Know Before You Grow: The Challenges of Selling Travel Services to European Consumers

28.02.2024 - 16:51 / travelweekly.com

The demand for travel is alive and well. Many travel businesses have experienced record-breaking sales since their return. With demand back to normal or even better, it's a great time to grow your business. A growing business is a wonderful thing, but it can also come with its challenges.

To facilitate greater growth, some businesses hone-in on specialty niches while others look to grow on a wide-scale basis. Some companies look to solicit business outside the U.S., but caveat venditor: U.S. domestic companies unfamiliar with laws or regulations relating to travel services in foreign jurisdictions can greatly increase their risks and responsibilities to their new foreign customers. Selling travel to foreign customers without full knowledge of the legal repercussions can result in unfortunate business consequences.

The European Package Travel Directive

If your company sells or is planning to sell packaged travel services to anyone residing in the United Kingdom or one of the European Union countries, read carefully. There are laws in these countries that will make your company responsible for anything that happens during travel. This liability includes holding your company responsible for any refunds to customers in the event of the bankruptcy or insolvency of a vendor that you have hired and paid but who is no longer in existence. These laws are loosely referred to as Packager of Holiday Laws or, more formally, The European Package Travel Directive (“the Directive”).

As a travel company in the U.S., when you sell to citizens or residents of the U.S., you are generally shielded from liability for the negligent acts, errors or omissions of your vendors and suppliers that may cause death or injury to one of your customers. You are also, generally, not responsible for the bankruptcy or insolvency of one your suppliers.

In order to receive this protection, you are required to demonstrate that you exercised reasonable due diligence and vetting in the selection of your suppliers and that you have disclosed to your customers at the time of the transaction that a third-party supplier or vendor provides the services that caused the injury, claim or some other type of problem. In most cases when selling travel services to residents or citizens of the U.S., in the event of the bankruptcy or insolvency of one of your suppliers, you will also avoid liability unless it can be shown that you knew or should have known at the time of the booking that the supplier was under financial distress. However, when selling travel services to anyone in the U.K. or a European Union country, you will completely lose those protections.

The Directive applies to both European tour operators and foreign parties selling travel services