Deferred refunds and vouchers for travel arrangements cancelled due to the COVID-19 pandemic

The outbreak of the COVID-19 pandemic and the resulting travel restrictions have hit the tourism industry hard. Closed borders and a lack of international connections have particularly affected the operation of travel agencies, many of which faced the risk of losing their liquidity. To prevent this, Poland has introduced provisions under which travel agencies have been granted the right to defer the refunds of fees and other payments made for tourist services not provided due to the COVID-19 pandemic and to offer customers vouchers in exchange for cash refunds.

In what situation and on what terms the traveller can withdraw from a contract concluded with a travel agency?

The issue of the traveller’s right to withdraw from a contract concluded with a travel agency is regulated under Article 47 of the Act of 24 November 2017 on tourist events and related tourist services. This provision states that the traveler may withdraw from a package travel contract at any time before the start of the package (sec. 1). In return, the traveller may be required to pay an appropriate and reasonable termination fee (sec. 2).

The amount of this fee may vary depending on when the withdrawal has occurred, the cost savings, and income from alternative deployment of the travel services (sec. 3). The principle is that the later the withdrawal is made, the higher the fee becomes, which means that if the withdrawal is made in the last days before departure, the costs incurred by the traveler may be very high.
Notably, the provision in question also states that the traveller can withdraw from a package travel contract without paying the withdrawal fee if there are ‘unavoidable and extraordinary circumstances’ occurring at the place of destination or its immediate vicinity and significantly affecting the performance of the package, or which significantly affect the carriage of passengers to the destination (sec. 4). In such circumstances, also the travel agency is entitled to terminate the contract, in which case it has to refund all the payments made by the traveller (sec. 5).

‘Unavoidable and extraordinary circumstances’ means a situation beyond the control of the party, covering, for example, warfare, other serious security problems such as terrorism, significant risks to human health such as the outbreak of a serious disease at the travel destination, or natural disasters such as floods, earthquakes or weather conditions which make it impossible to travel safely to the destination as agreed in the package travel contract.

When does the withdrawal become effective?

As a general rule, withdrawal from a package travel contract, similar to its termination, is effective upon receipt of the withdrawal/termination notice by the other party. However, this is hardly the case when the withdrawal or termination is directly related to the outbreak of the COVID-19 pandemic. According to Article 15k of the Anti-Crisis Shield 1.0., such withdrawals and terminations become effective only after a notice period of 180 days, which automatically postpones the refund payment as being due within 14 days after the effective withdrawal/termination.

What is also worth noting is the fact that Article 15k entered into force retroactively, i.e. from 13 March 2020 (i.e. form the day when the state of epidemic threat has been announced in Poland), while applying to the cases where the withdrawal/termination had been made before this date, but the 14-day deadline for paying the refund of fees or other payments made by the traveller had not yet elapsed (Article 31h of the Anti-Crisis Shield 1.0.).

If not the refund than what?

According to the discussed Article 15k of the Anti-Crisis Shield 1.0., instead of requesting a refund, the traveller may accept a credit note (so-called “voucher”) proposed by the travel agency for future travel arrangements (not later than one year from the scheduled date of the suspended event). This allows to change the terms of a previously concluded contract by indicating e.g. a new destination, time of travel, etc. The value of the voucher cannot be lower than the value of the suspended package.
The traveller does not accept the voucher, but if he/she does, the withdrawal/termination becomes ineffective. This means that the funds paid by the traveller will not be treated as new payments/fees and will therefore are covered by appropriate insolvency protection.

The article is for information purposes only and under no circumstances constitutes a legal opinion or advice. For more detailed information or legal assistance, contact DT’s lawyer.

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2020-05-06 16:01

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