As more countries close their borders or introduce travel restrictions, overseas travel is becoming more complex and difficult. Malta is no exception, having suspended all inbound passenger flights arriving after 23:59 CET on Friday 20 March. With the number of confirmed COVID-19 cases rapidly increasing around the globe, many tour operators and travelers are actively cancelling holiday bookings, raising questions on the latter's eligibility to receive a refund and the conditions under which this is permissible. In this update, we address travelers' rights in connection with the cancellation of package travel contracts as found in the Package Travel and Linked Travel Arrangements Regulations and their recent amendment by virtue of Legal Notice 80 of 2020, published on 18 March 2020.

The Package Travel and Linked Travel Arrangements Regulations describe the legal implications following the termination of a package travel contract by a traveler. Under normal circumstances, a traveler terminating a package travel contract prior to going on holiday is required to pay an appropriate and justifiable termination fee to the organizer. Package travel contracts sometimes provide for standardized termination fees. When they do not, a cancellation fee is calculated by deducting the cost savings and income from alternative deployment of the travel services from the price of the package.

However, if a traveler is forced to cancel a travel package because of unavoidable and extraordinary circumstances occurring at the place of destination or its vicinity, and where this significantly affects the performance of the package or the carriage of passengers to the destination, they will be exempt from paying a termination fee. They are also entitled to a full refund of the amount paid for the package.

If a package travel contract is terminated instead by the organiser and the cancellation is also prompted by unavoidable and extraordinary circumstances, a traveler is also entitled to a full refund.

Prior to the enactment of the latest amendments, any refunds payable to the traveler following a cancellation was to be made by not later than 14 days from the termination of the package travel contract. Now, the amendments extend this period to six months, in order to reduce the burden on the finances and cashflow of travel operators, who are among the most heavily hit sectors by the impact of measures intended to address the spread of COVID-19. This extension will apply to all contracts terminated between 1 March 2020 and 31 May 2020, both days inclusive.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.