Guarantee schemes are absolutely vital

01/10/2019 - After failing to secure a funding boost, Thomas Cook – the oldest travel company in the world and also the inventor of the modern package holiday – has been forced to cease trading. It is fair to say that this represents a great loss for the travel sector. But when Thomas Cook ceased trading, the local guarantee schemes in which the company participated took over. Once again, such guarantee schemes have proven vital.

Joining a recognised guarantee scheme

Last week, the liquidation of Thomas Cook shook the travel world. Hundreds of thousands of travellers are currently being repatriated from all over the world, with millions more receiving compensation. Non-EU countries are reacting with amazement to the good, professional service being provided to travellers by guarantee schemes, as the guarantee scheme is a completely unknown phenomenon in such countries. However, even in the Netherlands, it is still too often wrong to assume that a tour operator has joined one. Some tour operators have no guarantee scheme because “there’s no chance of them going bankrupt”, while travellers still too frequently forget to check for one when booking a trip. But if holidays cannot go ahead or travellers are stranded abroad due to tour operator insolvency, the resulting panic is considerable. A guarantee scheme should therefore perhaps be the most important condition to look for when booking a trip.

Fortunately, traveller protection has been an important principle in the EU for many years now. The rights of travellers are laid down by law and every tour operator is obliged to comply with the relevant legislation. One of the legal requirements is for tour operators to join a guarantee scheme. The Netherlands Authority for Consumers and Markets (ACM) helps to ensure they do by monitoring tour operator compliance with the law. But the travel landscape is changing. Providers are coming onto the market in ever-increasing numbers and trips can be put together in more and more different ways. None of this changes the most important detail of any package holiday, namely the mandatory guarantee scheme!

A guarantee scheme provides travellers with the assurance that they will not be stranded at their holiday destination or lose thousands of euros if their tour operator becomes insolvent. This assurance can often be obtained from a guarantee scheme for just a few euros per booking, so the cost is certainly no barrier.

Clearly, the liquidation of Thomas Cook is a major blow to all concerned. However, the effectiveness of the local guarantee schemes involved provides a bright spot for almost all the travellers affected. This is why this case once again demonstrates the importance of joining a good guarantee scheme. It’s good to know that proper provisions are in place in Europe.

Our thoughts are with all those involved with Thomas Cook at this time. If you would like to continue discussing this matter or have any questions about the VZR Garant guarantee scheme, please contact us.