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Tourism association: Refunds of all prepaid bookings would collapse sector

Riga Airport  (picture is illustrative).
Riga Airport (picture is illustrative). Source: ERR

The main body representing firms in the Estonian tourism sector has called for a freeze on requirements for repayment of advance booking fees in the current coronavirus pandemic, calling it a force majeure event. The organization, the Estonian Tourism Companies' Association (ETL), adds that if this does not happen, requiring the repayment of all fees would cause the collapse of the entire sector in Estonia.

"The obligations of businesses to consumers need to be relaxed. Repaying advance payments would mean a collapse of the entire sector," Mariann Lugus Ratas, ETL chief, wrote to Prime Minister Jüri Ratas (Center).

The ETL is a member of the European Travel Agents' and Tour Operators' Associations (ECTAA), the European Union umbrella organization for travel companies, which has been in direct contact with representatives of the European Commission as well as representatives of various national trade unions regarding the performance of package travel contracts.

"Everyone has the same concern, and noone can make a refund for missed and canceled trips [related to coronavirus]. Today's situation needs an 'out of the box ' solution," Lugus added.

The emergency situation declared by the Estonian government late last week, twinned with § 103 (3) of the Law of Obligations Act (referring to excusable force majeure) provide the legal basis to replace contract termination and subsequent repayment of advances with a temporary suspension and postponement of contracts.

"We believe you understand the positive impact of this proposal; businesses will retain consumer advances, keep afloat, jobs and tax revenue [fromt he tourism sector] would continue, and even in these times of crisis, people will have the opportunity to make new, brighter plans. This exception could apply only to all contractual situations involving COVID-19 situations. In a nutshell, we are freezing regular contract execution and moving forward in an emergency situation."

In addition, the ETL is also requesting the possibility of deferring repayments to state-owned enterprises at least until the end of the year, in its procurement/travel agency function for the public sector.

"Contracts prevent services to be provided free of charge. In the current situation, the work is done not for free, but for payment, because the agencies have to pay the booking and cancellation fees charged by the booking systems," the letter added.

The ETL is a voluntary association of tourism employers. The primary members of the union are Estonian travel agencies and tour operators, with associated members including transport companies, tourism organizations, educational institutions, hotels, insurance companies, tourism support service providers and foreign tourism organizations.

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Editor: Andrew Whyte

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