16 December 2010

CO's Farelock vs. EC's Cooling Off

A lot of people are excited about Continental's new FareLock Product. The European's are about to ammend an existing law which will guarantee that a customer can cancel within a new grace period. The agency community fears it would be in serious trouble if the amendment to the Consumer Rights Directive tabled by Scottish MEP Catherine Stihler is passed. Why a Scottish MEP is doing this of course is open to question.

Her fellow MEPs on the Internal Market and Consumer Protection committee vote on the amendment at the end of January. The Legislation would take effect within 3 years.

Which is better - the Professor questioned aloud? - Your homework for the week is to answer.


What this would mean - is that customers - whether they had paid a deposit or the amount in full, could cancel their holiday booking within two weeks, and demand a refund, regardless of whether the agent has already passed the payment onto the supplier.

Interestingly this would kill a whole revenue sector for the agent not to mention creating a lot of issues for them.

1 comment:

Mark Lenahan said...

I haven't read the proposals but from your description I think this could be a good thing for agencies in the long run. But something of a pain for supplier (airline, hotel, etc.) yield managers.

Will all travel suppliers will have to create rates which are refundable within a specific period of booking? Whether booked through agency or not. Does this not kill off instant purchase / no refund products totally, irrespective of the channel?

Or is this rule something that only applies to tour operators?

Note: they have 24hour rule already in some Scandinavian countries, and once the market learns to live with it, it actually makes some processes easier (e.g. securing payment).