumers to terminate the contract in certain situations ·          Codify that consumers can be entitled to non-material damages ·          Introduce a minimum prescription period for claims for damages and price reduction 
4.      Policy options
4.1.     Identified
policy options
Eight
policy options have been identified. These options reflect the suggestions made
by various stakeholders throughout the consultation process. They include
legislative and non-legislative measures, which can be combined to maximise
their effectiveness. 
·       
Option
1 – Maintaining the status quo – baseline scenario
(PO1)PO1 entails maintaining the PTD in its present form. It is
the ‘do-nothing’ baseline against which any potential changes under other
policy options and their impacts will be assessed. 
·       
Option
2 – Guidelines (PO2)
Option 2 entails maintaining
the PTD in its form and preparing guidelines. These would include CJEU rulings
and some clarifications on the scope and on the liabilities, addressing the
lack of clarity issues notably outlined in Annex 3, for:
-         
providing
information (pre-contractual, before departure, last minute bookings);
-         
performing
the contract properly; 
-         
providing
prompt assistance if the consumer is in difficulty, and
-         
sufficient
evidence for security in the case of insolvency.
Option 2 recognises that
certain aspects of the Directive require clarification and may deliver some
improvements for stakeholders by providing guidance.
·       
Option
3 – Introduction of a "Package Travel Label" and/ or requirement for
traders to state that the services in question  do not constitute a package- so
called "This is not a package" disclaimer (add-on option to other
policy options) (PO3)
This option covers two
sub-options:
Sub-option A entails the introduction of a "Package Travel Label" – an
obligatory logotype to be presented to consumers when purchasing a package.
Such Package Travel Label would be:
-         
a
mandatory pan-European logotype ;
-         
aimed
at clarifying whether a package is covered or not and which are the key rights
of it;
-         
available
in both off-line and on-line transactions;
-         
backed
up by verification and surveillance by national enforcement authorities, and 
-         
introduced
as add-on to other policy options and not as a stand-alone measure.
Sub-option
B
entails the introduction of an obligation for traders, when they are offering
combined travel arrangements which are not packages as defined in the PTD, to
inform travellers that individual service providers are solely responsible for
their contractual performance.
·       
Option
4 – Repeal of the Directive and self-regulation (PO4)
This option entails a repeal
of the current PTD and the adoption of self-regulation by the industry.
Self-regulation would include specific information requirements and
clarification on the liability for proper performance of the travel contract.
This option takes account of the fact that there are several pieces of
legislation[76]
which, to some extent, apply also to package travel, as well as industry codes
of conduct.
·       
Option
5 – Modernisation of the Directive and coverage of "one trader"
packages (PO5)
Option 5 involves a revision of the current PTD in which
the main legal structure of the existing Directive is kept, but which includes
addressing the problems outlined in section 2 and in Annex 3 (while Annex 4
provides a detailed description and justification for the legislative measures
proposed). The table below provides a summary of the proposed
policy measures and their correspondence with the identified problems.
 DRIVERS OF THE PROBLEM || SPECIFIC PROBLEMS || PROPOSED POLICY MEASURES Measures clarifying existing legal framework are highlighted in black whereas those introducing new measures are highlighted in red 
 OUTDATED AND UNCLEAR SCOPE OF THE DIRECTIVE || Consumer detriment for users of combined travel arrangements Absence of a level playing field || Modernising the scope to cover "one trader" packages (the Directive would be modernised to cover "one-trader" packages sold online and would clarify that "one-trader" packages sold at high street are legally subject to all PTD requirements). 
     OUTDATED AND UNCLEAR PROVISIONS resulting in consumer detriment   || Uncertainties in relation to prices || -Sub-option 0: status quo i.e. package travel contracts can allow for price increases due to certain increased transportation costs, including increased fuel prices or changes in the taxes or currency exchange rates; -Sub-option 1: introducing a cap of a maximum price increase of 10%; -Sub-option 2: clarifying that consumers have a right to terminate the contract if the price increases more than 5%, while requiring that possible cost decreases have to be passed on to the consumer as well; -Sub-option 3: making prices in the contract binding, except for price increases caused by unforeseeable increase in taxes or fees imposed by third parties for the performance of the services (e.g. tourist taxes or landing/embarking fees). 
 Uncertain liability || -Sub-option 0: status quo i.e. liability of retailer and/or organiser -Sub-option 1: contractual liability of the seller/retailer; -Sub-option 2: contractual liability of the organiser and joint liability in case the organiser is based outside the EEA; and -Sub-option 3: joint contractual liability of the seller/retailer and the organiser (consumer can seek redress from either of them); 
 Lack of right to termination || Introduction of termination rights for travellers against compensation and in force majeure cases without compensation 
 Uncertainty as to the right to compensation for non-material damages. || Clarification of right to compensation for non-material damages. 
 Cumbersome access to justice || Introduction of a minimum one-year prescription period for claims for damages or price reduction 
 UTDATED AND UNCLEAR PROVISIONS resulting in unjustified/ unnecessary costs || Outdated information requirements || Pre-contractual information requirements replacing the current mandatory requirements for the content of brochures;   
 Unjustified costs for package travel organisers in case of delays, cancellations, force majeure events and accidents related to transport   || Clarified rules on the possibilities to seek redress from the transport carrier in case of costs related to delays, cancellations, assistance or accidents regulated by the EU Passenger Rights. Consumers would continue to be able to choose whom to seek compensation and assistance from (transport carrier or the organiser of the package). 
 Clarified rules that travellers do not have a  right to double compensation for the same event from a carrier and a package organiser. 
 Unlimited liability for the  travellers' continued stay if the return journey cannot be provided in force-majeure situation || Setting a time limit for the organiser's obligation to ensure accommodation for the continued stay (e.g. for maximum 3-4 days). 
 Duplication of protection for business trips || Exclusion from the scope of business trips organised by TMCs. 
 Legal discrepancies leading to costs and obstacles to cross border trade (different scope, different information requirements, different rules concerning liabilities) || Increased harmonisation of rules concerning the scope of the Directive, information requirements, liabilities and obligations of the contractual parties 
 Divergent insolvency protection schemes and lack of mutual recognition || Flexibility of Member States as to the method of providing insolvency protection, whilst adding explicit rules on the effectiveness of the national insolvency protection scheme and, the mutual recognition of security provided under the law of the Member State of establishment.   
·       
Option
6 – Graduated approach- modernisation of the Directive and coverage of both
"one trader" and "multi trader" packages while applying a
lighter regime to "multi-trader" assisted travel arrangements (PO6)
This
option includes Option 5 (all proposed policy measures) supplemented with an
extension of the scope of the PTD with a graduated approach:
- "multi-trader"
packages would be subject to the same regime as pre-arranged packages
(including full liability for the performance of the package and the obligation
to procure insolvency protection),
-"multi-trader"
assisted travel arrangements do not display typical features of a package
and are hence less likely to mislead consumers. They would be subject to a
lighter regime,  limited to insolvency protection and an obligation to state in
a clear and prominent manner that each service provider will be solely
contractually responsible for the performance of its service(s) (policy option
3B).
As
mentioned above, in case of "multi-trader" travel arrangements, the
different components of the trip are purchased from different traders, often under
legally distinct contracts and as a consequence the distinction between seller
and organiser is often blurred. Therefore the following sub-options concerning
the liabilities are considered: 
Sub-option 1: the
liability is placed on a single provider (a trader selling the first component
who links to facilitate the purchase of the other components) who would be
considered as an "organiser";
Sub-option 2: liability
is placed on each involved provider for the service segment they offer;
Sub-option 3: joint
liability of all traders unless the parties designate only one trader to be
liable.
·       
Option
7 – Modernisation of the Directive and coverage of both "one trader"
packages and all "multi-trader" travel arrangements (PO7)
This
option includes PO 5 and 6 whilst subjecting also all "multi-trader"
assisted travel arrangements to all PTD requirements. This means that all
obligations and liabilities also would apply to "multi-trader"
assisted travel arrangements. Annex 4 provides a detailed description and
justification for the legislative measures proposed in Options 5 and 6, based
on the results of the public consultation.
·       
Option
8 – “Travel Directive” (PO8)
This option includes Option 7 supplemented with
an extension of the scope also to all independent travel arrangements
(stand-alone individual travel services, e.g. car rental, accommodation or
flight tickets). The market of independent travel arrangements accounts for
54% of all trips (about 277 Million trips annually). This option would in
principle apply the same set of rules to all travel services irrespective of
whether the product is offered/purchased as part of a package or as a
stand-alone product. 
The
proposed legislative policy options (PO5-PO8) are based on strengthened
targeted harmonisation. The aspects which require leaving flexibility to Member
States include prescription periods and method of insolvency protection. 
For
these provisions the minimum harmonisation is proposed while other provisions
are based on maximum harmonisation.
4.2.     Discarded policy
options
The Impact Assessment does not consider a
regulation since a directive allows the Member States a margin of manoeuvre
when incorporating the contractual rules in their national contract law system.
A regulation would not allow for such flexibility and could therefore badly
interplay with national contract laws in the Member States
4.2.1.   
Option
8 “Travel Directive”
PO8
is discarded because the majority of the most common consumer problems
with independent travel arrangements can, provided that appropriate enforcement
exists at national level, be successfully dealt with in the framework of
existing rules such as national contract law, the Unfair Contract Terms
Directive, the Unfair Commercial Practices Directive, the Consumer Rights
Directives well as the Regulations in the area of Passenger Rights. In contrast
to complex and atypical contractual relationship in case of packages, the
contracts for independent travel arrangements do not involve several service
providers which identity if often unknown to consumer. Therefore, such
contracts can be more easily managed by consumers in case of any problems. 
Moreover, this option would entail additional costs for the industry, in
particular for SMEs. These additional costs would most likely result in
unjustifiable higher prices for consumers.
5.      Assessment of Impacts
This
section presents the most relevant impacts of each of the policy options on key
target audiences, i.e. consumers, businesses and MS authorities, in the form of
a cost/benefit analysis. All the impact of each policy options will be
assessed against the baseline scenario(BS). The estimate of the BS compliance
and administrative costs, provided in section 2, will therefore be used to
assess the impact of the policy options redefining the scope of the PTD (PO5,
PO6 and PO7).
The detailed analyses of all the impacts are presented in Annex 5.
5.1.     Assessment
of Option 2 - Guidelines and Better Enforcement of Existing
Legislation (PO2)
Meeting
the objectives: this option would only very partially
meet the policy objectives. Indeed, unfair competition between different market
players is likely to continue. The regulatory fragmentation would remain. By
clarifying the current rules, this option may however lead to a certain
reduction of detriment as the result of better implementation of the PTD by
businesses and Member States. However, as guidelines per definition are not a
binding tool, these benefits would depend on their actual use by national
authorities.
Economic
impacts
Compliance
costs for businesses: There should be no
overall change in costs incurred by industry as a result of guidelines being
issued, as they would relate to clarifications of the existing PTD rules.
Administrative
costs for businesses: Similarly to compliance
costs, there would be no overall change in administrative costs incurred by
businesses as a result of guidelines. 
Impact
on SMEs: very little change compared to the BS.
Competition
in the Internal Market: A clarification of some
of the definitions in the PTD could, in theory and to some extent, lead to a
clearer segmentation between travel arrangements which are covered or not
covered by the PTD and, thereby, lead to somewhat fairer competition. However,
confusion might remain in particular in the area of "multi-trader" travel
arrangements and also for online "one-trader" packages.
Impact
on consumers: Consumers may gain some clarity and may also
be better protected due to better implementation and enforcement of the PTD.
However, some of the loopholes stemming from the content of the PTD provisions
would remain (e.g. lack of minimum prescription period to claim damages in
cross-border situations).
Impact
on EU budget: no change compared to the BS
Impact
on competitiveness: no change compared to the BS
Impact
on public authorities: no change compared to the BS.
Social
impacts: no change compared to the BS
Impact
on fundamental rights: no change compared to
the BS as the guidelines are not legally binding.
Environmental
impacts: no change compared to the BS
Stakeholders'
views: Issuing guidance was supported by the minority of
stakeholders. Only 28% of companies, 32% of business organisations and 11% of
consumer organisations were in favour in issuing the guidance.
Distribution
of impacts by Member States: All Member States will be equally impacted by
this PO.
5.2.     Assessment of
Option 3 – Introduction of a "Package Travel Label"
(PO3A) and/ or "This is not a package" disclaimer (PO3 B)- add-on
option to other policy options
5.2.1.    Sub-option A:
Package Travel Label
Meeting
the objectives: this option would only partially meet the
policy objectives. 
Indeed,
the label could reduce consumer detriment by enabling consumers to take better
informed decisions and it could result in fairer competition among the
different market players. However, the expected amount of consumer detriment
reduction would not off-set costs incurred by businesses for the implementation
of the label. 
Economic
impacts
Compliance
costs for businesses: Companies selling packages would need to get
familiar with new information requirements and adapt their web-pages and
promotional materials to display the Package Travel Label.  The average one-off
cost for adapting a company's website and /or printed materials has been
estimated at €500[77].  These
costs would potentially affect 72,000 companies selling packages at present
with the overall one-off costs amounting to €36 million. As this is an add-on
option, the final costs would depend on the policy option chosen.
Administrative
costs for businesses: Administrative costs coincide with compliance
costs, see Annex 6.
Impact
on SMEs: SMEs would absorb most of the costs in absolute values.
However these costs are one-off and relatively small.
Competition
in the Internal Market: Competition may become fairer, as the
label would help to distinguish packages which are inside or outside of the
scope of the Directive.
Impact
on consumers: The impact of a label is expected to be
relatively small. Indeed, data coming from the 2012 behavioural study dedicated
to the introduction of a "package travel label" show that only 3.1%
of consumers would click on the label to find out more about their rights.
However, out of those who clicked on the logo, 80% felt knowledgeable about
their rights. Also those who noticed the logo but did not click on it felt better
informed. It is estimated that detriment would decrease by about € 3 million
every year (see details in Annex 5). As the compliance costs related to the
introduction of the logo are one-off, no price increases for consumers are
expected. 
Impact
on public authorities: MS would be responsible for the enforcement of
the rules.
Impact
on EU budget:, the European Commission would have to ensure
to have the copyright on the logo and its registration as a trade mark. This
would represent a small cost for the institution of the order of a few thousand
Euros.
Social
impacts: This option is not expected to have specific and
significant impacts on employment.
Impact on fundamental rights: This option
would
result
in slightly higher consumer protection in Europe in the area of package travel
and, hence, is likely to have a positive impact on the rights protected by the
EU Charter of Fundamental Rights, notably and foremost Article 38 on consumer
protection. Article 16 on the freedom to conduct business would on the contrary
be somewhat negatively impacted, as the expected small consumer benefits would
most likely not compensate the significantly higher costs this option would
create for businesses.
Environmental
impacts: No environmental impacts are expected.
Simplification
potential: no impact
Stakeholders'
views: MS Authorities highly ranked the effectiveness
of the label in terms of greater clarity for consumers. However, most of
consumer and business organisations were sceptical about the benefits of the
label if it is not accompanied by an awareness raising campaign and quality
control procedures.
Distribution
of impacts by Member States: Member States with the highest share of
consumers buying traditional packages (i.e. UK, MT, NL) are likely to be
impacted more. As this is an add-on option, the distribution of impacts will
depend on the preferred policy option.
5.2.2.    Sub-option B:
"This
is not a package" disclaimer
Economic
impacts
Compliance
costs for businesses: Mainly companies selling on-line
"one-trader" packages and "multi-trader" travel
arrangements are likely to be affected by this option. Travel service providers
(e.g. hotels, car rental companies, airlines, and other transport carriers)
marketing their services on the Internet and providing links to other websites
would have to adapt their websites to display a clear disclaimer stating that
the product is not a package. Similarly as for the Sub-option A, the average
one-off cost for adapting a company's website has been estimated at €500[78]. As this is
an add-on option, the total cost could amount to maximum €34.5 million
depending on the policy option chosen[79].
Administrative
costs for businesses: Administrative costs
coincide here with compliance costs, see Annex 6.
Impact
on SMEs: SMEs would absorb most of the costs. The impact would be
however limited as these are one-off and small costs.
Competition
in the Internal Market: the same impact as
Sub-option A
Impact
on consumers: As the costs related to the introduction
of the disclaimer are one-off, companies would rather quickly absorb them and
consumers would hence benefit from more transparency and clearer information at
virtually no additional cost. 
The
reduction of consumer detriment is expected to be higher than under Sub-option
A (Package Travel Label) as a negative information would warn consumers who
otherwise might purchase unprotected travel under the wrong impression that it
is protected (as already indicated this is the currently case for 67% of users
of combined travel arrangements).
Impact
on public authorities: the same impact as Sub-option A
Impact
on EU budget: no impact
Social
impacts: the same impact as Sub-option A
Impact
on fundamental rights: the same impact as Sub-option A
Environmental
impacts: the same impact as Sub-option A
Stakeholders'
views: All stakeholders underlined the importance of the
transparency on the market i.e. clear information for consumers whether they
are buying a "non-protected" travel.
Simplification
potential: no impact
Distribution of impacts by Member States: IR, SE, IT
and SL where the share of consumers buying combined travel arrangements is
significantly above the EU average (Annex 2, Figure 5) and UK, DE and FR which
are the biggest online travel markets (Annex2, Figure 3) are likely to be the
most impacted by the additional compliance costs  linked with the introduction
of the "This is not a package" disclaimer.
5.3.     Assessment of
Option 4 – Repeal of the Directive
Meeting
the objectives:  In theory, this option could ensure a
more competitive and fairer level playing field and reduce unjustified costs
for businesses. 
However,
deregulation at EU level would most likely increase legal fragmentation, since
MS would be able to maintain and create rules in an uncoordinated manner. This
would be harmful to the Internal Market. 
In
case of the repeal of EU legislation, the number of unprotected consumers and
an amount of consumer detriment would increase.  
Economic
impacts
Compliance
costs for businesses: The repeal of the Directive might result in
decreased compliance costs for businesses of up to €10.5-€12.5 per package.
However, the cost savings for businesses would depend entirely on the
willingness of MS to repeal their national legislation protecting consumers. It
is likely that many MS would maintain and further develop their legislation in
this area.
Administrative
costs for businesses: Similarly to compliance costs, this PO might result in lower administrative costs for businesses of up to €409 million
depending on the number of MS that decide to repeal their national legislation
(the remaining baseline administrative costs are considered business as usual).
Competition
in the Internal Market: This option might increase legal
fragmentation within the Internal Market since MS would be able to maintain and
create rules in an uncoordinated manner. 
Impact
on SMEs: The repeal of the Directive might in theory lead to fairer
competition since nobody ( and hence also no SMEs) would be any longer subject
to the EU package travel requirements and the related compliance costs,
provided however that all MS would be ready to repeal their own national
legislation in this area.
Impact
on businesses from third countries: this option
could in theory facilitate organisers outside the EU to sell packages in the EU
as they would not have to comply with the PTD requirements. However, as it is
likely that MS decides to keep their national rules, the organisers outside the
EU will have to comply with national rules of each MS they sell packages to.
Impact
on consumers: The repeal of the Directive is likely to increase
gross consumer detriment (estimated at more than €159 million annually
for traditional packages and more than €1 billion for combined travel
arrangements every year). In theory, a lower cost burden for industry could
lead to lower end-prices to the consumer. The average price per package could
go down by about €10.5-€12.5, but only if MS decided to repeal their national
legislation.
Impact
on public authorities: MS would be free to decide whether to maintain
their national legislation unchanged, repeal their national legislation or
update their legislation. If legislation is repealed, consumers being stranded
when on holiday due to the insolvency of the tour organiser might more often
turn to embassies to receive necessary assistance and financial support to be
repatriated. 
Impact
on EU budget: no impact. 
Impact
on competitiveness: See Annex 7 for detailed analysis.
Quantifications are presented in this report under the other economic impacts.
Social
impacts: Only small social impacts expected. For
instance, consumers being stranded due to the insolvency of the tour organiser
would not receive the necessary assistance and financial support to be
repatriated, thus possibly causing delays to their professional activities.
Impact on fundamental rights: This option
would
result
in lower consumer protection in Europe in the area of package travel and, would
hence have a negative impact on the rights protected by the EU Charter of
Fundamental Rights, notably and foremost Article 38 on consumer protection. Article
16 on the freedom to conduct business might positively be impacted, depending
on the number of MS which would repeal their national legislation.
Environmental
impacts: Businesses would not be required to re-print brochures as a
result of the PTD and its indirect effect in practice (see section 2)
Simplification
potential: Deregulation could result in simplification of the legal
framework for businesses. However, the impact will depend on MS actions that
might revise their legislation leading to more fragmentation with reverse
effect on simplification.
Distribution
of impacts by Member States: All MS will be equally impacted by the Repeal of
the Directive.
5.4.     Assessment of
Option 5 – Modernisation of the Directive and coverage of
"one trader" packages (PO5)
Meeting
the objectives: This option meets
well the policy objectives, both improving the Internal Market functioning and
achieving a high level of consumer protection. Indeed, it would eliminate legal
fragmentation and provide for a more level playing field for operators. As more
packages would be brought under the scope of the PTD (this option would cover
about 40% of all holiday trips) and certain rules would be clarified, the
consumer detriment would decrease. 
Economic
impacts
Compliance costs for businesses: In some MS,
national legislation already covers some online "one-trader" packages
(e.g. DE and partly SE) and some large operators based in these countries may
be assumed to already comply with package travel requirements across all
countries in which they operate. However, it cannot be assumed that even in
those MS all traders selling "one-trader" packages online comply, in
practice, with all PTD-requirements, including the bankruptcy protection. The results
of the Consumer Detriment Study suggest that at least 50% of these travel
arrangements are sold at high street travel agents' and thus in most of the
cases are already subject to the PTD. It is therefore assumed that 50% of
"one-trader" packages that are currently not covered would now be covered.
Hence, approximately 44 million “one-trader” holiday packages and 1 million B2B
trips would be brought under the scope of the PTD, while 8 million of
"one-trader" B2B trips organised by TMCs would be excluded from the
scope of the PTD.
The following table presents the impact of
Option 5 (PO5) on costs of companies (detailed calculations are provided in
Annex 5)
 Savings on costs || Monetised values 
 Administrative costs- elimination of the brochure requirement (only big companies, currently under the scope of the PTD can benefit) || €390 million euro annually[80] (almost €3 euro per package) 
 Exclusion of business trips organised by TMC (only companies currently under the scope of the PTD can benefit) || - €60-€76  million euro annually  -€9.5 – 10.5 per package[81] 
 Elimination of differences in provisions hampering cross-border trade (Only companies trading cross-border can benefit) || €5 million annually    
 Clarified rules on possibilities of redress for package travel organisers from transport carriers in case of costs related to delays, cancellations, assistance or accidents regulated by the EU Regulations on passenger rights || Not possible to quantify 
 The introduction of a limitation (in days) to provide alternative arrangements in case of long lasting force majeure events || Not possible to quantify 
 Improved mutual recognition of insolvency funds and improved competition between insolvency schemes. Businesses might seek to subscribe to the most efficient scheme. || Not possible to quantify   
 New costs ||   
 Bringing new travel arrangements in the scope || €335-€424 million annually  -€7.5 - €9.5 per package 
The overall impact on the
industry would be a benefit of €42-€115 million annually (low €7.5 and
high €9.5 estimate of compliance costs per package).
Impact
on SMEs:  Mainly SMEs selling on-line
"one-trader" packages brought under the scope of the PTD (and which
currently have been treated as to be outside the scope) would incur increased
compliance costs. Those costs would amount to a maximum of €7.5 - €9.5 plus
€0.15 of administrative costs per package. Most SMEs which are selling
"one-trader" packages at high street (bricks and mortar travel
agencies) are already subject to all the PTD requirements, even though these
rules are not always properly enforced. The additional costs would therefore
affect mostly online sellers of these travel arrangements. SMEs would also
benefit from increased harmonisation and clarity of rules across the EU as they
would be able to rely on one set of rules across the EU. 
Micro-enterprises
account for 92% of all travel agencies and tour operators (79,000 companies).
The exclusion of micro and small businesses from the scope of the Directive
would not be therefore a viable option. Firstly, it would result in unfair
competition between businesses selling competing products whilst having
different regulatory regimes and hence facing uneven compliance costs.
Secondly, it would significantly increase consumer detriment, as consumers
would not be able to easily determine the rights they enjoy, as these would
depend on the size of the business they are purchasing from. Overall, excluding
or applying a lighter regime for small and/or micro enterprises would be
contrary to the objectives of the revision process, i.e. achieving a high level
of consumer protection and improving the functioning of the Internal Market[82]. 
Competition
in the Internal Market: Businesses would benefit from a fairer
level playing. Competition is likely to improve as a result of the
harmonisation of legislation (and the ensuing reduction in obstacles to trade).
Impact
on businesses from third countries: this option would
facilitate organisers outside the EU to sell packages in the EU as they would
have to comply with the same requirements in all MS.  Organisers outside the EU
selling packages to consumers in the EU, will face the same obligations as the
EU organisers i.e. they would face an increase of costs for packages newly
brought under the scope of the Directive.
Impact on consumers: PO5 would
reduce the detriment associated with "one-trader" packages,
especially in the on-line environment. Indeed, also these package travellers would be entitled to refunds of advance payments and
repatriation in the event of insolvency, redress in the event of
non-performance of contracts and spend less time and effort in seeking
compensation. It could be assumed that the detriment per package and incidence
of problems for "one-trader" packages brought under the scope of the
Directive would be the same as for pre-arranged packages. The estimated reduction
of consumer detriment would be therefore up to 88%[83], i.e. the baseline level of detriment associated with combined travel
arrangements would decrease.by €348 million assuming
that 50% of one-trader packages are newly brought under the scope of the PTD.[84] For
detailed calculations see Annex 5. Some consumers may experience an
increase in the price of “one-trader” travel arrangements, up to € 9.5, as
businesses may pass on to them the increased compliance costs. This impact will
depend on supply and demand elasticity, but in any case this is likely to be
less than 2% of the total price of the package and broadly comparable with the
cost of obtaining commercial travel insurance and, as such, unlikely to be
detrimental to consumers. In a competitive market, price increases on the end
product tend to get minimised to the possible extent.
Impact
on public authorities: all MS would be affected, as
this option would require some changes in the domestic legislation. MS would
bear the usual cost which accompanies the implementation of EU legislation. 
Impact
on EU budget: no impact, the European Commission would bear
the usual cost which accompanies the implementation of new EU legislation.
Impact
on competitiveness: More competition is expected in the sector, due
to the increased level playing field. See Annex 7 for detailed analysis.
Quantifications are presented in this report under the other economic impacts.
Social
impacts: Businesses selling "one-trader" packages would
incur additional costs, however as these costs will be passed on consumers,
they are not expected to have any negative effect on employment. In the longer
term, as business models would adjust, there would be more transparency and
more competition that might lead to job creation. 
Impact
on fundamental rights: This option
would ensure a high level of consumer protection in areas which are currently
unregulated by EU legislation. It fully complies with the provisions of the EU
Charter of Fundamental Rights, notably and foremost Article 38 on consumer
protection. Article 16 on freedom to conduct business would not be
significantly impacted since, even if there would be higher compliance costs,
there would also be a significant reduction in administrative burden. 
Environmental
impacts: The main effects of this policy options would relate to the
printing of brochures as undesirable environmental impacts linked to it would
no longer occur. 
Stakeholders'
views: The inclusion of "one-trader" packages
was supported by the overwhelming majority of stakeholders in the public
consultation (93% of MS' authorities, 78% of industry associations, 64% of
businesses and 96% of consumer organisations).
Simplification
potential: For businesses, this option would simplify the
regulatory environment, eliminating the need to research of different national
laws. Moreover, this option would simplify some of the current unclear
provisions of the Directive, in particular rules on liabilities and streamline
the information requirements.
Distribution
of impacts by MS: FR will be the MS that probably will be
the most impacted regarding rules on liability. In several other respects, such
as regards the insolvency protection, FR will be less impacted. In this area,
for instance, the UK will be significantly impacted, since the UK will have to amend their recently adopted rules which extend their insolvency protection
scheme also to cover the so called "Flight-Plus packages".  
IR, SE, IT and SL where the share of consumers
buying combined travel arrangements is significantly above the EU average
(Annex 2,  Figure 5) and the UK, DE and FR which are the biggest online travel
markets (Annex2, Figure 3).  
These countries are therefore likely to be the
most impacted by the additional compliance costs stemming from extension of the
scope of the Directive.
Assessment
of sub-options
·       
Sub-options
concerning the liability for proper performance of the contract
The
results of the public consultation about who should be responsible for the
proper performance of the contract are widely divided. The largest number of
respondents favoured the package organiser as the liable party or joint
liability.
Based
on the assessment (see annex 5 for details), sub-option placing the liability
on the organiser is the preferred solution as it is the least burdensome for
businesses while providing for sufficient protection of consumes. Only in one
MS (FR) there would be a shift of liability from retailers to organisers.
·       
Sub-options
concerning the revision of prices following the signature of the contract 
Industry
stakeholders argue that the existing rules on price revisions should be
maintained, while consumer organisations say that there is a need for increased
foreseeability of expenses and that the current possibilities of price
revisions should be abolished. 
Sub-option
1 (maximum increase capped at 10%) and sub-option 2 (price increase above 5%
giving the right to cancel the contract) are less costly for businesses while
safeguarding consumer interests. 
The
preferred measure could be therefore one of these sub-options or a combination
thereof. 
See
annex 5 for detailed assessment.
Impacts
of other substantive provisions
 Substantive provision || MS impacted || Impact of the provision 
 Introduction of termination rights for travellers against compensation, as well as without compensation for force majeure events || All MS would be impacted, but less impact in MS such as CZ, DE, BE, DK, EE, EL, FI, HU, LT, LV, PT and ES where variations of such termination rights already exist. || In serious unavoidable and extraordinary situations (force majeure cases), the majority of businesses act reasonably and, in order to maintain their reputation, cancel trips themselves. However, organisers and travellers might have different opinions as to the implications of extraordinary situations for the trip Consumers would benefit from gaining the right to cancel holiday in the event of a force majeure situation, such as for example the outbreak of violent conflict or an ecological disaster, even if the organiser refuses to do so. This may result in some increase of compliance costs for businesses. If a termination right against compensation is introduced, consumers would be able to terminate the contract at any time paying a fee to businesses. If the fee is proportionate, businesses would face a very limited impact as the compensation paid by consumers is supposed to cover these costs. 
 Clarification of right to compensation for non-material  damages || All MS except for AT, BE and EE that already explicitly provide for compensation for loss of enjoyment. || The consumer would be entitled to compensation for both material and non-material (moral) damages (e.g. loss of holiday enjoyment) in cases of non-performance or improper performance of the contract. For businesses the clarification should not bring significant costs, since this is an existing possibility, although not often used by consumers. 
 Flexibility of MS as to the method of providing insolvency protection whilst adding explicit rules on the effectiveness of the national insolvency protection schemes, the mutual recognition of security provided under the law of the MS of establishment, as requesting the well as establishment of central contact points (minimum harmonisation rule). || Limited effect on Member States. They will have to establish central contact points to facilitate the mutual recognition. || No additional compliance costs for companies. Businesses would benefit from mutual recognition of schemes across the EU, as increased competition among funds in the internal market is likely to drop the insurance costs. Businesses offering services cross-border would particularly benefit from reduced costs through mutual recognition as they would not need to provide the insolvency protection in each MS they operate. Consumers would get access to more offers at competitive prices. 
 Reinforced rules on the possibilities to seek redress from the transport carrier in case of costs related to delays, cancellations, assistance or accidents regulated by the EU Passenger Rights. Consumers would continue to be able to choose whom to seek compensation and assistance from (transport carrier or the organiser of the package). || All Member States || Package travel organisers could have some savings as it would be easier for them to recuperate at least part of the compensation paid to travellers in case of delays, cancellations, assistance or accidents regulated by the EU Passenger Rights. The extent of this saving is however unknown as two of these Regulations[85] have only recently entered into force and the APR is currently under review. At present, the possibility of seeking redress often depends on the specific arrangements between two business parties[86]. 
 The liability of the organiser to provide alternative arrangements for the continuation of the package in case of force majeure events would be limited (e. g. to a maximum number of three or four days). This provision would reflect the rules set out in EU Passenger Rights Regulations. || This would require legislative amendments in all Member States. || Compared to the legal situation today, this would mainly result in a cost reduction for organisers[87]. Consumers would in most instances not be significantly affected, but would incur increased detriment in situations where it is not possible for the traveller to return immediately to the place of destination within four days after the return. It can also be expected that such a cap on the liability to provide assistance would make it easier for organisers to insure this risk.  
 Introduction of minimum one year prescription period for claims for damages or price reduction (minimum harmonisation rule). || Member States will not be affected by such a minimum requirement || Overall, this provision would bring slightly increased legal certainty for consumers, but since most Member States already have at least one year prescription periods, no major cost or impacts are expected. 
5.5 Assessment of Option
6 - Graduated approach- modernisation of the Directive and coverage of both
"one trader" and "multi trader" packages
while applying a lighter regime to "multi-trader" assisted travel
arrangements (PO6)
Meeting the objectives: Compared to
PO5, this option would further contribute to the better functioning of the
Internal Market in the package travel sector, eliminating legal fragmentation
and levelling the playing field for operators. Making "multi-trader"
assisted travel arrangements subject exclusively to the obligations to declare
that they do not constitute a package and to procure insolvency protection,
would  increase transparency for consumers and ensure fair competition, while
avoiding unnecessary costs associated with all obligations applying to
packages.
Compared
to PO5, this option would further increase the number of consumers protected by
the PTD and would significantly decrease the consumer detriment.
Economic
impacts
There are 31 million "multi-trader"
holiday travel arrangements and 6 million business "multi-trader"
travel arrangements sold annually. However, the exact share of
"multi-trader" assisted travel arrangements and
"multi-trader" packages is not known. 
The
"lighter regime" provided by PO6 would be particularly beneficial for
SMEs currently selling "multi-trader" and "one-trader"
packages as it could be difficult for them to cover liability for the
performance of all services provided by different traders. These companies
would be able to adapt their business activities so as to face only some PTD
requirements (insolvency protection and an obligation to display the "This
is not a package" disclaimer). It is impossible to quantify precisely how
many businesses would do this.
High-street travel
agents selling "one-trader" packages in most cases have to already
comply with the current PTD, as interpreted by the CJEU. A change of the
business model would imply inconvenience for their customers, i.e. a need to
make separate payment transactions. Online traders selling
"one-trader" packages (for which it is less clear to what extent they
are covered under the current PTD as interpreted by the ECJ, although they
covered by national legislation in a number of Member States)  would have to
ensure that the services they offer are no longer booked within one booking
process (i.e. no longer put in a single "shopping basket" by
consumers). The additional services would have to be offered after the booking
of the first travel service is confirmed, which would imply some  redesigning
of their websites and, sometimes, a clarification of their commercial
agreements with other traders.  Sellers of "multi-trader" packages
could adapt their websites more easily, but they would have to stop charging an
inclusive or total price for packages:  this might imply the risk of losing
those customers who might find the separate payment transactions less
convenient.  It is therefore assumed that only around 25% of
"one-trader" packages[88]
and roughly  50% of multi-trader packages would in the future be sold as
"multi-trader" assisted travel arrangements.
Compliance costs for businesses: the same
savings as in PO5 are expected. Under PO6, traders selling
"one-trader" and "multi-trader" packages not covered by the
current rules  would incur additional compliance costs estimated at €7.5-€9.5
per package. Traders selling "multi-trader" assisted travel
arrangements would incur one-off administrative costs (see below) related to
displaying the "This is not a package" disclaimer and the cost for
the   insolvency protection. The current estimated cost of insolvency
protection for packages amounts to roughly €3 per package. Based on the
available figures and in particular on the experience of the UK "Flight Plus" scheme, which is a very similar model, the assumption is that
this cost would remain roughly the same also for "assisted travel
arrangements".
Given the above, the total additional
compliance cost for the industry of PO6 could be estimated at €528-€654 million annually (low-€7.5 and
high-€9.5 estimate of compliance costs per package).[89] 
However, using the above assumptions that some
traders might adapt their business models and no longer sell packages, the
additional yearly compliance costs of PO6 could be estimated at €386-€444
million annually (low- €7.5 and high- €9.5 estimate of compliance costs per
package)[90].
Administrative
costs for businesses: Same savings as in PO5. Some additional
administrative costs for businesses brought under the scope of the PTD:
-€2.8million annually [91]. Providers
of "multi-trader" linked travel arrangements, subject only to the
lighter information regime, would incur one-off administrative costs of €500
per company (€17 million for the whole industry[92]) to state in a clear
and prominent manner that each service provider will be solely responsible for
the performance of its services ("This is not a package" disclaimer).
Impact
on SMEs: Similarly to PO5, this option would increase compliance
costs for businesses including SMEs selling "multi-trader" packages.
However, PO6 provides for a lighter regime which would be particularly
beneficial for SMEs currently selling "one-trader" and
"multi-trader" packages which might find it difficult to assume
liability for the performance of different services included in the travel
combination. These companies would be able to adapt their business model and
face only some PTD requirements (insolvency protection and the obligation to
display the "This is not a package disclaimer") thus incurring lower
compliance costs (on average €3 per package) compared to sellers of packages
(on average €7.5-€9.5 per package).
PO6
would impact hotels, car rentals, airlines and businesses operating in the
transport sector other than airlines and car rentals. Most of these businesses,
excluding airlines, are SMEs/micro businesses (99%/73% for hotels, 99%/94% car
rentals, 99%/90% other transport services)[93]. For this reason, the
goals which option 6 aims to reach would be hampered if such businesses were to
be excluded from the scope.  
Competition
in the Internal Market: Businesses would also benefit from a
more level playing field compared to PO5. "This .is not a package"
disclaimer would bring transparency on the market and travel arrangements
which have similar characteristics would be subject to the same requirements.
Consequently, competition is also likely to improve correspondingly better than
in PO5.
Impact
on businesses from third countries: similar effects as PO5.
Impact on consumers: Compared to
PO5, this option would bring additionally around 31 million
"multi-trader" travel arrangements within the scope of the Directive,
bringing additional protection for consumers purchasing combined travel
arrangements. 
As estimated under PO5, the baseline detriment
for 15.5 million "multi-trader" packages is expected to be reduced by
88%. For
"multi-trader assisted travel arrangements", gven that the most
prevalent problems causing detriment concern provisions of information (22% of
EU-17 problems with combined travel arrangements) and services not provided at
all or of lower standard (17% of problems), it is assumed that the reduction of
detriment would be 30% lower compared to the decrease of detriment for
packages.
The yearly consumer detriment could be reasonably
estimated to decrease by €508 million. 
However, using the same assumptions as above,
i.e. that some traders might adapt their business models and no longer sell
packages, the total reduction of yearly consumer detriment could be estimated
at €430 million[94].

