Travel companies in Europe’s major outbound markets are being forced to flout Package Travel Directive (PTD) rules on consumer refunds or face financial ruin with all short-term bookings cancelled.

Tour operators and travel agents are looking to replace refunds with vouchers or refund credit notes, and the governments of Italy, France, Belgium and Denmark have already confirmed vouchers will suffice in place of cash refunds despite the PTD requiring consumers be refunded within 14 days.

Lawyers point out consumers are unlikely to be able to recover money through the courts as legal systems across Europe are barely functioning amid the coronavirus lockdown.

Leading UK industry lawyer Stephen Mason, senior counsel at Travlaw, said: “Refunds are due for cancelled holidays but nobody can afford to pay them and suppliers are not giving money back.”

He told an International Travel Law Network video conference this week: “The advice we’re having to give [industry] clients is not so much what the law says but solutions that might work in the real world regardless of whether it’s the strict letter of the PTD.”

Klaus Siebert, the partner at law firm Engels-Siebert in Dusseldorf, said: “In Germany, the PTD means the tour organiser would have to pay back within 14 days.

“But what happens now in Germany is that all tour operators and cruise companies simply offer credit refunds – future credits or vouchers – with different validities, from up to the end of the year to up to December 2021.

“Of course, consumer associations say this is not compliant and there needs to be paid in 14 days.

“The German travel association is discussing this with the government and the government has called on the EC to say ‘Bring out guidelines’.”

Siebert said: “We know certain countries – Italy, France, Belgium, Denmark and others – have put in place a voucher solution.

“In Germany, that is still not in place but all the actors in the market work with a sort of voucher solution. There is no one paying back [money].”

Micheal Wukoschitz, of CKW Lawyers in Vienna, said: “In Austria, it’s the same. All my clients try to offer vouchers to customers, sometimes with some add on.

“But no traveller can be forced to accept such a voucher because of the PTD.

“Austrian travel associations are trying to get some sort of solution like the Italian or Belgian system, but there is great opposition from consumer associations and I don’t think the industry will succeed in getting an exemption.”

However, Wukoschitz said: “At the moment the court system isn’t really working. All court hearings are cancelled or delayed. So if a traveller filed a lawsuit now it would take a lot of time for judgment.”

Mason agreed, saying: “That is similar to the UK. The court system is not really functioning so for consumers to enforce their rights is difficult, and by the time they can enforce their rights holidays may have started again.”