Package travel defects and refunds
If the travel services are defective, if the traveller has been given incomplete information about the trip at the time of booking, or if the organiser neglects its statutory obligations, the traveller may be entitled to a refund and, in some cases, compensation for damages.
Defects in the organiser’s service
The organiser’s performance is defective if:
- The travel services do not correspond to what has been agreed
- The organiser has given the traveller incomplete pre-contractual information before the trip, which can be expected to have influenced the traveller’s decision-making
- The organiser has neglected its obligation to assist a traveller in difficulty.
Compensation for a defect
In the event of a defect in the organiser’s performance during the trip, the organiser must rectify the defect, depending on its nature, either immediately or within a reasonable time defined by the traveller. The traveller may be entitled to a price reduction, compensation for damages or termination of the contract due to the defect.
The traveller cannot receive double compensation for one and the same defect. If a traveller has been granted a price reduction or compensation under European Union legislation on passenger rights (e.g. standard compensation for delayed flight) or international conventions (damages for loss of luggage), the amount of compensation will be deducted from another corresponding compensation granted for the same defect.
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- In addition to the standard compensation received from the airline, travellers claimed for a price reduction from the organiser. Since both claims were based on delays in the return flight, the defect being compensated is the loss of time caused by having to wait for the flight at the destination and arriving home later than expected. Therefore, the Consumer Disputes Board considered that the standard compensation could be deducted from the price reduction claimed on the basis of the delay.
- In addition to the standard compensation received from the airline, travellers requested a price reduction from the organiser when the package holiday had been cut short by two days due to a long delay in the outward flight. In the board’s view, the price reduction claim was not primarily based on the loss of time and the associated harm, but on the fact that the trip had been cut short and thus the service did not correspond to what had been agreed. Therefore, the compensation was not for the same defect, and the organiser was not entitled to deduct the amount of the standard compensation from the refund amount.
Rectifying a defect
The organiser must rectify defects in the travel service in such a way that no costs or material disadvantages are incurred by the traveller. For example, if a traveller is moved to a more expensive hotel due to defects in the original accommodation, the traveller does not have to pay for the price difference or transport to the other hotel.
The organiser should usually rectify the defect immediately. If it is not necessary to rectify the defect immediately, it should be done within a reasonable time as defined by the traveller.
What is a reasonable time depends on the nature of the defect and its significance to the traveller.
- If rectifying the defect is impossible or if it would cause disproportionate costs to the organiser, the organiser has the right to refuse to rectify the defect.
- In this case, the traveller will be entitled to a price reduction and compensation. Alternatively, the traveller could rectify the defect themselves and claim compensation for damages from the organiser to cover the costs.
The traveller has the right to rectify the defect themselves if it has not been done immediately or within a reasonable period set by the traveller. This is applicable, for example, when the traveller has to travel by taxi to catch the flight on time, because bus transport provided by the organiser has been delayed.
- The traveller is entitled to reimbursement for the costs incurred in rectifying the defect.
- The traveller has a duty to keep the costs caused by the defect as low as possible. The organiser has the right to refuse to pay unreasonable costs.
If a significant part of the travel services cannot be performed as agreed, or if the traveller is not returned to the place of departure as agreed, the organiser must offer a suitable alternative arrangement.
- Alternative arrangements must not cause additional costs for the traveller.
- Alternative arrangements must be of at least the same standard as the originally agreed travel services.
- The traveller is entitled to a price reduction if the package with alternative arrangements is of a lower quality than the original package.
If the traveller refuses alternative arrangements on reasonable grounds, the traveller is entitled to a price reduction and compensation. This is applicable, for example, in the following cases:
- no alternative arrangements are provided
- the alternative arrangements are not comparable to those agreed in the package travel contract
- the price reduction offered is insufficient.
If the traveller has an acceptable reason to refuse alternative arrangements and the package includes the carriage of the traveller, the organiser must arrange return journey as soon as possible and without any additional costs to the traveller.
Price reduction
The traveller is entitled to an appropriate price reduction for the period during which the organiser’s performance has been defective. There is no right to a price reduction if the organiser proves that the defect was caused by the traveller.
The price reduction must be appropriate. When calculating the price reduction, the starting point is the total price of the package, and not the price of the individual defective travel service.
