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Dáil Éireann debate -
Wednesday, 29 Mar 1995

Vol. 451 No. 3

Package Holidays and Travel Trade Bill, 1995: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

When the debate adjourned I was speaking about the position of small travel agents who employ two or three people. While I welcome the extra protection for consumers we must look at the case of those travel agents who will have to met the increased costs of insurance. The Minister stated yesterday that the cost of package holidays will increase for a short time as a result of the new arrangements under this Bill.

The 1982 bonding system will no longer be adequate and new arrangements must be put in place to cover pacakge holidays in Ireland. Major hotel groups offer home holiday and historical and cultural holiday packages. There will be extra costs involved in organising such tours in Ireland in future. Most Deputies spoke in terms of package holidays overseas and I understand 350,000 people avail of such holidays to the sun every year with 150,000 making their own arrangements. It was obvious during the World Cup last year that the bonding system was not adequate. Package tours were supposed to include accommodation and tickets for the games but, in the case of a well publicised Cork company, neither was supplied. Everyone passed the buck. The travel agent blamed the tour operator and the tour operator blamed the airlines and hotel companies. For the first time, the onus of responsibility will be placed on the tour operator and I welcome that. Under the Bill the tour operator is responsible for everything advertised and for the contents of the brochure.

Travel agents have pointed out that many of the 1995 brochures covered the period up to the end of September or early October. The Minister should consider putting down an amendment to exempt travel agents from the provisions of the Bill for that period. People often complain that home holidays are expensive and it would be unfortunate if their cost was increased as a result of the provisions of the Bill. Many of those in the tourism industry might refrain from selling packaged holidays in Ireland. The small tour operator will be hit as they try, in many instances, to provide specialised holidays.

The Bill does not clarify what is meant by business travel. If we are speaking about separate bookings for transport and accommodation it could be called a package holiday. Some EU countries have facilities whereby their nationals can travel within the EU without a passport. They are known as the Schengen group. Ireland is not a member of that group and the Government is aware that such a facility is not available for Irish citizens. It would be of great benefit if we could go on holiday in the EU without having a passport.

We have often spoken about the necessity for Irish people to have visas when visiting the US. Even though President Clinton announced last autumn that the Irish would not need visas we have not received the go-ahead from the US for this facility although I understand it is to happen next month. People in Northern Ireland and other European countries can travel to America without a visa.

There are 320 travel agents in Ireland, a large number of whom are small operators. They may find it difficult to get insurance because of the extra facility they may have to provide. The Bill is primarily about consumer protection and I support that. We must look at the question of passports and visas and also the times of flights and sailings. The timing of flights should be taken up with those in the tourism industry. Holiday flights often leave either very early in the morning or very late at night and people are very tired when they arrive at their holiday destination. Sufficient facilities should be provided to enable people to enjoy their holiday.

Ba mhaith liom fáilte a chur roimh an Bille seo thar cheann an Pháirtí Daonlathaigh. Leagann an Bille síos rialacha an Aontais Eorpaigh maidir le daoine atá ag dul ar saoire ar phacáiste a chuireann na trádálaithe taistil le chéile. Is cinnte go mbainfidh an-chuid daoine an-tairbhe as na rialacha nuair a chuirfear i bhfeidhm iad. Beidh siad níos sábháilte in a n-aigne féin agus iad ag dul ar saoire, go háirithe thar lear. Beidh iachall orthu siúd a chuirfidh na pacáistí seo amach gach eolas a chur síos ina gcuid brochures agus cloí le gach rud atá leagtha síos iontu. Muna gcomhlíonann siad na coinníollacha atá leagtha síos beidh orthu faoiseamh a íoc dóibh súd a bhíonn mí-shásta ina dhiaidh sin. Bhí sé le feiceáil le roinnt blianta anuas gur tharla sé gur thit comhlachtaí trádála taistil as a chéile agus gur fágadh daoine thar lear agus gan aon duine chun teacht i gcabhair orthu. Faoin mBille seo is cinnte go mbeidh cabhair ar a laghad le fáil ag daoine cuma cén aít a théann said ar saoire de bharr na rialacha seo, go háirithe taobh istigh den Aontas Eorpach féin.

The purpose of this Bill is the implementation of the European Union internal market in the tourism sector. Laying down common rules on package holidays will help eliminate the shortcomings and different practices which have been in operation in member states, thus bringing about a major improvement for Community consumers who will be able to benefit from comparable conditions when buying holiday packages in any member state.

In giving effect to the EU directive this legislation is in effect, a charter of rights for all EU consumers travelling on package holidays. We are all too well aware of the plight of Irish holiday makers who found themselves stranded abroad when their tour organiser suddenly went out of business or — as has also happened to many people on package holidays — the holiday destination and the services provided did not live up to the exotic promise of the brochure.

The Council of Ministers which, at the time of Ireland's Presidency in 1990, was presided over by Deputy O'Malley, brought forward this very important consumer protection measure. The directive was adopted on 13 June 1990 with a requirement that the implementing legislation be in place in each member state by 31 December 1992. The Minister for Transport, Energy and Communications might inform the House of the reasons his Department has not met that deadline. It would be useful to know the implementation date in other member states for comparison purposes.

From my reading of the Bill, it seems that the Department of Transport, Energy and Communications complied in most respects with the broad requirements of the directive. It is a matter for national law to determine the measures necessary to comply with this directive and whether more stringent provisions should be adopted to give even greater protection to the consumer. This Bill, welcomed by the Progressive Democrats, brings a double benefit. It will benefit the Irish holidaymaker because of the protection afforded while on holiday, but it will also be of immense benefit to the Irish tourism industry as foreign visitors coming here on package holidays promoted by Irish companies will have the benefit of the extra protection requirements and it should help greatly in further establishing Ireland as a good reliable tourist destination.

