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NEWS OPINION


Fco TRAVEL ADVICE


‘Change could put firms in better position’ Farina Azam, partner and travel lead, Kemp Little


T


he FCO has taken the unprecedented step of advising British citizens against


all but essential international travel with immediate effect for a period of 30 days (from 17 March). What does this mean from a legal perspective for travel companies who are already fighting for survival in the toughest trading conditions many of us have ever seen? The change to the FCO advice could


potentially be good news. It takes away the uncertainty that is currently hanging over international travel. More importantly, it strengthens claims made by customers on their travel insurance – and could put travel firms in a better position as a result.


Do package organisers need to refund customers now the FCO has advised against all but essential international travel for the next 30 days? Generally speaking, when the FCO advises against all but essential travel to a particular destination, it would invoke a customer’s right to cancel under Reg. 12(7) of the Package Travel Regulations 2018. However, these are unprecedented times, and the FCO advice doesn’t relate to any particular destination, but all British citizens travelling worldwide, so there is an argument normal rules shouldn’t apply. Reg 12(7) allows customers to


OTA IMPACT


‘The govt needs to help me guarantee basic income for my talented team’


Darren Burn, chief executive and founder, OutOfOffice.com and TravelGay.com


T


he realisation was horrible. I did the maths – in order for my travel


start-up to survive, I’d need to ask my team to take unpaid leave. Looking at our projected income


and cash flows, along with the indeterminate period of time this coronavirus crisis is set to last, meant I had to make the hardest business decision of my career.


cancel their trip without paying cancellation fees where there are “unavoidable and extraordinary circumstances” occurring at the destination or its immediate vicinity and affecting performance of the package or transport arrangements to the destination. Whether Reg 12(7) applies comes down to whether the package holiday can be performed as contracted – and this will depend on whether flights are still operating and hotels are still open, as well as any other social restrictions. Where customers


are due to travel within the next 30 days and wish to cancel their trip, my advice would be to push customers to make a claim on their travel insurance. Where customers purchased their travel insurance before coronavirus was an issue, their insurance policy should cover them now that they can no longer travel due to the FCO advice. If clients do not have travel


insurance, or if their insurer refuses to cover them, offer a deferred departure date – postponement is far preferable to a refund. If customers cannot make a claim on travel insurance and do


not wish to accept a postponement, then consider whether customers have the right to a refund under Reg 12(7) – could you still perform the package as contracted? The answer to this will depend on individual bookings and destinations.


What about customers whose holiday is more than 30 days away? The current FCO advice only applies to people due to travel in the next 30 days and does not apply to people due to travel beyond this period. Provided the package can still be performed (including flights, hotels and all other contracted elements), then if a customer wishes to cancel their holiday, the


organiser is entitled to enforce its standard cancellation charges. It’s unlikely travel insurance would cover the customer in these circumstances either. Some travel companies are allowing customers to defer their departure date due to the current circumstances and, while this is a wise commercial decision (it will generate some goodwill with customers), there’s no legal obligation to do so.


The team we’ve built at OutOfOffice. com is like family to me, each with their own talents. To secure their jobs for the future, I felt the choice was to offer them unpaid sabbaticals. Some will opt for redundancy. The government has since made an


attempt to try to appease businesses like mine. While I admire the polished sound bites of new chancellor Rishi Sunak, the reality is none of the measures so far actually help us. We are a profitable business. It’s


18 TRAVEL TRADE GAZETTE 23.03.2020


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