The traveller is entitled to a price reduction, for example, if:
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- Prior to the start of the trip, the organiser makes significant changes to the contract terms and conditions, and the traveller has not chosen to terminate the contract due to the changes.
- In the terms and conditions, the organiser has reserved the right to increase or lower the price of the trip if the costs referred to in legislation change (for example, changes in the exchange rates or taxes), and the costs are reduced, iso that the traveller is entitled to a price reduction corresponding to the reduction in costs.
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- The organiser refuses to rectify the defect because it is impossible or would cause disproportionate costs.
- No alternative arrangements are offered to the traveller.
- The alternative arrangements offered by the organiser result in a travel package whose quality is inferior to the originally agreed standard.
- The traveller refuses alternative arrangements because they are not comparable to those agreed in the package travel contract.
- The traveller terminates the contract during the trip due to a defect on the part of the organiser which significantly affects the realisation of the package, and the organiser fails to rectify the defect within a reasonable time limit set by the traveller.
Insignificant changes to the package travel contract do not justify a price reduction. The assessment of the significance of the defect may also be based on the traveller’s personal perspective. For example:
- A constantly broken lift can have a significant impact on the holiday of a person with disabilities or an older person, even though it could be insignificant to a young and healthy traveller.
- Defects in the kitchen equipment of a hotel apartment can have more impact on families with young children who intend to cook most of their meals while on holiday.
Compensation for damages
Right to damages
The traveller has the right to receive appropriate compensation from the organiser for any damages caused by a defect in the organiser’s performance.
The traveller is not entitled to compensation if the organiser can demonstrate that the defect was caused by:
- the traveller
- unavoidable and exceptional circumstances (e.g. war, terrorism, an outbreak of serious disease at the travel destination, natural disasters, strikes)
- third parties not involved in the provision of travel services, and the defect could not reasonably be foreseen or prevented. For example, when a sightseeing attraction which is part of an excursion is unexpectedly closed for visitors. This does not apply to service providers such as accommodation or transport service providers used by the organiser in the performance of the contract.
Amount of damages
In order to obtain compensation for damages, the traveller must be able to prove a defect in the organiser’s performance, the damages caused by the defect and the amount of the damage.
Travellers should endeavour to prevent and limit the losses. Any costs spared may be taken into account as a factor reducing the amount of compensation.
Damages to be compensated
Compensable damages include personal damage, property damage, financial loss and immaterial damage.
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Personal damage may include
- an accident cased to the traveller by the poor condition of the hotel room
- a salmonella infection caused by food served at the hotel as part of the package
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- loss of or damage to luggage
- inability to use personal items due to delayed delivery of luggage in cases where the length of the delay or other factors can be considered to have caused harm to the traveller.
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Financial losses include any extra costs incurred by the traveller due to a defect, as well as the expenses that are of no use. A delay in return transport can cause traveller loss of income or additional accommodation costs.
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Immaterial damages may result from personal or property damage or financial loss. For example, gastroenteritis caused by hotel food may cause immaterial damage to travellers in the form of pain and suffering and other temporary harm, permanent damage or loss of enjoyment of the trip due to the time spent recovering in the accommodation. However, a precondition for obtaining compensation for loss of enjoyment of the trip requires an occurrence of a significant problem in the provision of the travel services.
Booking errors
In the event of a technical defect in the travel service reservation system, the vendor of the travel service responsible for the system is liable, without undue delay, to compensate for any damage caused to the traveller by a booking error.
However, the traveller is not entitled to compensation if the booking error is caused by the traveller or by unavoidable and exceptional circumstances.
If the vendor books travel services that are part of the travel package on behalf of the traveller and incorrectly enters information provided by the customer in the system at the booking stage, the vendor must compensate the traveller for any damage caused by the error. However, if the traveller has not checked the accuracy of received documents, e.g. a booking confirmation, the traveller’s contribution to the error may be taken into account in the compensation amount.
Termination of the contract during the trip
If the defect has a significant impact on the performance of the package and the organiser does not rectify it within a reasonable time limit set by the traveller, the traveller is entitled to terminate the contract.
If the traveller terminates the contract, the traveller is entitled to a price reduction and damages as well as return transport corresponding to the package travel contract.