HOTELS IN FRANCE AND COVID-19: CREDIT OR REFUND?
Hotels in France and Covid 19 : credit or refund?
A temporary derogation from ordinary law
Order No. 2020-315 of 25 March 2020 relating to the financial conditions for terminating certain tourist travel and holiday contracts in the event of exceptional and unavoidable circumstances or force majeure was issued pursuant to Article 11 of Act No. 2020-290 of 23 March 2020 on emergency measures to deal with the Covid-19 epidemic. These provisions temporarily derogate from the provisions of the Tourism Code and the Civil Code.
Hoteliers, what to do to protect your cash flow?
Many States, including France, have adopted measures restricting travel, leading many travellers to request cancellations and refunds from travel agencies and hotels in particular.
We will focus here only on hoteliers whose ordinance, under the term “accommodation” which does not have a residential purpose, modifies the obligations “to enable them to offer their customers, for a strictly determined and limited period of time, a refund in the form of an identical or equivalent service, or through a credit note valid over a long period, of eighteen months, with the aim of balancing support for companies in the sector in this period of crisis with respect for consumer rights” (see Report to the President of the Republic). It is up to the professional to choose.
This repayment method is supposed to safeguard the cash flow of hoteliers. But its implementation may be false good news when one studies the mechanisms provided for in the text and the resulting uncertain points.