Any measure which helps to build a good image of Irish tourism is of great value to our economy. This industry has grown in importance over the years, the private and state investment made has helped to greatly increase the number of job opportunities and the industry has been an important revenue earner for the Exchequer.

As Article 10 on page 33 of the Bill indicates this measure was recommended to the Council of Ministers by its then President, my colleague, Deputy O'Malley on 13 June 1990. It is appropriate to acknowledge the contribution made in this area by Deputy O'Malley and his staunch opposition to the European airline cartel which charged such high access fares to this island economy and prevented the growth of travel to and from Ireland for so many years.

Air travel was virtually static from 1978 to 1985. Air fares rose by far more than the rate of inflation. When the Government in 1986 did a U-turn in the course of a Bill to fine and imprison those who discounted airline tickets, there followed a period of sustained growth in Irish air travel and tourism and it is higher than in any OECD country. The Green Paper on Aviation Policy, published a year ago by the then Minister, Deputy Cowen, showed the major benefits to be gained from airline deregulation policies which Deputy O'Malley was the first to espouse in this House in the years 1984 to 1986. That Green Paper quantifies some of the benefits that accrued. It states:

The benefits for Ireland in terms of wealth and employment creation as a result of the policies pursued over the past six years have been significant:

—visitor numbers to Ireland rose to 3.3 million per annum in 1993, an increase of over 60 per cent in 1987;

—over 25,000 jobs have been created in tourism between 1987 and 1993;

—increased tourism and foreign travel earnings amounted to over £560 million since 1987;

—travel by business people has increased by about 50 per cent which undoubtedly has helped our merchandise export drive.

It has now been clearly established that competition in air travel is the first prerequisite to good value for the traveller, however, there is much to be done still to realise this goal in Europe. Air fares in Europe are the highest in the world. European airlines' share of world air travel is falling rapidly. Many European State airlines exist on State handouts, of which the European Union has had to sanction some £10 billion to aid the slumbering State giants to the detriment of more competitive airlines. The control of slots at busy airports by old airlines under the grandfather rights system is a major barrier to competition which the European Union must address by reallocating slots to new airlines in sufficient quantities to make a significant impact. State aids and predatory pricing by large airlines on smaller carriers must also be addressed.

The charter airlines played an important role in getting the customer to his or her sun destination for about a third of the cost of scheduled airlines, according to the Cascade studies carried out by the Civil Aviation Authority. Within geographical Europe charter airlines have about 40 per cent of all passenger miles flown. The charter airlines are typically profitable, low cost and do not require State assistance.

Nonetheless the combination of the elements in a package tour has in the past proved unstable. Holidaymakers have been stranded abroad. Tour operators have gone out of business between taking payments for holidays and the date of those holidays. There has also been a number of cases where brochures have contained misleading information and inaccurate photographs of hotels and other amenities.

The reputable tour operators have been with us for many years and a bonding system is now in operation. Nonetheless, EU Ministers considered there was a need for this directive. A holiday abroad is a major item in any family budget and the anxiety caused by problems in the past had left a strong consumer lobby for Government controls over the package holiday sector. In an ideal economy there would be no need for regulatory controls. Good tour organisers would be kept on their toes by the arrival of new market entrants. In this case the interval between paying for and going on a holiday plus the number of producers in different countries involved in putting the package together, retailing it, providing the air transport and the accommodation, make it difficult for the consumer to apply market sanctions against the provider of an unsatisfactory holiday.

Nonetheless, there are costs resulting from this kind of legislation which are often overlooked. The Governments of Europe will incur legislative and administrative costs at a time when few of them are able to balance their books and virtually all of them levy tax bills which are already excessive. If the package tour industry had been self-regulating, this Bill would not have been required and taxpayers would be better off.

When levies are imposed on all the members of an industry in order to compensate customers of the unsatisfactory members of that industry, we have what is called in insurance terms "moral hazard". The conduct of the bad members of an industry is covered by levies on the customers of the majority in the industry who discharge their duties to the customer in a satisfactory manner. Government intervention in banking and insurance cases is open to this strong criticism, and this Bill incurs the same costs. For example, why should a customer of risky banks, insurance companies and tour operators be compensated by the clientele of banks, insurance companies and tour operators who run their affairs with probity?

There are benefits in terms of consumer protection to be gained from legislation such as this which are sufficient to justify our support for this Bill. Its provisions also involve costs to the public sector in assuming extra responsibilities and for companies' customers.

The European Union directive is comprehensive, covering all the main areas of concern to the travelling consumers, from their original perusal of a colourful and attractive brochure to booking a holiday, involving myriad services, including public and private transport, complicated schedules and timetables, transport by air, sea and road; accommodation, ranging from tents and caravans to registered guesthouses and hotels, luxury liners or hire-out yachts and motor boats; the list is endless.

While my party welcomes the Bill and intends supporting its Second Reading, some of its provisions to which I shall refer, require clarification, as they are causing concern to some people within the industry and among groups that organise cultural and educational tours on a non-commercial basis.

The first issue requiring greater clarification is that of information to be furnished to intending holiday-makers by tour operators or holiday organisers, on health requirements, under the provisions of section 10 (1) (e). It appears that the sponsoring Department and the drafters of this Bill gave insufficient attention to this important provision as the accompanying explanatory memorandum does not even mention it. From time to time we all become aware of unfortunate, sometimes disastrous, sequels to sun holidays through people becoming seriously ill from having eaten some food or drinking contaminated water.

