Important changes in tourist services law – the uncertain future of corporate events and team building trips?

A real revolution in the event industry is at hand. Not only does it impose additional obligations, increases the costs of organising events, but also creates additional business risk caused by highly ambiguous regulations. On 1 July 2018 the new act on packaged travel and linked travel arrangements came into effect, which introduces a large number of important regulatory changes in the travel services industry.[1]

More requirements and less freedom in the event industry

The most important change is that entities to which the act on travel services did not apply so far will be embraced by the regulations. From the effective date of the new act all those who organise package travel [2] or facilitate the purchase of linked travel arrangements [3], including on non-commercial basis, will be embraced by the new regulations. This means that such entities will be required to have sufficient financial backing (eg. Insurance guarantees) and fulfil additional administrative requirements associated for instance with the operation of the Tourism Guarantee Fund and obligatory contributions, or the duty to obtain an entry in the relevant register [4]. An important piece of information for instance for incentive agencies, event agencies and organisers of congresses and meetings is that the act enumerates cases to which it does not apply, namely:

• packaged travel and linked travel arrangements offered, ordered or facilitated on an ad hoc, non-profit basis and to a limited group of travellers only, that is organising a trip for a group of friends, a „green school” organised by the school itself etc.;
• packaged travel and linked travel arrangements purchased on the basis of a general agreement (i.e. providing for a long term order for a number of business trips over a specific period of time) for organising business trips between a travel company and a company or entity who conducts business activity for remuneration;
• packaged travel and linked travel arrangements lasting less than 24 hours, unless they include overnight accommodation.

In addition the act introduces:

• new concepts: travel company, linked travel arrangements, traveller, point of sales, incompliance;
• new definitions of terms: tourism organiser – will now embrace existing travel organisers as well as travel intermediaries, travel arrangements, tourist event;
• information duty towards the travellers  before they enter into specific forms of agreements;
• solutions improving the system of financial protection of travellers against the consequences of insolvency of travel organisers and enterprises facilitating the purchase of linked travel arrangements;
• changes in the existing formula of maintaining the Central Register of Travel Organisers and Enterprises Facilitating Purchasing of Travel Arrangements by delegating registration to the Provincial Marshalls without the need to obtain the approval of the Ministry of Sport and Tourism;
• the ability to print out the entry in the register of travel organisers and entities facilitating purchasing of linked travel arrangements from the website;
• a Central Contact Point operated by the minister appropriate for tourism;
• defined detailed rules of operation of the Tourism Guarantee Fund;
• regulations concerning administrative procedures, monitoring tools, scope of administrative control and administrative as well as criminal sanctions against entities offering tourist events and facilitating purchases of linked travel arrangements for conducting their business in breach of the law.

The act raises certain doubts as its provisions are not formulated in a clear and generally comprehensible manner, which gives rise to interpretation problems. The key difficulty seems to be absence of an unequivocal explanation of what exactly the legislator means by a „general agreement” and „business trip”, as well as absence of a specific indication when we are dealing with incidental, ad hoc facilitation or order of tourist events and linked travel arrangements.

Considering the foregoing and the appearing interpretations of the new regulations (including by the Ministry of Sport and Tourism), it is to be pointed that entrepreneurs involved in organising trips which serve as team-building retreats, incentive trips, congresses, conferences, meetings involving overnight accommodation and at least one additional travel arrangement, will usually be covered by the new regulations concerning tourist events and linked travel arrangements. Since the sanctions are serious [5]  (financial penalties up to PLN 50 000, fines, restriction of freedom or imprisonment up to 3 years), the event industry ought to conduct a very careful review of its practices and projects to determine whether or not it will have to meet additional requirements (including an entry in the register and submitting appropriate financial security) in order to be in a position to continue providing its services. More importantly, when drawing up cost lists of events the increased costs will also have to be taken into consideration.

[1] On this date the provisions of the act of 29 August 1997 on travel services related to travel organisers, travel intermediaries and travel agents will be repealed. The title of the act will also change, and will now read: „The act on hotel services and the services of tourist pilots and guides”. The purpose of the act is to adjust the law applicable in Poland to the provisions of the European Union directive, i.e. the directive of the European Parliament and Council no. 2015/2302/EU of 25 November 2015 on package travel and linked travel arrangements, amending Regulation (EC) No 2006/2004 and Directive 2011/83/EU of the European Parliament and of the Council and repealing Council Directive 90/314/EEC, regulating the operation of the travel industry in the entire European Union. Poland as a European Union member state is required to apply European law, and is one of the first countries to adjust to the new guidelines.

[2] According to the act on packaged travel and linked travel arrangements it is to be understood as a combination of at least two types of travel services for the purpose of the same trip or holiday, fulfilling the requirements mentioned in Art. 5 sec. 1 of the act;

[3] According to the act on packaged travel and linked travel arrangements it is to be understood as a) transport of passengers, b) accommodation for other than permanent stay purposes, which is not an inherent element of passenger transport, c) car hire or rental of other motor vehicles, d) other services provided to travellers which are not integral parts of the arrangements indicated in points a – c;

[4] Register of travel organisers and entities facilitating the purchase of linked travel arrangements;

[5] The provisions regulating the sanctions are to be found in Chapter 8 „Financial penalties and sanctions” of the act on packaged travel and linked travel arrangements;

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