At its meeting of June 5 this year, the Saeima adopted the Law on the Management of the Spread of COVID-19 Infection (hereinafter referred to as the Law), which, inter alia, also lays down a special framework for complex tourism services after the crisis period.
The Minister of Economics Jānis Vitenbergs: “The measures introduced to limit the spread of the virus hit the tourism sector in the hardest way literally stopping the activities of tourism companies. Planned trips were cancelled and no new ones were booked. People who had purchased trips to certain destinations, as well as tour operators and agents, who had already paid the money for organising their travels through flights, hotels and other bookings, have suffered. These funds are currently frozen due to the global tourism crisis, and the immediate return of funds for cancelled trips can lead to massive bankruptcies of tour operators.”
“I therefore call on both travellers and tour operators to be understanding in this situation, and to agree with each other on the best possible solutions – consumers should accept certificates thus supporting the industry, while tour operators should respect consumers who may be in critical need of the money lost due to the cancelled trip,” urges the Minister of Economics.
In accordance with the Law, tour operators will be able to issue a certificate or voucher (hereinafter referred to as the certificate) for the value of the unused trip to travellers instead of refunding the money. The traveller will be able to use the certificate to purchase another trip from the tour operator for the amount paid by the traveller to the tour operator or agent through which the package of tourism services was purchased. At the same time, it is also possible for the traveller to receive a full refund of the money paid for the cancelled trip.
Director of the Consumer Rights Protection Centre Baiba Vītoliņa: “This regulatory framework balances well the options of the consumer to choose and obtain a good alternative solution in the form of a guaranteed voucher, while at the same time enabling the providers of packages of tourism services to survive at this time of deep crisis. If we as consumers want to continue to travel, it is important that these market players continue to operate.”
Certificates issued by the tour operator will be valid for up to 12 months from the date of cancellation of the emergency situation in the country. On the other hand, if the traveller does not use the certificate within the period of its validity, they will be able to obtain a full refund of the money paid within 14 days of the expiry date.
Travellers will be able to use the certificate issued for one or more trips and to transfer it to another person or persons upon a previous agreement with the tour operator.
At the same time, the traveller and the tour operator will also be able to agree on a shorter period of use of the certificate, or on another alternative solution, including refund of money. The Law enables the traveller and the tour operator to agree on a mutually agreed time limit for the refund, or to choose an immediate refund. This means that the traveller has the freedom of choice to accept the certificate or to receive a refund. In the event that the parties are unable to reach an agreement on another refund period, the traveller is entitled to refund all the money in accordance with the applicable regulatory framework.
The certificate can only be issued by a tour operator who has received a special permit or licence and who has a valid security. Consequently, the certificate is guaranteed by an insurance policy issued by an insurer or by a guarantee issued by a credit institution – a security corresponding to the amount of the liability.
Similar practices in issuing certificates or vouchers are also observed elsewhere in Europe. Such a system has been introduced by countries such as Belgium, Croatia, France, Greece, Italy, Malta, the Netherlands, Poland, Norway, Spain, etc. Similarly, Latvia’s neighbours – Lithuania and Estonia – have also introduced a similar solution.
As it is known, a number of restrictive measures were imposed in relation to the spread of the Covid-19 virus, which had a significant impact on the functioning of the tourism sector as travelling was banned, thereby stopping the activities of tour agents and operators.
According to the EU Directive, in the event of cancelled trips, tour operators must refund the money paid by travellers. According to the information provided by the Consumer Rights Protection Centre, the commitments of tour operators to travellers currently amount to 18 million EUR.
Therefore, in some cases operators do not have the possibility to refund money to consumers quickly because, in order to obtain a competitive price, the tour operator makes the purchase of basic services (tourist accommodation, flight tickets, etc.) paying even one year in advance. Moreover, the impossibility to sell new travels and organise travels is exposing tour operator to an even greater risk of insolvency.