This highlights not only the type of information on health requirements that should be provided to intending holiday makers but also the important issue of ensuring immunisation against particular infectious diseases prevalent in many of the more exotic sun holiday destinations worldwide. For example, the hepatitis A virus, a serious debilitating infection of the liver, is found in areas of southern Europe graded as presenting intermediate risks while Africa, South America and Russia are regarded as high risk areas. Given the serious consequences of contracting hepatitis A, and the risk that arises in some holiday destinations of contracting the even more lethal hepatitis B virus, it is essential that holiday-makers travelling to areas at risk are made aware of the possibility of contracting those serious illnesses and be vaccinated against both forms of hepatitis before departure.

In the light of those health risks it would be appropriate for the Bill to spell out in more specific detail obligations on tour operators to provide intending holiday-makers with fuller information about them. Indeed it would be better still if requirements in relation to health risks in a host country formed part of the essential terms of the holiday contract spelled out in section 14. I urge the Minister to carefully consider upgrading this particular requirement.

I have received representations from the National Youth Council of Ireland expressing concern that the provisions of this Bill — intended to regulate commercial tour operators — do not extend to various organisations engaged in youth and educational exchange tours between this and other European Union member states. The Bill, as drafted, does not draw a distinction between commercial tour operators and groups and organisations engaged in cultural and educational exchange programmes, involving the transport of people between member states of the European Union. Given the non-profit status of educational and exchange organisations, there is a reasonable case for their exemption from some of the commercial requirements and definitions of this Bill, such as having to maintain a reserve fund against possible claims.

I am also aware that the Irish Travel Agents' Association is concerned about the intention to bring the provisions of this Bill into force within three months of its enactment as they have already published half a million brochures for the 1995 holiday season, a reasonable point — its implementation could well await the winter holiday brochures this year. However, it is abundantly clear that the full and effective implementation of these new provisions governing the harmonisation of travel laws between this country and the remainder of the European Union will bring much greater peace of mind to the 350,000 Irish people expected to embark on package holidays this year, while rendering this country a more secure holiday destination for people travelling here from the other 14 member states of the European Union.

I shall raise some further points on Committee Stage but my party will support this Bill.

I welcome the introduction of this important consumer protection Bill, dealing with the tourist industry which is of immense importance to our economy and within which there is enormous potential for growth as there are no curtailments, quota restrictions or the like involved. We must attract more tourists and there is no doubt that, following the cessation of violence in Northern Ireland, more people will be encouraged to choose our country as a holiday destination. Neither is there any doubt that the huge demand for the sun holidays of the past decade or so are on the wane, people realise there are health risks involved, so our mild climate and the attractions we can offer in a clean environment will attract many more visitors. However, we must ensure that when they come, they enjoy the same standards we expect when we travel abroad.

The provisions of this Bill seek guarantees for people purchasing a package holiday so that their experience is commensurate with that offered by the tour operator. It is only fair to point out that most people involved in the tourist industry are honest, people who have been involved over many years and built up a reputation. However, like any business, there will always be the whiz-kid who may set up an office down the street, offer package holidays at give-away prices, and disappear within six months, leaving many people disillusioned and disappointed. They tend to give reputable firms a bad name. Regardless of how many times they are warned, people tend to go for the glossy brochure or the television or billboard advertisement — there is nothing wrong with that because people selling a product must entice customers to their premises — but, having enticed them, any potential customer would be very foolish to choose such a product merely on the strength of its advertisement or relevant brochure. A good maxim is to believe half of what one sees and less still of what one reads, which would be true in the case of many brochures on products being sold not just here but worldwide.

The guarantees incorporated in this Bill are welcome. Too frequently we come across people who, having chosen a package holiday in good faith, on inquiry of their tour operator, were told they would have a panoramic view from their hotel bedroom window but, on arrival, may discover a "Coronation Street"— type view of the surrounding roof tops.

If one travels to Birmingham one does not expect to see anything else.

While it may be all right for Deputy Davern who is used to travelling, many people purchase such package holidays without having already travelled abroad and will expect the panoramic view illustrated in the brochure.

In addition, a brochure may well specify that one's hotel is within walking distance of the beach: does that comprise three miles, four miles? Let us be specific.

That is debatable.

Walking distance to the nearest beach should not be more than half a mile.

That is age.

Deputy Davern may have problems in that regard but there are means of having people transported if and when required. I am talking about people who buy a package deal offering various services but who, having paid through the nose, find that the deal does not live up to its claims. We must ensure that what the brochure states is accurate and, if not, there must be a come back. Too often people complain that the guarantees in the brochure are false. Guarantees must be put in place.

We want guarantees on food quality drinking water, hotel standards and so on. Frequently people have been disappointed in their holidays. The complaints of even one unsatisfied customer can affect business and the fly by night operator can do untold harm. If we are seeking guarantees for our people going abroad we should also give similar guarantees here.

We have a great opportunity to promote agri-tourism. I note the Bill does not cover bed and breakfast accommodation unless it is part of a package tour. Most people who visit the region I represent come on fishing holidays and expect to get bed and breakfast accommodation. There are also fishing clubs which operate package holidays and I am sure that would include the accommodation offered to them here.

While most people in the business provide top quality accommodation, people who see an opportunity but do not have experience in this field are moving into this industry. They would not provide the same standard of accommodation as those in the business who worked hard to build it up over, say, the past ten years. New operators cannot be allowed to undermine the industry because tourism is about to take off here and there is money to be made. We must have long term constructive planning and safeguards to ensure that people coming here are as satisfied as we would like our people going abroad to be.