Moreover, the "This
is not a package"- disclaimer would enable consumers to make informed
choices.
On the other hand, some consumers may experience an increase in the prices of
"multi-trader" and "one-trader" packages of around €7.5-9.5
per packages and of around €3 for "multi-trader" assisted travel
arrangements if businesses pass on their increased compliance costs. But,
similarly to PO5, such possible price increase case would be less than 2% of
the total price of the package.  
It is interesting to note, in this context, that
68% of surveyed consumers were willing to pay additionally €3 for insolvency
protection for standalone airline tickets[95], which shows that
consumers would be similarly likely to accept the potential increased prices
for "multi-trader" assisted travel arrangements offering them
protection against insolvency.
Impact
on public authorities: similar effects as PO5.
Impact
on EU budget: similar effects as PO5.
Impact on competitiveness: See Annex 7
for detailed analysis.
Social impacts: similar effects as
PO5.No negative impacts on employment are expected. In the longer term, the
transparency and increased competition might have some positive impacts on
employment.
Impact on fundamental rights: similar
effects as PO5.
Environmental
impacts: similar effects as PO5.
Simplification
potential: similar effects as PO5.
Stakeholders'
views: The inclusion of "multi-trader" travel
arrangements was supported by the majority of stakeholders in the public
consultation (67% of MS' authorities, 57% of industry associations, 64% of
businesses and 96% of consumer organisations).
Assessment
of sub-options
Sub-option
3 (joint liability unless the parties designate one liable trader) is the
preferred solution as it provides for the highest benefits to consumers while
imposing liabilities on a reasonable number of companies (dependant on B2B
arrangements). 
For
the detailed assessment see annex 5.
Distribution
of impacts by Member States: the same distribution of impacts as under
PO5.
5.6.     Assessment of
Option 7 - Modernisation of the Directive and coverage of
both "one trader" packages and "multi-trader" travel
arrangements (PO7)
Meeting
the objectives: Similarly to PO6, this option would contribute
to the better functioning of the Internal Market in the package travel sector
by eliminating legal fragmentation. However, by extending the scope to
"multi-trader" assisted travel arrangements, it would generate
disproportionate and unfair costs for these companies. Compared to PO6, this
option would further increase the number of consumers protected by the PTD
(covering 46% of all holiday trips) and would significantly decrease the
consumer detriment.
Economic
impacts
Compliance
costs for businesses: Same savings as in PO5. However, by
extending the scope to all "multi-trader" travel arrangements and by
making them subject to all PTD obligations, this option would generate
disproportionate and unfair costs for companies acting merely as
intermediaries, since they might not be able to guarantee the performance of all
services included in the travel combination.. The additional
compliance costs could be estimated at €610-€773 million annually[96] (low-€7.5 and
high-€9.5 estimate of compliance costs per package).
Administrative
costs for businesses: Same savings as in PO5. Some additional
administrative costs for businesses brought under the scope of the PTD: 
€5.6million annually [97]. 
Impact
on SMEs: Similarly to PO5 and PO6, mostly SMEs would be impacted by
increased compliance costs. Compared to PO6, this option does not provide for
any lighter regime. All travel companies with online presence and linking to
other travel providers would be subject to all PTD requirements which could be
considered as disproportionate burden.
Competition
in the Internal Market: Businesses selling packages
(pre-arranged, "one-trader" and "multi-trader" packages)
would benefit from a more level playing field similarly to PO6. However, as
this option would also impose all the PTD obligations on
"multi-trader" assisted travel arrangements, it would put traders
selling these products in an unjustified competitive disadvantage compared to
traders selling independent travel arrangements.
Impact
on businesses from third countries: similar effects as PO5
and PO6.
Impact on
consumers: This PO would further
increase the number of consumers protected by the PTD and would significantly
decrease the yearly consumer detriment by €593 million. For combined travel arrangements brought under the scope of the PTD,
consumers could face price increases of up to 2%. 
Impact
on public authorities: similar effects as PO5 and PO6.
Impact
on EU budget: similar effects as PO5 and PO6.
Impact on competitiveness: See Annex 7
for detailed analysis.
Social impacts: This PO might have
some negative impacts on employment compared to PO5 and PO6 as this option
places additional compliance costs on micro enterprises linking to other
service providers for purely informative purposes. The impact is not expected
to be significant as these companies can cease linking and avoid the compliance
costs.
Impact on fundamental rights: similar
effects as PO5 and PO6.
Environmental
impacts: similar effects as PO5 and PO6.
Simplification
potential: similar effects as PO5 and PO6.
Stakeholders'
views: The industry stakeholders have questioned the
feasibility of this option and argued that the inclusion of all
"multi-trader" travel arrangements in disproportionately burdensome.
Distribution
of impacts by Member States: the same distribution of impacts as under
PO5&PO6
6.                 
Comparative assessment of policy options
Comparison
of rating vs. objectives
   || Option 1 (Status quo) || Option 2 (Guidelines) || Option 3 A (Package Travel Label)- add-on option [98] || Option 3 B- "This is not a package" disclaimer- add-on option[99] || Option 4 (Repeal) || Option 5 Modernisation of the Directive and coverage of "one trader" packages  (PO5) || Option 6  Graduated approach- ||  Option 7 covering all "multi-trader" travel arrangements 
 Objective 1: Improve the functioning of the Internal Market in the package travel sector || Without EU action, the regulatory fragmentation would remain and so would the excessive administrative costs for businesses. With the growing popularity of customised travel arrangements, unfair competition is likely to continue and possibly increase. || Unfair competition between different market players is likely to continue. The regulatory fragmentation will remain. The guidelines might however clarify the current rules.   || As consumers increasingly recognise that the same label applies across the EU, this option is likely to result in fairer competition between different market players and could therefore strengthen the functioning of the Internal Market.   || Similarly to PO3 A (label), businesses would be able to compete on fairer grounds as the  non-protected products without protection would be clearly labelled. || Whilst not fully eliminating obstacles to cross-border trade, the PTD has reduced legal fragmentation. Deregulation at EU level would most likely again increase legal fragmentation since MS would be able to maintain and create rules in an uncoordinated manner. This would be harmful to the Internal Market, as well as to businesses and consumers. || This option would contribute to the better functioning of the Internal Market in the package travel sector, eliminating legal fragmentation and levelling the playing field for operators. Some unjustified compliance costs, e.g. eliminating special rules for brochures, will be removed. There would be however an increase of compliance costs for new customised travel arrangements brought under the scope of the PTD. || This option would further contribute to the better functioning of the Internal Market in the package travel sector compared to PO5, eliminating legal fragmentation. This option would provide for a more level playing field for operators than PO5. Some unjustified compliance costs would also be removed. || Similarly to PO6, this option would contribute to the better functioning of the Internal Market in the package travel sector, eliminating legal fragmentation. However, by extending the scope to "multi-trader" travel arrangements it would generate disproportionate and unfair costs for these companies, 
 Reduce costs and obstacles to cross-border trade in the package travel market || 0 || 0   || 0/+   || 0/+   || --   || ++   || ++ || ++   
 Ensure a more competitive and fairer level playing field for the businesses operating in the travel market || 0 || 0/+ || 0/+ || 0/+ || - || + || ++/+++ || ++ 
 Reduce unjustified compliance  costs for businesses in the package travel market || 0 || 0 || -- || - (increased administrative costs) || + || ++ (- for compliance costs for new packages brought under the scope) || ++ (- for compliance costs for new packages brought under the scope) || ++ (-- for compliance costs  for new customised travel arrangements brought under the scope of the PTD.) 
 Objective 2: Achieve a high level of consumer protection in the package travel market, || Consumers are likely to purchase more customised travel arrangements falling outside the scope of the PTD in future. This might further deteriorate the consumer understanding of the applicable protection rules and result in an increase of consumer detriment. || This option may lead to a reduction of detriment as the result of better implementation of the PTD by businesses and MS. However, as guidelines per definition are not a binding tool, these benefits will depend on the actual use by national authorities. || The label could reduce consumer detriment as consumers would be able to take informed decisions. However, the amount of this reduction would not off-set costs incurred by businesses for the implementation.   || "This is not  a package" disclaimer is expected to be more effective in reducing the consumer detriment than PO3A as a negative information might warn consumer who otherwise might purchase unprotected travel under the wrong impression that they are protected || In the absence of EU legislation, there is likely to be a significant decrease in the number of protected consumers and an increase in consumer detriment. || As more packages will be brought under the scope of the PTD, the consumer detriment will decrease. Consumers would also benefit from clarification of certain rules.   || Further decrease of consumer detriment than in PO5 as more travel arrangements would be brought under the scope. Moreover, consumers would benefit from clarity and transparency avoiding confusion as to whether a customised travel arrangement is protected or not. || Compared to POA, this option would further increase the number of consumer protected by the PTD and would significantly decrease the consumer detriment.   
 Reduce consumer detriment and increase transparency for travellers who buy combinations of travel services currently not covered by the PTD by  addressing  new market developments; || 0 || 0   || 0/+   || + || --   || +/++   || ++/+++ || +++   
 Reduce consumer detriment stemming from unclear and outdated provisions. || 0 || 0 || 0/+ || 0/+ || -- || ++ || ++ || ++ 
Comparison
of cost and benefits for businesses and consumers
   || Option 1 (Status quo) || Option 2 (Guidelines) || Option 3 A (Package Travel Label)- add-on option || Option 3 B- "This is not a package" disclaimer- add-on option || Option 4 (Repeal) || Option 5 (covering "one-trader" packages) || Option 6 Graduated approach- || Option 7  (cover all "multi-trader" travel arrangements) 
 Compliance costs for businesses || €1.6-€2.4 billion[100]) || No change || See administrative costs. ||   See administrative costs. || In theory, no costs || Additional compliance costs of €335-€424 million annually[101] || Additional compliance cost for the industry of €528-€654million annually[102] if the market structure remains unchanged. Additional yearly estimated compliance costs of at €386-€444 million annually if businesses adapt their business models.[103]   ||         
 Administrative costs || €409 million + €26 million for cross-border trade || No change || Additional costs of € 75/16 million one-off and €58/26 million recurring costs.   || Additional administrative costs of €500 per company (with maximum total cost of €35million depending on the policy option.[104] || In theory, no costs; potentially significant increase in administrative costs for cross-border trade || The administrative burden decrease by €390 million annually (due to the removal of the brochure requirement). Elimination of administrative costs for cross-border trade € 26million (€ 5 million annually). || Some additional administrative costs for businesses brought under the scope of the PTD -€2.8millionannually[105] Additional one-off administrative costs of €17 million (€500 per company)[106] to display "This is not a package disclaimer" || Some additional administrative costs for businesses brought under the scope of the PTD compared to PO5:  €5,6 million[107] 
 Consumer (traveller) detriment || €1 billion || No change || Small reduction of consumer detriment (€ 3 million per year)[108]. || Reduction of detriment expected to be higher than in sub-option 3A. || Increase in consumer detriment || The level of detriment would decrease by €348 million if 50% of one-trader packages are newly brought under the scope of the PTD. [109]. || The yearly consumer detriment could be estimated to decrease by €508 million. However if some traders adapt their business models not to sell packages the total reduction of yearly consumer detriment could be estimated at €430 million.[110]. || .The yearly reduction of consumer detriment estimated at €593 million.[111].   
6.1  Preferred
Policy option
Option
6 "graduated approach", including sub-option 3B, has a number of
advantages over other POs. Indeed, it meets the stated policy objectives as it
would level the playing field whilst ensuring that compliance costs will be
reasonable for the new players falling under its revised scope. This option
also provides for a lighter regime that would be particularly beneficial for
SMEs and micro-enterprises, which might find it difficult to assume liability for
the performance of different services included in the travel combination. For
consumers, PO6 would bring a significant reduction of consumer detriment due to
the widening of its scope, ensuring insolvency protection for all types of
combined travel arrangements, clarification of certain outdated and unclear
rules of the current Directive and increased transparency of the information
provided to consumers. It achieves a fair balance between business and consumer
interests by tackling only those situations where there are concrete elements
indicating to the consumer that he/she is purchasing a package, while applying
a "lighter regime" with only some PTD requirements (insolvency
protection and information obligations) to situations where the link between
the offered services is less prominent.
7.
Monitoring and evaluation
The monitoring and evaluation process should
focus on the three specific objectives determined by the problem definition.
Concerning the reduction of obstacles to
cross-border trade in the package travel market, the focus should be on: 
Increase
in cross-border trade in the package travel market;
Concerning the establishment of a level playing
field for the businesses operating in the travel market, the focus should be
on:
costs for businesses and  competitiveness of the
package travel market, including an active debate with business stakeholders,
e.g., a panel of traders established to review the costs and competitiveness of
the package travel market.
Concerning costs for businesses and detriment
for consumers stemming from unclear and outdated rules:
Costs for businesses, including an active debate
with business stakeholders,
 Number of consumer complaints concerning the
identified problems as submitted to the national consumer organisations and
ECC-net.
Concerning the reduction of consumer detriment
and making consumers aware of the applicable rules, focus should be on:
increase in the number of consumers protected
when going on holidays;
increased consumer awareness of the applicable
protection rules when purchasing package holidays;
decrease in the number of consumers experiencing
problems for different types of travel arrangements;
The 
following tools could be used to gather the necessary evidence and evaluate the
proposal:
·       
Monitoring
the proper transposition of the Directive by Member States;
·       
Consultation
of stakeholders to review the costs and competitiveness of the package travel
market;
·       
Preparation
of a Eurobarometer study on tourism and consumer protection;
·       
Monitoring
consumer complaints submitted through ECC-Net and national consumer
organisations.
A report on the application of the Directive
should be submitted to the European Parliament and the Council no later than
five years after the transposition deadline.
ANNEX 1
The
main requirements of the Package Travel Directive
The
Directive protects the interests of consumers buying a package holiday by
defining a range of the organiser’s and retailer’s duties and obligations and
some specific consumer rights. Below is the summary of the key provisions. They
all represent minimum consumer rights, and EU countries have been free to add
more stringent rules to protect consumers in their national laws.
1.     
Information
requirements 
The
organiser/retailer is obliged to provide the consumer with information at the
following steps of the contractual relationship: before the contract is
concluded, in the contract itself and before departure.
The
Directive also contains special requirements for brochures.
If a brochure is made
available to the consumer, it must not be misleading and must contain clear,
comprehensible and accurate information on:
 (a) price;
(b)
destination;
(c)
transport: means of transport, type, and category;
(d)
accommodation: its type, location, category, degree of comfort; its main
features, its approval and tourist classification;
(e)
meal plan;
(d)
itinerary;
(e)
passport and visa requirements as well as health formalities;
(f)
details of the payment schedule; 
(g)
whether a minimum number of people is required for the package to take place
and, if so, the deadline for informing the consumer in the event of
cancellation.
The
details contained in the brochure are binding on the organizer (or retailer, as
the case may be), unless the consumer was clearly informed of any changes before
signing the contract (this must then be clearly stated in the brochure) or if
the changes were agreed between the two parties later.
In
addition, the consumer must be informed about the following in good time
before the start of the journey:
(h) the
times and places of intermediate stops and transport connections, and details of
the place to be occupied by the traveller, e.g. cabin or berth on a ship, a
sleeper compartment on a train;
(i)
contact details of the local representative or a local agency which can provide
assistance; when these do not exist, at least an emergency phone number or
other means to contact the organiser or retailer when in difficulty;
(j)
information on optional insurance to cover the cost of cancellation by the
consumer or the cost of assistance, including repatriation, in the event of accident
or illness.
Furthermore, the
contract must
contain at least the following as long as relevant for the particular package:
 (a) the
travel destination(s) and, where periods of stay are involved, the relevant
periods, with dates; 
(b) the
means, characteristics and categories of transport to be used, the dates, times
and points of departure and return; 
(c) where the
package includes accommodation, its location, its tourist category or degree of
comfort, its main features, its compliance with the rules of the host Member
State concerned and the meal plan; 
(d) whether a
minimum number of persons is required for the package to take place and, if so,
the deadline for informing[112]
the consumer in the event of cancellation; 
(e) the
itinerary; 
(f) visits,
excursions or other services which are included in the total price agreed for
the package; 
(g) the name
and address of the organiser, the retailer and, where appropriate, the insurer;

(h) the price
of the package, an indication of the possibility of price revisions under
Article 4(4) and an indication of any dues, taxes or fees chargeable for
certain services (landing, embarkation or disembarkation fees at ports and
airports, tourist taxes) where such costs are not included in the package; 
(i) the
payment schedule and method of payment; 
(j) special
requirements which the consumer has communicated to the organiser or retailer
when making the booking, and which both have accepted; 
 (k) periods
within which the consumer must make any complaint concerning failure to perform
or improper performance of the contract
The
terms of the contract must be communicated to the consumer before the
conclusion of the contract. The consumer must also receive a copy of the
contract.
2.     
Binding
prices 
The
price of the package agreed in the contract is binding, with some limited
exceptions[113].
Price
increase is only possible if the contract expressly provides for it and states
precisely how the revised price is to be calculated, and is only allowed for
the revision in limited situations due to variations in: (a) transportation
costs (including fuel costs), (b) taxes and fees, such as airport taxes, and
(c) currency exchange rates on which the price of the package is based. 
No
price increase is allowed during the last 20 days before departure. 
3.     
Right
to transfer the package 
Where the
consumer is prevented from proceeding with the package, s/he may transfer
his/her booking. The transferor of the package and the transferee will be
jointly and severally liable to the organiser or retailer party to the contract
for payment of the balance due and for any additional costs arising from such
transfer.
4.     
Cancellation
or change of contract terms 
If
any of the essential elements of the package (such as the price) agreed in the
contract is significantly changed or if the organiser cancels the package, the
consumer has the right to withdraw from the contract and get a full refund. Alternatively,
s/he may accept a substitute package. If the substitute is of lower quality
than the original one, s/he is entitled to receive the price difference. If the
package is cancelled by the organiser, the consumer may also have the right for
compensation in addition to the full refund (with some exceptions, e.g. if the
package was cancelled due to a force majeure situation).
5.     
The
organiser's responsibility and complaint handling
The
organiser and/or retailer is liable for damages if the contract is not properly
performed (with some exceptions, e.g. if the reason for the improper
performance is caused by a force majeure situation). They are also required to
provide prompt assistance if the consumer is in difficulty, even though it is a
force majeure situation or the problem is caused by a third party not
connected to the package.
Consumers
are entitled to compensation for damages if the contract is not performed
properly (though the amount of the compensation can be limited by international
conventions and to some extent by national laws). The rule on liability,
Article 5, is to be interpreted as conferring, in principle, a right also for
compensation for non material damages[114]. A consumer is not
entitled to compensation for damages in certain situations, e.g. if the reason
for the improper performance is caused by himself or a force majeure
situation. If the service offered on the spot does not correspond to what was
agreed in the contract, the consumer must make a complaint as soon as possible.
The organiser (or their local representative) must try promptly to find a
satisfactory solution. Where, after departure, a significant proportion
of the services is not or will not be provided, the organiser must make
suitable alternative arrangements to the consumer, at no extra cost, for the
continuation of the package. If there is a difference between the services
contracted for and those supplied, the consumer is entitled to compensation. In cases
where it is impossible to make such alternative arrangements (or these are not
accepted by the consumer for good reasons) the organiser shall, where
appropriate, provide the consumer, at no extra cost, with equivalent transport
back to the place of departure (or to another return-point to which the
consumer has agreed) and shall, where appropriate, compensate the consumer. 
6.       Insolvency protection 
The
organiser and/or retailer must provide sufficient evidence of security for the refund
of the money paid and for the repatriation of the consumers in the event of
insolvency of the organiser. This means that the consumer must be fully
protected against loss of money and in the event the insolvency occurs while on
holiday that he is repatriated.
ANNEX 2
1.     
Problem
definition-data tables and graphs
Figure 1 Travel
and tourism economic impact
 2011 Key Facts GDP: Direct Contribution The direct contribution of Travel & Tourism to EU GDP is expected to be €356 bn (2.9% of total GDP) in 2011, rising by 2.9% per year to €474 bn (3.1%) in 2021 (in constant 2011 prices). GDP: Total Contribution The total contribution of Travel & Tourism to EU GDP, including its wider economic impacts, is forecast to rise by 2.4% per year from €960 bn (7.8% of GDP) in 2011 to €1215bn (8.1%) by 2021. Employment: Direct Contribution Travel & Tourism is expected to support directly 7,062,000 jobs (3.2% of total employment) in 2011, rising by 1.5% per year to 8,218,000 jobs (3.7%) by 2021. Employment: Total Contribution The total contribution of Travel & Tourism to employment, including jobs indirectly supported by the industry, is forecast to rise by 0.9% per year from 18,382,000 jobs (8.4% of total employment) in 2011 to 20,066,000 jobs (8.9%) by 2021.   
Source: World Travel
& Tourism Council, Travel and tourism economic impact, 2011
Figure 2 Trends in
overall online travel market size - Europe 1998-2008 with projections to 2009
 Year || Market (€ billion) || Internet sales (€ billion) || Internet sales (% of the market) 
 1998 || 200 || 0.2 || 0.10% 
 1999 || 212 || 0.8 || 0.40% 
 2000 || 227 || 2.5 || 1.10% 
 2001 || 223 || 5 || 2.30% 
 2002 || 221 || 8.9 || 4.00% 
 2003 || 215 || 14 || 6.50% 
 2004 || 220 || 21.2 || 9.60% 
 2005 || 235 || 30.4 || 12.90% 
 2006 || 247 || 40.3 || 16.30% 
 2007 || 254 || 49.8 || 19.60% 
 2008 || 260 || 58.4 || 22.50% 
 2009 || 254 || 65.2 || 25.70% 
Source: Carl H.
Marcussen, Trends in European Internet distribution of travel and tourism
services, Centre for Regional and Tourism Research, Denmark, updated 23 March 2009
Figure 3 Geographic
status for the European online travel market 2008
Source: Source: Carl H.
Marcussen, Trends in European Internet distribution of travel and tourism
services, Centre for Regional and Tourism Research, Denmark, updated 23 March 2009. Nordic: Denmark, Finland, Iceland, Sweden, Norway; Middle: Belgium, Netherlands, Luxembourg, Switzerland, Austria, and Ireland; Southern: Italy, Spain, Portugal, and Greece.
Figure 4 Evolution
of Low Cost Carriers capacity on intra European routes
Source: OAG
FACTS Executive Summary June 2011,
http://www.oagaviation.com/OAG-FACTS-June-2011-Executive-Summary
Figure 5 Incidence
of use of combined travel arrangements in the population within the last 2
years
Source: Study on
Consumer detriment in the area of dynamic packages, The European Commission,
Health and Consumers DG, prepared by London Economics, November 2009
Figure 6 Percentage
of holidays protected by PTD and additional MS provisions
Source: TUI, estimates
provided on the request of the Commission
Figure 7 Estimated
gross personal detriment for combined travel arrangements
Figure 8 Estimated
net personal detriment for combined travel arrangements (i.e. gross detriment
minus compensation)
Source: Study
on Consumer detriment in the area of dynamic packages, The European Commission,
Health and Consumers DG, prepared by London Economics, November 2009
Figure 9 Methodology
for the estimation of personal detriment
Gross personal detriment in sample =
Gross personal detriment per problem x Total
number of problems in sample 
where
Gross personal detriment
per problem =
     Average cost of
problem + average time spent complaining x value of time   
Total number of problems
in sample =
     Number of
respondents in sample with problems x 
                     Average number of problems experienced
by individuals with problems
Net personal detriment in sample =
Gross personal detriment in sample –
Compensation in sample
where
Compensation in sample =
Total number of problems in sample x 
                      Share of respondents with problems who
received compensation x 
      Average value of
compensation received
Annual personal detriment in population =
Personal detriment in sample/ share of households surveyed/
2 years
where
Share of household surveys= 
                Number of participating interviewees above
15 years/
                (Population/ average household size)
Source: Study on
Consumer detriment in the area of dynamic packages, The European Commission,
Health and Consumers DG, prepared by London Economics, November 2009
Figure 10 Incidence
of problems with combined travel arrangements in the last 2 years by number of
problems
Source: Study
on Consumer detriment in the area of dynamic packages, The European Commission,
Health and Consumers DG, prepared by London Economics, November 2009
Figure 11 Availability
of assistance by type of presentation – weighted average for EU-17
Source: Study on
Consumer Detriment in the area of Dynamic Packages, The European Commission
Health and Consumers DG, prepared by London Economics, November 2009
Figure 12 Gross
detriment per problem by type of travel arrangements
Source: Study on Consumer
detriment in the area of dynamic packages, The European Commission, Health and
Consumers DG, prepared by London Economics, November 2009
Figure 13 Incidence
of problems by type of travel arrangements (number of trips with problems per
100 trips)
Source: Study on
Consumer detriment in the area of dynamic packages, The European Commission,
Health and Consumers DG, prepared by London Economics, November 2009
2.     
Estimation
of the travel market segments
Estimation of the pre-arranged packages segment
This estimation relies
on data from Eurobarometer 328 (Q10) which provides data on how EU citizens
organised their main holiday trips in 2010 distinguishing four categories of
trips.
Figure
14
Source:
Flash Eurobarometer 328, 2011
We assume that the
purchase habits of consumers remain unchanged and even if citizens take 2-3
holidays per year, they purchase it the same way as they do for their
"main" holidays. These statistics do not correspond directly with the
market segments of interest for the present study. However, some analysis can
be made in relation to whether certain arrangements fall under the scope of the
PTD and to which market segments certain categories could be assigned.
   || PTD protected/ PTD not protected || Study category 
 Travel or accommodation organised individually || Unprotected || - independent travel arrangements - "multi-trader" travel arrangements - "one-trader" travel arrangements 
 Travel or accommodation booked through a travel agency   || Protected  or unprotected   || - independent travel arrangements -"one-trader" travel package 
 Package tour or all inclusive holiday booked via Internet || Protected || - pre-arranged packages 
 Package tour or all inclusive holiday booked through a travel agency || Protected || - pre-arranged packages 
 Other and no answer || Unprotected || - independent travel arrangements - "multi-trader" travel arrangements 
Based on the chart
above, it can be assumed that on an EU average pre-arranged packages account
for 23% of the holiday trips (package tour/ all inclusive holiday booked via
Internet (13%) + package tour/ all inclusive holiday booked through a travel
agency (10%)). 
 Estimation of the combined travel arrangements segment
According to the
Consumer Detriment Study[115],
23% of EU citizens purchased combined travel arrangements in the last two
years. Given the lack of other sources of data concerning these travel
arrangements, we assume that this figure can be an approximation of the shares
of combined travel arrangements. Based on this study it can be also estimated
that "multi-trader" travel arrangements account for 25% of the total
number of combined travel arrangements and therefore for 6% of the holiday
trips (25% x 23% = 5,75%) sold annually. Furthermore, based on empirical data
observations, it is assumed that, at present around 50% of
"multi-trader" travel arrangements are sold in a similar manner as
package travel and fall under the category of "multi-trader"
packages.
Estimation of the market segments
Based on the above
estimation of shares of combined travel arrangements and pre-arranged packages,
the market structure would be as follows:
Figure 15: Travel Market
Structure
Source: Own estimates based on Flash
Eurobarometer 328 and Study on Consumer Detriment in the area of dynamic
packages.
Estimation of the total volume of the market
In 2010, EU27 residents
(excluding Malta) made 1.0 billion holiday trips, of which more than
three-quarters were domestic trips, within the country of residence, and around
one quarter were outbound trips outside the country of residence. Considering
the duration of these trips, as would be expected domestic holiday trips are
mainly of short duration, lasting 1 to 3 nights, and outbound trips are more
often long trips of 4 nights and more.[116]
We can assume that short
domestic trips are not a substitute to packages and exclude them from the total
market estimate. We would get the estimate of the total market of 513 million
trips. 
 Market segment || % share || Number of trips (millions) 
 Pre-arranged packages || 23% || 118 
 "One-trader" packages || 17% || 87 
 "Multi-trader" travel arrangements || 6% || 31 
 Independent travel arrangements || 54% || 277 
ECTAA[117] estimated that 170
Millions packages are covered by the PTD (covering pre-arranged packages and
some of "one-trader" packages). As it has been estimated, between
25%-75% of "one-trader" packages comply with the PTD. This would mean
that, according to the estimates presented in the table above, between 140 and
183 million packages are compliant with the PTD which is in line (concerning
the highest estimates) with the estimates of ECTAA. 
Business trips
In 2010, business trips
were 172 million.[118] This data relates to the
EU-27 without Belgium, Estonia, Cyprus, Malta, the Netherlands and Slovenia. We can assume henceforth that, in the EU-27, business trips are about 200
million. They split as in the following table:
         || Number of business trips (in thousands)   || Share by type of trip (%)   
   All business trips || Domestic business trips   || Outbound business trips   || Domestic || Outbound 
 Short || Long || Short || Long 
 EU27 || 200 000 || 152 400 || 47 600 || 60 || 17 || 14 || 9 
60% of these trips are
domestic and with short duration. The remaining 40%, i.e. 80 million of trips,
could be eligible to be purchased as a travel package. 
It is nonetheless very
unlikely that business trips can be booked as a pre-arranged package travel, as
businessmen have a very precise schedule to respect and solutions need to be
tailor-made. Guild of European Business Travel Agents estimates that 80%-85% of
business trips (64-68 million trips)[119] are arranged by
travel management companies (TMCs)[120].As
there is a direct and bilateral relationship between TMC and its business
customers, it is assumed that the business trips arranged by TMCs most likely
fall in the category of "one-trader" packages or independent travel
arrangements.
Concerning the typology
of trips, it is reasonable to assume maintaining the same ratio as for
holiday's trips among "one-trader" packages, "multi-trader"
travel arrangements and independent travel arrangements (i.e. 17 – 6 – 54), in
a way they add to 100% (i.e. 22 – 8 -70).  As indicated above, TMCs are
unlikely to sell "multi-trader" travel arrangements. In order to
estimate number of business trips arranged by TMCs the same ratio of
independent travel arrangements and "one-trader" packages is applied.
The results of this assumption are shown in the following table.
 Market segment || % share || Number of business trips (millions) || Number of business trips arranged by TMCs (millions) 
 "One-trader" packages   || 22% || 18 || 16 
 "Multi-trader"  travel arrangements || 8%   || 6 || 0 
 Independent travel arrangements || 70% || 56 || 50 
 TOTAL || 100% || 80 || 66 
3.     
Overview
of applicable legislation and rights
 Product           || Single services || Packages 
 Accommodation   || Car rental       || Transport || Other tourists services (e.g. excursions, events) || PTD || Revised PTD 
 Air       || Rail       || Bus, coaches || Waterborne transport       
 Specific/sectoral EU legislation applies? || No, only if part of a package || No, only if part of a package   || Regulation 261/2004 || Regulation 1371/2007 || 181/2011 (into force in March 2013) || Regulation 1177/2010 (into force in December 2012) || No, only if part of a package || Directive 90/314 || n/a 
 Information requirements: 
 -In horizontal EU legislation[121] || Yes (UCPD; CRD for online sales)   || Yes (UCPD, CRD for online sales) || Yes (UCPD, Art. 8(2)CRD on internet cost traps  for online sales) || Yes (UCPD, Art. 8 (2) CRD on internet cost traps for online sales) || Yes (UCPD, Art. 8 (2) CRD on internet cost traps for online sales) || Yes (UCPD, Art. 8 (2) CRD on internet cost traps for online sales) || Yes (UCPD, CRD for online sales) || Yes, UCPD, || Yes, UCPD, 
 -In sectoral/specific EU legislation || No || No || Yes (including ASR[122] Article 23) || Yes || Yes || Yes || No || Yes, PTD || Possible 
 Contractual liability: 
 - for non-performance[123] || No, only national contract law || No, only national contract law || Yes, via the Montreal convention || Standardised compensation scheme || Standardised compensation scheme || Standardised compensation scheme || No, only national contract law || Yes || Possible 
 - denied boarding || n/a || n/a || yes || No, (only national contract law) || Yes || No, || n/a || yes || Possible 
 -cancellations || No, only national contract law || No, only national contract law || yes || Yes || Yes || Yes || No, only national contract law || yes || Possible 
 -delays || n/a || n/a || yes || Yes || Yes || Yes || n/a || yes || Possible 
 - lost luggage || No, only national contract law || No, only national contract law || yes || yes || Yes || No || No, only national contract law || yes || Possible 
 - personal injury || No, only national contract law/tort law || No, only national tort law || yes || yes || yes || yes || No, only national tort law || yes || Possible 
 Insolvency protection || No || No || No || No || No || No || No || yes || Possible 
 Unfair contract terms || Yes (UCTD; Art. 19,21,22 CRD) || Yes (UCTD, Art. 19,21,22 CRD) || Yes (UCTD, Art. 19,21 CRD) || Yes (UCTD; Art. 19, 21 CRD) || Yes (UCTD, Art. 19, 21 CRD) || Yes (UCTD; Art. 19,21 CRD) || Yes (UCTD; Art. 19, 21 CRD) || Yes (UCTD) || Yes (UCTD) 
 Misleading/ unfair commercial practises || Yes (UCPD) || Yes (UCPD) || Yes (UCPD) || Yes (UCPD) || Yes (UCPD) || Yes (UCPD) || Yes (UCPD) || Yes (UCPD) || Yes (UCPD) 
 Withdrawal right[124] || No || No || No || No || No || No || No || No || Possible with a limited withdrawal right, e.g. for breach of information requirements 
 Apply to B2B contracts || None of the EU legislation apply, only national contract law || None of the EU legislation apply, only national contract law || Yes || Yes || Yes || Yes || None of the EU legislation apply, only national contract law || Yes || Possible 
4.     
Gaps
in the current legal framework for packages
 Legal requirements || CRD || UCPD || PASSENGER RIGHTS REGULATION || SERVICES DIRECTIVE || Comment 
 Pre-contractual information || Does not apply || Applies, but is not targeted towards travel relevant information || Some information requirements, but limited to the transport element || Applies, but is not targeted towards travel relevant information || GAP[125]   
 Rules on marketing of packages || Does not apply || Applies || Some limited rules relating to the transport element, e.g. Air services Directive article 23 || Only very limited general rules || No gap 
 Rules on content of contract || Does not apply || No requirements || Some limited rules relating to the transport element, e.g. Air services Directive article 23 || Only very limited general rules, e.g. non-discrimination etc. || GAP[126] Unfair clauses is governed by the  Directive on Unfair Contract Terms 
 Rules on cancellations before departure || Does not apply || No rules || Rules relating to the transport element || No rules || GAP   
 Rules on transfer of bookings || Does not apply || No rules || No rules || No rules || GAP   
  Rules on remedies if something goes wrong || Does not apply || No rules || Rules only relating to the transport element || No rules || GAP   
 Rules on liability for damages || Does not apply || No requirements || Rules only relating to the transport element || No requirements || GAP   
 Rules relating to force majeure situations || Does not apply || No requirements || Rules only relating to the transport element || No requirements || GAP   
 Rules on insolvency protection || Does not apply || No requirements || No direct requirements protecting consumers in the event of insolvency || No requirements || GAP   
ANNEX 3
Specific problems with the package travel directive
Scope and definitions

The
scope of the Directive is closely related to the definitions in the Directive,
especially the definitions of "package", "organiser" and
"consumer" in Article 2(1), (2), and (4). 
The
overwhelming majority of stakeholders in the public consultation considered the
clarification/ updating of definitions as well as a clarification/extension of
the scope as important. 
1.1.   Definition of
"package" 
The
definition of the term "package" is of particular importance for the
Directive’s scope. 
The current
description of what falls within the definition does not fully take the reality
of today's travel market into account. 
This
includes, in particular, the growing popularity of the so-called "combined
travel arrangements" ("tailor-made"), where different travel services are
combined at the demand of the consumer and are sold to a large extent
over the Internet. 
In the Club
Tour-case[127]
the CJEU clarified that the combination of tourist services carried out by a
travel agency to the specific requests of the consumer up to the moment of
conclusion of the contract is covered by the Directive. In this respect the
term "pre-arranged", which is currently included in the definition,
seems superfluous and can create unnecessary confusion. 
The main
problem in practice has been to adapt
the current definition of a "package" to new purchasing methods,
notably to the "combined travel arrangements", especially in the on-line environment. 
Whether the product is under the scope will depend on a
rather complex case-by-case assessment[128].

