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Climate Change & Travel Claims: Part 2 – Droughts!

This is the second in a series of articles exploring how climate change is likely to impact the travel industry over the next few years!  In our previous article, Conor Askins looked at how extreme heat and wildfires would affect the travel industry.  This time we turn our attention to droughts.

The Catalan government formally announced a ‘state of emergency’ last month following a drought that has lasted more than 1,000 days and is ongoing!  This is already affecting travellers in the south of Spain with:

  • Water usage restricted for millions of people;
  • Local residents in Marbella being limited to 160 litres of water usage per day (1 adult bath is around 150 litres of water!);
  • Fines are being imposed if residents exceed this limit;
  • Showers at some swimming pools and beaches are closed;
  • Some hotels are filling swimming pools with seawater;

Unfortunately, the situation has the potential to escalate beyond the closure of a few swimming pools and beaches.  There are concerns that the situation could deteriorate with drinking water being limited or, in some places, unavailable.

Spain is the UK’s favourite holiday destination with approximately 15.6 million visits from UK residents in 2022.  Although the UK media have not been covering the situation in any great detail as yet, that may well change as we approach peak summer holiday season.

Travel companies face the risk of running into three common problems: (1) Customers trying to cancel their holidays and claim refunds, (2) Customers claiming for refunds after their holiday because it wasn’t ‘what they hoped for’, (3) A drop in sales to Spain and other Mediterranean countries.  But do such claims hold water?

Under Reg 12(7) of the Package Travel Regulations, travellers are entitled to cancel package holidays with a full refund before departure if their holiday will be significantly affected.  There are a few things to consider here:

  • Is the holiday likely to be significantly affected? It will depend on the facts.  It is arguable whether or not the closure of swimming pools alone is sufficient to trigger the right to cancel with a full refund.  However, as the impact on the holiday increases, so does the risk of claims being successful;
  • Is it ‘too soon to cancel’? Just because there is a problem at the holiday destination today doesn’t mean that there will be in 3 weeks.  A long spell of rain might be on the horizon, or the local authorities may implement measures to better control and distribute water supplies;
  • What was the situation at the time of booking? A recent decision from the EU courts (QM v Kiwi Tours) suggests that customers cannot claim refunds if the situation has not changed significantly between the time of booking and departure.

The concept of droughts affecting holidays in Spain remains a relatively new but emerging situation.  For now, there is a real risk that customers may be able to ‘tick all of the boxes’ above, cancel holidays and claim for a full refund.  But what about the longer term outlook?

The third point above is particularly important because, in the context of climate change, ‘dry holidays’ could eventually become ‘the new norm’.  This is where the decision in QM v Kiwi Tours may come to the rescue.

The UK courts are not obliged to follow the lead of the EU Courts in QM v Kiwi Tours but, on this particular issue, the travel industry will be grateful if they do.  Otherwise, customers might be entitled to claim for refunds due to ‘dry holidays’ in Spain indefinitely.

Aside from cancellations and refund claims, there are few other things to consider:

(1) Duty To Inform Customers: Package organisers are obliged to inform their customers of any significant changes to the main characteristics of the package. This could be a difficult call to make. For example, will the closure of all swimming pools at the hotel trigger this obligation?

(2) Duty of care: Package organisers have a duty of care to ensure the safety of their customers. Nobody wants to overreact and scare customers into cancelling their holidays unnecessarily. Equally, it is important not to underestimate the situation and risk customers being hospitalised – e.g. as a result of dehydration caused by lack of drinking water in a remote area.

(3) Marketing / Advertising: If the droughts continue to be a problem travel companies will need to reconsider how they are marketing the holiday. This includes any property descriptions on websites, brochures, in e-mails and booking confirmations.

Climate change may well be a slow process but the industry will no doubt be keeping a close eye on how different holidays may be affected in different ways over the coming years.  After all, what is considered ‘extraordinary’ today, may be considered ‘ordinary’ tomorrow. 

Do you sell holidays in Spain that are affected by the droughts or have a similar problem with holidays affected by unusual weather conditions?  If so, feel free to get in touch a member of the team at advice@travlaw.co.uk.

This article was originally published on: 25 March 2024

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