I have no objection to the number of people going on foreign holidays. We cannot be parochial and say our people should stay at home. With the economic uplift provided by this good Government — which I hope will continue for a reasonable period — people will have extra money in their pockets and will seek to go abroad. Retired people who have reared families, may decide to visit Europe. We must guarantee that their hard earned savings are not thrown away on a holiday that does not live up to their expectations.

Our sports people are gaining international fame and people are travelling abroad to support them. Last weekend I had the pleasure of travelling to support Caitriona McKiernan from Cornafein, County Cavan, to Durham where she came second and won a silver medal for the fourth time in the cross country grand prix. She is not acknowledged here but if she came from Dublin or Cork there would have been banner headlines. However, it is a marvellous achievement for a young girl from Cavan.

We travelled to Newcastle and on to Durham. I was annoyed that the Irish currency was not acceptable in the hotel in which we stayed, yet the punt was equal to the pound sterling. It is not good enough in this day and age that our currency should be belittled. One of the people travelling with us had Northern Ireland currency and the hotel would not accept it. I wonder whether the people in Northern Ireland are aware of that.

They probably heard about the coalition being in Government.

They have heard about it and say it is great to see the country on the move again and that they must visit Ireland now.

The Deputy got too much sun.

Tour operators should try to ensure that our currency is acceptable in accommodation, generally hotel accommodation. In the hotel to which I referred there was a billboard at the back of reception showing various currencies but the £IR was not quoted. I take that as an insult. That is not acceptable and it is time, as a nation, we insisted that we be allowed trade in our currency.

Some Deputies asked whether this Bill will result in increased holiday and travel costs. Up to now going on holiday was a risk, a type of gamble. A spoiled holiday cannot be costed. Surely guarantees are worth the extra costs. If tour operators want to give a package holiday without guarantees let them say it is without guarantee. If there are people who want to accept it, that is fine. This would operate like the smoking advertisements which say smoking is bad for health but people still risk taking the odd cigarette. If a tour operator guarantees that if a holiday does not live up to the offer made the money will be refunded, a price has to be paid for it. There are two sides to the argument. It is not acceptable that a tour operator should sell a pig in a poke. With all the mod cons and the various developments there should be no reason to doubt that places of destination live up to expectations.

We have a marvellous opportunity to promote Ireland which has miles of unspoilt beach and acres of open countryside. This legislation shows that the Minister is willing to adopt standards expected in Europe and that can only be beneficial. I compliment him.

I wish to share my time with my colleague, Deputy Davern. I too welcome this legislation. In the long term the consumer should benefit from such legislation. I hope the legislation will not apply to this year's brochures as it would make things very difficult for travel agents who have already sold holidays from those brochures. Travel agencies will have to make contingency plans for this legislation. I hope business travel will be excluded from it.

Deputy Boylan referred to the possibility of holiday costs being increased. I have spoken with a few travel agents who have said that in the long term the legislation will result in an increase in the price of holidays abroad. It will put pressure, as has already been shown, on small travel agents with regard to insurance. I understand that in the UK and Holland insurance costs increased by 40 per cent following the introduction of similar legislation. I am not criticising that. It is probably inevitable because travel agents will have to take more responsibility for what they are selling to their customer. I hope solicitors will not encourage people to sue travel agents merely because they experienced some slight difficulty during their holiday. Deputy Brennan referred to people who had sued travel agents and won on very dubious grounds——

He did not say they won the cases; he simply said that cases had been taken.

He referred to a person who fell off a camel in Tunisia.

If the package does not include a ride on a camel one cannot sue.

I have no doubt that some solicitors will pursue these cases. We have all heard of cases involving half built hotels, no facilities and people arriving at airports in the middle of the night with no courier to look after them. A holiday is a huge financial cost for people and it should be properly run from start to finish and be in accordance with the details given in the brochure. It is not good enough for a brochure to say that an apartment overlooks the sea when a hotel was built in front of it two years ago and one can no longer see the sea. This should not be allowed happen and I hope the legislation will put pressure on travel agents to ensure that they know what they are selling and can stand over it.

One of the worst examples of travel agents not doing their job properly involves Sportex which circulated a very glossy brochure giving details of a package holiday which included a flight to the USA for the World Cup, internal flights, hotel accommodation for a month and match tickets for the outrageous price of £1,200-£1,400. If travel agents had added up the individual costs they would have realised it was impossible to sell the package for this price. However, many of them decided to ignore this and sold these holidays which proved to be a nightmare for approximately 320 people from Ireland and England. Under the legislation it will not be possible for this to happen in the future. The travel agents who sold these packages were as responsible as Sportex for letting people down. It costs approximately £400 to fly to the United States, 30 nights accommodation costs a minimum of £30 a night and there are also the internal flights, giving a total of more than £1,500. The costs did not add up and travel agents should have known that. I do not know what action the Minister can take against Sportex.

The most worrying aspect of all this is that when people rang Sportex to complain they were put through to a company called Air Track Football Limited. The FA in England has had huge problems with Sportex and Chris Abbott has a history of letting down people who wish to attend sporting fixtures. I am delighted the legislation will deal with people who go out of their way to take money from fans. It is about time these people were put in jail. Both Sportex and the travel agents who sold these holiday packages to the general public are guilty of fraud.

I welcome this Bill which will deal with extreme cases similar to the one referred to by Deputy Ryan. Saliva must be dripping from the mouths of members of the Incorporated Law Society and the medical profession who regard this legislation as another bonanza. I am particularly concerned about small travel agents who are supposed to know the details of brochures on Turkey, Afghanistan, Australia, North America and other places they have never visited. These are the people we ask to pay rates, public liability insurance, employment levies, PRSI and tax. Yet we propose to place a further imposition on them by requiring them to take out insurance which will be very costly. When the Minister says there will be a small increase he really means that there will be a significant increase. I am sure he will agree that the price of holidays will be increased by 5-6 per cent as a result.