Furthermore, it is often unclear to the consumer that
different levels of protection apply for more or less equivalent travel
arrangements, depending on how they are sold. In addition, the transposition of
the Directive and the corresponding interpretation varies in the Member States.

This leads to a different scope of protection granted
within the Internal Market and affects competition and consumer protection. 
The public
consultation confirmed that both business and consumer stakeholders have
problems in distinguishing which travel arrangements fall under the definition
of a "package". 
Table 1: Interpretation
of the term "package" in different Member States
   ||   ||   ||   ||   
 MEMBER STATE || Cover one shop travel package sold in the high street || Covers one-shop travel packages sold on-line* || Covers multi-shop travel arrangements* || Covers B2B contracts 
 AUSTRIA || x || x ||   || x 
 BELGIUM || x || x ||   || x 
 BULGARIA || x || x ||   || x 
 CYPRUS ||   ||   ||   || x 
 CZECH REPUBLIC || x || x ||   || x 
 GERMANY || x || x || If the product is perceived as a package || x 
 DENMARK || x || x ||   || x 
 ESTONIA     || x || x ||   || Partly, as "legal persons" are outside the scope 
 FINLAND || Only in cases where services are not available separately || Only in cases where services are not available separately ||   || x 
 FRANCE || x || x ||   || x 
 GREECE || x ||   ||   || x 
 HUNGARY || x || X ||   || x 
 ITALY || Unclear reply || In theory, but no case-law yet ||   || x 
 LITHUANIA   || x || x ||   || X 
 LUXEMBOURG || x || x ||   || x 
 LATVIA || x || x || In theory, but no case law yet || x 
 POLAND || x || x ||   || x 
 MALTA || x ||   ||   || x 
 PORTUGAL || Unclear reply || Unclear reply ||   ||   
 SWEDEN || x || x ||   || x 
 SLOVENIA ||   ||   ||   ||   
 SLOVAKIA || Unclear reply ||   ||   ||   
 UNITED KINGDOM || x || Only in some cases, following the results of court decisions.  || Only some (Flight plus – insolvency protection) || x 
 THE NETHERLANDS || x || x ||   || x 
 SPAIN ||   ||   ||   || x 
 ROMANIA (no reply) ||   ||   ||   ||   
 IRELAND (no reply) ||   ||   ||   ||   
Source: Member States'
replies to questionnaires as a preparation to Member States' Workshop 5 June
2012, according to which the coverage appears to depend on a case by case
assessment. 
In the Member
States, there are currently significant differences in the definitions and
interpretation of the Directive's term "package". Some Member States
have, for instance, broadened the definition of a "package" and
covered, e.g., travel products containing only one element, trips of less than
24 hours or without overnight accommodation. A few Member States have not
included the requirement of other tourist services to account for "a
significant proportion" of the package[129]. Other EEA states, such
as Sweden and Norway, have also incorporated travel products that significantly
resemble travel packages. Germany found another solution whereby the consumer's
perception of what he is offered (whether it is a package) plays a role when
determining if a product is within the scope of the national package travel
law. 
Another
expression used in the definition of a 'package' that has created confusion is
"other tourist services not ancillary to transport and accommodation and
accounting for a significant proportion of the package". 
Some
stakeholders have asked for a clarification of "significant
proportion", possibly by expressing the concept explicitly, e.g. in a
percentage of the value of the package. Additionally, it is neither indicated
nor explained what kind of services could be regarded as "other tourist
services", which might also cause confusion or litigation[130]. 
Cruises are a
special case of a package holiday, since the maritime transport service
coincide with the accommodation. Thus, it would be useful to remove any
remaining doubt and clarify that cruises are within the scope of the Directive[131].

Similarly, we
find that transportation which includes accommodation, e.g. overnight
ship/train trips which include accommodation, causes difficulties in
determining whether it falls under the definition of a "package"[132].
In this “grey zone” area; it can be unclear if it should be considered to be a
combination of transport and accommodation services, creating problems for both
consumers and traders as to whether products are falling within the scope,
including whether such products should have protection against bankruptcy.  
1.2.   Definition of
"consumer"
The Directive
defines the consumer as "the person who takes or agrees to take the
package (”the principal contractor”), or any person on whose behalf the
principal contractor agrees to purchase the package (”the other beneficiaries”)
or any person to whom the principal contractor or any of the other
beneficiaries transfers the package (“the transferee”)". Consequently, the
definition of "consumer" in the Directive is significantly broader
than the definition of consumer in the rest of the Consumer Acquis, since there
is not a requirement that the consumer is acting for purposes which are outside
his trade, business, craft or profession. However, this solution is in
line with other EU transport legislation where the "passenger"[133]
is the protected party, irrespective of the purpose of the travels. The problem
in defining the consumer in this way is that the term "consumer" does
not fit with what the definition actually includes.  
1.3.   Definitions
of "retailer" and "organiser"
The notion of
"retailer" and "organiser" is not in line with the
definition of a "trader" or a "seller" and similar terms
describing professional parties in the Consumer Acquis. While it is required
elsewhere that a trader/seller is acting for purposes relating to his trade,
business, craft or profession, such a requirement is absent in the Directive.
The existing definitions of "retailer" and "organiser"
therefore also include private persons. This means that, under certain
circumstances, consumer-to-consumer contracts (C2C) come under the scope of the
Directive. Thus, the rules which are created on the basis that there is an
imbalance between the contractual strength of the two parties (consumer and
trader) do not fit in C2C cases. 
In the increasing trend
of offering customised/combined travel arrangements, suppliers do not
necessarily offer contracts for different travel services in their own name.
This has created legal grey zones, where both businesses and consumers are
often uncertain as to whether such packages are covered by the PTD and whom is
liable for the performance of the contracts. The coverage has, as indicated
above, to be determined on a case-by-case basis and will often lead to complex
judicial decisions and court proceedings, both in determining if the components
qualify as a package and whether the seller qualifies as an
"organiser" of the package. In several recent national court cases[134],
the courts have not considered sellers of combined travel arrangements as
"organisers" when they have been offering several travel components
in a combination, but not in their own name ("one-shop" travel
packages). This has led to an increasing number of customised combined travel
arrangements not being considered as under the scope of the Directive,
resulting in fewer consumers going on holiday being protected and creating an
un-level playing field for the traders selling packages.
Information requirements
The Directive
contains several obligations to provide information for the professional
party(ies) to the contract. Article 3 and 4 prescribe the minimum information
that must be given to the consumer at different stages in the conclusion of a
contract, including mandatory rules on what should be included in a brochure
that is made available to consumers. The general feedback from stakeholders is
that the current information requirements work rather well. However, some
problematic issues are explained below.
Requirements
for the brochure
According to
the current rules, if a brochure is made available for the consumer, it must
contain prices and other information, such as about the itinerary, the meal
plan, the destination and the means, characteristics and categories of
transport used. The particulars in the brochure are, as a general rule, binding
on the organiser/retailer, including the mentioned prices. These rules have led
to businesses complaining that they may be forced to reprint the brochures in
cases of changes in prices, accommodation, etc., which they consider to be very
costly and unnecessary, since the consumer always would be able to get the
updated price before he concludes a contract. 
Furthermore, they have complained that this rule
indirectly makes prices for packages less dynamic and flexible, which they see
as a competitive disadvantage compared to companies selling travel products
falling outside the scope of the Directive.
How to
provide the required information
The formal
requirements for the pre-contractual information in Article 4(1) a) are
unclear, as the Directive uses the wording "in writing or any other
appropriate form" and thereby leaves it open to interpretation what should
be considered as "appropriate". The same problem occurs if the
information has to be provided before the start of the journey as described in
Article 4(1) b). Even the formal requirements for the information to be
provided in the contract (see Article 4(2)) are unclear as the requirement is:
“in writing or such other form as is comprehensible and accessible to the
consumer”. However, according to the same provision, the consumer is entitled
to receive a “copy of these terms”, which normally in practice implies that the
consumer receives a paper copy of the contract. As a result, the way in which
information has to be provided is transposed or interpreted differently across
the Member States[135]
creating a legal framework with national difference that can make it more
difficult and cumbersome for traders to provide services in several Member
States. 
Furthermore, instead of
communicating in writing by post, consumers and professionals may nowadays
prefer other means of communication, such as e-mails, and in the Member states
it can be unclear whether this should be considered to be in "an
appropriate form". There is no reference to "durable medium" in
the Directive, something which is common in the more recent consumer
legislation. 
Last minute
bookings
The current
Directive is considered to be unclear when describing the information and
contractual requirements for last minute bookings. It has been questioned[136]
whether the exemptions from the information requirements in the case of last
minute bookings are applicable only with regard to the requirement of having a
written contract whose terms are communicated to the consumer before the
conclusion of the contract[137]
or also with regard to other information duties, in particular the requirements
of Article 4(1), i.e. the general information on passport and visa
requirements, etc. The Directive does not give any directions as to what is a
"last minute" booking.
Lack of
sanctions for non-compliance with the information requirements
The current Directive
does not provide for sanctions for traders who do not comply with the
information rules. This has been criticized as a shortcoming by several
stakeholders[138],
since rules without sanctions can be difficult to enforce. 
Contract changes before the
departure 
The package travel
market has traditionally been characterized by consumers booking packages a
long time before the departure and making pre-payments. While it has become
easier to purchase last minute tickets, especially via the Internet, the amount
of holidays being booked months in advance is still significant. Since the
contracts are often concluded a long time before the departure, certain
circumstances, including costs incurred by organisers, may change. The existing
rules on contract changes vary depending on the gravity of and the reason for
the contract change. The main problems related to these rules are explained
below.
Price revisions  
Article 4(4)
(a) regulates price revisions: The prices laid down in the contract shall not
be subject to revision unless the contract expressly provides for the possibility
of upward or downward revision and states precisely how the revised price is to
be calculated. Such revision is only possible until 20 days prior to departure
and on the grounds of actual variations in: 
-           transportation
costs, including the cost of fuel, 
-
          dues, taxes or fees chargeable for certain services, such as landing
taxes or embarkation or disembarkation fees at ports and airports, 
-           the
exchange rates applied to the particular package.
Stakeholders,
especially from the consumer side and from Member States, have argued that
there is a need to further restrict the possibilities of price revisions since
the financial risk for fluctuation is put on the consumer after the conclusion
of the contract, even if the price has been agreed in the contract. Furthermore
it is argued that traders normally would be able to hedge against such
fluctuations and also that the nature of fluctuations would involve that in the
longer run the traders do not bear a big financial risk. The limitations
suggested by stakeholders include a complete prohibition on price revisions,
specified percentage caps or an increase of the existing 20-day cut-off period.
The rules relating to price revisions vary significantly in the Member States
(see below under point 3.3), again creating a legal framework with national
difference that can make it more difficult and cumbersome for traders to
provide services in several Member States. Furthermore, the interplay between
this Article and Article 4(5) on significant alteration of essential terms is
unclear (see point 3.3) which is creating an ambiguity whether and when the
consumer should have a withdrawal right in cases of price increases.  
While the
Directive contains provisions on additional charges, which may be imposed on
the consumer in precise circumstances, it does not spell out whether the
contract may stipulate that the organiser's administrative costs connected to
price increases, e.g. due to altering fuel prices, may be passed on to
consumers, creating a legal ambiguity which can lead to unnecessary disputes
and/or litigation.  
Significant
alterations of essential terms before departure
If before the
departure, the organiser finds that he is constrained to alter significantly
any of the essential terms, such as the price, the consumer has, according to
Article 4(5), the choice either to withdraw from the contract without penalty
or to accept a rider to the contract specifying the alterations made and their
impact on the price. 
The Article is, however,
unclear as to what changes in the contract qualify as a "significant
alteration", or what should be considered as an "essential term"
(except for the price). This can create uncertainties both for consumers and
businesses and therefore also be a source of unnecessary litigation costs. A
majority of both Member States and consumer stakeholders asked for a
clarification of "essential terms" in the 2007 consultation[139].
Furthermore, Article
4(5) uses the term "withdraw", which in other pieces of legislation
is related to the "cooling-off period". Therefore, on grounds of
consistency, the term "terminate" should be used instead.
Finally, the Directive
is silent when it comes to how changes to the essential contract terms which
are not considered as significant should be treated. This creates legal
ambiguities which can lead to unnecessary disputes and/or litigation.   
Significant
price alterations 
While Article
4(4) a) regulates price revisions, Article 4(5) sets out the organiser's
obligations and the corresponding rights for the consumer in case the organiser
is forced to make significant alterations to the essential terms of the
contract before departure, including changes in prices. 
The wording
of the Directive is criticized for being too vague as the meaning of
"significant" alterations of the price is not specified. This can be
a problem both for consumers and businesses, as it is unclear when the consumer
should have a withdrawal right in case of price increases which, again, can
result in unnecessary disputes and litigation costs. Some Member States, e.g.
Slovenia and Romania, specify in the laws transposing the Directive that the
consumer may withdraw from the contract in case the agreed price increases more
than 10%. 
Other Member
States have used the minimum harmonisation approach to grant consumers more
protection by putting a cap on the possibilities for price increases, such as Italy, where the price increase can never exceed 10 %.
It is,
furthermore, unclear whether Art. 4(4) ("upward" or "downward
revision") deals with both possibilities, hence the word "or"
instead of "and" should be used in order to make it clear that it
should apply to both possibilities. Finally, the internal relationship between
Article 4(4) and 4(5) is open for interpretation, in the sense that it is
unclear whether Article 4(5) also applies to price revisions, or if Article
4(4) in such cases should be regarded as lex specialis.
Cancellations
of the contract before departure
According to
Article 4(6), in the event of cancellation of the package, the right to
compensation is limited if:
"(i)
cancellation is on the grounds that the number of persons enrolled for the
package is less than the minimum number required and the consumer is informed
of the cancellation, in writing, within the period indicated in the package
description; or 
(ii)
cancellation, excluding overbooking, is for reasons of force majeure, i.e.
unusual and unforeseeable circumstances beyond the control of the party by whom
it is pleaded, the consequences of which could not have been avoided even if
all due care had been exercised." 
Cancellation
of the package caused by other reasons than the fault of the consumer or the
above mentioned reasons entitles the consumer to compensation "if
appropriate". However, it is not specified in the Directive when
compensation could be appropriate (or inappropriate). Thus, there is most
likely not a homogenous interpretation of this term in the Member States.
Several Member States have introduced a general termination rights against
compensation (for example BE, CZ, DE, DK, EE, EL, FI, HU LT, LV, PT), whilst
others allow for termination even without compensation in force majeure events
(for example DK, FI)[140].
Consequently,
it can also be unclear for both businesses and consumers when compensation is
appropriate or not.
Cancellations
before departure on the ground that there are too few participants
At present the organiser
is entitled to cancel the package if the number of participants is less than
the minimum number required and the consumer has been informed about the
possibility of cancellation on this ground in the contract. 
The deadline for such
cancellations is determined by the organiser and has to be specified in the
contract. In both public consultations, consumer stakeholders and some Member States
argued that there should be a time limitation to the possibilities of
cancelling the package on the grounds that there are too few participants. This
is supposed to prevent circumstances where the consumer receives such
information only a few days before the scheduled departure at a time when it
can be difficult or at least very expensive to find other alternative offers or
otherwise reschedule the holiday. 
Cancellations
before departure due to force majeure 
On the one hand, the
organiser is entitled to cancel the package contract without any obligation to
pay damages for non-performance of the contract if the cancellation is for
reasons of force majeure, solely depending on his assessment of the security
situation. 
On the other hand, the
consumer does not have a similar right to cancel in the event of force majeure,
something that has been criticised by consumer advocates and there are examples
of organisers refusing to cancel the package even though national travel
advices advised against travelling to the destination. 
They are arguing that
the consumer can have a legitimate need for an option to cancel the contract[141]
if there is a force majeure situation in the area of the destination, e.g.
warfare or natural disasters, which is likely to have a negative impact on the
enjoyment or the safety during the holiday and where the organiser does not
take initiative to cancel the package. Such events would often not be covered
by travel insurances the traveller might purchase. Similarly, some consumer advocates
have argued that there also should be a possibility to terminate the contract
if there is a force majeure situation in relation to the traveller, e.g.
serious illness or death in close family, which prevents the traveller from
leaving for the holiday. Such events are, however, often covered by travel
insurances the traveller might purchase.  
Transfer of
the package before departure
Where the
consumer is prevented from proceeding with the package, he may transfer his
booking to a person who satisfies all the conditions applicable to the package,
having given reasonable notice of his intention before departure to the
organiser or to the retailer. From the wording of the Directive it is unclear
if the Member States are free to regulate whether the organiser or the retailer
should receive the notice from the consumer or if the consumer is entitled to
choose which of them to notify. Furthermore, the Directive does not specify the
content of "reasonable notice" in the Directive, which has resulted
in several different solutions in the various Member States[142]. In some
Member States the consumer's notice has to be in writing or even by a recorded
delivery. The term "reasonable notice" should also be clarified, at
least in order to point out that it is the timing of the notice that should be
reasonable and not the notice itself. 
Alterations of the contract after
departure
Also after
the departure circumstances might occur which can make it difficult, or even
impossible, to provide the services as foreseen in the contract. Article 4(7)
regulates the situation where a significant proportion of the services are not
being provided or the organiser perceives that he will be unable to procure a
significant amount of the services. Normally, the consumer will have a right to
get compensation for damages in such situations. The main regulatory problems
related to these situations are set out below.
Cancellations
after departure due to force majeure  
Article 4(7)
provides that, where, after departure, a significant proportion of the services
contracted is not provided, the organiser has to make suitable alternative
arrangements, at no extra cost to the consumer, for the continuation of the
package. If it is impossible to make such arrangements, the organiser shall
provide the consumer with equivalent transport back to the place of departure,
alternatively to another return point to which the consumer has agreed.
Furthermore,
under Article 5(2) the organiser is obliged to provide prompt assistance to
consumers in difficulty, e.g. in cases of force majeure. The Directive does not
specify what kind of assistance the organiser is obliged to provide and for how
long, but it states clearly that the organiser is not responsible for damages.
However, as long as the content of the obligation to provide assistance is not
specified, it can be difficult to decide what should be provided as assistance
and what costs should be covered by the organiser. The rules relating to
Article 4(7) and 5(2) are transposed differently in the Member States.
The incident
starting 15 April 2010 with the closure of air space and airports in Europe due
to volcanic activities in Iceland had huge impacts on the travel market. A
significant number of European consumers, airlines and package tour organisers
were heavily affected. Estimations from ECTAA (the European association of
travel agents and tour operators) showed that more than 1.2 million travellers
were stranded at the same time and that tour operators spent more than € 388
million on care and assistance to the stranded passengers as well as their
repatriation. This situation revealed several problems with the interpretation
of the Directive, namely Articles 4(7) and 5(2) and also to some extent its
interplay with the Air Passengers' Rights Regulation[143] (APR Regulation), see
section 4.2 below. Furthermore, it is unclear if Article 4(7) second
paragraph applies in situations where the package does not contain any
transport services. There is obviously a need for clearer rules in order to
remove any remaining doubts that the obligation to provide suitable alternative
arrangements, at no extra cost to the consumer, for the continuation of the
package (Article 4(7)) also applies in force majeure situations. Legal ambiguities
can lead to unnecessary and costly disputes and/or litigation which also were
reported in the event of the ash cloud in 2010.   
However, in
order to have proportional and balanced rules, and to prevent too heavy
responsibilities on the organiser, it might also be necessary to introduce
certain limitations for the liability of the organiser in situations where the
force majeure situation is preventing consumers to return to their home for a
long time period, e.g. introducing a cap to the liability, for instance 3 or 4
days (which is the case in several of the Passenger rights regulations).
However, the most important aspect will be to remove any doubt that organisers
are obliged to take care of travellers/consumers and make arrangements for the
continuation of the package.
 Interplay with the APR Regulation
Even though
the APR Regulation states that it shall not affect the rights of passengers
under the PTD, the relationship between the APR Regulation and the Directive is
not fully streamlined. As long as the package contains air transport, there is
an overlap between the two different legislations as both pieces of legislation
apply and give rights to the passenger towards both the airline (APR
regulation) and the organiser (PTD). In practice this overlap has created
confusing situations for the consumer, e.g. where the air carrier has been
telling him to contact the tour operator in order to escape the burden to
provide assistance and vice versa. 
Article 8 (2)
of the APR Regulation states that (contrary to the right to reimbursements) the
right for a return flight to the first point of departure, at the earliest
opportunity, also applies to passengers whose flights form part of a package.
In many circumstances, e.g. if the flight is cancelled, the passenger is
entitled to choose either to direct his claim (e.g. for continuation of the
package and assistance) towards the organiser (through the PTD) or he can
directly claim his rights under the APR Regulation towards the airline. 
However,
neither of the two pieces of legislations explicitly mentions that passengers
are not entitled to "double assistance" or "double
compensation" for the same incident (both from the air carrier and the
tour operator). This should be clarified in order to prevent potential abuse in
the future as well as simplifying the organiser's right to seek redress from
the service providers, the latter which the industry today claim not to work
well enough. It should, at the same time, be underlined that both the PTD and
the Passenger Rigths regulations apply where such transport is included in the
package.
Problems
related to performance, liability and obligation of the professional parties
The current
rules regarding the retailer's and organiser's liabilities and obligations
relate mainly to the obligation to provide information (Article 4), to proper
performance/liability for improper performance (Article 5), and to provide
evidence of security for refund of money/repatriation (Article 7). 
Who is the
responsible party?
A common
feature of the rules regulating performance, liability
and obligation of the professional parties is that the Directive
uses the wording "organizer and/or retailer" and thereby does not
designate one particular party as being responsible[144].

This wording
was chosen to leave the choice to the Member States to decide who should be the
responsible/liable party when transposing the Directive into national law.
Consequently, this solution has led to diverging national rules on who is
liable towards the consumer: the retailer, the organiser or both. These
divergences can be detrimental to the consumer as it can be unclear which party
is responsible, especially if the package holiday is purchased cross-border. It
can also lead to situations where the organiser and the retailer are blaming
each other without anyone of them taking the responsibility. Furthermore, differences
between Member States' legislation and the possibility for the consumer to
claim his rights may be problematic in particular in cases where the retailer
and the organizer are established in different Member States. The situation can also be
an obstacle to cross-border trade since legal fragmentation can deter traders
from selling travel packages cross-border. 
Compensation for damages
Article 5
covers the liability for damage suffered by the consumer due to non-performance
or improper performance of the services contracted for. The consumer can be
entitled to compensation for both material and non-material (moral) damages
(e.g. loss of holiday enjoyment) in cases of non-performance or improper
performance of the contract. 
The rule does
not explicitly state that the consumer has a right to compensation for
non-material damage and, in particular, that such compensation can arise from
the loss of enjoyment which the consumer has suffered because of improper
performance of the travel contract. However, this right was confirmed by the
CJEU in the Simone Leitner-case[145].
It is highly questionable whether this right is known to the average consumer
as this right is not explicitly mentioned in the Directive or most national
laws transposing the Directive. 
In parallel with the
general rule on compensation for damages in Article 5(2), Article 4(7) refers
to a right to compensation for consumers "where appropriate". It is
unclear if the rule in Article 4(7) thereby is an independent liability rule or
if it merely refers to the rule in Article 5(2). Moreover, it is not indicated
in what situations compensation could be "appropriate".  In Czech Republic and France this is specified to situations where the substitute service is of
lower quality. Such legal ambiguities can lead to unnecessary and costly
disputes and/or litigation.  
Moreover, as a
result of substantial differences in national laws concerning the possibility to
limit compensation in the case of damages resulting from non-performance or
improper performance of services included in the package, organisers and
retailers who want to directly market package tours in several Member States
have to engage in thorough legal checks on the possibility to limit
compensation in other Member States or they are compelled, in practice, to
refrain from agreeing any limitation on compensation if they want to act
lawfully. This can be a barrier to cross border trade. 
As an example, a
trader established in Belgium would like to direct sales of packages also to
consumers in Germany. However, since he does not know if he can impose the same
limitation to his liability as he can lawfully do in Belgium, i.e. two times
the costs of the travel package, he might refrain from directing sales cross
border. If he would engage in legal checks regarding this issue, he would find
out that he will not be able to use the same contract terms, since in Germany you cannot limit the liability to less than three times the costs of the
travel package. 
Type of
liability
It is not
totally clear from the wording of Article 5 what type of liability it imposes.
Most Member States seem to have interpreted Article 5 as imposing a
"strict liability"- like rule, though including certain exceptions to
the liability, such as force majeure or where the damage is caused by the
consumer himself or a third party not connected to the contract. 
However, in
at least two Member States (Ireland and the UK) the courts seem to interpret
Article 5 as imposing only a fault-based liability as regards personal injury
claims. In several Member States the organiser is not liable if he can prove
that he did not act intentionally or negligently[146]. 
Legal ambiguities can lead to unnecessary and costly disputes and/or litigation
and the difference of the interpretation of the rules can constitute an
obstacle to cross border trade and also represent a barrier for the consumer to
buy cross border if he is uncertain whether he would have less legal protection
if buying from a foreign trader. 
Conditions
for liability
The Directive
does not set up clear conditions for the liability, for instance the burden of
proof and the need for a causal link are not touched upon, leaving it to Member
States to interpret this. The consequence is that the practice and conditions
relating to the liability for proper performance in Member States deviates.
Notifications
There are
currently no requirements to the form to which the parties must stick for
notifying each other, e.g. in Article 4(3) the only requirement is to give
"reasonable notice" and in Article 4(5) the notice must be given
"as soon as possible". Similarly, according to Article 4(6) the
consumer must inform the organiser about his decision to either withdraw or
accept a rider to the contract "as quickly as possible". The lack of
clarity regarding deadlines can lead to unnecessary and costly disputes and/or
litigation. However, some Member States have transposed this rule by specifying
certain time limits (from two working days to eight calendar days). 
According to
Article 5(4), the consumer must communicate any failure in the performance of a
contract which he perceives on the spot to the supplier of the services
concerned and to the organiser and/or retailer in writing or any other
appropriate form at the earliest opportunity. There are several ambiguities or
unclear aspects related to this duty; notably who should receive the
notification (the organiser and/or the retailer?), the form of the notification
("in writing or any other appropriate form") and the timing of the
notification ("at the earliest opportunity"). Legal ambiguities can
lead to unnecessary and costly disputes and/or litigation.  
In general, the vague
regulation of the parties' notifications has created different rules in the
Member States. It can also give rise to disputes between the parties to the
contract, e.g. related to the timing of the notification, the proof of having
sent the notification and whether the notification was sent in an acceptable
form. 
Timing of repayment
The retailer/organizer
is obliged to repay the consumer in certain circumstances, e.g. if the consumer
uses his right to terminate the contract if the tour organiser has made
significant changes to essential terms[147]. However, these
rules lack a deadline for when the reimbursement/refund must be executed at the
latest. 
Insolvency protection
Under the
Directive the organiser/retailer must provide sufficient evidence of security
for the refund of all the money paid and the repatriation of the consumer in
the event of insolvency[148]. The
Directive itself does set out any explicit requirement for the actual method of
insolvency protection. Nevertheless, the CJEU has outlined in numerous rulings[149] that the
insolvency protection must be effective, i.e. it must guarantee the consumers'
repatriation and the refund of money that they have paid. As a result, there
are numerous diverging methods for providing insolvency protection in the
Member States, e.g. insurances, bank guarantees, national insolvency funds or a
combination of these methods. Some Member States have a wider scope of
protection than merely insolvency protection for services included in the
package. Consequently, there seems to be significant differences in the level
of consumer protection in the Member States[150]. Furthermore, the vague
wording of Article 7 has led to several court cases, with subsequent referrals
to the ECJ[151]. 
The performance checks
exercise in 2012 showed that different national rules regarding the obligation
to provide insolvency protection have also resulted in a situation where some
retailers or organisers who are trading cross-border had to pay several times
for insolvency protection which already had been secured in another Member State.[152]

The Commission has also
understood that there have been problems with the sharing of information
between the different protections schemes in the Member States as there is not
established any forum for such exchanges, e.g. information concerning fraudulent
traders who are operating in several Member States, possibly causing
unnecessary economic losses. The administrative cooperation system foreseen by
the Services Directive, the Internal Market Information system, can and is,
however, used by some authorities for this purpose though.
Prescription periods
The PTD does
not regulate prescription periods, leaving this to Member States. Consumer
organisations report that this can cause consumer detriment especially in cross
border situations where consumers are rarely aware of prescription periods in
other Member States. With the expected increase in cross border trade due to
harmonisation of rules, at least the minimum length of the prescription periods
should be regulated in a new Directive. 
ANNEX 4
Legislative
Measures proposed in options 5, 6
and 7
1.     
Introduction
A legislative approach is widely supported; the majority of stakeholders
in the public consultation indicated a more up-to-date directive as the
preferred option. Furthermore, the revision has also been requested from or
supported by the co-legislators and international bodies.[153]
Table 1: Preferred way of ensuring consumer protection in the field
of package travel
   || MS Authorities || Industry Associations || Companies || Consumer Organisations 
 A more up-to-date EU Directive || 89% || 70% || 64% || 96% 
 Repeal of the Directive and use of other existing legislation || 7% || 9% || 20% || 0% 
 Industry self-regulation || 19% || 37% || 36% || 4% 
 Issuing of detailed guidance for businesses || 37% || 30% || 32% || 11% 
 Undertaking awareness campaigns || 44% || 28% || 32% || 19% 
 None of the above || 0% || 2% || 4% || 0% 
 Other || 19% || 7% || 8% || 0% 
Source: Public consultations on the
revision of the Package Travel Directive, 2010
2.      Proposed
legislative measures in option 5 - Modernisation of the
Directive and coverage of "one trader" packages (PO5)
2.1.   Update of
definitions
2.1.1.      'Package'
The definition in the
existing PTD would be clarified to include "one-trader" 
packages. This reflects not only the principles of the CJEU ruling in the Club
Tour case[154],
but also the views from stakeholders, who in the majority favour the need to
clearly include more combined travel arrangements and cruises within the scope
of the Directive. However,  the "multi trader" travel arrangements
would not be covered by policy option 5. 
The majority of
respondents indicated that a combination of travel services should not
necessarily have to be sold or offered for sale "at an inclusive
price" to qualify as a ' package'. It is planned to define as a "
package" those combinations of not fewer than two different types of
travel services for the purpose of the same trip or holiday  fulfilling at
least one of several criteria which are "typical" for the sale of
packages, e.g. where such services are (a) put together by one trader,
including at the request of the traveller before one contract on all services
is concluded, (b) sold, offered or charged at an inclusive or total price, (c)
sold within the same booking process from a single point of sale or one single
trader, (d) combined after the conclusion of a contract by which a trader entitles
the traveller to choose among a selection of different types of travel services
(travel package gift box),  (e) advertised or sold  under the term
"package" or under a similar term, or (f) o purchased from separate
traders through linked online booking processes where the traveller's name or
particulars needed to conclude a booking transaction are transferred between
the traders at the latest when the booking of the first service is confirmed;
Option 5 would also
clarify that car rental would be considered as a travel service which, if sold
together with another travel service, can create a package.
Furthermore, in relation
to tourist services other than accommodation, transport and car rental, the
current requirement, according to which it needs to represent a
"significant proportion of the package", would be maintained, in line
with the views of many stakeholders, while specifying in a recital that such
additional tourist services should  account for more than 20% of the total
price or otherwise represent an essential feature of the trip.
2.1.2.      Consumer
The current
definition of a "consumer" in the PTD deviates from the rest of the
consumer acquis since it does not require that the consumer is acting for
purposes which are outside his trade, business, craft or profession. 
Some
stakeholders argue that the original definition in the existing PTD should be
updated to fall in line with the definition of 'consumer' in other consumer
legislation. This change would, however, have an impact on the scope of protection,
by excluding all business travel packages and package travels bought for mixed
business- and leisure purposes. 
Table 2
Travel arrangements that should be covered by the PTD 
 Travel-related Products or Arrangements || MS Authorities || Industry Associations || Companies || Consumer Organisations 
 Packages purchased for solely business purposes || 41% || 28% || 32% || 59% 
 Packages purchased for solely leisure purposes || 89% || 74% || 48% || 81% 
 Packages purchased for mixed purposes (private& business) || 63% || 46% || 60% || 74% 
Source:
Public Consultations on the Revision of the Package Travel Directive, 2010
The potential inclusion
in the scope of packages that are solely for business purposes received a
relatively low level of support from most stakeholder groups. This is confirmed
by the fact that, across stakeholder groups, respondents commented that
business-to-business trade does not require the same level of protection as
business-to-consumer trade and that, in general, there is little evidence of
detriment in B2B contracts. However, it was noted by key industry association
respondents that there may be difficulties in determining the precise purpose
of every trip, particularly in relation to trips involving both business and
leisure elements. Industry stakeholders representing SMEs also argued that SMEs
should continue to be protected under the scope of the PTD, since SMEs in many
instances are as vulnerable as consumers.
Under option
5, the protected party would be the "traveller". This concept
corresponds largely to the current definition of the "consumer" in
the PTD. However, packages purchased on the basis of a framework contract
between the traveller's employer and a trader specialising in the arrangement
of business travel (so-called "managed business travel") would be
excluded from the Directive. 
2.1.3.               Organiser
Option 5
would introduce some changes to the definition of an organiser, in the sense
that only traders can be organisers (and never consumers) and that all traders
who combine, including at the request of a traveller, travel services into a
travel package and sell or offer them for sale, either directly or through
another trader or together with another trader, would be considered to be an
organiser.
An essential
feature of option 5 is that at least one trader should always be responsible as
an organiser for the package as a whole. Therefore, only in cases where another
trader is acting as the organiser of a package, should a trader, typically a
high-street or on-line travel agent, be able to act as a mere retailer or
intermediary and not be liable as an organiser. 
2.1.4.               Occasional
organiser
Stakeholders
have been divided regarding the question of whether to keep the current
exemption for occasional organisers. 
Many
stakeholders have pointed to the need to clarify this concept.To increase
consumer protection and create fairer competition, Option 5 would narrow the
existing exemption for occasional organiser by limiting it to traders who do
not have the sale of travel packages as one of their main business activities
and who do not organise travel packages more than twice a year. 
Table 3
Whether certain travel arrangements put together by occasional organisers
should be covered by the PTD 
 Travel-related Products or Arrangements || MS Authorities || Industry Associations || Companies || Consumer Organisations 
 Packages occasionally organised by a company which normally does not organise packages (e.g. package travel to Oktoberfest in Germany organised and sold by a bank for best clients once a year) || 52% || 54% || 68% || 63% 
 Packages occasionally organised by a non-business organisation (or not-for-profit organisation) which normally does not organise packages (e.g. package travel to Vatican for Christmas celebration organised and sold by the local church) || 41% || 48% || 56% || 63% 
Source: Public
Consultations on the Revision of the Package Travel Directive, 2010
2.2.   Update of
Information Requirements and adaptation to the Consumer Rights Directive (CRD)
The current specific
rules on brochures, which have created administrative burden, will be
abolished. Traders may still use brochures, but option 5 would contain no
mandatory requirements for its actual content.
No major problems have
been identified in relation to the content of the existing list of information
requirements. However, option 5 would include strengthened requirements for the
timing of the information and its clarity, such as "prior to the
conclusion of the contract" the pre-contractual information should be
provided "in a clear and prominent manner". Furthermore, option 5
would require that the contract shall be "in plain and intelligible
language and, in so far in writing, be legible". To improve the
readability, the information requirements would be divided into three clear-cut
sections:
-               
pre-contractual information, 
-               
information in the contract and, 
-               
information before departure. 
There will be
detailed requirements for the pre-contractual information, mainly in line with
the information the consumer will have to receive today. 
The main
change would be that the traveller must also be informed  that the product sold
or offered for sale is a package and that, as a consequence, the traveller will
benefit from legal protection for travel packages under EU law. Furthermore, in
line with the Consumer Rights Directive, option 5 would also include a rule
stating that, if the information requirements on additional charges, fees or
other costs for services included in the package have not been complied with,
the traveller shall not bear those costs. 
Option 5
would adapt Article 8(2), Article 19, Article 21 and Article 22 of the CRD, so
that these rules also apply to packages.
2.2.1.      Including
other (modern) channels of marketing communication
Many stakeholders
complain about current special rules for the brochures and their binding
nature. Given that for 40% of Europeans the internet is the most important
source of information when making a decision about holiday[155],
special rules on what must be included in brochures seem no longer to be
crucial. Moreover, the financial and environmental costs of reprinting
brochures due to the existing legal requirements are large. Therefore, the existing rules regulating the
content of the brochure would be removed. This means that all the sale
channels would be treated in the same fashion and would have to adhere to the
same requirement to provide the consumer at least with the specified key
information about the travel package before conclusion of the contract
(pre-contractual information). Furthermore, this would remedy the complaints
from the side of industry that still produces brochures, namely that they have
a disadvantage compared to the part of the industry which only operates online.

