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ACM compels providers of pilgrimage packages to take travel guarantee measures

07-07-2020

The Netherlands Authority for Consumers and Markets (ACM) has compelled eight tour operators that offer pilgrimage packages to protect consumers against the consequences of possible bankruptcies. These eight operators are: 

  • Amlex Travel
  • Alferdoos Reizen Stars Travel
  • Elfourssan Reizen
  • De Richting 
  • Salsabil Travel
  • Stichting Al Manar Haj en Omra
  • Taoufik Reizen
  • Wadi Alrafidein Travel

These operators must take the statutorily required travel guarantee measures to protect consumers against possible bankruptcies of their tour operators. They can do so by participating in travel guarantee funds. If they fail to do so on time (or even fail to do so at all), they will have to pay periodic penalty payments, varying from 2,900 to 32,400 euros per week, depending on their turnover.

Edwin van Houten, Director of ACM’s Consumer Department, explains: “Pilgrimage packages are sold by specific providers, and are often sold in the local mosque. These trips are usually organized by specialized tour operators. Such tour operators, too, must comply with the rules that protect consumers against bankruptcies. It is critical that consumers are protected against tour operators’ bankruptcies, especially in times like these, with tremendous uncertainty for businesses and consumers alike.”

Investigation into pilgrimage packages

In 2019, ACM launched an investigation into approximately a dozen providers of pilgrimage packages. This investigation was prompted by indications suggesting that consumers often were not fully protected against a possible bankruptcy of the tour operator. These tour operators are providers of Hajj packages (a major pilgrimage to Mecca during a specific time of the year) and Umrah packages (a pilgrimage to Mecca that can be undertaken at any time of the year). Hajj packages cost, on average, 5,000 to 6,500 euros. Each year, Saudi Arabia allocates a limited number of visas to each country, and subsequently distributes these visas among specialized travel agencies.

Pilgrimage packages consist of a round-trip and accommodation. Following the investigation, ACM came to the conclusion that many pilgrimage tour operators did not meet the statutory travel guarantee requirements. ACM subsequently reminded them of the rules, and urged them to take the necessary travel guarantee measures. ACM has also been in contact with the embassy of Saudi Arabia about this matter.

For the 2020 season, the sale of Hajj packages would, under normal circumstances, start in late-April or early-May. ACM had imposed orders subject to periodic penalty payments on tour operators that still had not taken any travel guarantee measures after being reminded of the rules. They had been given until the start of the season to comply with the statutory requirements, so that consumers would be protected against possible bankruptcies of their tour operators. Due to the uncertainties about the consequences of the Coronavirus (COVID-19) outbreak on Hajj packages and Umrah packages to Saudi Arabia, ACM has postponed the publication of the decisions that had been taken earlier. As the operators have experienced difficulties with meeting the statutory requirements due to the ongoing pandemic, ACM has given them more time. The operators now have until October 2, 2020 to take the required travel guarantee measures by participating in travel guarantee funds. If they fail to do so on time (or even fail to do so at all), they will have to pay periodic penalty payments.

What are travel guarantees?

ACM enforces compliance with travel guarantee rules. Tour operators are statutorily required to take travel guarantee measures to protect consumers against possible bankruptcies of their tour operators. In addition, tour operators are required to inform consumers about the guarantee measures taken. In uncertain times like these, travel guarantees offer consumers certainty. Tour operators can take travel guarantee measures by participating in a travel guarantee fund. In this way, consumers who have already paid for their trips would not lose their money if these agencies went bankrupt. Consumers who have already started their trips can be repatriated if necessary, or continue with their trips on another operator.

ACM warns operators who offer trips without travel guarantees that they risk fines. Consumers are advised to check their tour operators’ travel guarantee measures before booking trips.