The legislation will lead to a significant increase in whimsical complaints. Deputy Brennan referred to a fellow who fell off a camel in Tunisia. If a brochure contains a picture of a person riding a camel then one may assume this is part of the package holiday. Such pictures encourage people to take a camel ride when in Tunisia. From my experience of the horse industry I know that some visitors who have never even ridden a bicycle go horse riding while on holiday. If anything happens to them while riding a horse the tour operator will be liable.

If a person on a driving holiday hits a pothole can he sue the tour operator for failure to warn him that there were potholes in Cavan, Monaghan and elsewhere? If a person plans a holiday to Ireland because he or she is told it is a friendly country and is mugged while here, can that person sue the people who sold the holiday? The provisions of the Bill are far too broad and will pander to people's whims. What about school, religious and voluntary group tours? Will the person who organises a bus to, say, a football match in Cork or Killarney be liable if something goes wrong? The Bill refers to "a person who acts as an agent other than for reward". This whole area needs to be reconsidered. Will the Minister consider not introducing the measures this year? If not, travel agents will have to reprint their brochures. There is a tendency sometimes to take the liberty of advertising a sunny climate in particular destinations, but we cannot even guarantee sunshine in Spain any more. In such circumstances would travel agents be liable under the legislation?

If people are encouraged to take out insurance there will be a huge number of claims. To some extent, the travel industry has been self-regulatory. If a person books a holiday through a travel agent, particularly in a small town, and the holiday turns out to be disastrous, the adverse publicity which would ensue could spell the end of the travel agency. Why should a travel agent be responsible if a person gets food poisoning while on holiday? I know that is not the Minister's intention, but the legal eagles will ensure that people will sue the travel agent at every hands turn. For example, if a person contracts AIDS while on holiday he or she could sue the travel agent for not supplying condoms or if a married couple were not made aware that they might have a lax moment while on holiday and the women became pregnant the travel agency is liable to be sued. I can foresee ridiculous cases arising as a result of this Bill, just as in the case of local authorities where people claim for reasons we never dreamt of.

While I welcome the overall package enterprise, it will be to the detriment of holidays at home because of the high cost involved. I am not concerned about cases brought to the High Court, but about the large number of minor cases brought before the District and Circuit Courts. To save money in legal costs, insurance companies will pay out lump sums of up to £7,000 to stop litigation going further. Will the Minister reconsider the provisions of the Bill and, in particular, ensure that travel agents cannot be held responsible for the variety of facilities they advertise? This would be detrimental especially for smaller agents and will tend to centralise large travel agencies in the big cities who can afford the insurance costs because they have the staff to monitor and research them. Once again areas outside the Pale will be adversely affected.

They are paying it already.

The Minister knows as well as I that the rates will increase.

I welcome the Bill. Even if the cost of holidays increases, in the long term consumers will welcome its provisions. The genesis of the Bill is in the sharp practices and misleading information which occurred in the past which left many people disappointed after their holidays. Most people go on holiday with high expectations and to enjoy themselves. They go of their own volition, they certainly do not go out of a sense of duty or obligation and, obviously, they are disappointed if the holiday is not to their satisfaction.

Holidays account for a considerable percentage of most people's average income, some even borrow to go on holiday. It is important, therefore, that people are afforded the necessary protection when they go on holiday. The basic principle of business is to keep the consumer happy and this is true in particular of the tourism industry. Holidays are discretionary but if a person is disappointed with a holiday, he or she will not be anxious to return to that destination and if travel agencies do not bear that in mind, they will go out of business sooner rather than later. Also, people who are dissatisfied with their holidays will not book through the same travel agency the following year. It is important that travel agencies maintain high standards to encourage people to book their holidays with them.

The Bill will increase the rights of consumers under a number of headings. It is important that a third party should be able to avail of bookings when the person who booked the holiday is unable to avail of it. In the past, many difficulties with package holidays arose from a lack of clarity and anxiety on the part of those selling holidays to present the holiday in the best possible light. While that may be the fairest and most charitable way to present a holiday, some people distort information and mislead people in presenting holidays. It is desirable that such practice is brought to an end.

The Bill provides for clear regulations in regard to categories of transport and the type and standard of accommodation and, as this is easily defined, people will know exactly to what they are entitled. The Bill also covers meals, tour itineraries and transport. It is also important that people are aware of the tax they must pay and the distance their hotel is from the beach. Vague terms such as "near the beach" and "beautiful views" should be clarified. There is no excuse for people being vague about the distance from the hotel to a beach or other facilities. It is a simple procedure to measure the distance, it can then be written in black and white. People will then know exactly where they stand and can plan accordingly.

The provisions regarding passports and visas are very important as it can be very frustrating to discover at the last minute that a visa or passport is not in order. It is pleasing to note that our passport facilities are being improved so that people can obtain a passport within a few weeks.

The Bill will make the process of providing package holidays much more complicated. The health and safety requirements are very welcome because nobody wants to become ill while on holiday. It is important that realistic and practical precautions are taken to ensure that does not happen. Minimum levels of insurance, insolvency arrangements, etc. are also important — we have had some nasty experiences in this regard in the past.

I agree with some of the remarks by Deputies opposite about Irish travel agents who have printed their 1995 brochures. I hope the Minister will take their difficulties into account because it was reasonable for them to go ahead and print those brochures when they did. I am sure something can be worked out to get over the immediate problem so that everybody will know where they stand.

