The Court of Justice of the European Union (CJEU) recently delivered a judgment which clarifies that official government advice not to travel (such as that issued by the UK FCDO) does not automatically constitute unavoidable and extraordinary circumstances under the Package Travel Directive (PTD). In addition, the court ruled that tour operators should be considered as being prevented from performing a package not only when it is impossible to provide the package but also in situations where the surrounding conditions have significantly changed (such as where there is a health crisis in the destination).

Facts of the case

Austrian customers booked a package holiday to the Maldives for December 2020. As the pandemic worsened, the Austrian government issued a travel warning advising against non-essential travel to the Maldives. The tour operator cancelled the trip, refunded the customers but then refused to pay compensation.  This was on the basis that the PTD does not require the payment of compensation when tour operators cancel a trip because that are “prevented from performing” the package due to unavoidable and extraordinary circumstances.

The customers argued that the travel warning alone did not constitute unavoidable circumstances. They claimed that a more nuanced assessment of the actual conditions in the Maldives was necessary to determine whether such circumstances existed. Furthermore, the customers contended that the tour operator was not prevented from performing the package because, in spite of the pandemic, it was not impossible for the package to be provided. As such, the customers argued that the tour operator could not rely on the PTD right for tour operators to cancel packages without having to pay compensation and sought compensation for loss of enjoyment and lost earnings.

The CJEU’s decision

The CJEU concluded that a government-issued travel warning, such as the one advising against non-essential travel to the Maldives, holds considerable evidential value when determining whether unavoidable and extraordinary circumstances exist under the PTD. However, the court emphasised that such advisories should not be considered compelling evidence and are not sufficient, on their own, to determine whether unavoidable and extraordinary circumstances exist in the destination. 

The main reason given by the court for this conclusion was that “[s]uch recommendations…do not necessarily accurately reflect the situation as it objectively presents itself at a given moment in the place where the trip concerned must be performed”.  For instance, if the official advice relates to an entire country (e.g. Spain), that may not accurately reflect the situation in a particular region or island (e.g. Canary Islands).

The court also clarified that being “prevented from performing” the package holiday under the PTD is broader than impossibility in providing the holiday. It also covers a scenario where “the conditions under which that package is performed” have significantly changed. Accordingly, a health crisis such as the Covid-19 pandemic may prevent the tour operator from performing the package even if performance is still technically possible (i.e. because the flight is operating and the hotel is open).

With these clarifications, the case has now been referred back to the Austrian courts to decide on the customers’ claim.

Practical implications for travel companies

This case is not binding on the UK Courts but it will be of persuasive value. In addition, this case will be binding on courts of EU Member State. Travel companies may therefore wish to take the following key take aways from the decision:

  • It is clear beyond doubt that official government advice against travel does not automatically mean that there are unavoidable and extraordinary circumstances occurring at the holiday destination. A more nuanced evidential investigation will be required to understand the position in relation to the particular holiday.
  • This more nuanced evidential investigation will be needed when both tour operators and customers seek to rely upon their rights under the PTD to cancel a package holiday due to unavoidable and extraordinary circumstances.  If the tour operator gets it wrong, they may be liable for compensation claims in addition to having to pay refunds.  If the customer gets it wrong, they may not be entitled to a full refund and the tour operator’s normal cancellation term will apply.
  • When tour operators are considering exercising their rights to cancel and refund the package due to unavoidable and extraordinary circumstances, they can take into account any impossibility in performing the package and also situations where the relevant conditions at the destination have significantly changed since the date of booking.

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