A “revolution” in Germany’s retail travel sector could affect the way South Africa is sold in the country, says Reinhart Mecklenburg, Director of AfroSales Tourism Marketing Services in Germany. It is routed in the revised EU Package Travel Directive (PTD) which comes into effect in July 2018, and prevents “mixing and matching” of products. The new regulation will not be limited to Germany, but will apply to all European countries in the European Union.
The German Ministry of Justice recently published a draft for the national implementation of the revised PTD, alerting German retail travel and hospitality associations to the new bureaucratic challenges. In its present form, the EU directive prevents independent travel agents from compiling customised travel arrangements containing products from different sources.
The latest development is that in response to this pressure, the German Ministry of Justice and Consumer Protection has confirmed that it will ‘soften’ at least some aspects of the directive before it is transposed into German National Law. “This is a very positive breakthrough, because the softening includes one of the most disputed EU clauses that would force retailers into the liabilities and responsibilities of a tour operator, when selling so called customised packages, compiling travel service components from different brochures and sources,” said Mecklenburg.
But as things currently stand, tour brochures for the European summer of 2018, usually produced in fall of the previous year, will have to contain all the new rules and regulations. “Travel agency staff will have to be trained on highly complicated liability matters and on very confusing consumer protection issues,” says Mecklenburg. “In addition, all reservation systems have to be updated. An absolute nightmare!”
Should the proposed directive come into being, it will cement the power of major players. “Our ‘Big-Boy’ wholesale tour operators are smiling,” comments Mecklenburg. “In fact, the new law helps them to enforce what they call controlled selling of ‘sell my brand only’ policies.”
Sketching some background, Mecklenburg said following a 1994 EU law on Deregulation of Distribution Channels, Germany’s mega wholesalers were no longer permitted to enter into exclusive sales agreements with independent retail agents. “For 22 years our retailers have been happily “mixing and matching” brochure products from the arch rivals. To the benefit of the consumer they sell what’s best for the client – not what’s best for the principals,” he explains.
Under the proposed new regulation, ‘banned’ exclusive sales agreements could be re-introduced through the back door.
Mecklenburg says PTD will make it almost impossible for a German retail travel agent to book a room directly at a hotel, or a tour from an operator in Southern Africa. The travel agent would have to show an insolvency insurance certificate from the African services supplier.
If the directive is not retracted, “an estimated 800 to 1 000 independent retail travel agencies could soon register as tour operators,” advises Mecklenburg. “Many of them will be looking for professional partners in Southern Africa who are willing to take care of low volume operators who are not know-it-all Africa specialists. On the other hand, these small guys have never heard of the ridiculous commission demands of some high-volume producers.”