Thus, it would
contribute to creating a level playing field and remove a significant
administrative burden for industry. 
2.2.2.      Durable
medium
Currently, information
is widely available on the internet from a variety of sources, and it may be
too prescriptive to impose the form in which information should be provided at
the pre-contractual stage. Therefore, the form in which information and notices
primarily should be provided to consumers would be specified only for the
contract and the departure stages, namely on a durable medium for both stages.
This is consistent with the approach used in other recent legislation. 
2.2.3.      Last minute
bookings
The
pre-contractual information requirements would specify what information should
be provided by consumers before concluding the contract. Most stakeholders
(including those in industry) did not see a need for this aspect to be
regulated. Also, with the advantages of electronic transactions - which have
been a major driver in the increase in last minute bookings - consumers are
able to receive electronic copies of documents on "durable medium"
almost immediately upon booking. Therefore there would be no special rules regarding
information requirements for last minute bookings. 
2.3.   Contract
changes and other issues
2.3.1.      Price
revisions
The industry
stakeholders have argued that the existing regime (see PTD article 4(4)), for
price revision is appropriate, while consumer organisations mainly argue that
there is a need for increased foreseeability of expenses and, thus, that the
current possibilities to revise the agreed price should be abolished. 
Member State
authorities, industry associations and operators coincide in that the highest
percentage of respondents opted for the current time limit in the PTD of 20
days. Consumer organisations and consumers predictably were mostly in favour of
prices in contracts being binding.
Table
4: Time limit for price changes
   || MS Authorities || Industry Associations || Companies || Consumer Organisations 
 8 weeks before trip || 4% || 4% || 8% || 11% 
 6 weeks before trip || 0% || 2% || 0% || 7% 
 4 weeks before trip || 15% || 11% || 8% || 0% 
 20 days before trip || 56% || 48% || 52% || 11% 
 Prices should be binding || 7% || 4% || 8% || 52% 
 Other || 15% || 13% || 12% || 15% 
Source: Public
Consultations on the Revision of the Package Travel Directive, 2010
As regards the maximum
acceptable level of price changes, Member States, industry associations and
companies selected a limit to price revisions of between 5% and 10%. However,
unsurprisingly, the highest number of industry respondents selected “It should
not be specified". Again, the majority of consumer organisations indicated
that prices should be binding.
Table 5:
Acceptable level of price revision
   || MS Authorities || Industry Associations || Companies || Consumer Organisations 
 <1% || 0% || 2% || 0% || 0% 
 2-5% || 26% || 2% || 16% || 15% 
 5-10% || 33% || 26% || 20% || 11% 
 15-25% || 0% || 4% || 0% || 0% 
 >25% || 0% || 2% || 4% || 0% 
 It shouldn't be specified || 26% || 39% || 48% || 11% 
 Prices should be binding || 15% || 11% || 4% || 67% 
Source:
Public consultations on the revision of the Package Travel Directive, 2010
Against this background,
the following sub-options have been analysed:
–       
Sub-option 0: status quo i.e. package travel contracts may
allow for price increases due to certain increased transportation costs, including
increased fuel prices or changes in the taxes or currency exchange rates;
–       
Sub-option 1: introducing a cap of a maximum price
increase of 10%;
–       
Sub-option 2: clarifying that consumers have a right to
terminate the contract if the price increases more than 5%, while requiring
that cost decreases have to be passed on to the consumer as well;
–       
Sub-option 3: making prices in the contract binding,
except for price increases caused by unforeseeable increase in taxes or fees
imposed by third parties for the performance of the services (e.g. tourist
taxes or landing/embarking fees).
2.3.2.      Essential
terms of the contract 
The current PTD does not
stipulate which terms of the contracts, other than the price, are considered as
essential and which may not be altered significantly without enabling the
consumer to accept an amendment to the contract or cancellation of the
contract. 
The results of the
consultation show that, in general, most of the terms indicated are considered
to be essential by most of the respondents. The terms that are in general
considered to be the least essential are changes to components of additional
services and changes in itineraries of those additional services. As might have
been expected, consumer organisations and consumers were slightly more in
favour of considering them as essential terms (slightly over 50%), companies
and industry associations least in favour (slightly under 50%), and Member
State authorities in the middle. 
Table 6:
Essential terms of the contracts 
   || Member States || Industry Associations || Companies || Consumer Organisations 
 Changes in overall price || 96% || 89% || 100% || 100% 
 Change in carrier (air-line, train service provider etc.) || 78% || 24% || 63% || 89% 
 Changes in travel times and/or dates || 96% || 85% || 96% || 96% 
 Changes in travel/holiday destination || 96% || 96% || 100% || 96% 
 Change in accommodation (e.g. different hotel) || 93% || 74% || 88% || 93% 
 Changes in components of additional services (e.g. sightseeing tours, entertainment packages) || 59% || 24% || 46% || 74% 
 Changes in itinerary of additional services || 56% || 24% || 54% || 63% 
 Change in the payment schedule || 74% || 76% || 79% || 85% 
 Change in special requirements which both parties accepted (e.g. facilities for disabled person) || 85% || 89% || 83% || 96% 
 Other || 19% || 17% || 4% || 37% 
Source:
Public consultations on the
revision of the Package Travel Directive, 2010
Based on the above,
there would be a list of terms that, if they have to be amended significantly,
would give rise to a right for the consumer to terminate the contract without
paying compensation (or accept the amendment). The list would include what
would be considered to be the main characteristics of the travel package:
(i)                 
the
travel destination(s), the itinerary and, where periods of stay are involved,
the relevant periods, with dates;
(ii)               
if
transport is included, the means, characteristics and categories of transport,
the points, dates and time of departure and return or, where the exact time is
not yet determined, the part of the day (morning, afternoon, evening or night)
of departure and return, the duration and places of intermediate stops and
transport connections;
(iii)              
if
accommodation is included, the location,
main features and tourist category including, where available, the rating under
a national or international hotel classification system applicable in the host
state;
(iv)             
whether
any meals are provided and, if so, the meal plan; 
(v)               
visits,
excursion(s) or other services which are included in the total price agreed for
the package;
(vi)             
the
language(s) in which the activities will be carried out and
(vii)            
special
requirements which were previously agreed by both parties (e.g. special
facilities for disabled persons) 
2.3.3.      Introduction
of special rules on termination rights 
According to
the PTD, the organiser is entitled to cancel the package contract without any
obligation to pay damages for non-performance of the contract if the
cancellation is for reasons of force majeure, Article 4(6). 
On the other
hand, the consumer does not have a similar right to cancel in the event of
force majeure, something that has been criticised by consumer organisations.
There are examples of organisers refusing to cancel the package even though
national travel advices warned against travelling to the destination. Thus,
consumer representatives have been arguing that the consumer can have a
legitimate need to cancel the contract without paying compensation if there is
a force majeure situation in the area of destination, e.g. warfare or natural
disasters, which is likely to have a negative impact on the enjoyment or the
safety during the holiday and where the organiser does not take the initiative
to cancel the package. Such events would often not be covered by travel
insurances the traveller might purchase.
In addition,
in several Member States, consumers currently have a possibility to terminate
the contract against paying reasonable compensation. Consumer organisations
have requested that this should also be a European rule.
Policy option
5 will introduce rules which will allow travellers to cancel the contract
before the departure by paying a reasonable compensation to the organiser. 
Furthermore,
where there is a force majeure situation (such as natural disasters, warfare,
contagious and dangerous diseases or similar circumstances) at the place of
destination or its immediate vicinity, travellers would also be able to
terminate the contract before the departure without paying any
compensation.
Lastly, the
existing rules relating to the organisers' possibility to cancel the contract
if a minimum number of travellers have not signed up for a certain trip, have
been criticized by consumer representatives, e.g. the ECCG opinion of 2010
where it is argued that this rule should be deleted. On the other hand, the
industry argues that this rule is very important for their business model. In
order to protect the traveller better than today against last minutes
cancellations, which can put him in difficult situations in relation to
holidays plans and difficulties in finding substitute trips, such cancellations
will only be allowed until 20 days before departure if a the minimum number
specified in the contract is not met.
2.4.   Clarification
of obligations and liabilities 
The Directive uses the
term "the organiser and/or retailer" which has given the Member
States the opportunity to choose which of the parties, or both, should be
responsible. However, this solution has led to diverging national rules on who
is liable towards the consumer: the retailer, the organiser or both. 
These divergences can be
detrimental to the consumer as it can be unclear which party is responsible and
it can also lead to situations where the organiser and the retailer are blaming
each other for not fulfilling the responsibilities. It can also be an obstacle
to cross-border trade since legal fragmentation can deter traders from selling
packages cross-border. 
2.4.1.      Responsibility
for providing information
Under
option 5, the responsibility for providing information (pre-contractual, before
departure) would lie with the organiser or anyone acting on his behalf.
This means that the responsibility rests with the organiser, but where the package
is sold through a retailer, the retailer is jointly liable for providing the
traveller with the relevant information. In practice, it would normally be the seller/retailer who would provide
information to consumers before the contract is signed. Insofar as one of these
traders has complied with this obligation, this has effect also for the other
party.
2.4.2.      Liability for
the proper performance of the contract 
The results of the public consultation on who should be responsible for
the proper performance of the contract are widely divided. The largest number
of respondents selected the package organiser as the party responsible for the
proper performance of the contract. However, many stakeholders favoured the
joint responsibility of the retailer and the organiser.
Table 7: Party responsible for the proper performance of the contract
   || MS Authorities || Industry Associations || Companies || Consumer Organisations 
 Seller of the package (the party who receives the payment directly e.g. travel agency) || 44% || 15% || 16% || 67% 
 The provider of the service where the difficulty arises (who may receive the payment indirectly, e.g. airline or hotel which is not organising the package ) || 33% || 57% || 80% || 56% 
 The organiser of the package  (tour-operator) || 89% || 89% || 72% || 89% 
 Other || 11% || 2% || 4% || 7% 
Source: Public consultations on the revision of the Package
Travel Directive, 2010
To clarify the
obligations of the professional parties involved in the performance of the
package travel contract, the liable party and its obligations would be
specifically defined. This means that the party would be liable to the
traveller for the proper performance of the travel services included in the
package, irrespective of whether the obligations under the contract are to be
performed by the organiser or by other service providers. 
In case of improper performance of the package travel contract, the
liable party would be obliged to remedy any lack of conformity, provide
alternative arrangements, reduce the price and/or grant compensation for
damages.
Given the above, the Impact Assessment analyses the following
sub-options:
-         
Sub-option 1: contractual liability of the
seller/retailer;
-         
Sub-option
2: contractual liability of the organiser and joint liability in case the
organiser is based outside the EEA; and 
-         
Sub-option
3: joint contractual liability of the seller/retailer and the organiser
(consumer can seek redress from either). 
2.4.3.      Responsibility
for providing prompt assistance if the consumer is in difficulty (for other
reasons than the organiser's improper performance)
Discussions with stakeholders confirm that all key actors have an
interest in ensuring that travellers do not get into difficulty. The
stakeholders' views on who should be liable for assisting the traveller in
difficulty are divided. 
In the public consultation, the majority of stakeholders in all groups
favoured the responsibility of the organiser. The seller of the package was
selected by the lowest number in each of the stakeholder groups. Some
respondents said that the individual service providers should be responsible in
such a case. This  presumably reflects the fact that they are usually the
closest and most immediately available party when things go wrong.
Table 8: Responsibility for providing prompt assistance if the consumer
is in difficulty
   || MS Authorities || Industry Associations || Companies || Consumer Organisations 
 Seller of the package (the party who receives the payment directly e.g. travel agency) || 44% || 22% || 20% || 56% 
 The provider of the service where the difficulty arises (who may receive the payment indirectly, e.g. airline or hotel which is not organising the package ) || 52% || 67% || 72% || 70% 
 The organiser of the package (tour-operator) || 93% || 85% || 72% || 74% 
 Other || 4% || 9% || 4% || 7% 
Source: Public consultations on the
revision of the Package Travel Directive, 2010
Even though
service providers are often at the site at which difficulties arise, the
traveller has no direct contractual relationship with them and may also face
some communication problems, especially if the service provider is based
abroad. For this reason, under option 5, the liability for providing prompt
assistance to travellers in difficulty would be placed on the organiser. The
fact that the organiser may in practice require the assistance of the service
provider in providing immediate assistance is a separate issue. Similarly
option 5 would also entail that nothing in the revised Directive shall affect
the rights travellers have as "passengers" against the air or other
carriers or other liable parties as defined in Regulations (EC) No. 2004/261,
(EC) No. 1371/2007, (EC) No. 1177/2010 or (EC) No. 181/2011.
2.4.4.           
Type
of liability for proper performance of the contract (strict or fault based
liability) and waivers of liability
There is a strong
preference of Member State authorities and consumer stakeholders for a strict
liability approach. 78% of MS authorities opted for holding the responsible
party liable simply for non-performance against what was promised in both
contract and marketing materials. Therefore, the option would ensure a model
based on a strict liability approach with limitations where the organiser
proves that the lack of conformity or the improper performance is attributable
to the traveller or to a third party unconnected with the provision of the
services contracted for and is unforeseeable or unavoidable, or due to
unavoidable and extraordinary circumstances. With the exception of damages
caused intentionally or with gross negligence as well as damages for personal
injuries, option 5 would allow that the contracts may limit compensation to be paid
by the organiser. However, such limitation would not be allowed to be
unreasonable and would only be valid if it does not limit damages to an amount
less than three times the total price of the travel package. Insofar as
international conventions binding the Union limit the extent or the conditions
under which compensation is to be paid by a service provider, the same
limitations would apply to the organiser. 
2.4.5.     
Obligation
to provide alternative arrangements
Where transport is
included in the package, in most cases also carriers are obliged to provide
compensation and assistance in case of delays, cancellations or accidents to
passengers under EU rules on passenger rights[156]. 
These rights of
passengers are in parallel to the right consumers have towards organisers if a
contract is not performed as agreed. Thus, consumers may in many situations
choose whom to turn to: the carrier or the organiser. This situation where
several parties (i.e. transport provider and a package organiser) are obliged
to provide compensation and assistance, might lead to unjustified cost for
certain businesses, in particular in cases where it is difficult for an
organiser to obtain redress from the service provider (e.g. a transport
provider) who is the party closest to the problem (delay, cancellation, etc.).
For consumers, the choice on whom to seek assistance from depends on the
situation (e.g. when a flight is cancelled, it is probably easier to contact
the tour organiser, who normally has an overview of all the components of the
package and who can, for instance, contact the hotel if one or more nights will
be missed, than for the consumer to address such problems to the air carrier).
The extent of the claim might also differ depending on whether it is directed
against the service provider or the organiser. (EU passenger rights provide for
a flat rate compensation whereas under the PTD a consumer may also claim other
damages). 
Currently there is no
limitation to the organiser's liability to provide alternative arrangements for
the organiser's duty to provide for the continuation of the package in case of
force majeure events of long duration which prevents the consumer from
returning home according to the planned schedule. This is clearly a burdensome
rule for businesses, since such situations are per definition beyond the
control of organisers or transport providers. ECTAA estimated that, during the
2010 volcanic ash crisis, tour operators had to provide care and assistance to
the stranded passengers, including their repatriation, for an overall cost of
€380 million. The EU rules on passenger rights provide for a limitation of such
assistance in case of bus, rail or maritime transport. In its proposal for an
amendment to the Air Passenger Rights Regulation the Commission proposes to
limit the carrier's liability to EUR 100 per night and three nights per
traveller. The PTD lacks a similar limitation of the organiser's liability in
such situations.
Several industry
stakeholders have argued that the current rules (Article 4(7)) put a disproportionate
burden on the organiser, since the liability to provide alternative
arrangements is not capped or limited. Furthermore, it is argued that the
organiser's possibility to seek redress from the service provider, have been
obstructed by contractual clauses in the contract between the organiser and the
service provider. 
To remedy this problem,
option 5 would provide that, where it is impossible, for reasons of unavoidable
and extraordinary circumstances, to ensure the traveller's transport back to
the place of departure within the time set out in the contract, the organiser
must provide appropriate arrangements for the traveller's continued stay at the
place of destination. However, the obligation would be limited to three days 
and to EUR 100 per night and traveller. 
2.4.6.      Insolvency
protection
The responsibility for providing evidence of security should lie with the
organiser.
Information on the insolvency protection obligation as well as the name of the
entity providing the insolvency protection and its contact details should be
included in the package travel contract. 
The different national rules regarding the obligation to provide
insolvency protection have also resulted in a situation where some retailers or
organisers who are trading cross-border had to pay several times for insolvency
protection which already had been secured in another Member State.
Option 5 would entail an introduction of a principle of mutual
recognition of insolvency protection schemes among Member States, in order to
prevent instances where traders are required to have "double"
insolvency protection[157]
if selling packages in more than one Member State. To reinforce the insolvency
protection schemes in the Member States as well as consumer protection, option
5 will also oblige Member States to establish adequate and effective means to
control that organisers are fulfilling the requirements in paragraph and that
national enforcement authorities cooperate in this respect. 
2.4.7.      Method of
insolvency protection 
The idea of a pan-European insolvency fund was widely rejected by the
overwhelming majority of stakeholders in the public consultation. Moreover,
industry and MS are likely to be reluctant to lose control of their national
schemes. 
There are currently three main types of national schemes i.e. national
guarantee funds, bank guarantees and insurance schemes. 60% of the MS
authorities indicated that the schemes operating in their MS were effective or
very effective. However, the problem of different insolvency schemes was
highlighted as one of the obstacles for cross-border trade.
The IA would therefore analyse two sub-options:
-               
mandatory national insolvency funds in all MS 
-               
the current system, giving flexibility as to the method of
providing insolvency protection.
Member States would still have to ensure that their national insolvency
protection schemes are effective and are able to guarantee the prompt
repatriation or the refund of all travellers affected by the organiser's
insolvency. In cases where insolvency protection may be provided in the form of
a guarantee or an insurance policy, it would be clarified that such security
cannot be limited to attestations issued by credit institutions and insurers
established in a particular Member State.
To solve the cross-border problems both sub-options would ensure that
there is a non-discriminatory treatment of foreign traders or mutual
recognition of foreign based traders which can prove that they have provided
efficient and full security for their packages in another Member State. 
Thus, in order to facilitate the free movement of
services, Member States would be explicitly obliged to mutually recognise an
organiser's insolvency protection existing under the law of the Member State of establishment. 
To facilitate the supervision of organisers operating cross-border and
the mutual recognition mechanism option 5 would also lay down rules on the
cooperation between relevant national authorities, including the creation of
central contact points.
2.5.   Access to
justice 
European consumer associations have reported that a large number of the
complaints received are within the area of travel services. For instance, data
provided by the European Consumer Centres (ECCs) show that the most frequent
type of consumer complaint, out of 552 cross-border complaints related to the
PTD in 2011, is related to package travels not performed at all or which are
not in conformity with the booking. The current PTD does not set up any contact
points for complaints, minimum prescription periods or mechanisms for out of court
dispute resolutions, which have been criticized by and called for by various
consumer organisations/bodies, e.g. the ECCG opinion of 21 April 2010 [158].
See Annex 3 for further details. Against this background, option 5 will entail the
introduction of a contact point for the traveller, namely a right for the
traveller to address messages, complaints or
claims directly to the retailer through which the package was purchased if he
chooses not to address the organiser directly as well as a minimum prescription
period of one year.
3.      Proposed
legislative measures in option 6 - Graduated approach-
modernisation of the Directive and coverage of both "one trader" and
"multi trader" packages while applying a lighter regime to
"multi-trader" assisted travel arrangements (PO6)
This option includes all the legislative measures of Option 5
supplemented with an extension of the scope of the PTD to cover "multi
trader"
travel arrangements.  
3.1.  
Scope of the Directive
There is a clear
indication that stakeholders are in favour of extending the scope of the
current Directive to include not just pre-arranged packages, but also most of
the so-called tailor made combined travel arrangements, including the
"multi-trader" travel arrangements. The inclusion of transport and tourist
activities where the service covers a period of less than 24 hours received was
supported only by consumer organisations. 
Table 7:
Travel arrangements that should be covered by the PTD
 Travel-related Products or Arrangements || MS Authorities || Industry Associations || Companies || Consumer Organisations 
 Accommodation, transport and/or other tourist services purchased as a package for an inclusive price (i.e. current definition of a package travel under the PTD) || 89% || 93% || 100% || 96% 
 Accommodation, transport and/or other tourist services purchased on the internet from the same site where consumers can assemble the content of the package || 93% || 78% || 64% || 96% 
 Accommodation, transport and/or other tourist services purchased on the internet from different sites which are clearly linked on their web pages || 67% || 57% || 64% || 93% 
Source: Public consultations on the revision of the Package
Travel Directive, 2010
This inclusion of
"multi-trader" travel arrangements has been supported by a high
number of stakeholders in the public consultation[159],
including stakeholders from the travel industry and Member States. 64% of
companies, which might be expected to be the stakeholder group least in support
of including combined travel arrangements within the scope of the legislation,
indicated that they thought tailor-made combined travel arrangements bought
from a single website ("One-trader" packages) as well as combined
travel arrangements bought from interlinked websites ("multi-trader"
travel arrangements) should be included in the scope of the Directive. 
This figure was higher
for MS authorities (93% for packages from a single site, or 67% for linked
sites) and, as might have been expected, the options gained significant support
from consumer organisations, with support for both options ranging from 88% to
96%.
The main arguments from
these stakeholders are that the "multi-trader" travel arrangements should
be covered in order to create a level playing field, to protect consumers going
on holiday and to avoid that consumers are misled (believing that they are
purchasing a protected package while they are not).
However, it is clear
that the option of covering all "multi-trader" travel arrangements
raises several legal and technical issues, given that traders acting solely as
intermediaries might not be able to guarantee the performance of all services
included in the travel combination.
Based on the
above, option 6 includes Option 5 (all proposed policy measures) supplemented
with an extension of the scope of the PTD with a graduated approach:
- "multi-trader"
packages would be subject to the same regime as pre-arranged packages
(including full liability for the performance of the package and the obligation
to procure insolvency protection),
-"multi-trader"
assisted travel arrangements that do not display typical features of
packages, would be subject to a lighter regime, i.e. the obligation to provide
a security for their own insolvency and that of service providers  combined
with policy option 3 B (obligation to state in a clear and prominent manner that
each service provider will be solely responsible for the correct contractual
performance of its service and that the traveller will not benefit from the
rights granted to package travellers except for insolvency protection. In
practice, to determine whether "multi-trader" travel arrangements
display typical features of a package would have to be based on an assessment
of how the travel arrangement was offered for sale. The objective and
alternative criteria for this assessment would be that a combination of travel
services is:
(i)      purchased
from a single point of sale within the same booking process,
(ii)    offered or
charged at an inclusive or total price,
(iii)   advertised or
sold under the term 'package' or under a similar term,
(iv)  combined after the
conclusion of a contract by which a trader entitles the traveller to choose
among a selection of different types of travel services, or
(v)    purchased
from separate traders through linked online booking processes where the
traveller's name or particulars needed to conclude a booking transaction are
transferred between the traders at the latest when the booking of the first
service is confirmed.
In
situations where a website provides no targeted offer for additional travel
services for the same trip or holiday or only “editorial links” or pure
"advertising links" no particular rules seem to be required. 
3.2.   Obligations
and Liabilities 
Under Option 6 three sub-options concerning the obligations of the
professional parties involved in "multi-trader" packages are examined with regard to: 
-         
providing information;
-         
proper performance of the contract and
-         
providing insolvency protection.
In
the case of "multi-trader" packages, the different components of the
trip are sold from different traders, often under legally distinct contracts
and as a consequence the distinction between seller/retailer and organiser
would be blurred. Therefore the following sub-options concerning the above
mentioned liabilities/obligations are considered: 
Sub-option 1: the
liability is placed on a single provider (a trader selling the first component
who links to facilitate the purchase of the other components) who would be
considered as an "organiser";
Sub-option 2: liability
is placed on each involved provider for the service segment they offer;
Sub-option 3: joint
liability of all the involved traders unless the parties designate only one
trader to be liable.
4.      Proposed
legislative measures in option 7 – Modernisation of the Directive and full
coverage of both "one trader" packages and "multi-trader"
travel arrangements (PO7)
This
option includes Option 5 and 6 whilst subjecting also all
"multi-trader" assisted travel arrangements to the full liability
regime under the revised PTD. This means that "multi-trader" assisted
travel arrangements would be subject to the same regime as pre-arranged
packages, "one trader" packages and "multi-trader"
packages, including full liability for the performance of the services included
in the travel arrangement and the obligation to procure insolvency protection.
ANNEX 5