I wonder if the Bill will create some difficulties for small operators here, in particular, people who provide bed and breakfast type accommodation and offer fishing, pony riding and golfing facilities etc. They will be covered by this Bill. It is highly desirable that the services they offer should be adequate, but I sincerely hope the Bill will not discourage them from developing new products to sell to their customers. It is important that such operators should work at developing new packages. Obviously they will have to raise their standards, and it is desirable that they should do so. However, I hope due consideration has been given to the problems they will encounter and that it will be possible to alleviate legitimate problems that arise. In that context it is worth mentioning that about one-third of the work-force in the European Union are employed in organisations which employ fewer than ten people. The tourism industry is a very important area for growth in employment and I am anxious to see the development of new packages.

The provisions of the Bill will probably result in an increase in the cost of holidays but one gets what one pays for. If we are paying for a better service, that should prevent a recurrence of many of the disappointments that were suffered in the past, and that is desirable.

The Bill is also part of a phenomenon whereby consumers' rights are given much more attention than in the past. That is desirable but, as a society, we have become very concerned with rights. However, in addition to rights there are obligations and duties, and I sometimes feel that we have become excessively concerned with rights and inclined to disregard obligations and duties. It would not be out of place if there were an element of adjustment in the balance between rights and obligations. It would do us no harm to pay a little more attention to our responsibilities and obligations. The preoccupation with rights has given rise to court cases and that phenomenon is undesirable from the point of view of the welfare of our society.

I compliment the Minister on introducing this Bill which is well overdue. The Bill legislates for a 1990 directive, and some Opposition speakers complained about the delay in introducing it. At the same time there is concern about the three months within which the Minister intends to make this Bill apply to the travel trade here. The Opposition cannot have it both ways; they cannot on the one hand complain about the delay and, on the other, complain about the haste with which the Minister introduced the legislation. People intending to go on a package holiday know that if they have not made arrangements by July next, they will not be going anywhere, either abroad or touring this country, until well into the autumn. That is why there are so many television stations advertising the packages that are available. The implementation of the provisions of this Bill in three months time will have little effect on those who have booked their holidays. A person going on a package holiday must book early in the year.

The Minister is right in saying that as a result of this Bill there will be accuracy and clarity in the content of brochures and promotional material. Many brochures are heavy on coloured pictures of beautiful scenery and the like and light on explaining what the package involves and how the prices change from one month to another. If information in brochures is clearer it will be a help. We have all heard about the small print in contracts, but one would need a magnifying glass to see exactly what one is committing oneself to when signing up for a package holiday. I hope the Minister will ensure that the print in those brochures is big enough for people to read them in order to understand what they are signing up for.

When I was planning to go to America I hired a car at what I thought was a particularly attractive rate, but when I got there I discovered that if I did not take out additional insurance and returned the car with the slightest scratch, $200 or $300 would be added to the cost. In addition I had to bring it back to the place from which I had hired it. There are other arrangements whereby one can hire a car at one airport and leave it at another. The people organising the car hire made it clear to me that the car had to be returned at a particular time and if I wanted to keep it an extra day or two the cost would rocket. People have also had the experience of taking a package holiday to a resort that looked particularly attractive in the brochure only to find that the hotel was partly finished and next door there were builders using jackhammers and making a terrible racket. In other resorts one might be placed in accommodation beside some of the lager louts that we recently had experience of at the last soccer international match in Dublin. In attractive looking places like Magaluf people complain that they would need a bodyguard to go out in the evening to any of the restaurants or hotels. We have all heard of such complaints and I hope this Bill will adequately deal with these problems.

More protection obviously means an increase in the price of the holiday because of the added cost of insurance. Most people realise it is wise to be properly insured when they go abroad, and if the cost of the insurance can be contained in the initial expenditure that is all the better. The Minister will have to keep a close watch on the additional insurance costs and monitor any additional costs that may be applied to contracts following the passage of this Bill. I say that particularly because we live near a large country that offers a great deal of very attractive packages. For £70 one can be flown to Manchester, Luton or Gatwick where the competition for business is intense and there is a huge range of offers. We do not want our tour operators to face even more intense competition on price when the Bill comes into operation.

While we are delighted with the peace dividend it is worth reminding ourselves that there is also an international airport in Northern Ireland. The Minister should correspond with his counterpart in the Northern Ireland Office to ensure that the rules will apply equally to those travelling through that jurisdiction. It is important that there is a level playing field. While competition is desirable and the Bill provides for consumer protection, tour operators in a neighbouring jurisdiction may take advantage of it with the result that consumers will travel 100 miles to take advantage of a far better deal.

Some Deputies questioned the timing of the Bill and mentioned this may cause problems but I do not think it will have any great effect in the coming holiday season. Having waited five years I am delighted it has been introduced and I am sure it will be passed through the House today.

The purpose of the Bill is to transpose an EU directive into Irish law. It is important that the same regulations apply in all member states. The Bill provides for the provision of information by the organiser and retailer to the consumer who will be at liberty to transfer his business to a third party.

Great emphasis is being placed on tourism development with each country seeing itself as a holiday destination. Although my own country does not have a coastline or high mountains it still has much to offer in terms of fishing, walking holidays and places of historical interest.

While the Bill provides for consumer protection it will also place a great responsibility on tour operators. I understand that of the 322 tour operators in the country about 200 are small with two or three employees. The Bill should not impose heavy demands on them.

The legal eagles could have a field day having regard to the frightening increase in litigation in recent years as compared with other countries. In this regard many bed and breakfast establishments provide fishing equipment, boats and trekking ponies to people who may not be very skilled. I perceive problems in terms of litigation. The downside to this Bill is that it may seriously curtail the efforts of those who are trying to develop their businesses.

I thank Deputies for their contributions to the debate and appreciate the constructive manner in which comments were made and the general support expressed for the Bill. A number of questions were asked and some Deputies suggested amendments to certain sections.

