EU travel directive warning to medical tourism agents

European Union Package Travel Directive rules apply to medical tourism agencies, even if they send patients to a travel agency. EU Council has backed the new Package Travel Directive to bring it up to date with the developments in the travel market.

The Package Travel Directive (90/314/EEC) protects European consumers going on holiday and covers pre-arranged package holidays-including medical travel trips.

Any agency that offers to arrange medical treatment in or from the EU, and also offers any other travel service- or even a link to another travel service- will have to comply with the new rules just as any tour operator or travel agent does. Medical travel is not excluded from the new rules and as far as regulators are concerned there is no difference between holiday and medical travel.

The Directive provides protection covering: information requirements, liabilities for services (e.g. sub-standard hotels or hospitals) and protection (reimbursement of sums paid or repatriation) in the case of a tour operator or airline going bust.

The EU Council has backed the new Package Travel Directive to bring it up to date with the developments in the travel market.

New rules will bring protection for package trips up to speed with the digital age and bring about a major change. The new Package Travel Directive will change the regulation on financial protection from the country where the services are being sold to the one where the travel organisers are located.

Less administrative burden, easier cross-border transactions and legal certainty will benefit businesses. In addition to existing rights being given to more consumers, travellers will also benefit from reinforced rights:

  • Clearer information: traders have to provide travellers with understandable information on the package and the protection they benefit from under package holiday rules, including on prices and potential additional charges.
  • Fairer and more predictable prices: if the package organiser wishes to increase the price by more than 8%, the traveller has the right to cancel their holiday free of charge. The trader is also required to pass on price reductions to the consumer.
  • Stronger cancellation rights: free cancellation before departure in case of natural disasters, war, or other serious situations at the destination. Package travellers will also be able to cancel their holiday for any reason by paying a reasonable cancellation fee.
  • Clear identification of the liable party — who has to deal with the problem if something goes wrong. This will be the organiser of the package in all EU Member States. Member States may in addition make the retailer liable.
  • Clear liability for booking errors: traders will be made explicitly liable for booking errors in relation to packages and linked travel arrangements.
  • Clarification on essential consumer rights: the organiser is required to assist travellers in difficulty, for example with information on health services and consular assistance, and helping to arrange alternative travel plans. For example, travellers will be entitled to additional accommodation for three nights if the return journey cannot be carried out on time in case of a natural disaster, unless the relevant passenger rights regulation provides for a longer period.
  • Guarantees of money-back and repatriation: if the package organiser goes bankrupt, these guarantees will be extended to linked travel arrangements. *Facilitators of such arrangements, such as airlines, will be obliged to take out insolvency protection, guaranteeing refunds and repatriation in case they go bankrupt.

The European Parliament adopted the new rules in October 2015. Member States will have two years to implement the new rules a further 6 months for it to be in force.

The new rules will apply to 3 different sorts of travel combinations:

  • Pre-arranged packages – ready-made non-business trips from a tour operator made up of at least 2 elements: transport, accommodation or other services, e.g. car rental.
  • Customised packages – selection of components by the traveller and bought from a single business online or offline- and that business includes medical travel agents (whatever they are called)
  • Linked travel arrangements – If the consumer, after having booked one travel service on one website, is invited to book another service through a click through link.

One example of where the current regime comes up short against current consumer practices is in regard to “click-through” travel packages. A traveller who books a flight online can be offered the opportunity to book accommodation from the airline’s webpage with just a few clicks. Details are frequently transferred from one service provider to the next without the need to enter them again.

Under the current regime, such a procedure would not be considered a “package”. If, once at the destination, the accommodation fell through for any reason, the airline would have no obligations to compensate or assist the traveller, who would be left without a remedy.

The new Directive adopts a broader definition of “package”, which captures “click-through” packages and thus affords the same protection to travellers who have booked under this procedure as those who have booked more traditional package holidays through a travel agent. Under the example above, the airline, as the first service provider in the process, will be considered to be the “organiser” for the purposes of the Directive. Later provisions place a number of responsibilities on the organiser if a significant proportion of the travel services under the contract cannot be performed. These include repatriating the traveller at no extra cost, providing accommodation for up to three nights, to make alternative arrangements for the continuation of the package at an equivalent or higher quality, and to compensate the traveller if such alternative arrangements cannot be made.

Other protections

“Linked travel arrangements” are offered lesser protection under the Directive, albeit more than currently, chiefly through compensation in the event of the insolvency of one of the service providers. The line between a “linked travel arrangement”, which is not a package, and a “click-through” arrangement, which is a package, is a narrow one.

There are heightened information requirements which all travel service providers must comply with, including stating clearly whether or not their product is considered a “package” and thus afforded the full range of protections under the Directive. There is a new right of cancellation for the consumer that did not feature in the old legislation, and it is harder for service providers to alter the price or terms of the contract.

The new Directive is good news for consumers, but may be worrying to agents. All agencies will need to carefully review their selling practices and insurance policies to ascertain where they may be facing increased exposure under the new rules.

In particular, travel service providers-including medical travel ones- not currently selling package holidays will need to examine their processes to see if they might be classed as an “organiser” of a package under the new definitions.

All businesses should set up procedures for supplying to consumers the enhanced information required, and should check that their cancellation policy and cancellation fees are in accordance with the new Directive.

Any agency within the EU or other countries that agree to follow EU Directives-that offers medical treatment plus travel or plus accommodation- even if using three separate providers, and even if the customer pays those providers direct, will have to comply with the new rules in the future. Agents sending people outside of Europe will now have to comply too, as the laws will be based on the location of the agency, not the country the customers go. Agents are reminded that under current EU rules, all websites must show who runs the website and show the registered office address.