Detailed assessment of
policy options
1.      Policy
option 1 (Status Quo) - Baseline scenario (BS)
1.1.   Baseline
compliance costs for industry 
Option 1 is effectively
the baseline against which any potential changes under the other policy options
and their impacts will be assessed. It is therefore important to clearly set
the baseline compliance costs for the industry. This estimate will be
particularly used to assess the impact of the policy options which change the
scope of the PTD (PO4, PO5 and PO6).
There has not been
sufficient quantitative information provided by various stakeholders (at the
level of detail required) or otherwise available to enable a wholly
quantitative baseline to be developed. Furthermore, there are significant
differences across Member States concerning the transposition of the PTD and
the market structure. Therefore, it was necessary to make a series of
assumptions to provide the basis for the analysis. A series of “average” costs
per business have thus been developed - most of which have been based on qualitative
data provided by various stakeholders. 
The uncertainty around
these averages means that, for the impact assessment, relatively wide ranges
have been provided for most variables and a sensitivity analysis has been
undertaken by developing ‘high’, ‘medium’ and ‘low’ estimates, where possible,
in order to reflect the possibility of costs varying from the average.  
The following compliance
costs have been identified and estimated:
-         
obtaining
insolvency protection 
The
insolvency protection of customers may take different forms: participation in a
guarantee fund (e.g. Belgium, Netherlands, etc.), individual insurance (e.g. Germany) or bank guarantees. The cost of the insolvency protection is based on the credit
standing/credit worthiness of the tour operator. Guarantee funds, insurance
businesses/banks will carry out a financial/risk evaluation of the balance
sheets of the tour operators and determine their level of risk. 
For example,
in the UK, the basic cost of participation in the insolvency scheme amounts to
£2.50 (€2.9) per passenger. In addition to this basic cost, many package
organisers are also required to supplement the security of the scheme by way of
bonding.[160]
Information provided by a large tour operator at the European market suggests
that the insolvency protection costs around €3-€3,50 per package. Therefore
this range has been taken forward in the estimates. This figure includes also
indirect administrative costs currently associated with obtaining insolvency
protection (e.g. providing information to audit inspections).
-         
Providing
information to consumers (including making changes to brochure)
See section
on administrative costs and annex 6 for administrative cost calculations. 
-         
Proper
performance of the contract 
In order to
cover the liability for the proper performance of the contract, tour operators
usually contract specific liability insurances. Their costs vary depending on
the country where the tour operator is based, the type of risks to be insured,
deductible per loss and limits of compensation per damage. Based on the
information provided by industry stakeholders[161]
the total costs related to the performance of the contract have been estimated
at €2.50 (see box 1).
Box 1 Examples of
costs relating to the performance of the contract 
1.       
Liability
Insurance concerning Personal or Material Damages under the Contract
This insurance cover personal or material
damages that are incurred during the course of the travel which are the fault
of the tour operator or his contractual service providers caused by his or
their acts (negligence/intent) or omissions.
Insurance costs for the tour operator
(plus any taxes):
- Average premium per customer:  €0.50
- Minimum premium per contract: €300
Extra costs for insuring special risks
such as diving, trekking, skiing etc.
- Average premium per customer:  €1.30[162]
- Minimum premium per contract: €1200
2.       
Liability
Insurance concerning Financial Damages under the Contract
This insurance covers financial damages
that the customer incurs during the course of travel (e.g. loss of earnings,
loss of vacation time or unnecessary expenditures for a travel that was not
performed due to overbooking) which are the fault of the tour operator or his
contractual service providers caused by his or their acts or omissions.
Insurance costs for the tour operator
(plus any taxes):
- Average premium per customer: €0.50
- Minimum premium per contract: €300
3.       
Liability
Insurance concerning rescue or extra costs as well as abatement costs
This insurance covers:
a) costs for rescue measures or
alternative services that might become necessary e.g. in case a contractual
partner/agent terminates services because of insolvency and the tour operator
has to make new arrangements in order to fulfil his contract with the customer
b) cases where the consumer makes use of
his right to claim a compensation for non-performance of the contract (e.g. no
warm water in the shower or a construction site near the hotel etc.) 
Insurance costs for the tour operator
(plus any taxes):
- Average premium per customer: €0.70
- Minimum premium per contract: €2,500
In summary, if a tour operator makes use
of all of these insurance options he will face the following costs:  
- Average premium per customer: €3.00 
- Minimum premium per contract: €4,000
- As the insurance covering special risks
such as diving, trekking, skiing etc. only applies to some packages, an
assumption of the average cost of €2.50 has been taken forward in the
IA.
- Assisting consumers in
difficulty
Assuming
costs of €100 to €200 per case and a 1% pay out rate (1 in 100 cases requiring
assistance), dividing the costs by 100, give per package costs of €1 - €2.
-         
Cross
border (due to the differences in national legislations)
See section
on administrative costs and the SCM sheet (annex 6) developed for cross-border
administrative cost calculations. These costs are not incurred by all
businesses and could indeed be higher depending on assumptions made (see table
4).  
-         
Contract
changes - essential terms (and other)
A nominal
figure of €1 - €1.5 has been used for aspects where industry will clearly carry
out these activities. 
Table 1 Baseline
compliance costs incurred per package to comply with the PTD
 Costs associated with:  || 
 ||   || Compliance  Costs 
 || Obtaining insolvency protection  || €3 - €3.5 
 || Administrative costs- providing information to consumers (including making changes to brochure) || €3[163] 
 || Assisting consumers in difficulty || €1- €2 
 || Proper performance of the contract || €2.5 
 || Contract changes - essential terms (and other) || €1- €1.5 
 || Total || €10.5-€12.5   
For the impact assessment, an average cost of €10.5 -
€12.5 per package will be taken forward, out of which €3 represents
administrative costs. It is recognised that businesses trading cross-border
would incur the additional administrative costs of €2 associated with cross
border trade (out of which €0:50 is recurring cost).
1.1.1.       Baseline
administrative costs for businesses
The Table below sets out
the information requirements under the existing PTD, separating out the
“business as usual” costs from the actual burden resulting from the PTD
requirements.
Table 2 PTD
information requirements 
   || PTD requirements || Business as usual || Additional burden 
 Pre-contract || When a brochure is made available to the consumer, it shall indicate in a legible, comprehensible and accurate manner both the price and adequate information concerning: ||   || ü 
 (a) the destination and the means, characteristics and categories of transport used || ü ||   
 (b) the type of accommodation, its location, category or degree of comfort and its main features, its approval and tourist classification under the rules of the host Member State concerned || ü ||   
 (c) the meal plan || ü ||   
 (d) the itinerary || ü ||   
 (e) general information on passport and visa requirements for nationals of the Member State or States concerned and health formalities required for the journey and the stay; ||   || ü 
 (f) either the monetary amount or the percentage of the price which is to be paid on account, and the timetable for payment of the balance || ü ||   
 (g) whether a minimum number of persons is required for the package to take place and, if so, the deadline for informing the consumer in the event of cancellation. || ü ||   
 (h) possibility to revise (prior to concluding contract) any of the particulars set out in brochures must be stated therein if later wish to revise things such as price ||   || ü 
 In the contract || (a) the travel destination(s) and, where periods of stay are involved, the relevant periods, with dates; || ü ||   
 b) the means, characteristics and categories of transport to be used, the dates, times and points of departure and return; || ü ||   
 (c) where the package includes accommodation, its location, its tourist category or degree of comfort, its main features, its compliance with the rules of the host Member State concerned and the meal plan || ü ||   
 (d) whether a minimum number of persons is required for the package to take place and, if so, the deadline for informing the consumer in the event of cancellation; || ü ||   
 (e) the itinerary; || ü ||   
 (f) visits, excursions or other services which are included in the total price agreed for the package; || ü ||   
 (g) the name and address of the organizer, the retailer and, where appropriate, the insurer; ||   || ü 
 h) the price of the package, an indication of the possibility of price revisions (and how they should be calculated) under Article 4 (4) and an indication of any dues, taxes or fees chargeable for certain services (landing, embarkation or disembarkation fees at ports and airports, tourist taxes) where such costs are not included in the package; || Partial ||   
 (i) the payment schedule and method of payment; || ü ||   
 (j) special requirements which the consumer has communicated to the organizer or retailer when making the booking, and which both have accepted; || ü ||   
 (k) periods within which the consumer must make any complaint concerning failure to perform or improper performance of the contract. || ü ||   
 Before departure || (a) the times and places of intermediate stops and transport connections as well as details of the place to be occupied by the traveller, e.g. cabin or berth on ship, sleeper compartment on train; || ü ||   
 (b) the name, address and telephone number of the organizer's and/or retailer's local representative or, failing that, of local agencies on whose assistance a consumer in difficulty could call.  Where no such representatives or agencies exist, the consumer must in any case be provided with an emergency telephone number or any other information that will enable him to contract the organizer and/or the retailer; ||   || ü 
 (c) in the case of journeys or stays abroad by minors, information enabling direct contact to be established with the child or the person responsible at the child's place of stay; || ü ||   
 (d) information on the optional conclusion of an insurance policy to cover the cost of cancellation by the consumer or the cost of assistance, including repatriation, in the event of accident or illness. ||   || ü 
Information
requirements identified as representing an additional burden in the right
hand-column involve:  
researching the insurance market and providing details to travellers;
researching local agencies and providing telephone numbers of those who
might provide assistance in the event a traveller gets into difficulty; 
researching information on passport and visa requirements and providing
information to travellers;
reprinting of brochures when prices or other (adequate) information
changes;
providing details of retailer/organiser and insurer; and 
setting out in brochures the possibility for changing any particulars
laid out (incl. price).
Table 3 provides the total
sum of the administrative costs associated with the existing PTD information
requirements. The total baseline administrative costs have been estimated at
€421 million of which €409 million are administrative burden (the remaining
costs are business as usual costs i.e. the costs that businesses would incur
anyhow, even in the absence of legal obligations e.g. information about the
destination or price of a package). The detailed calculations
are presented in the SCM spread-sheets (see annex 6). See also Box 2 explaining
the assumptions of the calculation. 
Table 3 Summary of
administrative costs associated with information requirements
 Total administrative costs || ~€421 million 
 Total administrative burden || ~€409 million 
 Total business as usual || ~€12 million 
 Average cost per business || ~€4,700 
 Average cost per package || ~€2.63 
Box 2 Methodology and assumptions for calculations of
administrative costs 
·         
There are approximately 90,000 tour operators/travel
agents in the EU and these are split between 45% retailers, 35% tour
operators/retailers, 20% tour operators. The information is provided at the
point of sales. It is therefore assumed that 80% of the businesses (retailers
and tour operators/retailers) will bear these costs;
·         
A wage rate of €15 per hour is used for a “clerk” to
adapt information materials for compliance with the PTD;
·         
Changes to materials/templates are assumed to take
around 10 hours (based on a breakdown of the specific tasks required);
·         
The activities are done for every sale but it is assumed
that software is adapted to import information from the booking process into
the contract. Therefore the frequency of 3 times a year has been assumed;
·         
It has been assumed that only large tour operators use
brochures (0.5% of all tour operators). Therefore, 250 businesses will bear the
costs of preparing and printing the brochures.
·         
The cost of reprinting brochures is based on estimate
calculated from UK figures on reprints (€ 1 per reprint) and consistent with
Dutch business cost estimate of approximately € 1.7million.  However, they are
very different to German estimate of € 5.63 to 6.25 per brochure for some
businesses.
These assumptions were developed by the Consultant and
verified by selected industry stakeholders (European Travel Agents and Tour
Operators Association (ECTAA), German Travel Association (DRV) and Association
of British Travel Agents (ABTA).
1.1.2.      Baseline
cross-border administrative costs for businesses 
An attempt has been made
to quantify the costs that may be arising for businesses in order to trade
cross border, where these costs are driven primarily by the different
information requirements which are applicable in different Member States. Table
4 provides the administrative costs relating to cross border trade. The
baseline administrative burden in a cross-border context (due to the minimum
harmonisation of the current Directive, the businesses have to get acquainted
and comply with various different national rules) have been estimated at of €
26 million (€21 million of one-off costs and €5 million of recurring costs). A
detailed explanation of the assumptions is presented in Box 3. The calculations
underlying these figures are provided in the SCM spread-sheets (see annex 6).
Table 4 Summary of
administrative costs associated with cross border trade
   || Baseline Cost/€ 
 One off administrative costs for researching MS requirements and legal advice: || 21 million 
 Recurring administrative costs: || 5.1 million 
 Recurring administrative burden: || 0 
 Recurring business as usual costs || 5.1 million 
 Total administrative cots || 26,1 million 
 Average cost per business involved in cross-border trade || 1469 
 Average cost per package || 1.65 
 Bo Box 3 Methodology and assumptions for calculations of cross-border administrative costs A ·          The number of businesses trading cross border in different Member States is based on the figures estimated in Eurobarometer Flash 278 (2009) which carried out a survey into business attitudes towards enforcement and redress in the internal market and collected information on the extent to which businesses engaged in cross border trade. The survey did not focus specifically on the travel sector. Estimates were that 14% of businesses engaged in cross border trade in 4 or more Member States (4 used for estimates), 6% in 2-3 (3 used in estimates) and 5% in one other Member State (suggesting a total of 25% of businesses being involved in cross border trade); ·          There are approximately 90,000 tour operators/travel agents in the EU which sell package travels[164] and these are split 45% retailers, 35% tour operators/retailers, and 20% tour operators. Not all travel agents and tour operators will be responsible for providing information at the same time as retailers and tour operators work together. We therefore assume 80% of the businesses will be responsible, based on figures for retailers and tour operator/retailers;  ·          10% of businesses’ sales are cross-border sales (based on responses to the public consultation) and this % is applied to the market for pre-arranged packages); ·          Four key tasks are identified with regard to trading cross border: ·          Researching requirements in each Member State where a business wishes to sell. This is assumed to take five hours per Member State at a wage rate of €75 per hour; ·          Adapting pre-contractual information to meet requirements in each Member State:  This is assumed to take four hours per Member State at a wage rate of €15 per hour per Member State; ·          Adapting contract materials to meet requirements in each Member State:  This is assumed to take one hour per Member State at a wage rate of €15 per hour per Member State; ·          Adapting pre-departure material to meet requirements in each Member State:  This is assumed to take one hour per Member State at a wage rate of €15/hour per Member State. These assumptions were developed by the Consultants and verified by the selected industry stakeholders European Travel Agents and Tour Operators Association (ECTAA), German Travel Association (DRV) and Association of British Travel Agents (ABTA) 
1.1.3.      Functioning
of the Internal Market and competitions
As consumers get more
internet savvy, the sales of combined travel arrangements are likely to
increase.  This would further negatively impact on the functioning of the
internal market and competition where businesses selling similar products have
to comply with different rules. The compliance costs have been estimated at
€10.5 - €12.5 on the price of a package. 
Similarly, businesses
wishing to sell cross-border would continue to bear significant costs. They
would need to check the relevant national regulations in place in different
Member States and ensure compliance of their travel products with the various
regulatory requirements in these countries. This results in additional costs
per business for selling cross border of €1469. However, it is likely that
Member States take action at local levels to protect their citizens (e.g. by
extending their national legislation to cover more types of packages/products).
This would result in further regulatory fragmentation and further distortion of
the Internal Market.
1.1.4.      Impact
on SMEs
In the absence of action
at EU level, micro, small and medium sized businesses would continue to suffer
disproportionally from the absence of fair competition on the market and costs
stemming from unclear and fragmented rules. The costs of clarifying legal
provisions and finding out about the rules applicable to cross-border contract,
weigh more heavily, in relative terms, on micro and small businesses.
1.1.5.      Impacts
on consumers and households
There will be no direct
costs to consumers from retaining the status quo. However, consumers would
continue to suffer further detriment as combined travel arrangements get more
popular.
According to the
Consumer Detriment Study in the area of dynamic packages[165], combined
travel arrangements cause more detriment than any other types of travel
arrangements.  Not only is the incidence of problems for combined travel
arrangements (8.2%) much higher than for pre-arranged packages (3.1%) and
independent travel arrangements (1.6%) but also the gross detriment per
problem  associated with combined travel arrangements is much higher (€593 per
package) than that associated with pre-arranged packages (€191 per package).
This could be partially remedied if Member States decide to enhance the
protection at national level. On the other hand, the increased regulatory
fragmentation could lead to higher prices and limited choice for consumers as
more businesses would refrain from cross-border operations.
1.1.6.      Impact
on public authorities
No impact expected.
1.2.   Assessment
of relevant social impacts
This option is not
expected to result in specific impacts in the employment and labour markets
(i.e. new job creation, loss of jobs, etc.) 
1.3.   Assessment
of relevant environmental impacts
The continued re-printing
of brochures, where this is solely the result of the Directive, would continue
to impact on the environment.
Limited information
provided by industry suggests that around 1.7 million brochures for one large
business or 30 million brochures for one country (Netherlands) are re-printed
solely to ensure compliance with the Directive. Extrapolating these figures
across the numerous businesses across the EU involved in printing brochures
would result in a significant amount of brochures being re-printed. The impact
on these re-printed brochures on water resources, energy, emissions of VOCs,
etc. are some of the undesirable environmental impacts which would continue to
occur.
However, it should be
borne in mind that the environmental impact of these brochures is likely to be
insignificant when compared to the overall environmental impacts of the travel
industry. 
1.4.   Assessment
against objective
 Policy Objectives || Option Rating* || Comments 
 Objective 1:  To improve the functioning of the Internal Market in the package travel sector, by: 
 Reduce costs and obstacles to cross-border trade; || 0 || With no action at EU level, Member States may take action at local levels to protect their citizens (e.g. extending their national legislation to cover more types of packages/products). This would result in an increased regulatory fragmentation and additional costs for businesses. 
 Ensure a more competitive and  fairer level playing field for the businesses operating in the travel market.   || 0 || Unfair competition between different players in the travel sector is likely to continue and possibly increase (e.g. with the growing popularity of combined travel arrangements). 
 Reduce unjustified compliance costs for businesses in the package travel market; || 0 || With no EU action, the unjustified costs for businesses stemming from different provisions of the PTD would remain unchanged. 
 Objective 2:  To achieve a high level of consumer protection in the package travel sector, while respecting the freedom to conduct business, by: 
 Reduce consumer detriment and increase transparency for travellers who buy combinations of travel services currently not covered by the PTD by  addressing  new market developments;   || 0 || As consumers get more internet savvy, they may be expected to self-package or purchase combined travel arrangements falling outside the protection of the PTD.  This is likely to result in more consumers mistakenly buying unprotected holidays believing that they purchase a protected package travel. 
 Reduce consumer detriment stemming from unclear and outdated provisions.   || 0 || With no EU action, consumers will continue to bear costs stemming from some unclear or outdated  provisions  such as for example lack of foreseeability in relation to prices or uncertain liabilities of the retailer/organiser. 
*Option Rating
from -3 (extremely poor) to +3 (very highly effective)
2.      Policy
option 2: Guidelines
2.1.   Assessment
of relevant economic impacts
2.1.1.      Functioning
of the Internal Market and competition
A clarification of some
of the definitions in the PTD could, in theory, result in a clearer
segmentation between PTD covered and non-PTD covered packages and thereon lead
to fairer competition. However, guidelines are by definition "non-legally binding" and hence it cannot be
guaranteed that these clarifications will indeed be taken up by businesses and
Member State authorities.
Similar to BS, there is
likely to be increased regulatory fragmentation as Member States may take
action at local levels to protect their citizens (e.g. extending the protection
rules to cover more types of travel arrangements).
Overall, PO 2 is
unlikely to significantly enhance the functioning of the internal market; in
particular, as it fails to sufficiently address the potential for future
regulatory fragmentation which impacts on the functioning of the internal
market or provide a fair competitive environment for businesses operating in
the travel market. 
2.1.2.     Compliance
costs for businesses
There
should be no overall change in costs incurred by industry as a result of the
guidelines being issued. This is because the guidelines essentially relate to
clarifications of the existing PTD, thus any costs arising are those which
should have been incurred already as part of the BS.
The main benefits to businesses of introducing guidelines will arise from
increased regulatory clarity. However, the effects of clarification will depend
on the actual use that national authorities and courts make of it. 
2.1.3.     Administrative
costs for businesses
The guidelines do not
impose additional information requirements on businesses, but clarify the
existing PTD. Hence, there is no actual administrative burden associated with
PO 2, as the above costs would have been incurred anyway. While some businesses
may need to change their current practices in order to adjust to clarifications
set out in the guidelines, the extent of these changes is not known and these
costs should in theory also have been incurred in the status quo situation. 
2.1.4.     Impact on
SMEs
Very little
change compared to the BS.
2.1.5.     Impact on
consumers and households 
Public consultation with stakeholders indicates that most of them show
low support for the option of issuing guidelines to businesses (percentage in
favour across all stakeholders ranging from 11% - 37%, where the 11% was from
consumer organisations)[166]. This suggests that the
introduction of guidelines is not perceived as resulting in increased consumer
protection. Of course, it is possible that consumers may gain some clarity from
guidelines and also be better protected due to better implementation (by
businesses) and enforcement (by Member State Authorities) of the PTD; however,
these are broadly indirect benefits which are not quantifiable and which would
not allow to durably tackle the lack of legal clarity at EU level, concerning a
number of combined travel arrangements. 
2.1.6.     Impact on
public authorities
No change
compared to the BS.
2.2.   Social
impacts
PO2 is not expected to
result in any specific impacts in the employment and labour markets (e.g. new
job creation, loss of jobs, etc.) 
2.3.   Environmental
Impacts
The continued
re-printing of brochures – as an indirect result of the Directive - would
continue to impact on the environment as under status quo.
2.4.   Assessment
against objective
 Policy Objectives || Option Rating* || Comments 
 Objective 1:  To improve the functioning of the Internal Market in the package travel sector, by: 
 Reduce costs and obstacles to cross-border trade; || 0 || While it cannot be stated for certain to what extent Member States would make use of the guidelines, it is reasonable to expect that their introduction might result in fewer Member States taking independent regulatory actions to protect their citizens compared to the baseline scenario. 
 Ensure a more competitive and fairer level playing field for the businesses operating in the travel market. || 0/+ || Unfair competition between different players in the travel sector is likely to continue. 
 Reduce unjustified compliance costs for businesses in the package travel market;   || 0 || There should be no overall change in costs incurred by industry as a result of the guidelines being issued. However, some clarification of existing rules might bring ,some minor savings for the industry, 
 Objective 2:  To achieve a high level of consumer protection in the package travel sector by: 
  Reduce consumer detriment and increase transparency for travellers who buy combinations of travel services currently not covered by the PTD by  addressing  new market developments;   || 0 || Similarly to the baseline scenario, as consumers get more internet savvy, they may be expected to self-package or purchase combined travel arrangements falling outside the protection of the PTD. 
 Reduce consumer detriment stemming from unclear and outdated provisions.   || 0 || Guidelines may slightly increase the clarity of the current rules. 
*Option
Rating from -3 (extremely poor) to +3 (very highly effective)
3.      Policy
option 3: Package Travel Label (PO3A) and/or "This is not a package"
disclaimer (PO3B), add-on option to other policy options
Two sub-options have been envisaged:
·       
Sub-option A: Introduction of a Package Travel
Label 
·       
Sub-option B: Introduction of a disclaimer
"This is not a travel package"
3.1.   Assessment
of sub-option A - Package Travel Label
3.1.1.      Functioning
of the Internal Market and competition
The introduction of the
PTD label is likely to increase cross border trade as consumers increasingly
recognise that the same logo (and legislation) applies across Member States.  
It would also contribute
to a more even playing field amongst the different businesses in the travel
sector. Sellers of pre-arranged packages whose services offer high levels of
protection should have reduced trouble competing with sellers of combined
travel arrangements that offer little or no protection.
3.1.2.      Compliance
and administrative costs for businesses
Companies selling
packages would need to get familiar with new information requirements and adapt
their web-pages and promotional materials to display the Package Travel Label. 
The average one-off cost for adapting a company's website and /or printed
materials has been estimated at €500[167].  These costs would
potentially affect 72,000 companies selling packages at present with the
overall one-off costs amounting to €36 million. As this is an add-on option,
the final costs would depend on the policy option chose.
3.1.3.      Impact
on public authorities
Public authorities will be responsible for proper
enforcement of the rules and monitoring the correct use of the label. This does
not require setting up a designated certification body. This task could be done
by the national bodies enforcing the marketing and other rules in this sector. 
The European
Commission would have to ensure to have the copyright on the logo and its
registration as a trade mark. This would represent a small cost for the
institution of the order of few thousands of euros.
3.1.4.     Impact on
consumers
The study on consumer detriment in the area of dynamic packages shows
that 67% of consumers who used a combined travel arrangement that was not
covered by the PTD wrongly believed that they were protected.[168] 
There is henceforth a large share of consumers which would substantially
benefit from a better understanding of their key rights, as this would help to
reduce the consumer detriment estimated as approximately € 1 billion per year.
The introduction of the label may help consumers in having a better vision of
their rights concerning package travels. 
The Commission ran an independent behavioural study with the main purpose
to understand the potential effectiveness of such a label, hereunder to which
extent consumers would click on the label in an Internet booking process and
how the reading of the key rights connected to the label would help consumers
to better understand their rights and avoid detriment.
The main results of the study are not positive in this sense. Consumers[169] went through a virtual
booking process in which they were asked to book a flight and a hotel.
Different scenarios were tested, in which consumers at some point were presented
with no label or with different sizes and positions of different possible
labels. A click on the label brought the consumer to a list of 10 key rights
which stem from the provisions of the PTD. The best result was obtained when
the label was flashy and dynamic: 3.1% of the respondents clicked on it.
Consumers who clicked on the label had a better understanding of each of the 10
key rights compared to consumers who did not click on the label. Asked to
select the right answer, consumers who clicked on the label selected the right
answer from 4.4% to 19.2% more often than the other consumers. The average for
the 10 key rights is 11.4%. 
Given these results, and knowing that about 25% of the market is online,
the maximum impact (assuming that an improvement in the knowledge of the rights
would prevent the share of consumers who wrongly believe they are protected to
suffer detriment) that the label can have on reduction of consumer detriment is
25% x 3.1% x 11.4% x € 1 billion = € 883,500 per year.  
There is also a difference among consumers who noticed the logo during
the booking and consumers who did not. 
Asked to declare if they think they are protected by European
legislation, consumers who noticed the logo (53.6% of the total) selected the
correct answer 7.5% more often than consumers who did not notice the logo.
Conservatively assuming that 5% of these consumers will check their actual
rights and will avoid possible detriment, and assuming that this result also
holds for consumers who will see the label in print when purchasing packages in
brick-and-mortar situations, further reduction in detriment is 53.6% x 7.5% x
5% x € 1 billion = € 2,010,000. 
Overall,
benefits for consumers stemming from the label are of the order of € 3 million
every year. It is straightforward to see that it would be impossible to off-set
the costs for businesses (€ 75 million one-off and € 58 million every year),
even in the case of 100% of consumers clicking on the label.[170] 
There may
some benefits if an awareness campaign would promote the label and would also
improve knowledge of key rights for the consumers clicking on the label (i.e.
an increase not only in the 3.1% of those who actually clicked on the logo, but
also of those just 11.4% who correctly understood their key rights). It may
also be that consumers would progressively become more familiar with the label
and that these percentages might hence increase. This would indeed take some
time.
3.1.4.      Assessment
of relevant social impacts
Although, there would be
some minor creation of (temporary) jobs (e.g. IT, printing, etc), Option 3 is
not expected to result in specific impacts in the employment and labour markets
(i.e. new job creation, loss of jobs, etc.).  
3.1.5.     
Assessment of relevant environmental impacts
No environmental impacts
are expected. 
The re-printing of
brochures – as an indirect result of the Directive - would continue to impact
on the environment as under Option 1.
3.2.   Assessment
of sub-option B - "This is not a package" disclaimer
3.2.1.      Functioning
of the Internal Market and competition
This option would contribute
to a more even playing field amongst the different businesses in the travel
sector. 
Sellers of non-protected
packages pre-arranged packages whose services offer high levels of protection
should have reduced trouble competing with sellers of combined travel
arrangements that offer little or no protection.
3.2.2.      Compliance
costs for businesses
Travel services providers (hotels, car rentals, airlines,
other transport companies) operating on the Internet and linking to booking
process at other websites (that offer additional travel services) in a targeted
manner in order to facilitate for the procurement of additional travel services
before the initial booking process is finalised, would need to adopt their
websites to display a disclaimer "This is not Package". 
The average one-off cost for familiarising with new
requirements and adapting a company's website has been estimated at €500[171].

Companies selling "one-trader" packages and
""multi-trader" travel arrangements" are likely to be
affected by this option.  
As it has been estimated, there are 72,000 companies selling
pre-arranged packages. These companies are likely to sell also
"one-trader" packages. It could be assumed that 50% of these
companies i.e. 36,000 companies are selling their products online and could be
impacted by this sub-option.[172]
In relation to "multi-trader" travel
arrangements" this option is likely to capture online
booking processes which are linked to facilitate in a targeted manner the
procurement of additional travel services before the initial booking process
has been completed, in particular:
·         
websites
of airlines or other transport providers (including car rentals) from which a
traveller has been redirected to purchase other travel components relating to
accommodation and/or car rentals on linked/partner's websites; and 
·         
websites
of hotels from which a traveller has been redirected to purchase other
components relating to transport (including car rentals) on linked/partner's
websites.
Table 5
determining the number of businesses selling ""multi-trader"
travel arrangements"
   || % Assumed || Number of Businesses 
 HOTELS ||   ||   
 Total number of hotels and other accommodation across the EU-27 from which a package could, in theory, originate ||   || 200,000 
 Number of hotels and other accommodation with an online presence || 50% || 100,000 
 Number of hotels and other accommodation with an online presence and linking to other websites || 25% || 25,000 
 CAR RENTALS ||   ||   
 Total number of car rentals across the EU-27 ||   || 13,000 
 Number of car rentals with an online presence || 50% || 6,500 
 Number of car rentals with an online presence and linking to other websites || 25% || 1,625 
 AIRLINES ||   ||   
 Total number of airlines across the EU-27 from which a package could, in theory, originate ||   || 300 
 Number of airlines with an online presence || 80% || 240 
 Number of airlines with an online presence and linking to other websites || 75% || 180 
 ALLOTHER TRANSPORT (EXCEPT AIRLINES AND CAR RENTALS) ||   ||   
 Total number of all other transport across the EU-27 from which a package could, in theory, originate ||   || 57,900 
 Number of other transport with an online presence (assume 50%) || 50% || 28,950 
 TOTAL number of companies with an online presence and linking to other websites ||   || 34,043 
 Overall TOTAL of Businesses ||   || 271,200 
 Box 4 Methodology and assumptions for estimating the number of affected businesses  -          Based on Eurostat data, there were 201,802 hotels and similar establishments (this includes hotels, apartment hotels, motels, roadside inns, beach hotels, residential clubs, rooming and boarding houses, tourist residences and similar accommodation). This number does not, however, include “other collective accommodation establishments” which include holiday dwellings, tourist campsites, youth hostels, tourist dormitories, group accommodation, school dormitories and other similar accommodation - numbering around 237,000 across the EU-27. -          The estimate of the number of car rental businesses (13,000) is based on the basis the data in Eurostat’s Structural Business Statistics database[173].  -          The estimate of 300 airlines is based on Eurostat values; and -          57,900 transport businesses in addition to airlines and car rentals is based on the number of railway businesses (887) plus number of businesses involved in other passenger land transport [174] (37,000) plus  number of businesses involved in water transport (includes freight) [175] (20,000). Estimates of the number of businesses that would be affected are based on the following assumptions: -          businesses with an online presence: it has been assumed that 50% of hotels, other accommodation establishments, car rental and transport businesses (with the exception of airlines) sell their products online, while 80% of airlines have an online presence.  The assumption on the proportion of hotels that sell their services via the internet broadly corresponds with Eurostat data[176], the relevant percentages for other stakeholders are based on guesstimates as Eurostat does not provide data to sufficient level of detail[177]; -          businesses with an online presence and linking to other websites: it has been assumed that 25% of businesses with online presence link to other websites. However, in the case of  airlines, it has been assumed that 75% of airlines with online sales link to other websites; and 
As estimated above, this option is likely to affect 36,000
companies selling "one-trader" packages and about 34,000 companies
selling "multi-trader" travel arrangements. The total maximum cost of
this policy option would  therefore amount to maximum €35 million depending on
the policy option chosen.[178]
3.2.3.      Administrative
costs for businesses
Administrative
costs coincide here with compliance costs, see Annex 6.
3.2.4.      Impact
on SMEs
SMEs would absorb
most of the costs, both in absolute values and relatively to their turnover,
even though this percentage would be very small (0.2% and 0.01% respectively).
3.2.5.      Competition
in the Internal Market
The same impact as
Sub-option A.
3.2.6.      Impact
on consumers
As the
costs related to the introduction of "This is not a travel package"
disclaimer are one-off, it is expected that companies will absorb these costs. 
Consumers
would benefit from clear information. 
The
reduction of consumer detriment is expected to be much higher than under
Sub-option 
A as a
negative information would warn consumers who otherwise might purchase
unprotected travel under the wrong impression that it is protected (as
indicated  before this is the case for 67% of users of  combined travel
arrangements).
3.2.7.      Impact
on public authorities
MS would
be responsible for the enforcement of the rules. The same impacts as sub-option
A.
3.3.   Social
impacts
The same impact as
Sub-option A.
3.3.1.      Impact
on fundamental rights
The same impact as
Sub-option A.
3.4.  
Environmental impacts
The same
impact as Sub-option A.
3.5.   Assessment
against objective
 Policy Objectives || Option Rating* || Comments 
 Objective 1:  To improve the functioning of the Internal Market in the package travel sector, by: 
 Reduce costs and obstacles to cross-border trade. || 0 || The introduction of a PTD label and/or "This is not a package" disclaimer is likely to slightly strengthen the functioning of the internal market and increase cross border trade as consumers increasingly recognise that the same label/disclaimer (and legislation) applies across Member States. 
 Ensure a more competitive and fairer level playing field for the businesses operating in the travel market. || 0/+ || The introduction of a PTD label and/or "This is not a l  package" disclaimer is likely to result in fairer competition between different players in the travel sector - especially as there will be a clear distinction between products which are covered by the PTD and those which are not.. Sellers of non-protected packages and traders selling pre-arranged travel packages whose services offer higher level of protection, should be able to compete for the customers which are more enlightened as to the level of protection they will enjoy for the different products.   
 Reduce unjustified compliance costs for businesses in the package travel market;   || -- and – for  3B || The introduction of a PTD label and/or disclaimer as such would reduce unjustified compliance costs for businesses stemming from unclear and outdated provisions. Both sub-options would increase administrative costs for businesses. These would be mostly one-off costs except of the certification scheme (sub-option A 2) where companies would need to bear verification costs annually. 
 Objective 2:  To achieve a high level of consumer protection in the package travel sector, while respecting the freedom to conduct business, by: 
 Reduce consumer detriment and increase transparency for travellers who buy combinations of travel services currently not covered by the PTD by  addressing  new market developments;   || 0 and + for PO3 B || As consumers get more internet savvy, more consumers may be expected to self-package or purchase combined travel arrangements. The label itself would not increase the number of consumers protected, however, it could reduce consumer detriment. This reduction is not expected to be high. Sub-option B is likely to be more effective as a negative information would warn consumers who otherwise might purchase unprotected travel under the wrong impression that it is protected. 
 Reduce consumer detriment stemming from unclear and outdated provisions.   || 0/+ || The introduction of the label and/or disclaimer would not as such contribute to any reduction of detriment stemming from unclear/outdated provisions. However, some benefits are expected in relation to the current unclear scope of the protection rules and especially the introduction of a disclaimer could prevent travellers from purchasing unproteted travels while wrongly believing that the product is a travel package.   
Option Rating
from -3 (extremely poor) to +3 (very highly effective). The effectiveness of
this option would be higher if combined with policy options 5 or 6.
4.      Policy
Option 4 – Repeal of the Directive (PO4)
4.1.   Functioning
of the Internal Market and competition
The
repeal of the Directive might in theory eliminate obstacles to cross-border trade
and would result in more even market playing field.
Since
it is likely that at least some MS maintain their legislation and others take
action at national level to strengthen consumer protection, the Internal Market
would be more fragmented and there would be more obstacles to cross-border
trade.
4.2.   Compliance
costs businesses
The
repeal of the Directive might result in decrease of compliance costs for
businesses (up to €10.5-€12.5 per package). However, the cost savings for
businesses will depend on the willingness of MS to repeal their national
legislation protecting consumers. It is likely that many MS would maintain and
further develop their legislation in this area.
4.2.1.      Administrative
costs for businesses
Similarly to
compliance costs, this PO might result in decrease of administrative costs for
business up to €409 million depending on the number of MS that decide to repeal
their national legislation.
4.3.   Impact
on SMEs
The
repeal of the Directive might in theory lead to fairer competition and decrease
of compliance costs which impact, in relative terms, more heavily on micro and
small enterprises. The impact will however depend on the willingness of MS to
repeal their national legislation.
4.4.   Impact
on consumers and households
The repeal of the
Directive is likely to increase consumer detriment (estimated at more than €159
million annually for pre-arranged packages compared to more than €1 billion
for  combined travel arrangements). In theory, a lower cost burden to the
industry could lead to lower end-prices to the consumer.
4.5.   Impact
on public authorities
MS would be free to
decide whether to maintain their national legislation unchanged, repeal their
national legislation or to update their legislation. If legislation is
repealed, consumers being stranded when on holiday due to the insolvency of the
tour organiser might more often turn to embassies to receive necessary
assistance and financial support to be repatriated. 
4.6.   Assessment
of relevant social impacts
Only small social impacts expected. For instance, consumers
being stranded due to the insolvency of the tour organiser will not receive
necessary assistance and financial support to be repatriated. Thus, consumers
may be stranded for longer periods, which in return can have an impact on
employers (their employees do not return back in time after their holidays).
4.6.1.      Impact
on fundamental rights
This
option would result
in a lowering of consumer protection in Europe in the area of package travel
and, hence, is likely to have a negative impact on the rights protected by the
EU Charter of Fundamental Rights, notably and foremost Article 38 on consumer
protection. Article 16 on the freedom to conduct business is positively
impacted, but depending on the number of MS repealing their national
legislation.
4.7.   Assessment
of relevant environmental impacts
 Businesses
would not be required to re-print brochures solely as the result of the PTD
obligations and its application in practice.
4.8.    Assessment
against objectives
 Policy Objectives || Option Rating* || Comments 
 Objective 1:  To improve the functioning of the Internal Market in the package travel sector  by: 
 Reduce costs and obstacles to cross-border trade; || -- || The repeal of the Directive might in theory eliminate obstacles to cross-border trade. However, it is likely that Member States maintain their legislation and take action at national level to strengthen consumer protection. This would result in further fragmentation of the Internal Market and would create more obstacles to cross-border trade. 
 Ensure a more competitive and fairer level playing field for the businesses operating in the travel market. || - || In theory, the repeal of the Directive would result in fairer competition between different players in the travel sector. However, this does not take into account the possibility of national legislation being retained with would lead to even greater national differences for businesses operating in the travel market (both between businesses on the domestic market and between businesses established in different Member States). 
 Reduce unjustified compliance costs for businesses in the package travel market;   || + || The repeal of the Directive might reduce and eliminate some unnecessary compliance costs. The extent of this reduction will however depend on number of Member States that decide to repeal or revise their national legislation in this field. 
 Objective 2:  To achieve a high level of consumer protection in the package travel sector, by: 
 Reduce consumer detriment and increase transparency for travellers who buy combinations of travel services currently not covered by the PTD by  addressing  new market developments;   || -- || In the absence of EU legislation, there is likely to be a significant decrease in the number of protected consumers and an increase of consumer detriment. This could, however, be remedied at national level. 
 Reduce consumer detriment stemming from unclear and outdated provisions.   || -- || The repeal of the Directive might in theory reduce the detriment stemming from unclear and outdated provisions. Any such reduction would however, be offset by an increase of detriment for consumers travelling without protection. 
Option Rating
from -3 (extremely poor) to +3 (very highly effective)
5.      Policy
Option 5 – Modernisation
of the Directive and coverage of "one-trader" packages (PO5)
PO 5 introduces a number
of legislative changes compared to the current PTD in relation to:
-         
definitions
and scope;
-         
information
requirements;
-         
clarification
of obligations and liabilities;
-         
contract
changes and other issues.
The detailed description
of changes proposed measures of PO 5 is presented in Annex 4.
The impact of each of
these changes is assessed in depth and presented in a separate sub-sections.
The assessment ends up with an overall summary of key impacts of this policy
option.
5.1.   Update
of definitions and clarification of the scope of Directive
5.1.1.      Functioning
of the Internal Market and competition
A clear
inclusion of "one-trader" packages under the scope of the Directive
would result in a levelling of the market playing and in an improvement in
competition. In several Member States today, two traders may sell essentially
the same services, but only one of them incurs costs of complying with the
Directive. Since all businesses selling pre-arranged travel package and
“one-trader” packages under this option would be incurring the same compliance
costs, businesses would compete on more equal terms. The strengthened
harmonisation of legislation would eliminate obstacles to cross-border trade
and enhance the competition.
5.1.2.      Competitiveness,
trade and investment flows
It is unlikely that any
costs incurred will result in a change from the current situation in terms of
the global competitive position of EU firms or productivity. There is a
possibility that some businesses may try to relocate their websites outside of
the EU in order to avoid compliance with the Directive. However, since they
would be obliged to comply with the EU laws if they sell packages on the EU
market, it is not expected that there would be a significant relocation of
economic activity. 
5.1.3.      Compliance
costs for businesses
              Inclusion of "one-trader"  packages
in the definition of a travel package
The
exact number of businesses selling "one-trader" packages that are not
subject to the PTD is not known.. In some MS, national legislation already
covers some online "one-trader" packages (e.g. DE and SE[179])
and some large operators based in these countries may be assumed to already
comply with package travel requirements across all countries in which they
operate. However, it cannot be assumed that even in those MS all operators who
create the perception of selling packages comply, in practice, with all
PTD-requirements, including bankruptcy protection. Furthermore, feedback from
stakeholders confirms that not all "one-trader" l packages sold in
high street comply with all PTD requirements.
In order to quantify this number, the following assumptions have been made:
o       the market of
combined travel arrangement market is estimated at 23% of the EU travel market,
accounting for 118 million packages. For business trips, this market represents
the 30% of the total, i.e. 24 million packages;[180]
o       the market
for "one-trader" holiday packages is estimated at 17% of the travel
market and amounts to approximately 87 million trips, for business trips this
is 22% i.e. 18 million packages;
o       business trips
organised by TMCs account for 80-85% of all business trips. Therefore, it is
considered that most business travellers do not use pre-arranged packages, but
rather prefer more combined solutions. The business trips arranged by TMCs tend
to fall in the category of "one-trader" packages or independent
travel arrangements. In light of such assumptions, the market of  combined
travel arrangements for business purposes has been estimated at around 24
million trips (out of which 16 million are "one-trader" packages
organised by TMCs) while independent travel arrangements have been estimated at
around 56 million trips (out of which 50 million trips are arranged by TMCs).[181]
It has been
assumed that 50% of "one-trader" packages are subject to the current
PTD. 
This is based
on stakeholders’ feedback and the result of the Consumer Detriment Study, which
seem to suggest that at least 50% of these travel arrangements are sold in high
street and therefore are already subject to the PTD. 
Hence, under
PO5, approximately 44 million “one-trader” holidays packages and 1 million of
B2B trips would be brought under the scope of the PTD while 8 million of
"one-trader " B2B trips organised by TMC will be excluded from the
scope.
The impact of
this change would be that businesses selling such products would be required to
comply with the Directive’s requirements, including making provisions for
insolvency protection, providing all information stipulated to travellers,
becoming liable in the event of non-performance of the contracts, etc. 
TMCs selling
business trips excluded from the scope which would no longer need to comply
with the Directive's requirements will have reduced compliance costs. These
costs and savings are assessed below in the appropriate sections.
Businesses
would benefit from increased regulatory clarity (regarding which travel
arrangements are covered by the PTD and which are not) and this should result
in a decrease in litigation costs
For
cruises, the clarification is not expected to bring additional businesses or
packages within the scope of the Directive. 
5.1.4.       Impact
on consumers and households 
It is possible that some consumers may
experience an increase in the price of “one-trader” packages, as businesses
might pass on the additional costs of ensuring compliance. This impact will
depend on supply and demand elasticity. However, in any case, this is likely to
be less than 2% of the total price of the package[182]
and broadly comparable with the cost of obtaining commercial travel insurance
and, as such, unlikely to be detrimental to consumers. In a competitive market,
price increases on the end product are normally minimised to the extent
possible. 
Inclusion of "one-trader" packages would result in reducing
consumer detriment. Travellers would receive refunds of advance payments and
assistance with repatriation costs in the event of insolvency, redress in the
event of non-performance of contracts and spend less time and effort in seeking
compensation.  
The Table below shows estimates of the level of consumer detriment
resulting from combined travel arrangements[183]
on an annual basis. It should be noted that the value of detriment for combined
travel arrangements covers both "one-trader" tpackages and
"multi-trader" travel arrangements where some of
"one-trader" packages are already compliant with the Directive. 
Table 6 Detriment associated with combined travel arrangements not
currently under scope of the PTD
   || Number of combined travel arrangements || Value  of purchased combined travel arrangements(€)[184] || Value of net detriment in population (€) 
 EU-27 || 118 million holidays || 87 billion || 1,065 billion 
 % of "one-trader" packages to be made compliant || Number of "one-trader" packages to be made compliant || Value of trips to be made  compliant (€) || Value of net detriment associated with products to be made compliant ( €)[185] 
 50% || 43,6 million || 32,3 billion || 395 million 
The value of net detriment associated with 44 million of
“one-trader” packages (with a value of €32 billion) brought under the scope of
the PTD, has been estimated €395 million. 
Bringing these trips under the scope of the Directive
would not necessarily mean that the detriment would disappear completely but
would significantly decrease. The incidence of problems with pre-arranged
packages is 3.1% compared to 8.2% for combined travel arrangements and that the
average cost per problem with pre-arranged packages amounts to €191 compared to
€592 for combined travel arrangements. It could be assumed that the detriment
per package and incidence of problems for "one-trader" packages
brought under the scope of the Directive would be the same as for pre-arranged
packages The estimated reduction of traveller's detriment would be up to 88%[186] i.e. the level of detriment
", would decrease up to €348 million if 50% of "one-trader"
packages are brought under the scope of the PTD.[187]

