Regulation of Offer for Replacement Trip
The global pandemic caused by Covid-19 disease has caused huge losses to the tourism industry.
A Serbian Deputy Prime Minister and the Minister of Trade, Tourism and Telecommunications, Mr. Rasim Ljajić, even though there is no sufficient official data yet, the damage in tourism for the first five months, caused by the coronavirus crisis, was expected to amount to approximately 300 million euros.
In addition to travel agencies, about 500,000 citizens who paid for their travel arrangements by 15 March are at a disadvantage. The issue of refunds, as well as the realization of tourist arrangements in another term, was raised.
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.
The Government of the Republic of Serbia, based on article 123, item 3 of the Constitution of the Republic of Serbia, in connection with the Law on Tourism, passed the Regulation on offering a replacement trip for a tourist trip that was cancelled or not realized due to COVID-19 disease caused by SARS-CoV-2 virus (“Regulation”), which entered into force on 30 April 2020.
Prior to the enactment of the Regulation, except from the Consumer Protection Law (about which we wrote earlier), the Law on Contracts and Torts was also applied to passengers, which stipulate that the passenger may withdraw from the contract in full or in part at any time:
- 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 Regulation enables travel agencies to offer passengers a replacement trip for an unrealized tourist trip that was paid in full or in part by 15 March 2020, regardless of the period of realization, and which was cancelled or unrealized during the state of emergency or later due to the circumstances caused by SARS-CoV-2 virus-induced COVID-19 disease. The Regulation does not prescribe the deadline within which travel agencies should submit an offer to passengers, as well as the obligation of travel agencies to make an offer in general.
Mandatory elements of the offer
If the travel agency makes an offer for the use of a replacement trip, the offer must contain the name and surname of the passenger, the amount, date of issue, the period of validity of the offer, as well as information that a travel guarantee is provided for the replacement trip. An offer for a replacement trip may not be lower in value than the sale price or the amount paid by the passenger for the unrealized trip.
This offer is given by the travel agency as a travel organizer for an unrealized trip, regardless of whether the trip was purchased from a travel organizer (travel agency) or from an intermediary. The offer is handed to the traveller by the travel organizer or intermediary, in written form directly or electronically.
The possibility of issuing an offer for a replacement trip, under the conditions of this Regulation, also applies to excursions.
If the passenger accepts the offer
If the passenger decides to accept the offer of the travel agency before the realization of the replacement trip, a new contract on organizing the trip is concluded, with the cancellation of the previous one. The new contract on the replacement trip contains the number of issued travel guarantee in case of an insolvency and for damage compensation.
If the replacement trip is realized at another destination, before concluding a new contract on organizing the trip, the travel organizer, i.e. the intermediary in the sale of the tourist trip, obtains the written consent of the passenger.
Until when can a replacement trip be used?
The passenger can use the replacement trip for a period of one year from the day of delivery of the offer, and no later than 31 December 2021.
If the passenger does not accept the offer
If the traveller decides not to accept the offer, the travel agency is obliged to refund the paid funds within 14 days from the expiration of the deadline for the realization of the replacement trip (31 December 2021), i.e. by January 14, 2022.
This, in other words, means that passengers will have to wait for a refund and it will be paid to them without interest.
Scope of the Substitute Travel Regulation
The Regulation intends to protect travel agencies that are in a severe crisis.
However, the basis of the Regulation in relation to the Law on Tourism is unclear, given that the Regulation only states that it was adopted “in connection with the Law on Tourism”.
Also, this piece of legislation may face scrutiny in terms of its compliance with the constitution and laws of Serbia for potential violations of certain legal principles and warranties.
In light of the above, passengers who are interested in refunds may, by operation of this Regulation, be unfairly placed and treated, since they should wait for their money, with no interest accrual, until 14 January 2022 which is, on its own, associated with risks of collection.