Before addressing these I reiterate by way of general comment that it is important to bear in mind that the primary purpose of the Bill is the transposition of the EU directive on package travel, package holidays and package tours into Irish law. Ireland is obliged to transpose this directive by virtue of her membership of the European Union and by enacting this legislation we are fulfilling our obligations in this regard.

What we are seeking to do is strike a balance between the rights of the consumer and the cost to the travel trade. We have found this balance. I understand that the travel trade, with which my Department has had a number of rounds of consultations, is generally satisfied with the Bill. A number of matters remain the source of concern for the trade. However, while there is some flexibility in implementing the directive it is limited. We must implement both the letter and the spirit of the directive.

Deputy Brennan and a number of other Deputies asked that the commencement order bringing the Bill into operation should not be made until three months after the Bill has been enacted. A number of aspects have to be balanced. First, as was pointed out by a number of Deputies, we are over two years late in bringing this directive into operation. It is important to give consumers the protection afforded by the Bill as soon as possible. On the other hand the travel trade must be given adequate time to prepare the ground in relation to the accuracy of brochures on the shelves and other matters. The travel trade knows that this Bill is on the way and is already making the necessary preparations. At the same time it is important that it should have adequate time to prepare fully for the new requirements under the legislation. I am sympathetic to the request made by Deputy Brennan and other Deputies and have taken due note of it. It will not require an amendment to the Bill as it refers to the timing of the order which will be made bringing the Bill into operation.

Deputy Brennan's point about the lead-in time for implementation of the Bill is linked to another point made by some Deputies regarding retrospection. In other words, what will happen if, after the Bill comes into operation, a customer picks up a brochure in a travel agency which was issued before the Bill became law? Once the Bill is enacted my Department will be contacting travel agents and tour operators to draw attention to the new requirements. During the lead-in time the onus will be on travel agents to ensure that they stock only brochures which comply fully with the new requirements. I will ensure that the lead-in time is fully adequate for this purpose. In the interest of consumers it would not be reasonable that it should exceed three months.

On the question of whether travel agents should not be liable for misleading information in brochures, it is a requirement of the directive that brochures be fully accurate. The directive makes both the organiser and retailer liable to a consumer who relies on the brochure. This is necessary for the consumer. A number of Deputies mentioned that exaggerated claims are often made. This point is covered by the Bill. The consumer is entitled to be offered a fully accurate description of the package he is paying for. It will be a defence for the retailer to show that he did not know and had no reason to suspect that the brochure was false or misleading.

There could also be a situation where a travel agent knowingly distributes a misleading brochure produced by a tour operator outside the jurisdiction. In those circumstances the consumer should be able to take action against the travel agent because nobody else would be available to the consumer to take action against.

Deputy Brennan asked that the Bill be more specific on business travel in order to clarify that it is not a package. I am satisfied that the Bill before the House covers this point adequately. It was carefully drafted to ensure that business travel does not come within the definition of "package". The important point is that business travel is not prearranged. The guidelines which will be issued by the Director of Consumer Affairs on what constitutes a package will make it clear that business travel is not covered.

Some Deputies asked whether this legislation will apply to people who offer bed and breakfast type accommodation. I can understand the reasons for concern as this kind of accommodation has become increasingly popular in recent years. However, the concern is not well founded. The provisions of this Bill will not apply where bed and breakfast accommodation is offered on its own — in other words, to the vast majority of cases. The legislation will apply if the accommodation is combined with transport or with some other tourist service which accounts for a significant proportion of the package.

Transport, in this instance, obviously does not include services such as picking up someone from the local bus or rail station.

Or the pub.

Such a service would be ancillary to the accommodation. It would, however, include the provision of train tickets — this would mean that an inclusive package would be created.

Other tourist services in this regard could include activities such as golf and fishing. People on these types of breaks will have spent significant amounts of money and it is only right and proper that the consumer should have protection in these circumstances, whether they are staying in bed and breakfast accommodation or in hotels.

Where bed and breakfast accommodation in Ireland is being provided as part of a package organised abroad, it is the organiser in that country, Germany for instance, who will have to comply with the provisions of the directive as enacted in that country. In these circumstances, the person who provides bed and breakfast accommodation here is unlikely to need any additional insurance cover over that which they have already.

I would stress that this is consumer protection legislation which highlights the onus on the package provider to ensure that the product sold, and the manner in which it is sold, is satisfactory. While there is a greater onus put on package organisers, nonetheless consumers will have to prove their claims and the organiser will not be liable where the consumer himself or herself is at fault.

The Bill is one of a number of measures aimed at protecting consumers. The European Commission has been very active in this field in recent years and in February this year my colleague, the Minister for Enterprise and Employment, made regulations implementing the Directive on Unfair Terms in Consumer Contracts. The Director of Consumer Affairs will also be taking these regulations into account in his implementation of this Bill when enacted.

The provision in the Bill regarding the information to be provided to the consumer about health formalities required for the journey and the stay is taken directly from the EU Directive. What is in question here is that an intending consumer should be informed if there are particular requirements of the authorities in the country to be visited or any countries through which the consumer would pass in the course of the journey in respect of innoculations or vaccinations. It is sufficiently clear in my view that the health requirements in question are those imposed by the national health authorities in the various countries.

A number of Deputies have raised the question as to whether youth exchange organisations come within the scope of this Bill. The short answer to that is that they do.

These organisations are engaged in the business of selling packages to the public on a full time basis. Consumers are entitled to the comfort of knowing that they will have the protection of the legislation both from the point of view of getting what they pay for and having their money secure in the event of the organisation in question being unable to meet its financial obligations. This is all the more necessary given that what we are talking about here, very often, are under age minors.