5.2.   Update
of information requirements
5.2.1.      Functioning
of the Internal market and competition
              Changes in requirements for brochures
Repealing provisions that apply solely to brochures is expected to result in
fairer competition between the different businesses in the travel sector since the current Directive places an extra burden on
businesses that issue brochures (in terms of having to issue updated versions
to reflect changes in prices as well as requiring different information in
different Member States resulting from the fact that the Directive is based on
minimum harmonisation).
              Changes to information requirements
There are currently wide
variations in the stipulations of different Member State's legislations regarding
the information that should be provided. This constitutes a barrier to
cross-border trade (harmonisation of information requirements was rated as
either “important” or “very important” for over 60% of businesses responding to
the public consultation). PO5 would remove this barrier enabling businesses to
produce the same information (albeit in different languages) across EU and may
assist in streamlining the collection and distribution of information.  
5.2.1.1.Administrative
costs for businesses
              Changes to information requirements
The proposed set of
information requirements is set out in the table below, separating the
"business as usual" information from the administrative burden.
Table
7 Information Requirements for PO 5
   || PTD requirements || Business as usual || Additional burden 
 Pre-contract || a) the identity such as the trading name, the geographical address of the organiser and, where applicable, the retailer, as well as their telephone number and e-mail address ||   || ü(very limited) 
 b) the total price (including all taxes and additional applicable fees and charges), the arrangements for payment and, where applicable, the existence and the conditions of deposits or other financial guarantees to be paid or provided by the traveller || ü ||   
 (c) the travel destination(s), the itinerary and, where periods of stay are involved, the relevant periods, with dates; || ü ||   
 d) if transport is included, the means, characteristics and categories of transport, the points, dates and time of departure and return or, where the exact time is not yet determined, the part of the day (morning, afternoon, evening or night) of departure and return, the duration and places of intermediate stops and transport connections; ||   || ü (very limited) 
 e) if accommodation is included, the location, main features and tourist category including, where available, the rating under a national or international hotel classification system applicable in the host state; || ü ||   
 f) whether any meals are provided and if so, the meal plan; and visits, excursion(s) or other services which are included in the total price agreed for the package || v ||   
 g) whether a minimum number of persons is required for the package to take place and, if so, the deadline before departure for informing the traveller in the event of cancellation || ü ||   
 h) general information on passport and visa requirements in order to participate in the package tour for nationals of the Member State or States concerned and in particular on the periods for obtaining visa and, if any, health formalities required for the travel package ||   || ü 
 i) that the product is a travel package and, as a consequence, the traveller will benefit from legal protection for travel packages under EU law ||   || ü 
 In the contract || The contract would contain the pre-contractual information listed in a) – j) above, plus: || - || - 
 a) special requirements which the traveller has communicated to the trader and which both have accepted || ü ||   
 b) if different from the contact details provided earlier, the contact details of the organiser or the person who is acting in his name or on his behalf whom the traveller can contact to complain about any improper performance which he perceives on the spot || ü ||   
 c) information that the traveller may terminate the contract at any time before departure against compensation without stating any reason ||   || ü 
 d) the possibility of having recourse to an amicable dispute settlement, where applicable ||   || ü 
 e) information that the organiser - is responsible for the proper performance of all included travel services - is obliged to provide assistance if the traveller is in difficulty -is obliged to procure insolvency protection to guarantee a refund of all payments made by the traveller, and, where passenger transport is included in the package, his repatriation, as well as the name of the entity providing the insolvency protection and its contact details, including its geographical address ||   || ü 
 Before departure || a) the name, address and telephone number of the organiser's local representative or, failing that, of a local agency whose assistance a traveller in difficulty could request. Where no such representatives or agency exist, the traveller must in any case be provided with an emergency telephone number or any other information that will enable him to contract the organiser; ||   || ü 
 b) in the case of journeys or stays abroad by minors that include accommodation, information enabling direct contact to be established with the minor or the person responsible at the minor's place of stay.    || ü ||   
 c) the necessary receipts, vouchers or tickets, including the precise times of departure, intermediate stops, transport connections and arrival. || ü (even though new requirement) ||   
* new
requirements
The majority of the
requirements are essentially the same as in the current Directive. The introduction
of a limited number of new information requirements are not considered to be
considerable burdensome for business. The impacts of the new information
requirements are also reduced by the fact that compared to the existing PTD,
the information requirements are simplified and some are also scrapped (e.g.
mandatory information on insurances.) Furthermore, some of the new information
requirements are contain information that most traders anyway would provide
(e.g. necessary tickets, email address, etc.) Thus they are not expected to
have a significant impact on the administrative burden on businesses.
Changes in requirements for brochures
The
changes in requirements for brochures would significantly reduce the
administrative costs for businesses. 
The
number of businesses using brochures and the number of brochures that they
re-issue as a result of the Directive’s requirements is not exactly known.
However, based on a number of assumptions and information provided by
stakeholders (see Table 8)[188],
it has been estimated that the annual saving would amount to €400 million.
Table
8 Assumptions regarding cost of brochure reprinting
 Item || Assumption 
 Number of businesses reprinting brochures as a result of the Directive || 250 - This is based on 90,000 travel agents/tour operators in the EU, of which large businesses only produce brochures (0.5%) and of these, only tour operators and tour operators acting also as retailers (total 55% of the market as estimated by ABTA). 
 Cost of reprinting per business || €1.6m - This is calculated by using an estimate of approximately €1 per reprint as estimated by ABTA. It is estimated that approximately 30m reprints are made as a result of the Directive in UK at a cost of €30m. An estimated 6,826 travel agents/tour operators existed in UK in 2008 and applying 0.5% to calculate the number of large businesses and 55% of those to calculate the number of tour operators and those tour operators who also act as retailers gives a total of approximately 19 businesses.  Dividing €30m by 19 businesses gives approximately €1.6m per business. 
Overall, PO5
will result in a decrease in administrative burden from €409 to €18.5 million. 
This is mostly due to
the removal of the requirement for brochures (approximately €400m). There is,
however, an increase in administrative costs due to the fact that an increased
number of businesses and products will be brought under the scope of the
Directive ("one-trader" packages), but this is clearly offset by the
reduction in costs to those businesses required to re-print brochures. The
table below presents the comparison of administrative costs of PO 5 and
baseline scenario.
Table
9 Comparison of administrative costs
   || BS Cost/€ || PO 5 Cost/€ 
 Total administrative costs || €421 million || €31.1million 
 Total administrative burden || €409 million || €18.5 million 
 Total business as usual || €12 million || €12.6 million 
   ||   ||   
 Average cost per business || €4,683 || €346 
 Average cost per package || €2.63 || €0.15 
 Average administrative burden || €2.56 || €0.09 
              Removal of special rules regarding
information requirements for last minute bookings
This
aspect is expected to place some additional burden on businesses in Member
States where exemptions from information requirements for last minute bookings
have been established. This burden is not expected to be significant since many
consumers and businesses already make use of electronic communications.
              Changes to form in which information should
be provided
There
are potential reductions in administrative costs arising from the fact that
businesses would be able to provide information to customers in a durable
medium. It is, however, not possible to quantify the amount of savings this
represents. Still, the savings are not expected to be significant since many
businesses already make use of electronic communications.  
5.2.1.2.Cross-border
administrative costs for businesses
In the baseline
scenario, it has been calculated that the cross border requirements (associated
with differing information requirements) result in total costs of €26 million
for the industry. The businesses wishing to sell cross-border need to check the
relevant national legislation in place in different Member States. 
PO5
would eliminate these costs and represent savings to businesses in the EU of
over €5 million annually with an additional approximate one-off saving of €21
million. The Table below sets out the administrative costs associated with
information requirements under the baseline scenario for businesses engaging in
cross border trade. PO5 which is based on full harmonisation of information
requirements would eliminate these costs.
Table
10 Administrative costs associated with cross-border aspects of information
requirements
   || Baseline Cost/€ || Option 5 Costs/€ 
 One off costs for researching MS requirements and legal advice: || 21 million || 0 
 Recurring administrative costs: || 5.1 million || 0 
5.2.2.     
Impacts  on consumers and households 
The proposed elimination
of specific information requirements related to brochures would not have any
overall negative effect. PO 5 maintains the
information requirements that should be necessary in order to make an informed
transactional decision. Therefore, the abolishment of additional information
requirements in some Member States, due to fully harmonised information rules,
is likely to only have a minimal effect, if any, on the overall level of
consumer detriment. 
There
should also be little or no increase in detriment associated with allowing
businesses to provide information in a durable form, since, in theory, the same
information should be available to them regardless of the form. 
The
removal of the obligation to provide prices in the brochures is not expected to
have major impacts on the marketing of package travel. Since prices are often
crucial in order to have effective marketing and with the experience from other
sectors (where no obligation in this regard exists) tour operators are still
likely to indicate prices in their brochures. However, there would probably be
more use of price lists in annexes or indicative prices with a reference to
updates published on the Internet. As a consequence, for consumers not having
access to the Internet, price comparisons might become more cumbersome.
New information
requirements are to be introduced under PO5. They include information:
•           that the
product is a travel package and, as a consequence, the traveller will benefit
from legal protection for packages under EU law (pre-contract)
•           that the
organiser: 
- is responsible for the
proper performance of all included travel services
- is obliged to provide
assistance if the traveller is in difficulty 
-is obliged to procure
insolvency protection to guarantee a refund of all payments made by the
traveller, and, where passenger transport is included in the package, his repatriation,
as well as the name of the entity providing the insolvency protection and its
contact details, including its geographical address (contract); and
•           information
that the traveller may terminate the contract at any time before departure
against compensation without stating any reason (contract).
The Consumer Detriment Study found out that 68% of
consumers purchasing "unprotected travels" mistakenly thought that
they were protected.[189] Therefore, the fact that
consumers would be informed whether they are purchasing a protected package
would be particularly beneficial to consumers.
5.3.   Clarification
of the liabilities and obligations of the professional parties
5.3.1.      Functioning
of the Internal market and competition
Strengthened harmonisation of rules concerning the
liabilities of the professional parties will contribute to a levelling of the
market playing field and would eliminate some obstacles to cross-border trade. 
For example, in Member States where retailers can be held
responsible for the performance of the package contract (e.g. France), foreign
retailers may be discouraged from selling packages here. The harmonised
approach of PO5 would eliminate such disincentives to cross-border operation.
5.3.2.       Compliance
costs for businesses
              Providing information
Making
the organiser or anybody acting on his behalf responsible for providing
information is not expected to increase compliance costs for businesses. In the majority of the Member States the organiser
and/or the retailer is/are currently liable for providing information to the
consumer. In practice, the organisers are often generating the necessary
information which is then provided by the seller (who has a direct contact with
consumers). 
              Performing the contract properly
The party having liability for the contract performance is responsible
for the provisions of all the services included in the contract, also those
provided by sub-contractors. 
If the contract is not properly performed, the liable party may have to
pay compensation to the consumer. In most cases, businesses take out liability
insurance for this purpose which usually covers:
-         
material damages;
-         
body injuries or death of customers; and 
-         
in some cases, specific liability insurances (e.g.
covering special risk such as diving) 
The specific liability insurances
vary greatly in cost between operators and depend on a variety of factors. The premium rates for such insurance vary from 0.5% to 1.5% of a
business’s annual turnover[190]. 
Sub-option 1
- responsibility rests with retailers/sellers
Under this
sub-option, only in two Member States (France and the Czech Republic)[191]
would the situation regarding the liability of the professional party for the
proper performance of the contract not change. Hence, in a majority of Member
States there would be a transfer of liabilities and associated costs from the
organiser to the retailer/seller. A number of industry and Member State
Authority stakeholders consulted during the impact assessment have stressed the
fact that organisers generally have a much closer relationship with service
providers than sellers/retailers do. As a result, if responsibility is
transferred to retailers who do not have such control, there may be an increase
in the number of business-to-business claims from sellers/retailers against the
organiser of the contract, in the event that contracts are not performed
correctly. Making sellers/retailers responsible for the performance of
contracts is also likely to affect SMEs to a greater extent than the other two
sub-options. SMEs are much more represented in this sub-group of businesses,
with organisers tending to be larger businesses. In essence, all sub-options
under PO5 represent a transfer of liabilities and associated costs between
businesses rather than an increase in overall burden.  However, as sellers may
face increased costs in setting up additional contracts with a potentially
large number of service providers, it is possible that this sub-option may
result in an increase in overall costs for the travel sector.  
              Sub-option 2 – responsibility rests with
organisers and joint liability between the organiser and retailer in case the
organiser is based outside the EEA; 
In
the majority of Member States, the organiser is responsible for the performance
of the contract. Consequently, this sub-option would leave the situation in
practice mostly unaltered.  Only in the Czech Republic and France[192],
where the consumer can turn with his claim to the trader (even though the
organiser should be liable), there is likely to be a small change with a shift
in responsibility from retailers/sellers to organisers being required. Under
this option, there may be also a slight decrease in consumer protection in all
countries with joint liability and a decrease of costs for some businesses in
those MS where there is joint responsibility. The fact that organisers
generally have a closer relationship with service providers than
retailers/sellers could suggest that making them responsible for the
performance of the contract may contribute to a reduction in problems
experienced by consumers. Retailers selling packages organised by companies
outside the EEA could be impacted as consumers might seek redress from them.
This impact is, however, expected to be minor.
Sub-option 3
– joint responsibility
Joint
responsibility already exists in Belgium, Cyprus, Slovakia, Greece, Denmark,
Spain and some variations of joint liability also exist in Bulgaria, Ireland,
Austria, Malta, Lithuania, Luxembourg, Portugal, Romania, Italy and France[193].
This sub-option would therefore represent no change (and consequently no costs
and benefits) for businesses operating in these Member States.  Under the
joint-responsibility sub-option, the traveller can essentially choose who to
make a claim against (the retailer or the organiser) in the event of non-performance
of the contract. The cost impacts of this are likely to be higher for
sellers/retailers than for organisers. This is partly due to the fact that it
is likely that travellers would in most cases approach the sellers/ retailers
(they are the main point of contact when concluding the contract, rather then
organisers who may be named on the contract but with whom the traveller has had
no previous direct contract[194]).
Therefore any transfer of the ensuing costs to organisers would need to be done
on a business-to-business basis with reference to contracts concluded between
the retailer and the organiser.  Another potential cost increase which has been
highlighted by stakeholders relates to the possibility for double costs (i.e.
where both organiser and retailers have to purchase extensive liability
insurances) and by that "double" consumer protection (which should be
redundant unless one of the parties goes bankrupt).
              Providing prompt assistance if the consumer
is in difficulty
PO5 envisages
amending the Directive to clearly make the organiser responsible for providing
such assistance. This is only a minor clarification as compared to the status
quo as currently there is not a single Member State where the retailer/seller
is specifically stated to be solely responsible. In practise, large tour
operators often take it upon themselves to assist consumers in difficulties, as
much as part of providing a service (and therefore maintaining their reputation
and competitive edge) as being due solely to the requirements of the Directive.
They usually have representatives on site to assist with any problems that
might arise for their customers. The business model of combined travel
arrangement providers tends to involve a wider range of service providers at
lower volumes than the pre-arranged travel package holiday organisers.
Therefore, it does not then make the same financial sense to have
representatives in all destinations. There would probably be an increase in the
number of help centres which are not localised at the holiday spots. The
organiser of "one-trader" packages
might also need assistance of other service providers to help consumers in
difficulty.  
              A strict liability for proper performance
of the contract
The Directive does not specify what kind of liability it
imposes. In a majority of the Member States, the liability is interpreted
rather strictly. Thus, there would be no increase of compliance costs expected
in a majority of Member States for pre-arranged packages. However, for
instance, in the UK (which seems to imply "culpa liability" for
personal damages) the revised provisions may lead to an increase in compliance
costs.  
              Providing evidence of security/insolvency
protection
PO5 involves
making the organiser or anyone acting in his name liable for providing evidence
of security/insolvency protection. In practice this would mean that the seller,
who is the one having contact with the consumer, would then have to show proof
of that the package is secured against insolvency. The organiser would financially
be responsible for providing the bankruptcy protection.  This only represents a
small change to the current situation and will normally require sellers to ask
the organisers for evidence of having taken out the relevant protection for
their products. Whilst there may be some issues over the extent of proof that
sellers are expected to obtain, this aspect is not expected to impose any
significant costs on sellers/retailer, nor organisers for that matter.  
With
regard to financial liability for providing the protection, most of Member
States have adopted the Directive’s wording and oblige the "organiser
and/or retailer" to provide security in the event of insolvency.
Specifying that it is the organiser that would be financially liable would, therefore,
shift this burden to the organiser. Thus, some benefits in terms of clarifying
the business to business costs may occur. In this regard, sellers can avoid
incurring double costs where both organiser and sellers/retailers take out
insolvency protection.
5.3.3.      Impact
on SMEs
Most
of the sub-options are not expected to result in any significant burden for
SMEs. However, shifting responsibility for performance of contracts to
retailers/sellers (sub-option 1) would place a significantly higher burden on
those businesses compared with the current situation. Given that SMEs are
represented to a higher degree among travel agents than organisers, the
sub-option 1 would imply that SMEs would be more likely to be impacted
negatively than larger businesses. However, this would affect only online
travel agents as brick and mortar travel agencies selling
"one-trader" packages are already subject to all the PTD
requirements.
5.3.4.       Impacts
on consumers and households 
For the
liability for the proper performance of the contract, travellers would benefit
from clarity over which party they should approach regarding non-performance of
the contract under each of the sub-options. The sub-option that makes
sellers/retailers responsible for the performance of the contract is compatible
with the fact that travellers tend to make more complaints directly to the
seller of the product. This should also prevent them being passed around
between sellers/retailers and organisers. The joint responsibility would appear
to be the easiest sub-option for the traveller since they can choose to which
party they are going to direct their complaint. This party would then be
responsible for dealing with the complaint or claim. However the
joint-responsibility might result in slight increase of prices for consumers as
there is a risk of double costs (i.e. where both organiser and retailers will
take insurances for the same liabilities).
Travellers
would also benefit from the clarification of the liability rules. They would
also be more assured and confident in making purchases if they are provided
with evidence that their travel package is protected against insolvency.
The clarification of
liabilities for providing information and assisting consumers in difficulties
is not expected to have any significant impact on consumers. 
5.4.   Contract
changes and other issues
5.4.1.      Functioning
of the internal market and competition
The harmonisation of
rules and extension of scope to cover "one-trader"
packages equal the treatment of businesses selling similar products and
improve the competition. Currently, due to divergent rules in Member States on
price revision or essential terms of the contract, businesses are not able to
compete on an equal footing with those in other Member States. For example, in
the UK and Cyprus, national legislation requires that businesses incur the
first 2% of price increase before passing on to consumers and in Italy
businesses are currently not able to charge price increases higher than 10%. 
5.4.2.      Compliance
costs for businesses
              Price revision
Although comprehensive data regarding price changes (the
size and frequency) made by businesses for the reasons permitted in the
Directive are not available, consultation with businesses participating in the
public consultation provided some limited information on their incidence and
scale.  

Figure 1 Amount, on average, by which each reason tends
to increase the price
Table
11 Price changes in the contract
 Reason for Price Change || Number of respondents ticking %   
 Percentage of total annual sales subject to a price increase (due to reasons below) || <1% || 1-4% || 5-10% || 11-20% || 21-50% || >50% 
 Variations in transportation costs, including the cost of fuel (fuel surcharges) || 17% || 0% || 4% || 0% || 13% || 4% 
 Variations in taxes, duties and fees chargeable for services such as landing taxes, embarkation/disembarkation fees at ports and airports || 8% || 8% || 8% || 4% || 8% || 4% 
 Variations in exchange rates applied to the package || 8% || 4% || 13% || 8% || 0% || 0% 
The results presented in
the table and figure above are not sufficiently robust to draw quantitative
conclusions regarding the overall levels and incidence of price increases,
since the sample was small and not all respondents answered the relevant
question but illustrative conclusions can be drawn. 
For example, almost 60%
of those that actually provided information on the level of price increases due
to variations in transport costs indicated that price increases were less than
2% of the price; 45% of those responding also indicated that this was a reason
for price increases in respect of less than 1% of annual sales.
PO5,
by including "one-trader" packages in the scope of the
PTD, would enable a greater number of businesses to make price revisions
(currently providers of non-compliant "one-trader" packages rarely
revise the prices after conclusion of the contract). 
This
would be of particular relevance to SMEs which are represented to a greater
extent in the "one-trader" packages market than in the pre-arranged
travel package sector
Table 12 Price changes in
the contract- comparison of sub-options
 Stakeholder || Sub-option 1 (Maximum increase capped at 10% percentage) || Sub-option 2 (Clarifying that increase of price above 5% entitles consumer to cancel a contract) || Sub-option 2 (Making prices in the contract binding, with exceptions) 
 Businesses (larger + SMEs) || No significant costs for businesses as there are only limited number of cases in which there would be a real necessity to increase prices more than 10%.[195] Businesses would gain clarity that, if they increase the price above 5%, consumers would be able to cancel a contract without penalty. || Businesses would gain clarity that if they increase the price above 5%, consumers would be able to cancel a contract without penalty. || Higher costs than sub-option 1, as businesses would not be able to increase the price due to changes in the transportation costs or exchange rates..  Businesses might increase the general prices before the conclusion of the contract in order to "insure" themselves against the cases in which they would need to increase prices after the signature of the contract. 
              Essential terms of the contract
It
is expected that specifying in the Directive what is regarded as the essential
terms of the contract would have only a small impact on costs incurred by
businesses. 
The
majority of stakeholders already view most of the terms mentioned in the
Directive's annex as essential terms. Consequently, it is not expected that
their behaviour would change significantly.  
However,
a specification of what should be regarded as the essential terms may be more
burdensome for businesses than today. For example currently businesses do not
have to provide a name of the carrier in the pre-contractual information. 
If
this was changed, this might lead to more consumers asking for termination of
their contracts. Similarly, consumers would be also able to terminate the
contract if the price of the package increases. This would result in an
increase of compliance costs for businesses. However, it is unlikely that
consumers will terminate their travel arrangements if the price increase is minor
or unless the consumer has justified reasons not to be transported by that
particular carrier. 
              Termination rights for travellers
In serious unforeseen
and extraordinary situations (force majeure cases), the majority of businesses
act reasonably and, in order to maintain their reputation, cancel trips
themselves. However, perceptions may differ between the organisers and the
travellers as to the implications for any travels (not just in terms of safety,
but also in terms of enjoyment of the trip e.g. in the case of an ecological
accident such as a nearby oil spill which might prevent access to a key part of
the travel). Consumers would be able to terminate a contract against
compensation for any reasons. 
As businesses would get
the compensation, this right would not generate additional costs.
5.4.3.      Impacts
on consumers and households 
              Price revision and essential terms
For the majority of
travellers whose travels are already within the scope of the Directive, no
additional costs concerning price revision are anticipated. However, full
harmonisation may increase costs, for instance for those travellers in the UK
and in Cyprus[196]
who are faced with a price increase below 2% of the package price (this would
be the case under both sub-options).
However, travellers purchasing
"one-trader" packages brought into the scope of the Directive would
potentially face additional costs as suppliers of such packages would now be
able to amend the price and charge the increase to the consumer. 
The potential costs for
consumers would be, however, offset by giving them the right to terminate the
contract if the price was increased above 5% (sub-option 2).
In case of minor price
increases (majority of price increases are below 5%) consumers would most
likely accept it. Capping maximum price increases at 10% (sub-option 1) would
additionally protect consumers which may otherwise face price increases above
this threshold. 
Table 13 Price changes in the
contract- comparison of sub-options
 Stakeholder || Sub-option 1 (Maximum increase capped at 10% percentage) || Sub-option 2 (Clarifying that increase of price above 5% entitles consumer to cancel a contract) || Sub-option 2 (Making prices in the contract binding, with exceptions) 
 Consumers || Consumers would see price increases capped at 10% even in those cases where actual variation in costs is higher. Consumers would benefit as business would be obliged to pass on the reduction of costs on the price of a package. || Consumers would gain clarity that they can cancel a contract without penalty if a price is increased by 5% or more. || It is possible that, in order to compensate for uncertainty, businesses would increase the prices before the signature of the contract. However, consumers would enjoy a higher protection as prices would be more stable. 
              Termination rights for travellers
It is clear that
consumers would benefit from gaining the right to decide for themselves whether
they wish to embark on a holiday in the event of a force majeure situation,
such as for example the outbreak of violent conflict or an ecological disaster.
5.5.   Summary
of key impacts 
5.5.1.      Economic
impacts
5.5.1.1.Compliance
costs for businesses  
Under the
baseline scenario, it has been estimated that businesses selling PTD-covered
packages currently incur compliance costs of
around €7.5 - €9.5 per package and €3 of administrative costs.
Assuming that 50% of
one-trader packages are already covered by the current PTD, the additional
compliance costs would amount to €335-€424 million (low-€7.5 and high-€9.5
estimate of compliance costs per package). These additional compliance costs
for the industry will be offset (at least partially):
Table 14:
Compliance costs for businesses under PO5
Additional
yearly compliance costs for businesses
 Number of trips to be made compliant || Low estimate of compliance costs (€7.5 per package) || high estimate of compliance costs (€9.5 per package) 
 43,6 million holiday trips || €327 million || €414,2 million 
 1 million B2B trips || €7,5 million || €9,5 million 
 Total || €334,5 million || €423,7 
Annual
savings for business trips
 Number of trips to be excluded from the scope || Low estimate of savings of compliance costs (€7.5 per package) || high estimate of savings of  compliance costs (€9.5 per package) 
 8  million B2B trips || €60 million || €76 million 
These additional compliance costs for the industry will be offset (at
least partially under the medium and high estimate of  "one-trader"
packages  to be made compliant with the PTD) by the reduction of administrative
costs and cost savings stemming from the exclusion of business trips organised
by TMCs from the scope of the Directive.
The reduction of administrative costs would stem mostly from the removal
of requirements for brochures and is estimated at €390 million[197].
In addition, businesses trading cross-border would save €5 million of recurring
administrative costs.
Exclusion of business trips arranged by TMCs would bring savings between €60-€76 million assuming that 50% of B2B trips organised by TMCs are subject
to the current PTD.[198]
The overall impact on the industry would be a benefit of €51-€123 million
annually (low-€7.5 and high-€9.5 estimate of compliance costs)
These figures
have to be considered as a high estimate. Firstly, package travel organisers
would have some savings as it would be easier for them to seek redress from
transport carriers, in case of costs related to delays, cancellations,
assistance or accidents regulated by the EU Passenger Rights. The
introduction of a limitation to provide alternative arrangements in case of
long lasting force majeure events, would, furthermore, save costs for the
industry. Secondly, it is also likely that the mutual recognition of
insolvency funds would imply a reduction in the costs. As already noted,
the difference between costs of insolvency protection for traders established
in different MS can be very significant. Competition between various insolvency
protection schemes may bring significant savings to businesses, since it can be
expected that they would seek to subscribe to the most convenient fund once the
mutual recognition system is in force across the EU.
5.5.1.2.
Impact on SMEs 
SMEs selling
"one-trader" packages newly brought under the scope of the PTD would
incur increased compliance costs. 
Those costs would amount
to a maximum of €7.5 - €9.5 plus €0.15 of administrative costs per package. SMEs
which are selling "one-trader" packages at high street (brick and
mortar travel agencies) are already subject to all the PTD requirements. The
additional costs would therefore affect mostly online sellers of these travel
arrangements. SMEs would also benefit from increased harmonisation and clarity
of rules across the EU as they would be able to rely on one set of rules across
the EU. 
Micro-enterprises
account for 92% of all travel agencies and tour operators (79,000 companies).
The exclusion of micro and small businesses from the scope of the Directive
would not be therefore a viable option. 
Firstly, it would result
in unfair competition between businesses selling competing products whilst
having different regulatory regimes and hence facing uneven compliance costs. 
Secondly, it would
significantly increase consumer detriment, as consumers would not be able to
easily determine the rights they enjoy, as these would depend on the size of
the business they are purchasing from. 
Overall, excluding or
applying a lighter regime for small and/or micro enterprises would be contrary
to the objectives of the revision process, i.e. achieving a high level of
consumer protection and improving the functioning of the Internal Market[199].

