Sustainable Tourism Law

A NEW DRAFT REGULATION OF PACKAGE TRAVELS IN SPAIN 559 This guarantee is requested to travel packages organizers and retailers. This may constitute the guarantee before their activity starts and it must be kept as long as the company is in business. This Decree is innovative with regards to the definition of insolvency stated by it. This definition, however, is not in accordance with the one provided by the Insolvency Act. The decree considers that insolvency takes place when, because of liquidity problems of the organizer or retailer, travel services stop running, will no longer be provided or will only partially be provided, or when the providers of such services require travellers to pay for them. As it disregards the efforts made to consider when consumers may put this guarantee into effect, we consider that some interpretation concerns may arise from this provision. First, it does not determine which administrative authority will be entitled to ascertain that the defective execution of a travel -or the forecast that it will not be executed- takes place as a consequence of the liquidity problems of the agency. Neither does it consider which criteria will be used to verify that situation. Besides that, there is a lack of conformity between this rule and the general principles set in the Spanish Insolvency Act, as long as this regulation does not consider the declaration of insolvency of a company as a consequence of occasional problems of liquidity, as indicated in the Decree. Guarantees may take the form of individual guarantees, collective guarantees and of guarantees for each travel package. The first one may be formalized by means of an insurance contract or any form of financial guarantee. During the first year of business, this guarantee must be up to a minimum amount of one hundred thousand euro. From the second year on, its amount must be, at least, equivalent to five percent of the turnovers resulting from the sale of travel packages during the previous financial year and, in any case, it must be of more than one hundred thousand euro. Collective guarantees may be established by business associations through the contributions of its members to a solidarity guarantee fund. In these cases, the amount of the guarantee will be, at least, of fifty per cent of the sum of the guarantees that each individual company -organizer or retailer- is supposed to have established if it did it independently. The guarantee fund must be of a minimum amount of two million five hundred thousand euro. Finally, organizers and retailers may contract a particular insurance for every user of package travel services. The requirement for the guarantee to be immediately effective is fulfilled when the traveller gets it within one month of this having been requested.