If the tourist suffers the cancellation of his vacation, he has the right to receive a refund of the money for his expense and not just a proportional part. The Court of Justice of the EU confirmed this Monday the reinforcement of consumers' hopes that, in certain cases, they will be able to recover their money after the bankruptcy of their tour operator. The European Court of Justice (ECJ) in Luxembourg ruled that protection against an organizer's insolvency can also apply if the consumer cancels their trip due to "unavoidable and exceptional circumstances and the tour operator becomes insolvent."
There is no reason to treat travelers whose vacation is canceled because the tour operator goes bankrupt any differently than travelers who canceled their trip due to “unavoidable and extraordinary circumstances.” EU law stipulates that a consumer who does not take their package holiday due to “unavoidable and exceptional circumstances” is entitled to a full refund. The ruling is based on cases from Belgium and Austria; In both cases, those affected had canceled their trips planned for 2020 due to the Covid pandemic. Shortly after, the tour operator went bankrupt. In the Austrian case, consumers sued HDI, the tour operator's insurer. According to the court, HDI argued that it did not have to refund anything because the trip was canceled due to Corona and not due to insolvency. The ECJ did not follow this argument. HDI has not yet commented on the current ruling.
In both cases, the national courts must now make a final decision, taking into account the ruling of the ECJ. Under EU law, member states must ensure that package holidays are fully protected against the organizer's insolvency. If a tour operator closes, it is a problem for many consumers. The bankruptcy of the Munich tour operator FTI recently shocked the sector. The third German tour operator to date, after Tui and DER Touristik, declared bankruptcy at the beginning of June and soon after canceled all trips that were already booked.
Unlike the cases currently heard before the Court of Justice, here the package travelers were insured through the German Travel Insurance Fund (DRSF), which was created in 2021. "The majority of refunds should be made before the fall," a spokeswoman announced in early June. According to the DRSF, the FTI affected a total of 250.000 package trips that were cancelled. Additionally, there were 60.000 package travelers who were already vacationing with FTI when the bankruptcy occurred. Now the payments that those affected had to make on site in order to continue the trips they had already started can also be reimbursed. The fund has not yet provided any information on the total amount of compensation owed.