5.5.1.3.
Impacts for consumers 
Travellers would experience the following impacts:
-         
a
reduction in the overall detriment: the
estimated reduction of the detriment would be up to 88%[200]
i.e. the level of detriment would decrease up to €348 million if 50% of
"one-trader" packages were brought under the scope of the PTD.
-         
full
harmonisation may lead to an increase of the level of consumer protection in a
few Member States as more packages would be covered.
In addition consumers
could expect some savings/ benefits due to:
·       
Increased
transparency. Consumers will know when or when not they are buying a protected
travel package. Significant information must always be presented to the
traveller before the contract is signed;
·       
More
contractual flexibility. In addition to the right to transfer the contract,
consumers will be able to cancel the contract before the departure by paying a
reasonable compensation to the organiser. In force majeure situations at the
place of destination or in instances where a significant breach of contract can
be anticipated, consumers can before the departure terminate the contract
without paying any compensation;
·       
Clear
rules on liability. The travellers will have one interlocutor if something goes
wrong with the performance of the contract. Due to his liability for the
performance of the services, the organiser will have incentives to be diligent
when choosing his sub-contractors;
·       
Clearer
remedies if the travel package contract is not properly performed.
5.5.1.4.
Impacts for public authorities 
All
MS would be affected as this option would require some changes in the domestic
legislation. MS would bear the usual cost which accompanies the implementation
of EU legislation.
Requiring
Member States to set up mandatory insolvency is likely to result in additional
costs which are estimated to be around €22 million.
5.6.   Impacts
of key provisions
In the light
of consumer and business problems described in chapter 2 of the report, the
following changes to the substantive provisions of the Directive have been
proposed and assessed:
Table 15:
Assessment of key provisions
 Substantive provision || MS impacted || Impact of the provision 
 Introduction of termination rights for travellers against compensation || All MS would be impacted, but less impact in MS such as CZ, DE, BE, DK, EE, EL, FI, HU, LT, LV, PT and ES where variations of such termination rights already exist. || In serious unforeseen and extraordinary situations (force majeure cases), the majority of businesses act reasonably and, in order to maintain their reputation, cancel trips themselves. However, organisers and travellers might have different opinions as to the implications of extraordinary situations for the trip. This may result in some increase of compliance costs for businesses however the compensation paid by consumers is supposed to cover these costs. Consumers would benefit from gaining the right to decide for themselves whether they wish to embark on a holiday in the event of a force majeure situation, such as for example the outbreak of violent conflict or an ecological disaster. If termination right against compensation is introduced, consumers would be able to terminate the contract at any time paying a fee to businesses. If the fee is carefully proportionate, then businesses would face a very limited impact. 
 Clarification of right to compensation for non-material  damages || All MS except for AT, BE and EE that already explicitly provide for compensation for loss of enjoyment. || The consumer would be entitled to compensation for both material and non-material (moral) damages (e.g. loss of holiday enjoyment) in cases of non-performance or improper performance of the contract. For businesses the clarification should not bring significant costs, since this is an existing possibility, although  not often used by consumers. 
 Flexibility of MS as to the method of providing insolvency protection whilst adding explicit rules on the effectiveness of the national insolvency protection schemes, the mutual recognition of security provided under the law of the MS of establishment, as requesting the well as establishment of central contact points (minimum harmonisation rule). || Limited effect on Member States. They will have to establish central contact points to facilitate the mutual recognition. || No additional compliance costs for companies. Businesses would benefit from mutual recognition of schemes across the EU, as increased competition among funds in the internal market is likely to drop the insurance costs. Businesses offering services cross-border would particularly benefit from reduced costs through mutual recognition as they would not need to provide the insolvency protection in each MS they operate. Consumers would get access to more offers at competitive prices. 
 Reinforced rules on the possibilities to seek redress from the transport carrier in case of costs related to delays, cancellations, assistance or accidents regulated by the EU Passenger Rights. Consumers would continue to be able to choose whom to seek compensation and assistance from (transport carrier or the organiser of the package). || All Member States || Package travel organisers could have some savings as it would be easier for them to recuperate at least part of the compensation paid to travellers in case of delays, cancellations, assistance or accidents regulated by the EU Passenger Rights. The extent of this saving is however unknown as two of these Regulations[201] have not yet entered into force and the APR is currently under review. At present, the possibility of seeking redress often depends on the specific arrangements between two business parties[202]. 
 The liability of the organiser to provide alternative arrangements for the continuation of the package in case of force majeure events would be limited (e. g. to a maximum number of three or four days). This provision would reflect the rules set out in EU Passenger Rights Regulations. ||  This would require legislative amendments in all Member States. || Compared to the legal situation today, this would mainly result in a cost reduction for organisers[203]. Consumers would in most instances not be significantly affected, but would incur increased detriment in situations where it is not possible for the traveller to return to immediately the place of destination within four days after the return. It can also be expected that such a cap on the liability to provide assistance would make it easier for organisers to insure this risk.  
 Introduction of minimum one year prescription period for claims for damages or price reduction (minimum harmonisation rule). || Member States will not be affected by such a minimum requirement || Overall, this provision would bring slightly increased legal certainty for consumers, but since most Member States already have at least one year prescription periods, no major cost or impacts are expected. 
5.7.   Social
Impacts
Limited effects are also
expected to result from the implementation of PO5.
Businesses selling
combined travel arrangements brought under the scope of the PTD would incur
additional costs and this might have a limited negative effect on employment.
PO5, by making the retailers responsible for the performance of the contract
(under sub-option 1) might have implications for the financial viability for
some SMEs (who would have to a greater extent take out liability insurance
with  possible knock on effects to employment). 
However,
fairer competition for those businesses which are already subject to the PTD
may provide opportunities for absorbing any job losses.
5.7.1.      Impact
on fundamental rights
This option would
ensure a high level of consumer protection in areas which are currently
unregulated by EU legislation. 
It fully complies
with the provisions of the EU Charter of Fundamental Rights, notably and
foremost Article 38 on consumer protection. Article 16 on freedom to conduct
business is not significantly impacted as, on one hand, there would be more
compliance costs, but on the other one, there would be significant reductions
in administrative burden.
5.8.   Environmental
impacts
The environmental
impacts identified under the baseline scenario (need reprint the brochures)
would be eliminated. However this savings are likely to be insignificant when
compared to the overall environmental impacts of the travel industry.  
5.9.   Assessment
against objective
 Policy Objectives || Option Rating* || Comments 
 Objective 1:  To improve the functioning of the Internal Market in the package travel sector, by: 
 Reduce costs and obstacles to cross-border trade; || ++ || The full harmonisation of option 5 would contribute to the better functioning of the Internal Market in the package travel sector , eliminating legal fragmentation and obstacles to cross-border trade. 
 Ensure a more competitive and fair level playing field for the businesses operating in the travel market. || + || This option would result in fairer competition between different market players in the travel sector as sellers of pre-arranged packages and sellers of "one-trader" packages would need to comply with the same legal requirements. 
 Reduce unjustified compliance costs for businesses in the package travel market; || ++ (- for compliance costs for new packages brought under the scope) || This option would significantly reduce unjustified costs for businesses by excluding business trips organised by TMCs from the scope of the Directive, eliminating special requirements for information to be provided in the brochures and limiting organisers obligation to assist consumers  in force majeure events. 
 Objective 2:  To achieve a high level of consumer protection in the package travel sector,, by: 
 Reduce consumer detriment and increase transparency for travellers who buy combinations of travel services currently not covered by the PTD by  addressing  new market developments;   || +/++ || "One-trader" packages would be brought under the scope of the PTD. Reduction of traveller's detriment is estimated to up to €326 million (assuming 50% of "one-trader" packages would be brought under the scope of the PTD). The transparency would also increase as under the pre-contractual information, consumers would be also informed whether they are buying a protected package. 
 Reduce consumer detriment stemming from unclear and outdated provisions.   || ++ || This option would update and clarify some of the PTD provision. Clarification of responsibilities of the professional parties would enhance consumers' ability to seek redress in case something goes wrong. Consumers would also benefit from a right to termination the contract if they made mistakes and would gain more certainty as to the prices of the package. 
6.      Policy
Option 6 - - Graduated approach- modernisation of the Directive and coverage of
both "one trader" and "multi trader" packages while
applying a lighter regime to "multi-trader"
assisted travel arrangements
Assessment
of relevant economic impacts
6.1.   Functioning
of the Internal market and competition
PO6 would result in a
more even playing field and competition between sellers of combined travel
arrangements and pre-arranged packages. This option is also likely to
strengthen the harmonisation of the internal market and increase cross border
trade as consumers increasingly recognise that these products are covered under
the PTD and the same legislation applies across Member States. Making
"multi-trader" assisted travel arrangements subject exclusively to
the obligations to declare that they do not constitute a package and to procure
insolvency protection, would  increase transparency for consumers and ensure
fair competition, while avoiding unnecessary costs associated with all
obligations applying to packages
6.2.   Compliance
costs  for businesses  
There are 31
million "multi-trader" holiday travel arrangements and 6 million
business "multi-trader" travel arrangements sold annually. However,
the exact share of "multi-trader" assisted travel arrangements and
"multi-trader" packages is not known. 
The "lighter
regime" provided by PO6 would be particularly beneficial for SMEs
currently selling "multi-trader" and "one-trader" packages
as it could be difficult for them to cover liability for the performance of all
services provided by different traders. These companies would be able to adapt
their business activities so as to face only some PTD requirements (insolvency
protection and an obligation to display the "This is not a package"
disclaimer). It is impossible to quantify precisely how many businesses would
do this.
High-street travel
agents selling "one-trader" packages in most cases need to already
comply with the current PTD, as interpreted by the ECJ. A change of the
business model for them would imply inconvenience for their customers, i.e. a
need to make separate payment transactions. Online traders selling
"one-trader" packages (for which it is less clear to what extent they
are covered under the current PTD as interpreted by the ECJ, although they are
covered by national legislation in a number of Member States) would need to ensure
that the services they offer are no longer booked within one booking process
(i.e. no longer put in a single "shopping basket" by consumers). The
additional services would need to be offered after the booking of the first
travel service is confirmed, which would imply some  redesigning of their
websites and, sometimes, a further clarification of their commercial agreements
with other traders.  Sellers of "multi-trader" packages could adapt
their websites more easily but they would need to stop charging an inclusive
price for packages:  this might imply the risk of losing those customers who
might find the separate payment transactions less convenient.  It is therefore
assumed that only around 25% of "one-trader" packages[204]
and roughly  50% of multi-trader packages would in the future be sold as
"multi-trader" assisted travel arrangements.
With regard to the
number of businesses affected by PO 6, it has been estimated that sub-option 1
on liability would potentially impact on 6,565 businesses and sub-option 2 on
24,043 businesses (see table 16 and box 4)
This option is likely to
capture travel products which resemble a package, in particular:
·         
websites
of airlines or other transport providers (including car rentals) from which a
traveller has been redirected to purchase other travel components relating to
accommodation and/or car rentals on linked/partner's websites; and 
·         
websites
of hotels from which a traveller has been redirected to purchase other
components relating to transport (including car rentals) on linked/partner's
websites.
Capturing the full range
of "other tourists services" (e.g. spas, cafes, restaurants) is not
the intention of PO6 and is therefore not included in these estimates.
Table 16
Determining the number of businesses likely to be affected by option 6.
   || % Assumed || Number of Businesses 
 HOTELS ||   ||   
 Total number of hotels and other accommodation across the EU-27 from which a package could, in theory, originate ||   || 200,000 
 Number of hotels and other accommodation with an online presence || 50% || 100,000 
 Number of hotels and other accommodation with an online presence and linking to other websites || 25% || 25,000 
 Number of above hotels and other accommodation which would sell "multi-trader" travel arrangements and would qualify under Option 6 as the initial web site - and hence, be treated as an organiser of the package - || 20% || 5,000 
 CAR RENTALS ||   ||   
 Total number of car rentals across the EU-27 ||   || 13,000 
 Number of car rentals with an online presence || 50% || 6,500 
 Number of car rentals with an online presence and linking to other websites || 25% || 1,625 
 Number of car rentals with online presence which would qualify under Option 6 as the initial web site - and hence, be treated as an organiser of the package - || 5% || 81 
 AIRLINES ||   ||   
 Total number of airlines across the EU-27 from which a package could, in theory, originate ||   || 300 
 Number of airlines with an online presence || 80% || 240 
 Number of airlines with an online presence and linking to other websites || 75% || 180 
 Number of airlines with an online presence and linking to other websites which would qualify under Option 6 as the initial web site - and hence, be treated as an organiser of the package - || 20% || 36 
 ALLOTHER TRANSPORT (EXCEPT AIRLINES AND CAR RENTALS) ||   ||   
 Total number of all other transport across the EU-27 from which a package could, in theory, originate ||   || 57,900 
 Number of other transport with an online presence (assume 50%) || 50% || 28,950 
 Number of other transport with an online presence and linking to other websites (assume 25%) || 25% || 7,238 
 Number of other transport with an online presence and linking to other websites which would qualify under Option 6 as the initial web site - and hence, be treated as an organiser of the package - || 20% || 1,448 
 TOTAL (initial service providers) ||   || 6,565 
 TOTAL (service providers with an online presence and linking to other websites) ||   || 34,043 
 Overall TOTAL of Businesses ||   || 271,200 
 Box 4 Methodology and assumptions for estimating the number of affected businesses  -          Based on Eurostat data, there were 201,802 hotels and similar establishments (this includes hotels, apartment hotels, motels, roadside inns, beach hotels, residential clubs, rooming and boarding houses, tourist residences and similar accommodation). This number does not, however, include “other collective accommodation establishments” which include holiday dwellings, tourist campsites, youth hostels, tourist dormitories, group accommodation, school dormitories and other similar accommodation - numbering around 237,000 across the EU-27. -          The estimate of the number of car rental businesses (13,000) is based on the basis the data in Eurostat’s Structural Business Statistics database[205].  -          The estimate of 300 airlines is based on Eurostat values; and -          57,900 transport businesses in addition to airlines and car rentals is based on the number of railway businesses (887) plus number of businesses involved in other passenger land transport [206] (37,000) plus  number of businesses involved in water transport (includes freight) [207] (20,000). Estimates of the number of businesses that would be affected under PO6 are based on the following assumptions: -          businesses with an online presence: it has been assumed that 50% of hotels, other accommodation establishments, car rental and transport businesses (with the exception of airlines) sell their products online, while 80% of airlines have an online presence.  The assumption on the proportion of hotels that sell their services via the internet broadly corresponds with Eurostat data[208], the relevant percentages for other stakeholders are based on guesstimates as Eurostat does not provide data to sufficient level of detail[209]; -          businesses with an online presence and linking to other websites: it has been assumed that 25% of businesses with online presence link to other websites. However, in the case of  airlines, it has been assumed that 75% of airlines with online sales link to other websites; and -          businesses with interlinked websites which could qualify as initial website: assumed to be 20% of businesses with interlinked websites for hotels, airlines and other transport, with the exception of car rentals where this is assumed to be 5% (in other words, it is considered rather unlikely (and counter-intuitive) that many car rentals would qualify as an initial service provider in that a consumer would first purchase car rental and then get redirected to another website to purchase other travel components relating to accommodation and/or or other transport on linked/partner's websites).   It is considered that travel agents and tour operators are unlikely to sell "multi-trader" travel arrangements, rather focussing on standalone products or “"one-trader" packages".  
Under PO6,
traders selling "one-trader" and "multi-trader" packages
would incur additional compliance costs estimated at €7.5-€9.5 per package.
Traders selling multi-shop assisted travel arrangements would incur one-off
administrative costs (see below) related to displaying "This is not a
package" disclaimer and a cost of insolvency protection. The current
estimated cost of insolvency protection for packages amounts to roughly €3 per
package. Based on the available figures and in particular on the experience of
the UK "Flight Plus" scheme which is a very similar model, the
assumption is that this cost would remain roughly the same also for "assisted
travel arrangements".
Given above
the total additional compliance cost for the industry of PO6 could be estimated
at €528-€654million annually (low-€7.5
and high-€9.5 estimate of compliance costs per package).[210] 
Table 17
Additional compliance costs incurred per package to comply with the PTD - PO6
 Number of trips to be made covered as packages || Low estimate of compliance costs (€7.5 per package) || high estimate of compliance costs (€9.5 per package) 
 15,4 million holiday trips || €115,5 million || €146,3 million 
 3 million B2B trips || €22,5 million || €28,5 million 
 Total || €138 million || €174,8 million 
 Number of trips to be covered as assisted travel arrangements || Low estimate of compliance costs (€3 per package) 
 15,4 million holiday trips || €46,2 million 
 3 million B2B trips || €9 million 
 Total || €55,2 million 
However,
using the above assumptions that some traders might adapt their business models
and no longer sell packages, the additional yearly compliance costs of PO6
could be estimated at €386-€444 million annually (low- €7.5 and high- €9.5
estimate of compliance costs per package)[211].
Table 18
Reduced compliance costs for "one-trader" and
"multi-trader" packages sold which could be sold as assisted travel
arrangements in the future

 Number of trips to be made compliant || Low estimate of "savings" (€4.5 per package) || high estimate of compliance costs (€9.5 per package) 
 22,3 million "one-trader" packages || €100,4 million || €145 million 
 9,2 million "multi-trader" packages || €41,4 million || €59,8 million 
 Total || €141,8 million || €423,7 
6.2.1.      Administrative
costs for businesses
Some additional
administrative costs for businesses brought under the scope of the PTD:
-€2.8million annually [212].
Providers of "multi-trader" travel arrangements, subject only to the
lighter information regime, would incur administrative costs of €500 per
company (€17 million for the whole industry[213]) to provide the
message "this is not a package" in a durable medium to their
customers.
6.3.   Impacts
on SMEs
Similarly to PO5, this
option would increase compliance costs for businesses including SMEs selling
"multi-trader" packages. However, PO6 provides for a lighter regime
which would be particularly beneficial for SMEs currently selling
"one-trader" and "multi-trader" packages which might be
ill-placed to assume liability for the performance of different services
included in the travel combination. These companies would be able to adapt
their business activities and face only some PTD requirements (insolvency
protection and an obligation to display the "This is not a package disclaimer")
incurring lower compliance costs (on average €3 per package) compared to
sellers of packages (on average €7.5-€9.5 per package).
PO6 would impact hotels,
car rentals, airlines and businesses operating in the transport sector other
than airlines and car rentals. Most of these businesses, excluding airlines,
are SMEs/micro businesses (99%/73% for hotels, 99%/94% car rentals, 99%/90%
other transport services)[214].
For this reason, the goals which option 6 aims to reach would be hampered if
such businesses were to be excluded from the scope.  
6.4.   Impact
on consumers and households
Compared to
PO5,  this option would bring additionally around 31 million
"multi-trader" travel arrangements within the scope of the Directive,
bringing additional protection for consumers purchasing combined travel
arrangements. As estimated under PO5, the baseline detriment for 15.5 million
of "multi-trader" packages is expected to reduce by 88%. Given
that the most prevalent problems causing detriment concern provisions of
information (22% of EU-17 problems with combined travel arrangements) and
services not provided at all or of lower standard (17% of problems) that would
be to an extent tackled by the "lighter protection", 
The yearly
consumer detriment could be reasonably estimated to decrease by €508 million.
However, using the same assumptions as above that some traders might adapt
their business models and no longer sell packages the total reduction of yearly
consumer detriment could be estimated at €430 million[215]. it is assumed that the
detriment for "multi-trader" assisted travel arrangements would be
30% lower compared to the decrease of detriment for packages.
Moreover, the
"This is not a package"- disclaimer
would enable consumers to make informed choices. 
On the other
hand, some consumers may experience an increase in the prices of
"multi-trader" and "one-trader" packages of around €7.5-9.5
per packages and of around €3 for "multi-trader" assisted travel
arrangements if businesses pass on their increased compliance costs. But, similarly
to PO5, such possible price increase case would be less than 2% of the total
price of the package.  
It is
interesting to note, in this context, that 68% of surveyed consumers were
willing to pay additionally €3 for insolvency protection for standalone airline
tickets[216]
which shows that consumers would be similarly likely to accept the potential
increased prices for "multi-trader" assisted travel arrangements
offering them protection against insolvency.
Table 19 Detriment associated with "multi-trader" travel
arrangements
   || Number of combined travel arrangements || Value of  purchase of combined travel arrangements (€) || Value of net detriment in population (€) 
 EU-27 || 118 million || 87 billion || 1,065 billion 
   || Number of "multi-trader" travel arrangements to be made compliant || Value of trips to be made  compliant (€) || Value of net detriment associated with products to be made compliant €) 
 PO5 || 43,6 million "one-trader" packages || 32,3 billion || 395 million 
 PO6 || 15,5 million "multi-trader" packages || 11,4 billion || 139,6 million 
 PO6 || 15,5 million "multi-trader" assisted travel arrangements || 11,4 billion || 139,6 million 
6.5.    Impact
on public authorities
Similar
effects as PO5.
6.6.    Social
impacts
Similar
effects as PO5.
6.6.1.      Impact
on fundamental rights:
Similar
effects as PO5.
6.7.   Environmental
impacts
Similar effects as PO5. 
6.8.   Assessment
of sub-options
 Stakeholder/ Impact || Sub-option 1 (liability of a single service provider) || Sub-option 2 (liability of each of the involved service providers) || Sub-option 3 (joint liability of all traders unless the parties designate only one trader to be liable) 
 MS impacted || All MS impacted. || All MS impacted. || All MS impacted 
 Impact on businesses || Around 6,500 businesses are likely to be impacted by compliance costs- they could be liable for services provided by different companies. || Around 34,000 businesses (which include the 6,500 businesses under Sub-option 1) are likely to bear the compliance costs. || Depending on the business arrangement, between 6,500-34,000 companies would be impacted. If one liable party is not designated, then any company could be liable for services provided by different companies. 
 Impact on consumers || Greater clarity as to who is responsible for compliance with the PTD and from whom travellers can seek assistance or redress. || Where travellers wish to seek assistance or redress, there could be a number of parties that they would have to interact with. || One interlocutor for consumers to seek assistance and redress. In cases where parties do not designate one trader, consumer could decide who to turn to. 
6.9.   Assessment
against objective
 Policy Objectives || Option Rating* || Comments 
 Objective 1:  To improve the functioning of the Internal Market in the package travel sector, by: 
 Reduce costs and  obstacles to cross-border trade; || ++ || Similarly to PO5, the strengthened harmonisation would contribute to the better functioning of the Internal Market, eliminating legal fragmentation and obstacles to cross-border trade. Making "multi-trader" assisted travel arrangements subject exclusively to the limited obligations would ensure fair competition, while avoiding unnecessary costs associated with all obligations applying to packages 
 Ensure  a more competitive and fair level playing field for the businesses operating in the travel market. || ++/+++ || This option would result in fairer competition between different market players in the travel sector compared to PO5 as more competing products would be brought under the scope of the PTD levelling the market playing field. 
 Reduce unjustified compliance costs for businesses in the package travel market; || ++ (- for compliance cost for travels brought under the scope) || Similarly to PO5, this option would significantly reduce unjustified costs for businesses by excluding business trips organised by TMCs from the scope of the Directive, eliminating special requirements for information to be provided in the brochures and limiting organisers obligation to assist consumers in force majeure events. PO6 also provides for a lighter regime which would be particularly beneficial for SMEs currently selling "one-trader" and "multi-trader" packages which might be ill-placed to assume liability for the performance of different services included in the travel combination. These companies would face only some PTD requirements. 
 Objective 2:  To achieve a high level of consumer protection in the package travel sector, by: 
 Reduce consumer detriment and increase transparency for travellers who buy combinations of travel services currently not covered by the PTD by  addressing  new market developments;   || ++/+++ || The number of consumers protected by the PTD would increase. Bringing "multi-trader" packages under the scope of the PTD will reduce the consumer detriment associated with these products. The total reduction of consumer detriment could be estimated at €508 million or €430 million if some companies change their business models. 
 Reduce consumer detriment stemming from unclear and outdated provisions.   || ++ || Similarly to PO5, this option would update and clarify some of the PTD provision reducing consumer detriment. Consumers, among others, would benefit from increased foreseeability in relation to prices, more clear liabilities and a right to terminate the contract against compensation. 
7.      Assessment
of Option 7 - Modernisation of the Directive and coverage of both "one
trader" packages and "multi-trader" travel arrangements (PO7)
7.1.   Functioning
of the Internal market and competition
This option is also
likely to strengthen the harmonisation of the internal market and increase
cross border trade as consumers increasingly recognise that all combined travel
arrangements are covered under the PTD and the same legislation applies across
Member States.  However, by extending the scope to "multi-trader"
travel arrangements which are not directly competing with "packages"
it would generate disproportionate and unfair costs for these companies.
7.2.   Compliance
costs  for businesses  
Compared to PO5, PO7
extends the scope of the PTD to cover 31 million "multi-trader"
travel arrangements and 6 million business trips. 
However, by extending
the scope to all "multi-trader" travel arrangements and by making
them subject to all PTD obligations, this option would generate
disproportionate and unfair costs for companies acting merely as
intermediaries, since they might not be able to guarantee the performance of
all services included in the travel combination. 
The total additional
compliance costs of PO7 could be estimated at €610-€773 million annually[217] (low-€7.5
and high-€9.5 estimate of compliance costs per package).
Additional costs for the
industry are likely to be partially offset in the medium term by increased
competition and transparency in the sector bringing reduced costs for
traditional package providers benefitting from lower compliance costs (see
assessment of PO5).
Table 20 Additional
compliance costs incurred per package to comply with the PTD  
 Number of trips to be rbought under the scope of the PTD || Low estimate of compliance costs (€7.5 per package) || high estimate of compliance costs (€9.5 per package) 
 74,4 million holiday trips || €558 million || €706,8 million 
 7 million B2B trips || €52 million || €66,5 million 
 Total || €610 million || €773million 
7.3.   Impacts
on SMEs
Similarly to PO5 and
PO6, mostly SMEs would be impacted by increased compliance costs. Compared to
PO6, this option does not provide for any lighter regime. All travel companies
with online presence and linking to other travel providers would be subject to
all PTD requirements which could be considered as disproportionate burden.
7.4.   Impact
on consumers and households
Compared
to PO5, PO7 would bring 31 million travel arrangements, representing a value of
approximately €23 billion, within the scope of the Directive. Using the same
approach as under PO5, the table below shows
estimates of the level of consumer detriment resulting from combined travel
arrangements brought under the scope of the PTD. It could be estimated that the
yearly consumer detriment would decrease by €593 million. 
Table 20 Detriment associated with "multi-trader travel
arrangements
   || Number of combined travel arrangements || Value of purchase of combined travel arrangements(€) || Value of net detriment in population (€) 
 EU-27 || 118 million || 87 billion || 1,065 billion 
   || Number of  combined  travel arrangements to be brought under the scope of the PTD || Value of trips to be made  compliant (€) || Value of net detriment associated with products to be made compliant €) 
 PO5 || 43,6 million || 32,3 billion || 395 million 
 PO7 || 31 million || 22,8 billion || 279 million 
It is possible (and likely) that some consumers may
experience an increase in the price of "multi-trader" travel
arrangements as businesses may pass on the increased compliance costs.  This
will however depend on supply and demand elasticises. However, any price
increase per package is likely to be around 1% (i.e. €7,65 - €9.65€ - /€741) of
the total price of the package. 
7.5.   Impact
on public authorities
Similar
effects as PO5 and PO6.
7.6.   Social
impacts
Similar
effects as PO5 and PO6.
7.6.1.      Impact
on fundamental rights:
Similar
effects as PO5 and PO6.
7.7.   Environmental
impacts
Similar effects as PO5
and PO6.
 Policy Objectives || Option Rating* || Comments 
 Objective 1:  To improve the functioning of the Internal Market in the package travel sector, by: 
 Reduce costs and  obstacles to cross-border trade; || ++ || Similarly to PO5, the strengthened harmonisation would contribute to the better functioning of the Internal Market, eliminating legal fragmentation and obstacles to cross-border trade. However, by extending the scope to "multi-trader" travel arrangements which are not directly competing with "packages" it would generate disproportionate and unfair costs for these companies 
 Ensure  a more competitive and fair level playing field for the businesses operating in the travel market. || ++ || This option would result in fairer competition between different market players in the travel sector compared to PO5. 
 Reduce unjustified compliance costs for businesses in the package travel market; || ++ (-- for compliance cosrs for new multi-trader travel arrangements brought under the scope) || Similarly to PO5, this option would significantly reduce unjustified costs for businesses by excluding business trips organised by TMCs from the scope of the Directive, eliminating special requirements for information to be provided in the brochures and limiting organisers obligation to assist consumers in force majeure events. 
 Objective 2:  To achieve a high level of consumer protection in the package travel sector, by: 
 Reduce consumer detriment and increase transparency for travellers who buy combinations of travel services currently not covered by the PTD by  addressing  new market developments;   || +++ || The number of consumers protected by the PTD would increase. Bringing "multi-trader" travel arrangements under the scope of the PTD will reduce the consumer detriment associated with these products. The total yearly reduction of detriment could be estimated at €508 million. 
 Reduce consumer detriment stemming from unclear and outdated provisions.   || ++ || Similarly to PO5, this option would update and clarify some of the PTD provision reducing consumer detriment. Consumers, among others, would benefit from increased foreseeability in relation to prices, more clear liabilities and a right to terminate the contract against compensation. 
ANNEX 6
Calculation of Administrative Costs
Annex 7
Competitiveness and Impacts on
the Tourism Sector 
Effective policy options
for a possible revision of the Package Travel Directive[218]
(PTD) should ensure a high level of business competitiveness.
Assessing impacts on
competitiveness requires particular attention within the Commission impact
assessment process, as Article 173 (1) of the TFEU states that "The Union
and the Member States shall ensure that the conditions necessary for the
competitiveness of the Union's industry exist".
When policy initiatives
are likely to impact particular sectors of the economy, twelve consecutive
steps are necessary in order to assess competitiveness.[219]

 Specific analysis
     for sectoral competitiveness

Policy options 4, 5, 6
and 7 have the potential to affect the competitiveness of the tourism sector,
for the following reasons (a summarising table is also proposed below). Option
1 is the baseline scenario, while options 2 (non binding guidelines) and 3 (a
label/disclaimer) are not expected to significantly affect sectoral competitiveness.
Option 4: The repeal
of the Directive might result in decrease of compliance costs for businesses by
€10.5-12.5 per package, hence affecting the sector's capacity to produce the
services at a lower cost, and potentially to offer them at a lower price.
However, this effect would be largely mitigated as MS would have to
independently decide if repealing or not their consumer law: repeals of all
national pieces of legislation across the 27 MS is unlikely. Furthermore,
option 4 would not reduce the administrative burden associated to cross-border
trade and the research of national provisions, € 2 per package, as MS would be
free to legislate in this area. It is hence unclear to what extent such option
might increase competitiveness, levelling up in some cases the playing field
among businesses currently regulated under the PTD and businesses which operate
outside the scope of the Directive.
Option 5: If
"one-trader" packages were brought within the scope of the Directive,
there would be an impact on the costs to provide travel services for those
businesses that would be brought under the scope of the Directive and which
today offer travel arrangements which in the Member States are currently not
considered to be within its scope. See the report and Annex 5 for more details.
The result would likely be fairer competition between sellers of combinations
of travel services sold as traditional packages or single-point of purchase
travel arrangements.
Option 6: Impacts go
in the same direction as option 5, where the main difference is the addition of
"multi trader" travel arrangements within the scope of the Directive.
See the report and Annex 5 for more details. Fairer competition would take
place between sellers providing combinations of travel services be it as
pre-arranged packages, as "One trader"-packages  or
"multi-trader" travel arrangements. Thanks to the graduated approach,
excessive costs related to "multi-trader" assisted travel
arrangements are avoided,
Option 7: Impacts go
in the same direction as option 6, but are more extreme since the full
inclusion of "multi-trader" assisted travel arrangement would entail
significant additional compliance costs due to the full extension of the scope
for these travel arrangements. Furthermore, mostly SMEs would be impacted by
increased compliance costs. 
Thus, option 7 is
considered to add disproportionate costs by extending the scope to travel
arrangements which are not directly competing with "packages". See
the report and Annex 5 for more details.
Is a revision
of the Package Travel Directive likely to have a significant impact on
enterprise competitiveness in terms of:
 Cost and price competitiveness || PO4 || PO5 || PO6 
 Cost of inputs || No || No || No 
 Cost of capital || No || No || No 
 Cost of labour || No || No || No 
 Other compliance costs || Slightly positive, levelling the playing field but only if all MS repeal their provisions || Negative (only for those businesses which would be covered and are not currently covered), but levelling the playing field || Negative (only for those businesses which would be covered and are not currently covered), more costly than PO5, but levelling the playing field more incisively 
 Cost of production or distribution || No || No || No 
 Price of business outputs || No || Slightly negative, but prices of travel arrangements brought under the scope would increase in the short term, while in the long term more competition may lead to price reduction || Slightly negative, possibly increasing prices of more travel arrangements in respect to PO5, but prices of travel arrangements brought under the scope would increase in the short term, while in the long term more competition may lead to price reduction 
 Capacity to innovate ||   ||   ||   
 Capacity to produce and bring R&D to the market || No || No || No 
 Capacity for product innovation || No || Positive, due to expected increased competition in the internal market which will drive innovation. The level playing field would encourage businesses to innovate their business model to emerge. || Positive, due to expected increased competition in the internal market which will drive innovation. Compared to PO5, innovation is expected to increase in particular concerning the "multi-trader" travel arrangement providers' business model 
 Capacity for process innovation || No || No || No 
 Access to risk capital || No || No || No 
 International competitiveness ||   ||   ||   
 Market shares (single market) || Negative, consumers will have less protection and will be less confident in purchasing travel arrangements, especially cross-border || Positive, increased consumer confidence will make consumers purchase more safely and maybe more within the internal market. Harmonisation of provisions will also bring more trade || Positive, increased consumer confidence will make consumers purchase more safely and maybe more within the internal market. Harmonisation of provisions will also bring more trade. Compared to PO5 this effect is stronger as involving more combined travel arrangements. 
 Market shares (external markets) || Slightly negative || Slightly positive || Slightly positive – attracting customers from outside the EU for all covered combined travel arrangements. 
 Revealed comparative advantages || No || No || No 
Policy option 7 is
likely to have the similar impacts on enterprise competitiveness as option 6,
but the main difference is the additional compliance costs related to this
option. Consumer confidence is also expected to be increased, so is the
levelling of the market playing field, but these positive effects will not
outweigh the negative effects caused by the additional compliance costs. Thus,
option 7 is considered to be impacting the competitiveness in a more negative
manner than option 6.

 Proportionality of
     the analysis

There are two main
policy objectives for a revision of the Package Travel Directive: (a) improving
the functioning of the internal market in the package travel sector and (b)
achieving a high level of consumer protection in the package travel market.
It is clear that in order
to achieve a high level of consumer protection in the package travel market,
the competitiveness of this sector will be partly impacted. The negative
impacts identified in the table above and originated by the compliance costs
necessary in order to achieve policy objective (b) get compensated by achieving
policy objective (a), which aims to make easier cross-border trade reducing non
necessary administrative costs, such as the costs to re-print brochures (see
report and annex 5).
A quantitative analysis of
the impacts concerning compliance costs (negative impacts on enterprise
competitiveness which are generated by a policy goal other than
enterprise competitiveness, such as consumer protection) is thoroughly
presented throughout the impact assessment and in particular in Annex 5. For
the remaining identified impacts on competitiveness, such as price of outputs,
increased innovation and market shares, a qualitative approach seems
proportionate as impacts will clearly depend by the single characteristics of
affected enterprises (e.g. the level of propensity to innovate of enterprises
in the package travel market once competition would increase due to a better
level playing field), which are difficult and disproportionate to quantify.

 Affected sectors

Impact on the sectors
directly affected by the policy initiative
All considered policy
options have direct competitiveness impacts only on the package travel market,
i.e. on businesses which are involved in the sale of pre-arranged and/or
combined travel arrangements, or their single components (independent travel
arrangements). 
Indirect impacts on
sectors outside the supply chain
The travel market other
than the package travel market may be indirectly affected. If consumer
protection for combined travel arrangements is reinforced (PO 5, 6 and 7) , the
ratio of consumers going on holiday with a package / consumers going on holiday
with independent arrangements is likely to increase. This would negatively
impact the direct purchasing of independent travel arrangements of a holiday,
even though the extent of this effect is not known.
Indirect impacts on
sectors in the supply chain of the affected sectors
See the effect on
sectors outside the supply chain, as holiday with independent arrangements can
also be components of packages. If packages acquire more popularity when
consumer protection is reinforced, then the negative impact for this industry
which is mentioned in the paragraph above would be mitigated, as providers of
packages' components would be able to sell their products more often to
packages' organisers than to the final consumers.

 SME competitiveness

As SMEs are the
overwhelming majority of all businesses in Europe (99% according to last data
from Eurostat, 2009), achieving a high level of consumer protection in the
package travel field would be impossible without keeping them within the scope
of the revision of the Directive. There are 86,000 tour operators and travel
agencies in the European Union.[220]
On average, they have 7 employees each[221]. 
Micro-enterprises
(businesses with less than 10 employees) account approximately for 79,000
businesses, i.e. the 92% of the total. As they are the overwhelming majority of
all tour operators and agencies, it does not seem justified to exclude them
from the scope of the policy options. In excluding them, under policy option 5
the policy goal of achieving a high level of consumer protection would most
likely fail.
Under policy option 6
and 7, all relevant travel service providers operating on the Internet selling
travel arrangements falling within the scope of the PTD would have to oblige to
its requirements (see Annex 5). Following the assumptions described in Annex 5,
Section 6.1.1.1, this would directly impact between 5,000 and 25,000 hotels, up
to 1,600 car rentals, up to 180 airlines and between 1,400 and 7,000 businesses
operating in the transport sector other than airlines and car rentals, out of
the total number of enterprises outlined in the main report, Section 1.3. Most
of these businesses, excluding airlines, are SMEs/micro businesses (99%/73% for
hotels, 99%/94% car rentals, 99%/90% other transport services)[222].
For this reason, the goals which option 6 aims to reach would be very much
deterred if such businesses are excluded from the scope.  
Furthermore, the compliance
costs which would provide more burden for businesses are estimated per package.
As a smaller business would most likely sell fewer packages than a larger one,
it would face compliance costs proportionate to its overall turnover. In the
consultation process, UEAPME, the European association of craft, small and
medium-sized enterprises, did not ask or provide particular reasoning for SMEs
to be exempted from the Directive.[223]
PO6 with its
"graduated approach" also provides for a lighter regime that would be
particularly beneficial for those SMEs and micro enterprises who are currently
selling combined travel arrangements, but do not want to compete on the package
travel market as such. These companies would be able to adapt their business
activities for a relatively low cost by simply clarifying to consumers that
they do not offer packages display a disclaimer on their websites stating that
"This is not a travel package".
A possible sub-option
which could be part of both option 5, 6 and 7 would be exempting micro and
small firms which organise packages within their country of origin. However,
this would be detrimental to competition, even among small businesses and could
also be detrimental to consumers. Businesses organising packages within and out
of their country of origin would have to comply with the Directive, thus being
at competitive disadvantage with the ones which only organise domestically.
This would also be a disincentive to start organising packages across border. 
For consumers, the protection would then depend on the size of the company, a
factor which is not always known to the consumer. Thus, such a rule can create
an unclear situation regarding whether the rules apply, leading to legal
uncertainty. If nevertheless consumers are aware that they would get lower
protection from SMEs, such a rule could turn out to be a disincentive to
purchase from these businesses, which is a scenario that should be avoided.
Furthermore, seen from the consumer perspective, the need for protection, and
especially insolvency protection, can be the same both for domestic travels and
travels abroad. For instance, in Italy, a package travel to the Italian Alps
can contain the same risks and have as high price as a package travel across
the border to the French Alps (this also applies to those Member States which
have outer territories, e.g. U.K citizens going on package holidays to
Gibraltar/Falklands islands or French citizens travelling to Ile de la
Reunion). For more details by policy option, please refer to the main text of
the impact assessment or to Annex 5.

 Effect on cost and
     price competitiveness

Policy option 4 would
cut compliance costs in the package travel sector only provided that individual
MS repeal their existing national provisions. This is however deemed unlikely
to happen in practice. Policy options 5, 6 and 7 would increase compliance
costs for the combined travel arrangements (respectively "one-trader"
packages and "multi trader" travel arrangements), and by consequence
businesses, which would be brought within the scope. The change in compliance
cost is foremost connected to the inclusion of "multi-trader" travel
arrangements, since, in respect of "one-trader" packages, it is
mostly a matter of clarifying the existing scope of the Directive, see Annex 3
point 1.1.
The main report, Annex 5
and Annex 6 provide further details on compliance costs and their calculations.
It has to be noted that the extra compliance costs would remove the
disadvantages which create an uneven playfield in the market, asking businesses
selling customised travel arrangements to comply with the same provisions as
businesses selling traditional packages. 
None of these policy
options have impacts on prices and cost of intermediate consumption or on cost
of capital, labour or energy.
The policy options may
have an effect on consumer's choice and prices. In particular, prices on
certain products currently not covered by the Directive and which now will be
covered may rise, up to € 7.5 – 9.5 per package (i.e. the compliance costs
without the costs linkedassisted to the brochures and to cross-border trade,
about 1% of the price of an average package according to the Consumer Detriment
Study[224]),
if businesses decide to pass on the cost to consumers with a 1:1 ratio. This
depends from the level of competition in the market and the elasticity of the
demand to prices, which are unknown. In any case this is likely to be
less than 2% of the total price of the package and broadly comparable with the
cost of obtaining commercial travel insurance and, as such, unlikely to be
detrimental to consumers. In a competitive market, price increases on the end
product are normally minimised to the possible extent. As the playing field
would be levelled, increased competition may also bring lower prices to
consumers. 
The policy options may
have just a very limited impact on the possible  restructuring of enterprises'
operations, and mainly  concerning the provision of the new required
information to consumers (e.g. reorganising the duties of the staff).

