Anyone who arranges or sells travel arrangements subject to the provisions of the Travel Guarantees Act (1972:204) must lodge a travel guarantee with Kammarkollegiet before these arrangements can be marketed or sold. The purpose of the Act is to provide financial protection for travellers if a travel arrangement is cancelled or interrupted, usually as the result of the bankruptcy of the travel operator.
The amount secured by the guarantee can be used to recompense the costs of any advance payment, full payment, value of the benefits included in the travel agreement and possible costs for repatriation. If the tour has for some reason not been completed, the guarantee can be used to reimburse the travellers affected. Requiring a guarantee is considered to help to ensure that only travel companies with sufficient funding to offer protection to their customers actually venture into the travel business.
Travel arrangements for which security must be lodged under the Act
The Act applies to anyone who sells or markets the following travel arrangements:
- package tours
- transport in conjunction with package tours
- travel arrangements consisting of separate transport and accommodation services that together bear a substantial resemblance to a package tour
- travel arrangements that consist of transport and an educational visit involving accommodation with a host-family, even if this accommodation is free of charge
All package tours must be covered by a travel guarantee, irrespective of whether they are sold to private persons, companies or other legal entities. For the other three types of travel arrangement guarantees are only required when they are sold to private persons.
The purchase of a ticket solely for travel is not covered by the Travel Guarantees Act. Those who sell transport only are not required to lodge a guarantee under the Act.
The amount to be guaranteed
Kammarkollegiet determines the size of the guarantee individually for each and every operator, based on information about the extent of the operations for which a guarantee is required. The Travel Guarantees Act stipulates that every operator must provide accurate figures: failure to do so may lead to monetary fines or prosecution.
The following factors affect the calculation of the size of the guarantee:
- The number of travellers every month
- The price of the travel arrangements
- Advance payments and cancellation fees
- How long before departure payment must be made
- Repatriation costs (standard figures)
An operator’s financial liability is calculated on a monthly basis. The amount required for a specific month is determined by adding the income for that month, any advance payments for future travel arrangements not yet settled in full, and the costs for repatriation of customers travelling in that particular month. An increment of 10 percent is added to this sum, which is then rounded off. All operators must have a guarantee that is valid until further notice and covers at least six months of a year. If this guarantee is not sufficient for the entire year because the operator has one high season or more, the guarantee must be supplemented by additional guarantees valid only for specific months.
How to proceed
Operators must report their activities using the forms available on Kammarkollegiet’s website under the “Resegarantier” tab.
The documents that must be submitted are the notification form (”Anmälan”), the budget form (”Budget”) and copies of marketing material (i.e. brochures or other materials). If the operator has already lodged security, the follow-up form (”Budgetuppföljning”) must also be submitted to declare the actual outcome for the preceding period. The follow-up form must be signed by an authorized accountant if the operator is a limited company.
Kammarkollegiet will then determine the size of the guarantees and notify the operator. The operator must then contact a bank, an insurance company or a credit market company that can issue the guarantee. A guarantee must always consist of a written undertaking to pay from one of these institutions: the operator cannot pay the amount directly to Kammarkollegiet.