The European Union is looking to tighten regulations on websites selling travel packages, a move to protect consumers better when tour operators fail. The plan is a response to the huge increase in people booking holidays online, particularly "dynamic packages" in which flights, accommodation, car rental and other services are purchased from separate providers via one website.
Dynamic packages account for a third of European travel sales, which in 2008 totalled 246 billion euros ($370 billion), making Europe the world's largest regional travel market, according to the EU's executive European Commission.
EU rules on package holidays date from 1990 - before the Internet - and protect consumers against losses, cancellations and airlines going bust only in cases where flights, accommodation and services are booked via a single provider.
"We need tough protection that gives all consumers booking a package holiday the peace of mind they deserve," EU Consumer Commissioner Meglena Kuneva said in a statement announcing plans for a year-long study into how the rules can be improved.
The number of EU citizens booking dynamic packages via websites such as Expedia and Opodo has grown rapidly in the past two years, climbing to more than 100 million, according to statistics provided by the Commission.
The process involves holidaymakers booking a flight through one website, which often redirects them to another site for car hire, hotel bookings and other services such as tours.
In Ireland and Sweden, around 45 percent of holidaymakers now make bookings using dynamic packages, often without realising that they are much less protected against potential losses than via a traditional package holiday. The change in consumer habits is most clearly illustrated by statistics showing that 98 percent of passengers who travelled from Britain in 1997 were protected by the EU's package travel directive. By 2005, that had fallen to less than 50 percent.
The collapse of airlines in recent years - between November 2005 and September 2008, 29 airlines went bankrupt, according to EU figures - has exacerbated the problem, with passengers left stranded in foreign airports with no insolvency protection.
"I am particularly concerned about the issue of insolvency," Kuneva said. "Anyone who saw the TV pictures of thousands of holidaymakers stranded at airports after bankruptcies ... knows that now is the right time to ask tough questions about extending basic insolvency protection to consumers."
The European Commission plans to look into a range of proposals to extend protection for consumers, possibly including an EU "travel protection label" that would show travellers whether they are protected under the legislation. Concrete measures to be introduced in a new package travel directive will be put forward in the second half of 2010.
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