 Effect on capacity
     to innovate

Improved competition in
a market would lead to lower prices and/or more innovation. Businesses, asked
to compete more fiercely, may decide to innovate their services in order to
stay in the market.
This is expected to
happen especially among the providers of combined travel arrangements, which
may desire to improve their business models in order to capture more consumers.
This would have, at the end of the day, a positive effect for the sectorial
economy as a whole.

 Effect on sector's
     international competitiveness

With respect to non-EU
competitors, the policy options are not expected to have any negative impact as
effect. Potential price increases for certain travel products are not expected
to trigger a change in the behaviour of European consumers concerning the
choice to buy a package travel from a tour operator outside Europe. It is true
that the rise of the Internet allows consumers to buy packages everywhere, but
the expected innovation driven by policy options 5 and 6 would likely push
businesses selling customised travel arrangements to think about new business
models, which may be more attractive for consumers than what it is sold
overseas. 
Consumers from outside
Europe may have an interest to purchase their holidays from a European
business, as packages will grant high consumer protection. This may bring a
positive effect also on international trade.
Steps
8-12 in the Operational Guidance ask for, if
assessed as proportionate, quantification of all impacts described in the
previous steps. In this Annex are presented some data, especially concerning
SMEs, while in the main text and mostly in Annex 5 and 6 all calculations on
compliance and administrative costs, as well as other impacts are provided.
Referring to the table at the beginning of this Annex, for most of the impacts
concerning sectorial competitiveness a qualitative analysis has been considered
sufficient and proportionate.
[1]
World Travel & Tourism Council, Travel and tourism economic impact, 2011
[2]
UNWTO World Tourism Barometer, September 2012.
http://media.unwto.org/en/press-release/2012-09-12/international-tourism-track-hit-one-billion-end-2012
[3]
Council Directive 90/314/EEC of 13 June 1990 on package travel package holidays
and package tours, OJ L 158, 23.6.1990.
[4]
See Annex 1 for the detailed description of the PTD main requirements.
[5]
Communication from the Commission to the European Parliament, the Council, the
Economic and Social Committee and the Committee of the Regions, A European
Consumer Agenda – Boosting confidence and growth, 22.5.2012, COM(2012) 225
final. 
[6]
Communication from the Commission to the European Parliament, the Council, the
Economic and Social Committee and the Committee of the Regions, Single Market
Act II- Together for new growth, COM (2012)573 final,: ANNEX II:  "Single
Market Act I: Status of Actions"
[7] Combined travel arrangements are often referred to by the industry
as dynamic packages. The term combined travel arrangements is therefore a
synonym to dynamic packages and will be used interchangeably throughout the
document in particular when referring to the results of Study on Consumer
Detriment in the area of Dynamic Packages.
[8]
Consumer detriment is defined as negative outcomes for individual consumers,
relative to some benchmark such as reasonable expectations. It focuses on ex
post outcomes for those consumers who have a negative experience. It may
comprise both financial and non-financial detriment, with the latter including
loss of time. More information about the methodology for assessing the consumer
detriment can be found at:
http://ec.europa.eu/consumers/strategy/docs/study_consumer_detriment.pdf.
[9]
The Commission Working Document, summary
of responses and individual stakeholders contributions are published on the
following website: http://ec.europa.eu/consumers/rights/travel_en.htm.
[10]
The Summary of the Workshop is published on the following website: http://ec.europa.eu/consumers/rights/docs/sum_report_27102009_en.pdf.
[11]
The ECCG opinion on the revision of the PTD is published on the following
website: http://ec.europa.eu/consumers/empowerment/eccg_en.htm.
[12]
Due to the ash cloud, only 50 stakeholders participated physically in the
workshop. The rest could follow the workshop via web-streaming.  The recordings
of the workshop are published on the following website
http://ec.europa.eu/consumers/rights/travel_en.htm
[13]
Web-streaming of the stakeholder's
conference is available at: http://scic.ec.europa.eu/streaming/index.php?es=2&sessionno=6a4d5952d4c018a1c1af9fa590a10dda
[14]
Based on the results of the 2009 public consultation, 89% of MS' authorities,
74% of industry associations and 79% of companies were in favour of harmonising
the rules concerning scope and definitions, 82% of MS' authorities and 88% of
companies were in favour of harmonising the rules concerning information
requirements, 89% of MS' authorities and 88% of companies were in favour of
harmonising the rules concerning the liabilities.
[15]
E.g. Council conclusions on consumer
Affairs on the 2255th Council meeting, European Parliament resolution of 16
January 2002 (2001/2136(INI)), ECCG opinion of 21 April 2010, Opinion of the
European Economic and Social Committee of 11.05.2011 (Official Journal C 132)
[16]
Regulation (EC) No 261/2004 (air
passenger rights), OJ L 46/1 of 17.02.04; Regulation (EC) No 1371/2007 on rail
passengers’ rights and obligations, OJ L 315/14 of 03.12.07; Regulation (EU) No
181/2011 concerning the rights of passengers in bus and coach transport, OJ L
55/1 of 28.02.11, to be applied from 1 March 2013; Regulation (EU) No 1177/2010
concerning the rights of passengers when travelling by sea and inland waterway,
OJ L 334/1 of 17.12.2010, to be applied from 18 December 2012.
[17]
Directive 93/13/EEC of 5 April 1993 on
unfair terms in consumer contracts.
[18]Directive
2005/29/EC of the European Parliament and of the Council of 11 May 2005
concerning unfair business-to-consumer commercial practices in the Internal
market.
[19]
Directive 2011/83/EU of 25 October 201,
whose rules shall be applied from June 2014.
[20]
The table in Annex 2 gives an overview on traders' obligations and how
different categories of travellers are protected by existing legislation and on
how they will be protected under the proposal for a new package travel
directive.
[21]
Directive 2006/123/EC on services in the internal market.
[22]
Directive 2000/31/EC of the European Parliament and of the Council of 8 June
2000 on certain legal aspects of information society services, in particular
electronic commerce, in the Internal Market ('Directive on electronic
commerce')
[23] As from June 2014 when Directive 2011/83/EU becomes applicable (see
above).
[24]
Eurostat structural business statistics, see also Annex 7.
[25]According
to ABTA estimates there are 45% retailers, 35% tour operators/retailers, 20%
tour operators.
[26]
Hotels, apartment hotels, motels,
roadside inns, beach hotels, residential clubs, rooming and boarding houses,
tourist residences and similar accommodation.
[27]
See also Annex 5.
[28]
Eurostat structural business statistics,
last available data 2009. See also Annex 5 Section 6 and Annex 7 for extra
details.
[29]
Eurostat, Data in focus, 66/2011.
[30]
http://www.newmediatrendwatch.com/regional-overview/103-europe?start=2,
See also Annex 2
[31]
http://www.crt.dk/uk/staff/chm/trends.htm.
[32]
http://epp.eurostat.ec.europa.eu/portal/page/portal/tourism/data/database.
[33]
Estimates based on Eurostat tourism database, Study on Consumer Detriment in
the area of Dynamic Packages, Flash Eurobarometer 258. These data have been
recently confirmed by 2011 figures provided by European Travel Agents and Tour
Operators Association  (ECTAA);  see Annex 2 for a detailed methodology of
estimates.
[34]
The Study on Consumer Detriment in the
area of Dynamic Packages confirms that there is a positive correlation between
the incidence of use of combined travel arrangements and the internet
penetration. Together with the growing number of Internet users, the market is
expected to shift towards combined travel arrangements. The data provided by
business stakeholders (see figure 6, annex 2) show that the share of
"protected" pre-arranged packages has been decreasing steadily.
[35]
Study on Consumer Detriment in the area
of Dynamic Packages, DG SANCO, London Economics, 2009.
[36]
Based on information provided by the
Guild of European Business Travel Agent (GEBTA)
[37]
The assumption taken forward is that business trips arranged by TMCs tend to
fall in the category of "one-trader" packages or
"multi-trader" linked travel arrangements or independent travel
arrangements.
[38]
It is reasonable to assume maintaining
the same ratio as for holidays' trips among "one-trader" packages and
"multi-trader" travel arrangements and independent travel
arrangements. See estimates based on Eurostat in Annex 2.
[39] Case
C-400/00
[40]
See Annex 2: 118 million pre-arranged
packages +an estimated 50% of the 87 million "one-trader" packages=
160 million trips are already covered by the PTD
[41]
Consumer Detriment Study, ibidem.
[42]
Consumer Detriment Study, ibidem.
[43]
For this reason, the administrative burden estimated in this Impact Assessment
as results of re-printing brochures should be considered as a high estimate. See
Annex 6.
[44]
160 million of packages when 50% of "one-trader" packages are assumed
to be covered, see Annex 6.
[45]
Vice-President Kallas' information note to the Commission, The impact of the
volcanic ash cloud crisis on the air transport industry, 2010. SEC(2010) 533
[46]
The Commission's proposal for a
Regulation amending Regulation (EC) 216/2004, COM (2013) 130 limits the
liability to 3 days and €100 per night.
[47]
The Guild of European Business Travel
Agents (GEBTA), the European Travel Agents and Tour Operators Association
(ECTAA) are in favour of excluding B2B trips from the scope of the PTD.
[48]
Depending on the assumption (25% or 75%) of "one-trader" business
trips organised by TMC are currently covered by the PTD.
[49]
The Commission staff working document on the result of the performance checks
of the internal market for services (construction, business services and
tourism) (SWD(2012) 147 final).
[50]
The calculations underlying these figures
are provided in the SCM spread-sheets (see Annex 6) and section 1.1.1.2 of
Annex 5.
[51]
Flash EB 300, Retailer's attitudes towards cross-border trade and consumer
protection, 2011. The sample excludes micro-retailers.
[52]
Article 7.
[53]
See joined cases C-178/94, C-179/94,
C-189/94 and C-190/94 and later followed up in C-410/96 and C-140/97.
[54]
The case-law of the Court of Justice on
the Package Travel Directive established that the Treaty freedoms allow a
service provider that has furnished the security required by one Member State’s
legislation to make use of that security for its establishment in another
Member State. This case-law was also explicitly reflected in Article 14,
paragraph 7, of the Services Directive, which explicitly prohibits that a
Member State requires a service provider to provide or participate in a
financial guarantee or to take out insurance from a provider or body
established in their territory. Furthermore, Article 23, paragraph 2 of the
Services Directive also clarifies that in cases of secondary establishment, a
Member States may not require professional liability insurance or a guarantee
from the provider where he is already covered by a guarantee which is
equivalent, or essentially comparable as regards its purpose and the cover it
provides in another Member State in which the provider is already established.
Where equivalence is only partial, Member States may require a supplementary
guarantee to cover those aspects not already covered.
[55]
See the Commission Staff Working document on the result of the performance
checks of the internal market for services (construction, business services and
tourism) (SWD(2012) 147 final), Tourism Background Paper, Section 2.2.
[56]
Ibidem; Section 2.4
[57]
The differences in costs also reflects lack of effectiveness of insolvency
schemes in some MS. The Commission has launched several infringement procedures
against Member States where the national insolvency protection tuned out to be
insufficient to provide adequate protection for consumers.
[58]
Consumer law compendium, page 257-285.
[59]
Results of the public consultations 2009.
[60]
Consumer law compendium, page 238-244.
[61]
For instance, Germany and Sweden apply package travel protection to products
that consumer perceive as packages.
[62]
Ibidem.
[63]
Consumer law compendium, page 333-339.
[64]
E.g. Article 4, 5, 6 and 7.
[65]
Consumer Law Compedium, 
[66]
Results of the public consultations 2009.
[67]
According to data provided by business stakeholders, taking the UK market as an
example, in 1998 more than 98% of leisure travel bookings were made subject to
regulatory protection , while by 2007, the proportion had dropped to 57%. Today
it is estimated to be less than 50%. In Denmark and the Netherlands, the share
of pre-arranged packages (under the scope of the PTD or national provisions)
was estimated in 2008 at 43% and 38% respectively. In Finland and Sweden the
percentage of holidays protected by the PTD and additional MS' provisions in
2007 dropped to around 30%. See also figure 6 in annex 2.
[68]  Communication on Passenger protection in case of airline
insolvency, COM(2013) 129 final
[69]
Consumers purchasing unprotected combined travel arrangement can indeed claim
and receive compensation in case of non-conformity of the services with the
contract based on national contract law. In the study, the difference among
gross and net detriment is however very small, i.e. € 60 million. 
[70]
For more detailed data and explanation of the consumer detriment methodology
see also Annex 2 (Figures 9-13).
[71]
See also section 2.2.3 where the differences in MS are presented
[72]
Member States' replies to questionnaires as a preparation to Member States'
Workshop 5 June 2012
[73]
CJEU 168/00.
[74]
ECCG opinion of 21 April 2010 on the review of the package travel directive
(PTD), http://ec.europa.eu/consumers/empowerment/docs/20100421eccg_opinion.pdf
[75] COM(2011) 793 final and COM(2011) 794 final
[76]
E.g. Directive 2005/29/EC of the European
Parliament and of the Council of 11 May 2005 concerning unfair
business-to-consumer commercial practices in the Internal market, as well as EU
rules on passenger rights. 
[77]The
Impact Assessment for the Proposal for a Regulation of the European Parliament
and of the Council on a Common European Sales Law estimated the one-off cost
for adapting a company's website to display a disclaimer forming a consumer
about the application of the European contract law has been estimated at€500. 
[78]The
Impact Assessment for the Proposal for a Regulation of the European Parliament
and of the Council on a Common European Sales Law estimated the one-off cost
for adapting a company's website to display a disclaimer forming a consumer
about the application of the European contract law has been estimated at€500. 
[79]
500€* (36,000 companies selling
"one-trader" packages with an online presence + 34,000 companies
selling "multi-trader" travel arrangements). For the detailed methodology
of estimate see annex 5.
[80]
€421 of administrative costs under the BS
(see section 5.1) - €31.1 million of administrative costs under PO5 (see Annex
5 and Annex 6). 
[81] TMCs are unlikely to produce brochures and therefore do not incur
thereof related administrative costs.
[82]
see Annex 7, where an assessment of
possible specific sub-options aiming to reduce the burden for SMEs is
presented.
[83]
The consumer detriment for 100 pre-arranged packages amounts to €592 (100*3.1%
incidence of problems *€191 average cost of problem) compared to €4,862 for 100
combined travel arrangements (100*8.2% incidence of problems* €593 average cost
of problem).
[84]
It should be noted that the figures on the incidence of problems and average
cost per problem cover all combined travel arrangements i.e. some
"one-trader" packages where some of them are already compliant with
the PTD and some "multi-trader" travel arrangements for which the
level of incidence of problems and an average cost of problem are likely to be
higher.
[85]
Regulation 181/2011 concerning the rights of passengers in bus and coach
transport has entered into force in March 2013, whereas Regulation 1177/2010
concerning the rights of passengers when travelling by sea and inland waterway
entered into force in December 2012.
[86]
Impact Assessments accompanying different proposals for the EU passenger rights
provide an estimate of the maximum costs related to different provisions not
excluding package travellers.
[87]The
Impact Assessment on the possible review of Air Passenger Rights Regulation
estimated that the assistance costs in case of travel disruption in case of
force majeure events would reduce by 40% with a 3-day cap and by about 20% with
a 4-day cap.
[88] At present, around 50% of "one-trader" packages are sold
in brick and mortar shops.
[89]
50% of "one-trader" packages (PO5) and all "multi-trader"
packages, i.e. 63 million holiday and business trips*€ 7.5-€9.5 (low and high
estimate of compliance cost per package excluding administrative costs) + all
assisted travel arrangements i.e. 18,4 million holiday and business trips* €3
(cost of insolvency protection).
[90] Compliance costs of PO6 calculated above minus
reduced costs by €4.5-€6.5 for 25% of "one-trader" packages and 50%
of "multi-trader" packages i.e.29.5 million trips that might in the
future be sold as multi-trader assisted travel arrangements thus incurring
average costs of €3 per packages instead of €7.5-€9.5 per package.
[91]
18.5 million packages brought under the
PTD  x € 0.15 = € 2,775,000 (see Annex 5 for more details). The cost per
package estimate (based on option 5) has been used to estimate recurring
administrative costs for providing information as it is impossible to determine
the exact number of companies which would be responsible for providing
particular pieces of information. Under sub-option 1 (contractual liability
only on the initial service provider), even though the legal responsibility
lies with the initial web page, in practice the detailed information about a
specific travel component is likely to be provided by the service provider.
Similarly, under sub-option 2 (each service provider responsible for the
service they offer), each of the service provider will be responsible for their
respective part of the package (e.g. an airline will be responsible for
providing information on the time of departure, but not on the classification
of accommodation included in the linked travel arrangements).
[92]
This option is likely to impact hotels,
car rental and transport providers with on-line presence and linking to other
websites. Based on Eurostat data and number of assumptions (for details see
annex 5), it has been estimated that there are 34,000 companies like this.
[93]
Eurostat Structural Business Statistics, 2009.
[94]
The same approach is applied as in PO5. Therefore, the same methodological
constraints apply to these estimations. For detailed calculations see annex 5.
[95] YouGov survey of 2500 consumers carried for the Impact Assessment
Study on the Review of the Package Travel Directive, Risk&Policy Analysts,
2010
[96]
31 million "multi-trader" travel arrangements and 43.6 million
"one-trader" packages *€ 7.5-€9.5 (low and high estimate of
compliance cost per package excluding administrative costs). See Annex 5.
[97]
37 million "multi-trader"
travel arrangements brought under the PTD  x € 0.15 = € 4,650,000 (see Annex 5
for more details). The cost per package estimate (based on option 5) has been
used to estimate recurring administrative costs for providing information as it
is impossible to determine the exact number of companies which would be
responsible for providing particular pieces of information. Under sub-option 1
(contractual liability only on the initial service provider), even though the
legal responsibility lies with the initial web page, in practice the detailed
information about a specific travel component is likely to be provided by each
concerned service provider. Similarly, under sub-option 2 (each service
provider responsible for the service they offer), each of the service provider
will be responsible for their respective part of the package (e.g. an airline
will be responsible for providing information on the time of departure, but not
on the classification of accommodation included in the linked travel
arrangements).
[98]
The effectiveness of this option would be higher if combined with policy
options 5 or 6.
[99]
Similarly to PO3 A, the effectiveness of
this option would be higher if combined with policy options 5 or 6.
[100]
€10.5-€12.5 per package x 162 million
packages (i.e. 118 million pre-arranged packages+ an assumed 50% of the
"one-trader" packages being already covered by the PTD).
[101] Low-€7.5 and high-€9.5 estimate of
compliance costs per package, assuming that 50% of one-trader packages are
already covered by the current PTD. See also assessment of PO5.
[102]Low and
high estimate of compliance cost *€ 7.5-€9.5 per package and cost of insolvency
protection €3 for "multi-trader" assisted travel arrangements. See
also assessment of PO6.
[103] Compliance
costs of PO6 calculated above minus reduced costs by €4.5-€6.5 for 25% of
"one-trader" packages and 50% of "multi-trader" packages
See also assessment of PO6.
[104]
36,000 companies selling
"one-trader" packages and 34,000 companies selling
"multi-trader" travel arrangements See assessment of option 3. 
[105]
 "multi-trader" packages * €0,15 administrative cost. 
[106]
See assessment of option 6.
[107]
All "multi-trader" travel arrangements x €0,15 administrative cost. 
[108]
Based on data from a behavioural study. See assessment of option 3.
[109]
See assessment of option 5 for details.
[110]
See assessment of option 6 for details.
[111]
See assessment of option 7 for details.
[112] Limitation to deadline.
[113] See Article 4 (4).
[114] C168/00 (Simone
Leitner).
[115] http://ec.europa.eu/consumers/rights/docs/study_consumer_detriment_dyna_packages_en.pdf.
[116] http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/4-27092011-AP/EN/4-27092011-AP-EN.PDF.
[117] European Travel Agents and Tour Operators Association,
estimates provided on the request of the Commission.
[118] Eurostat business trips by duration, 2010.
[119] In the assessment of options, an estimate of 66 million
business trips annually  is taken forward
[120] Travel agencies which are specialised in providing services
for corporate clients
[121] The CRD will be applicable as of 13 June
2014 for single services (and not for package travels falling under the PTD).
Up to this date, the following directives apply: the Distance Selling Directive
97/7/EC with general information requirements; the Doorstep Selling Directive
85/577/EEC with information requirements on the particulars of the contract and
the right of withdrawal 
[122] Air Services Regulation 1008/2008
[123] Until 13 June 2014, Art. 7 (2) of the Distance Selling
Directive continues to apply. It requests that the trader informs the consumer
if the service is unavailable and provides for a right to reimbursement as soon
as possible and the latest within thirty days.
[124]  For single services under the conditions set out in Art. 16
(1) of the CRD. Until 13 June 2014, the Doorstep Selling Directive continues to
apply; it provides for a right of withdrawal.
[125] E.g no rules on:  itinerary, intermediate stops, rating
under hotel classification system,  if a minimum number of persons are required
for the package to take place, health and visa requirements, meal plans,  etc.
[126] E.g. no rules on cancellation or termination rights, special
requirements of the traveller which the organiser has accepted, name of the
entity providing the insolvency protection and its contact details, the minimum
number of persons are required for the package to take place, etc.
[127] C-400/00.
[128] See also the related point in 1.3
concerning the definition of the "organiser". 
[129]  The
Consumer Law Compendium, page 243.
[130] E.g. see reference for a preliminary
ruling, pending Case C-32/10 (Semerdzhiev) and judgement in C-237/97 AFS
Intercultural Programs Finland.
[131] See
also Case C-585/08 Pammer.
[132]  Case C-585/08 Pammer.
[133] E.g.
Regulation 2004/261(air passenger's rights) and Regulation (EC) No 1371/2007 of
the European Parliament and of the Council of 23 October 2007 on rail
passengers’ rights and obligations.
[134] E.g., CAA vs Travel Republic (UK),
BGH Judgement of 30. September 2010 – Xa ZR 130/08 (DE), Judgement of 11 June
2010 Erste Kammer, 08/04611, SGR vs ANVR (NL).
[135] Consumer law compendium, page
257-285.
[136] Consumer law compendium page 265.
[137] Article
4(2)(b).
[138]See Summary of responses to the public
consultation in 2007 
http://ec.europa.eu/consumers/rights/summary_responses_publication_final_30012007.pdf
and in 2010 
http://ec.europa.eu/consumers/rights/docs/20100430_summary_responses.pdf.
[139] See
Summary  of responses (2007). 
[140] Member
States' replies to questionnaires as a preparation to Member States' Workshop 5
June 2012
[141] Given that the organiser does not
cancel the contract despite this situation.
[142]  Consumer
law compendium page 292.
[143]  (EC) No 261/2004, see
especially Article 3(6) and Articles 6, 8, 9.
[144] E.g. Article 4, 5, 6 and 7.
[145] ECJ 168/00.
[146] Consumer law compendium page 321.
[147] Article 4(6).
[148] Article 7.
[149] See
joined cases C-178/94, C-179/94, C-189/94 and C-190/94 and later followed up in
C-410/96 and C-140/97.
[150] E.g.
according to Belgian law, travel services, including stand-alone products, sold
by travel agents should be covered. Since 1 January 2010, a new Danish law is
requiring that consumers are offered the possibility to purchase insolvency
protection also for stand-alone air tickets and car rental outside Denmark. 
[151] E.g. C-178/94, C-179/94, C-189/94,
C-190/94, C- 410/96 and C-140/97.
[152] The
Commission staff working document on the result of the performance checks of
the internal market for services (construction, business services and tourism)
(SWD(2012) 147 final)
[153] E.g. Council conclusions on consumer Affairs on the 2255th
Council meeting, European Parliament resolution of 16 January 2002
(2001/2136(INI)), ECCG opinion of 21 April 2010, Opinion of the European
Economic and Social Committee of 11.05.2011 (Official Journal C 132)
[154] C-400/00 Club Tour.
[155]
Flash Eurobarometer 334, 2011
[156] E.g. Regulations (EC) No. 2004/261, (EC) No. 1371/2007, (EC) No.
1177/2010 or (EC) No. 181/2011.
[157] As reported in the
Commission staff working document on the result of the performance checks of
the internal market for services (construction, business services and tourism)
(SWD(2012) 147 final)
[158]
http://ec.europa.eu/consumers/empowerment/docs/20100421eccg_opinion.pdf
[159]
http://ec.europa.eu/consumers/rights/docs/20100430_summary_responses.pdf
[160] UK Department for Transport, Regulating Air Transport: Consultation
on Proposal to Update the Regulatory Framework for Aviation, December 2009.
[161] European Travel Agents and Tour
Operators Association (ECTAA), German Travel Association (DRV) and Association
of British Travel Agents (ABTA).
[163] See annex 6 for the detailed calculation
of administrative costs.
[164] Eurostat structural business
statistics: 90,000 businesses, an assumption of 80% selling package travels is
taken into account.
[165]
http://ec.europa.eu/consumers/rights/docs/study_consumer_detriment_dyna_packages_en.pdf.
[166] http://ec.europa.eu/consumers/rights/docs/20100430_summary_responses.pdf.
[167]The Impact Assessment for the Proposal for a Regulation of the
European Parliament and of the Council on a CommonEuropean Sales Law estimated
the one-off cost for adapting a company's website to display a disclaimer
forming a consumer about the application of the European contract law has been
estimated at€500. 
[168] Study on Consumer Detriment in the area of Dynamic Packages, The
European Commission Health 
  and Consumers DG, prepared by London Economics, November 2009.
[169] From 10 representative MS: Austria, Czech Republic, France,
Germany, Ireland, Italy, Poland, Spain, Sweden and the United Kingdom.
[170] 25% x  11.4% x € 1 billion + €
2,010,000 = € 30,510,000 per year, which is less than € 58,000,000.
[171] The Impact Assessment for the Proposal for a Regulation of the
European Parliament and of the Council on a Common
European Sales Law estimated the one-off cost for adapting a
company's website to display a disclaimer forming a consumer about the
application of the European contract law has been estimated at€500. 
[172] Eurostat indicates that 41% of
businesses with over 10 employees in the accommodation sector (NACE Rev 1.1
H551-H552 and NACE Rev 2 I55) received orders on-line in 2009. No data is
provided for other companies in the tourism/travel sector. It has been
therefore assumed that 50%  of tour operators/ travel agencies are selling
packages online.
[173]The most recent data classed under NACE Rev 1.1 are used where
available and for the remaining MS (with the exception of Malta for which no
data are available), estimates are derived on the basis of NACE Rev 2 data
using an assumption that car rental businesses account for 20% of the total
number of businesses renting and leasing all motor vehicles.  This assumption
is based on the average value for MS for which data are available.
[174]Extrapolated on the basis of national GDP from Member State data in
the Eurostat Structural Business Statistics Database.  This includes NACE Rev
1.1 codes I6021 and I6023 (other scheduled passenger land transport and other
passenger land transport) and, as such, includes land passenger transport
excluding railways and taxis.
[175]Based on data from the Eurostat Structural Business Statistics
Database (NACE Rev 1.1 code I61).
[176]Eurostat indicates that 41% of businesses with over 10 employees in
the accommodation sector (NACE Rev 1.1 H551-H552 and NACE Rev 2 I55) received
orders on-line in 2009 (down from 48% in 2007 according to NACE Rev 1.1).  50%
therefore seems a reasonable assumption.
[177]For the rental sector, Eurostat data on businesses trading online
are only available for the broad category of NACE Rev 1.1 K which relates to
‘Real estate, Renting and Business activities’ (possibly including sub-sectors
such as R&D, consultancy, industrial cleaning, etc.) and the proportion of
businesses with more than 10 employees trading online was 9% in 2009 (down from
15% in 2007).  However, this figure is unlikely to be representative of the car
rental sector.  The proportion of businesses with over 20 employees in the NACE
Rev 2 data for the transport and storage sector (H49-H53) which received
on-line orders was 11%.  However, these data include irrelevant sub-sectors,
such as transport by pipeline, removal services, postal services, warehousing
and storage, etc. for which we expect the proportion of businesses trading
online to be much smaller than in personal transport.  
[178] Based on the Eurostat data and certain assumptions it has been
estimated that a number of companies impacted could amount to 34,000. See annex
6.
[179]
Consumer Law Compendium, p.241-244.
[180] See Annex 2 for explanations.
[181] It is reasonable to assume maintaining the same ratio as for
holidays' trips among "one-trader" packages, "multi-trader"
travel arrangements and independent travel arrangements. See estimates based on
Eurostat in Annex 2.
[182] Dividing the average price of a
combined travel arrangement (€741) by the cost of compliance per package of
€10.5 - €12.5 puts the compliance cost at between 1.4% and 1.7%of the overall
cost of the package.  
[183] Study on Consumer detriment in the area of dynamic packages,
ibidem.
[184] Number of combined  travel
arrangements multiplies by the average cost of combined travel arrangement i.e.
€741.
[185]Figures in this column are calculated by multiplying the figures in
the previous column by the ratio of net detriment for all combined  travel
arrangements e.g. 395 million =32,3 billion  x (1 billion (net detriment for
all combined  travel arrangements)/87 billion  (value of all combined  travel
arrangements i. 
[186] The consumer detriment for 100 pre-arranged l packages amounts to
€592 (100*3.1% incidence of problems *€191 average cost of problem) compared to
€4,862 for 100 combined  travel arrangements (100*8.2% incidence of problems*
€593 average cost of problem). (€4,862-592)/€4,862 = 88%.
[187] It should be noted that the figures on the incidence of problems
and average cost per problem cover all combined  travel arrangements i.e. some
"one-trader" packages where some of them are already compliant with
the PTD and some "multi-trader" travel arrangements for which the
level of incidence of problems and an average cost of problem are likely to be
higher.
[188] DRV, ABTA.
[189]
http://ec.europa.eu/consumers/rights/docs/study_consumer_detriment_dyna_packages_en.pdf.
[190] Information provided by ECTAA, see
also section 1.1.
[191] Consumer Law Compendium, p,318-321.
[192] Ibidem.
[193] Ibidem.
[194] The consumer detriment study found
that approximately 49% of consumers making complaints regarding combined 
travel arrangements complained to the seller, whereas only 10% made complaints
to the holiday representative onsite.
[195]
The only ‘price-rise reason’ which was
indicated by consultation to result in increases of above 10% was due to
variations in exchange rates. 
[196] Consumer Law Compendium, pages 285-290.
[197] €421 of administrative costs under
the BS- €31,1 million of administrative costs under PO5. 
[198] TMCs are unlikely to produce brochures and therefore do not incur
thereof related administrative costs of €3 per package.
[199] see Annex 7, where an assessment of possible
specific sub-options aiming to reduce the burden for SMEs is presented
[200] The consumer detriment for 100
pre-arranged packages amounts to €592 (100*3.1% incidence of problems *€191
average cost of problem) compared to €4,862 for 100 combined travel arrangements
(100*8.2% incidence of problems* €593 average cost of problem).
[201]
Regulation 181/2011 concerning the rights of passengers in bus and coach
transport enteres into force in March 2013, Regulation 1177/2010 concerning the
rights of passengers when travelling by sea and inland waterway enters into
force in December 2012.
[202]
Impact Assessments accompanying different
proposals for the EU passenger rights provide an estimate of the maximum costs
related to different provisions not excluding package travellers.
[203]The
Impact Assessment on the possible review of Air Passenger Rights Regulation,
estimated that the assistance costs in case of travel disruption in case of
force majeure events would reduce by 40% with a 3-day cap and by about 20% with
a 4-day cap.
[204] At present, around 50% of "one-trader" packages are sold
in brick and mortar shops.
[205]The most recent data classed under NACE Rev 1.1 are used where
available and for the remaining MS (with the exception of Malta for which no
data are available), estimates are derived on the basis of NACE Rev 2 data
using an assumption that car rental businesses account for 20% of the total
number of businesses renting and leasing all motor vehicles.  This assumption
is based on the average value for MS for which data are available.
[206]Extrapolated on the basis of national GDP from Member State data in
the Eurostat Structural Business Statistics Database.  This includes NACE Rev
1.1 codes I6021 and I6023 (other scheduled passenger land transport and other
passenger land transport) and, as such, includes land passenger transport
excluding railways and taxis.
[207]Based on data from the Eurostat Structural Business Statistics
Database (NACE Rev 1.1 code I61).
[208]Eurostat indicates that 41% of businesses with over 10 employees in
the accommodation sector (NACE Rev 1.1 H551-H552 and NACE Rev 2 I55) received
orders on-line in 2009 (down from 48% in 2007 according to NACE Rev 1.1).  50%
therefore seems a reasonable assumption.
[209]For the rental sector, Eurostat data on businesses trading online
are only available for the broad category of NACE Rev 1.1 K which relates to
‘Real estate, Renting and Business activities’ (possibly including sub-sectors
such as R&D, consultancy, industrial cleaning, etc.) and the proportion of
businesses with more than 10 employees trading online was 9% in 2009 (down from
15% in 2007).  However, this figure is unlikely to be representative of the car
rental sector.  The proportion of businesses with over 20 employees in the NACE
Rev 2 data for the transport and storage sector (H49-H53) which received
on-line orders was 11%.  However, these data include irrelevant sub-sectors,
such as transport by pipeline, removal services, postal services, warehousing
and storage, etc. for which we expect the proportion of businesses trading
online to be much smaller than in personal transport.  
[210]
50% of "one-trader" packages (PO5) and all "multi-trader"
packages i.e. 60 million trips*€ 7.5-€9.5 (low and high estimate of compliance
cost per package excluding administrative costs) + all assisted travel
arrangements i.e. 15 million trips* €3 ( cost of insolvency protection)
[211] Compliance costs of PO6 calculated above
minus  reduced costs by €4.5-€6.5 for 25% of "one-trader" packages
and 50% of "multi-trader" packages i.e.29.5 million trips that might
in the future be sold as multi-shop assisted travel arrangements thus incurring
average costs of €3 per packages instead of €7.5-€9.5 per package.
[212]
918.5  million packages brought under the
PTD  x € 0.15 = € 2,775,000 The cost per package estimate (based on option 5)
has been used to estimate recurring administrative costs for providing
information as it is impossible to determine the exact number of companies
which would be responsible for providing particular pieces of information. Under
sub-option 1 (contractual liability only on the initial service provider), even
though the legal responsibility lies with the initial web page, in practice the
detailed information about a specific travel component is likely to be provided
by the service provider. Similarly, under sub-option 2 (each service provider
responsible for the service they offer), each of the service provider will be
responsible for their respective part of the package (e.g. an airline will be
responsible for providing information on the time of departure, but not on the
classification of accommodation included in the "multi-trader" travel
arrangements).
[213]
This option is likely to impact hotels,
car rental and transport providers with on-line presence and linking to other
websites. Based on Eurostat data and number of assumptions, it has been
estimated that there are 34,000 companies like this.
[214] Eurostat Structural Business Statistics, 2009.
[215] The same approach is applied as in PO5. Therefore, the same
methodological constraints apply to these estimations. For detailed
calculations see annex 5.
[216] YouGov survey of 2500 consumers carried for the Impact Assessment
Study on the Review of the Package Travel Directive, Risk&Policy Analysts,
2010
[217]
31 million "multi-trader" travel arrangements and 43.6 million
"one-trader" packages *€ 7.5-€9.5 (low and high estimate of
compliance cost per package excluding administrative costs). See Annex 5.
[218]
Directive 1990/313/EEC.
[219] According to the
Operational Guidance for assessing impacts on sectoral competitiveness within
the Commission Impact Assessment System – A "Competitiveness
Proofing" Toolkit for use in Impact Assessments, 27.1.2012, SEC(2012) 91
final.
[220] Eurostat Structural
Business Statistics, 86,000 tour operators and travel agencies in the EU27,
last data available: 2009.
[221]
http://www.ectaa.org/Portals/0/MOM11-002-448.pdf, number of employees/number of
tour operator.
[222] Eurostat Structural
Business Statistics, 2009.
[223] UEAPME position on
review of the Package Travel Directive, 2010, and letter to the European
Commission, 2012.
[224] Study on Consumer
Detriment in the area of Dynamic Packages, DG SANCO, London Economics, 2009.