COVID-19 and guidance for tour operators

15 May 2020

The recent Government guidance as we tentatively move into step 1 of the lockdown easing plan, does not appear to apply directly to the travel and tourism sector. 

However, whilst extension of the furlough scheme will come as welcome news to many and will help to preserve a number of jobs in the industry, news that employers will be expected to contribute towards the 80% wages being paid to staff from August onwards may be cause for serious concern, particularly among smaller, independent tour operators who will have seen almost all existing bookings cancelled and very few new bookings being made.  The admission by Health Secretary Matt Hancock on ITV’s This Morning that summer is effectively cancelled and, “it’s unlikely that big, lavish international holidays are going to be possible this summer.  I just think that’s a reality of life”, will do little to alleviate fears in the industry or instil consumer confidence in booking holidays later this year.

Airline and airport traffic is significantly reduced and with the upcoming implementation of a 14 day quarantine period for all foreign arrivals into the UK (bar the Republic of Ireland and France), tourism and business travel is likely to be stifled for some time to come.  With Foreign & Commonwealth Office advice remaining against all but essential international travel, it may take many years for the sector to fully recover from the impacts of COVID-19 and Flybe is unlikely to be the only casualty.

There are additional issues for Tour Operators to be aware of:

Refunds

  • Where flights and holidays have been cancelled due to the pandemic and airlines or tour operators have offered vouchers rather than cash refunds, consumers may instigate group actions for full refunds.  In accordance with Regulation 13 of the Package Travel and Linked Travel Arrangements Regulations 2018,   a full refund should be offered where the holiday is cancelled due to unavoidable and extraordinary circumstances.  Regulation 14 goes on to state that the organiser must reimburse any payments made within 14 days of cancellation.  There appears to be no exclusion for ‘force majeure’ events, which had been indicated in the previous 1992 Regulations. The government has taken no legislative action to extend the time period for providing a refund or to legitimise credit notes as a viable alternative option.The most pressing issuing remains the 14 day deadline for refunds and delays in getting payments from airlines and other suppliers.Tour operators should ensure they maintain good relationships with consumers, keeping them fully updated at all stages and they should seek to make vouchers and credit notes an attractive alternative option; if the consumer insists on a cash refund, in line with current legislation, this must be provided.

Claims against hotels, cruise ships and airlines

  • Actions may also be brought against hotels or cruise ships if consumers allege they contracted COVID-19 during their stay.  If suppliers knowingly exposed guests to the risk of illness, the claims could succeed.  It is therefore important to ensure that robust cleaning protocols are in place, which must be fully documented and independently verified.  The suppliers should also have procedures in place for isolating any guest who displays positive signs of the virus.
  • Claims may be pursued against airlines under the Montreal Convention if a traveller displaying symptoms was allowed onto a flight and subsequently tested positive for COVID-19, passing the virus on to others.  Causation will be difficult however, as Claimants would need to prove that a particular person on board was the ‘super spreader’, that they contracted the virus on board the flight and not elsewhere in the airport and they themselves would need to have suffered more than just ‘mild’ symptoms to fulfil the ‘injury’ criteria. 
  • Likewise, claims may be pursued under the Athens Convention against cruise ships where cruises were allowed to continue despite passengers displaying symptoms or passengers on previous journeys having tested positive.  There are already a number of class actions being pursued on this basis in the USA.  It may be easier to prove causation in these claims if passengers on a previous journey had tested positive for COVID-19 and the cruise ship did not take adequate steps to isolate them or deep clean the vessel before embarking on a new journey.  It is therefore important to ensure that procedures are in place to adequately isolate anyone displaying symptoms and to ensure deep cleaning takes place, all of which must be fully documented.

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Disclaimer: This document does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. It is intended only to highlight issues that may be of interest to customers of BLM. Specialist legal advice should always be sought in any particular case.

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