This treatment of educational and youth exchange organisations is consistent with the attitude taken by other member states, none of whom have excluded it from their legislation transposing the directive into national law. However, school tours, scout camps and pilgrimages are quite a different matter. They are organised on an occasional basis only and as such will be excluded from the requirements of the Bill.

Does that mean the annual pilgrimage is out or just the occasional one?

It depends on how religious one is.

Even if the current Bill were never introduced, all foreign travel, including that organised on an occasional basis as described above, comes within the scope of the Transport (Tour Operators and Travel Agents) Act, 1982 and must be sold only by a tour operator or travel agent licensed and bonded under that Act. Anyone — and that include voluntary bodies, schools and pilgrimages — organising foreign travel must do so through a licensed travel agent or tour operator in order that people buying the travel may have the protection of the Act even if it takes place only once a year.

I note the suggestion for amending the definition of "travel agent" in the Bill. I will look at this point again on Committee Stage.

I appreciate the concerns that have been expressed about the safety of Irish holidaymakers travelling abroad. This Bill is meant primarily to transpose the EU Directive on Package Travel into Irish legislation. It is not a vehicle to introduce wider measures. Nonetheless, the legislation will place a greater onus on the travel trade to ensure that all the elements of the contract with the consumer, including those relating to accommodation, are properly performed.

This Bill transposes EU Directive No. 90/314/EEC into Irish law. Deputies have commented about the delay in implementing the directive. This was due in the main to the need for a comprehensive consultative process. There have been extensive rounds of consultations with the travel trade and with carriers. The complexities of the directive also meant that my Department had to consult with the EC Commission to seek clarification on a number of points. Those are the reasons it was not implemented before now. It is now being done because there is a new dynamic Minister in the Department who took the bull by the horns and decided to bring the Bill before the House and get it passed as soon as possible.

I want to say to Deputy Molloy, who raised this question, that his former Leader when Minister was President of the Council of Ministers and had every opportunity, during his period in office, to bring this directive into Irish law as soon as it was passed. It ill becomes the Deputy to criticise delays on the part of others when his party delayed also.

One of the points discussed with the Commission was the period specified in section 15 in regard to last minute reservations. The Commission informed us that, bearing in mind the other provisions of the directive, member states are allowed to decide the timeframe on this matter. A number of Deputies have suggested that a period of 14 days should apply. The Bill provides for a seven days period. However, in view of the points made by the Deputies, I will look again at the matter on Committee Stage and also at the point raised by a number of Deputies about defamation.

Some Deputies have expressed concerns about the possibility that implimentation of the directive will result in large increases in holiday prices. I do not expect any such large increases as a result of this legislation. Additional costs, if they arise, will be because of the need for package providers to have additional insurance cover in respect of the activities of providers of accommodation abroad. The travel trade business is highly competitive and this will have its own effect on keeping prices steady.

Deputies referred to possible large increases in prices — increases of up to 40 per cent in insurance costs were mentioned. Concern was expressed that this could result in small travel agencies going out of business. I do not accept that this will happen and it is completely unrealistic to suggest that prices of packages will escalate by anything of this order.

I am satisfied that the increased costs to the package provider, when spread over the large number of packages sold over the year, will result in a negligible increase in prices, if any. Even if there is a small increase in prices I am satisfied that the additional improvement in the protection of the consumer is worth this increase. The Director of Consumer Affairs, who will be administering this legislation, when enacted, will be extremely vigilant to ensure that the introduction of the Act will not be used as an excuse to increase holiday prices unnecessarily.

Deputies mentioned the need for an arbitration system. There is an existing arbitration scheme administered by the travel trade itself in respect of foreign travel. Consumers can also have redress to the small claims court for claims up to £500 in respect of any package for which they have contracted.

The need to transpose this directive presented me with the opportunity to amend a small number of sections of the Transport (Tour Operators and Travel Agents) Act, 1982. It allows me to eliminate a number of anomalies which have come to notice in the light of implementing the 1982 Act. Carriers have heretofore been exempted from the provision of that Act.

The current Bill applies to all package organisers, including carriers who put packages together for sale. In addition, where a carrier puts packages together which include overseas travel, the exemption under the 1982 Act is now being removed. It will be necessary for all such carriers to be licensed and bonded under that Act in future in respect of that element of their business. This will level the playing field between carriers and the tour operators with whom they compete. It will also give consumers who book with carriers the protection of the 1982 Act.

Problems were experienced with the operation of the 1982 Act in identifying precisely what was encompassed by overseas travel. It referred only to travel outside Ireland. That Act, as amended by this Bill, will in future apply to all travel commencing in the State to destinations anywhere in the world outside the State or outside Northern Ireland.

In recent decades, tourism as a leisure pastime within the European Union has expanded and developed beyond recognition. More than 180 million people within the Community take their holidays away from home each year. This is in addition to those travelling for business, professional and educational reasons.

It was clear that the different measures adapted at the level of the member states were not working as well as they should and, in the interests of developing policies for protecting the consumer, it was necessary to have common rules and a common framework for holiday packages in all member states.

This is important legislation which will improve the protection of consumers in Ireland buying holiday packages and will raise the standards of service to all holidaymakers. It should be welcomed not only by consumers but by all in the trade. It gives clear guidelines to package organisers on what is required by them and on the extent of their liability.

Will the Minister consider an arbitration system, which may cost much less money, given that people have the right to go to court anyway?

There is already a voluntary arbitration system in place for foreign travel and that system will continue in operation.

Any measure that would discourage legal costs would be acceptable.

That system is working very well.

Question put and agreed to.