Limiting pre-payments in the Package Travel Directive: an ersatz of consumer protection

One measure envisaged by the European Commission in the revision of the Package Travel Directive (PTD) is the limitation of pre-payments within the framework of the PTD. The latter regulates pre-arranged package holidays and self-customised packages where travellers choose different elements from a single point of sale.

While sold as the golden ticket that will protect consumers from companies going bust, we believe that limitations on prepayments can have negative consequences on the tourism ecosystem, including travellers. Limiting prepayments risks to:

• Reduce the bargaining power of hoteliers involved in package travels with intermediaries.
• Increase the cost of travel impacting package organisers as well as consumers enjoying less affordable travel and a reduced offer.
• Create legal uncertainty for hoteliers. Due to the complexity of the market, the diversity of sales channels and business models, hotels are likely to sell standalone accommodation only.
• Affect hotels’ investment capacity to maintain and improve the quality of their infrastructures.

A European Commission’s proposal will be published in September 2023 subject to an internal quality check in July. HOTREC calls on the European Commission to carefully consider the impact a limitation of prepayments could have on tourism businesses.