Cancellation of tourist arrangements during and after the state of emergency

On 15 March 2020, the Government of the Republic of Serbia declared a state of emergency due to the pandemic of the COVID – 2019 virus, which resulted in the closure of borders and the prohibition of movement.

The declaration of the state of emergency has raised a number of issues related to tourist arrangements, which should occur during the state of emergency, as well as those which should occur after the danger of infection desists.

The National Association of Travel Agencies of Serbia JUTA (YUTA) has issued a statement that, by 10 May 2020, a model of value vouchers should be presented and which, instead of refunds, would serve as compensation for travel arrangements paid by the Serbian citizens for the coming summer, which would remain unrealized due to the pandemic of the COVID – 2019 virus.

A model of value vouchers or cancellation of  the travel

Given that many travel agencies are not currently working due to the state of emergency, it is not physically possible to approach their premises and cancel travel arrangements in this manner.

Yet, it is possible to do so by the exchange of formal corresponndence in line with the concluded contract and accompanying rules.

That said, and without prejudice to the practicality and usefulness of the announced model of value vouchers, these vouchers only represent one of the possible options, and the traveler has the right to consider it, and to accept or reject it, thus, to stay in the arrangement or to cancel the contract.

Cancellation of the travel by the organizer

According to the article 878 of the Law of Contracts and Torts, a travel organizer may withdraw from contract, entirely or partially, without being obliged to redress losses, should prior or in course of performing the contract extraordinary circumstances take place which could not have been foreseen, avoided or eliminated, and which had they existed at the time of entering into contract would have amounted to a justified ground for the travel organizer not to enter into contract.

In this particular case, a notion of the state of emergeny encompases “extraordinary circumstances“ which is, due to global COVID – 2019 virus pandemic, most likely declared in the jurisdicitons of the desired travel destinations. In the event of such cancellation of the contract prior to its execution, a travel organizer is obliged to fully refund the passenger.

The Law on Tourism regulated this issues in the same manner. Namely,  Article 68 of the said Law provides the travel cancellation procedures, initiated both by the travel agencies and by the traveler.

In case the travel agency cancels the trip, the traveler is entitled to a complete refund from the agency, regardless of the circumstances in which the cancellation has been made (ie. whether the trip was canceled in regular or extraordinary circumstances of a force majeure nature). This refund should be made within 15 days from the day of cancellation, otherwise the agency may face fines that range from 200,000 to 800,000 dinars.

The question remains what will happen in cases where the agency has not canceled the tourist arrangement but the passenger wants to cancel the tourist arrangement, as well as with regards to the trips that should be made after the danger of infection ceases.

Cancellation of  the travel by passenger

If the passenger withdraws from the contract within a reasonable time before the start of the trip, which is set according to the type of arrangement in each case individually, the travel organizer is only entitled to reimbursement of the administrative costs.

In the event of untimely cancellation of the contract, the organizer may demand from the passenger compensation in a certain percentage of the agreed price, which is determined in proportion to the period remaining until the start of the tourist trip and which must be economically justified.

The Consumer Protection Law in article 99 regulates this issue and stipulates that, if the consumer withdraws from the contract due to the circumstances that he/she could not avoid or eliminate and which, if they existed at the time of the conclusion of the contract, would represent a justifiable reason for him/her not to conclude the contract, as well as if the consumer, organizer or intermediary provides appropriate replacement, the organizer is entitled exclusively to the reimbursement of actual costs. The same article of the said Law explicitly provides that the officially declared state of emergency in the country of travel shall be deemed, inter alia, as circumstances of force majeure nature.

The consequences of canceling the trip

The legal repercussions are more favorable to the agencies in case the trip is cancelled by the traveler.

So, when the traveler cancels the trip, he/she is entitled to a refund, but only to the extent determined by the general terms and conditions of travel (whether the refund shall be full or partial, as in most cases, depends on the manner this matter is regulated in the said terms & conditions). In this case, the deadline for refund is 15 days from the day of cancellation, otherwise the travel agency is threatened with a fine ranging from 150,000 to 500,000 dinars.

Additionally, the agency is entitled to compensation for administrative expenses when the traveler has timely canceled the trip, i.e. within the deadline stipulated in the general terms & conditions of travel (regardless of the cancellation reasons). And if the traveler canceled the trip due to circumstances that he could not avoid or eliminate and which, if they existed at the time of the conclusion of the contract, would represent a justifiable reason for him/her not to conclude the contract, the agency is entitled to reimbursement of the actual costs incurred on this occasion.

The importance of general travel conditions

The mentioned rights, as well as the procedure, deadlines and obligations of the travel agencies with regards to the travelers’ complaints for cancellation of the trip, non-performance or incomplete performance of the services covered by the travel program, are obligatory elements of the general terms and conditions of travel for each travel agency, in accordance with Article 71 of the Law on Tourism.

If the agency does not possess the general terms & conditions of travel, or those do not contain all the required elements, the agency can be fined from 150,000 to 500,000 dinars.

Within general travel conditions, which passengers generally do not read, all the rules of the trip must be explained, as well as the travel cancellation procedure. These conditions often prescribe that the reasons for canceling or stopping the trip cannot be considered cases of local terrorist attacks, explosions, infections, epidemics and other diseases, adverse climatic conditions, etc. but only if no state of emergency has been declared by the state authorities regardless of those circumstances.

How to avoid cancellation costs

Cancellation costs can be avoided by purchasing an insurance policy with insurers that offer the sale of travel cancellation insurance, where one should take into account the cases whose realization is covered by the policy.

How to terminate the contract

The passenger shall contact the agency in writing form to cancel the contract. If the passenger is not satisfied with the response of the agency, the passenger has the opportunity to contact the National Association of Travel Agencies of Serbia JUTA, which in such cases provides a free arbitration procedure. The arbitral award is final and binding on the parties. However, the parties have the opportunity to bring an action for setting aside of the arbitral award before the court and to exercise rights in civil proceedings. Also, the passenger has the opportunity to contact the tourist inspection, which has no possibility to refund the passenger, but, if the inspection determines that the agency did any violations of the Law, it is entitled to submit a motion before the competent court, in order to initiate the misdemeanor proceedings.