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State Assistance for Travel Industry Affected by Coronavirus Outbreak

State Assistance for Travel Industry Affected by Coronavirus Outbreak

Serbia
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The global pandemic caused by Covid-19 disease has caused huge losses to the tourism industry.

The Minister in charge of Trade, Tourism and Telecommunications in Serbia said that even though there is no sufficient official data yet, the damage to tourism industry for the first five months, caused by the coronavirus crisis, was expected to amount to approximately EUR 300 M.

In addition to travel agencies, about 500,000 citizens who paid for their travel arrangements by 15 March 2020 are at a disadvantage. The possibility of refunds and enjoying tourist arrangements on different dates were questioned and addressed.

The National Association of Travel Agencies of Serbia JUTA (YUTA) has recently issued a statement that a model of value vouchers shall replace refunds and should serve as compensation for unused travel arrangements, fully or partly, paid by the Serbian citizens.

On the other hand, the Serbian Government passed the Regulation on offering replacement travels for tourist travels that were cancelled or not realized due to COVID-19 disease caused by SARS-CoV-2 virus (“Regulation”), which entered into force on 30 April 2020.

GENERAL REGIME

Prior to the enactment of the Regulation, except from the Consumer Protection Law warranties (about which we wrote earlier), the Law on Contracts and Torts also entitles passengers to withdraw from the contract at any time:

  • but within a reasonable time before the start of the trip, which is set according to the type of arrangement in each case individually, in which case the travel organizer is only entitled to reimbursement of the administrative costs;
  • but in case 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.

SPECIAL REGIME

On the other hand, 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 offers to passengers, as well as the obligation of travel agencies to make such offers at all.

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, to the passenger, for the unrealized trip, regardless of whether the trip was purchased from a travel organizer (travel agency) or from an intermediary. Technically, the offer should be 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 short trips and 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, among other things, 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 should obtain 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 which is supposed to be paid back without any increase, such as interest, for instance.

Potential issues

The Regulation intends to protect travel agencies that are, undoubtedly, in severe crisis.

On legal side, 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”.

If tested, this secondary piece of legislation may fail to withstand the compliance check due to latent violations of constitutional warranties and legal principles.

But, it remains to be seen will disagreeing passengers insist on refunds or remain patient for more than year and half form now.

Only time will tell.

By Stojkovic Attorneys

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