Down payments, final payments and insurance: How differently package holidays are regulated in Europe

Demand for package holidays remains stable in the European Economic Area, but despite EU-wide harmonization efforts, the legal framework for consumers and tour operators shows significant country-specific differences.

While the European Union has established a common foundation through the Package Travel Directive, significant leeway remains for national legislators regarding key parameters such as the amount of deposits, deadlines for final payments, and the design of insolvency protection. A detailed comparison of the regulations in the member states of the European Union, as well as in the associated countries of Switzerland, Norway, Iceland, and the United Kingdom, reveals a fragmented picture that is particularly relevant for consumer protection in the case of cross-border bookings.

The European directive and the national scope for implementation

The foundation of modern package travel law in the European Union is Directive 2015/2302, which establishes minimum standards for the contractual rights of travelers. This directive primarily concerns information obligations, liability issues in the event of service deficiencies, and the fundamental right to insolvency protection. However, the specific details of payment terms were not fully harmonized in the directive. This means that individual member states were left to decide whether and to what extent they imposed restrictions on deposits or deadlines for final payment.

For this reason, a legal disparity has developed in Europe. While some countries have enshrined strict consumer protection laws that heavily regulate advance payments, others largely leave this matter to the free market and the terms and conditions of tour operators. This divergence affects the liquidity management of companies as well as the financial risk for consumers in the period between booking and the actual start of the trip.

Regulations on down payments and final payment deadlines in a comparison of countries

In Germany, the practice of advance payments is regulated by the jurisprudence of the Federal Court of Justice and the German Civil Code. As a standard, a tour operator may demand an advance payment of up to 20 percent of the total price at the time of booking, provided they issue the customer a valid insolvency protection certificate. Higher advance payments are only permitted in exceptional cases where the operator can demonstrate that they are already incurring corresponding fixed costs at this early stage, for example, for non-refundable flight tickets. The remaining balance is generally due 20 to 30 days before departure.

Austria follows a similarly strict approach. According to the Package Travel Regulation, the deposit may not exceed 20 percent of the travel price and may only be received at the earliest eleven months before the agreed end of the trip. The final payment is only permitted at the earliest 20 days before the departure date, unless comprehensive insurance is in place that also fully covers early payments.

A completely different picture emerges in countries like Spain, Italy, France, and the Netherlands. In these countries, there are no rigid legal limits on the deposit paid at the time of booking. The exact amount and the due date for the final payment are subject to contractual freedom and are defined in the terms and conditions of the respective tour operators. In practice, Spanish and French operators often require deposits of between 25 and 30 percent, while the final payment is usually due 30 days before departure. In the Scandinavian countries of Norway, Sweden, and Denmark, there are also no explicit legal limits on deposits; however, national consumer protection authorities monitor whether the deposits are proportionate to the services provided.

Insolvency protection systems in the European Union

A key component of package travel law is the obligation to safeguard customer funds in the event of the tour operator's insolvency. The directive requires that the refund of all payments made, as well as the repatriation of travelers, must be guaranteed in the event of insolvency. However, member states have established very different safeguard schemes for this purpose, ranging from private insurance models and bank guarantees to state-organized funds.

In Germany, the system underwent fundamental reform following the insolvency of a major tourism group in 2019. The German Travel Security Fund has been active since November 1, 2021. This fund is financed by contributions from the travel industry and insures package tours, handling refunds and repatriation in the event of insolvency. Smaller tour operators with annual revenue below a certain threshold can alternatively continue to protect themselves through traditional insurance policies or bank guarantees.

Austria relies on a system where tour operators must register in the official GISA directory (Austrian Business Information System) and provide proof of insolvency protection through insurance or a bank guarantee. Compliance with the required coverage amounts is strictly monitored. In France, protection is primarily handled through cooperative or private guarantee institutions such as the Association Professionnelle de Solidarität du Tourisme, which covers the costs of trips or refunds in the event of a crisis. In the Netherlands and Belgium, cooperative funds like the Stichting Garantiefonds Reisgelden guarantee collective protection.

Special features in the associated states and the United Kingdom

The United Kingdom transposed the European directive into national law before leaving the European Union. The British system is essentially based on the ATOL (Air Travel Organisers' Licensing) system for package holidays, administered by the Civil Aviation Authority. For trips without a flight component, separate safeguarding requirements apply, typically through escrow accounts or insurance. The deposit amount is not legally fixed and is determined by the market; the final payment is usually due 12 to 14 weeks before departure.

In Switzerland, consumer protection is regulated by the Federal Act on Package Tours. Swiss tour operators are legally obligated to guarantee the refund of customer payments and repatriation. This is usually done through the Swiss Travel Industry Guarantee Fund or other recognized foundation solutions. There are no legal regulations regarding the maximum deposit amount; however, the industry standard is 20 to 30 percent at the time of booking. Norway and Iceland have state-controlled travel guarantee funds (Reisegarantifondet) with which all tour operators must register and deposit financial collateral to ensure immediate compensation in the event of insolvency.

Legal consequences of cross-border bookings

Cross-border bookings are an important scenario for European consumer protection. For example, if an Austrian consumer books a package holiday with a tour operator based in Germany, the question arises as to the applicable law and the responsible insolvency protection.

According to the provisions of the European Rome I Regulation on the law applicable to contractual obligations, consumers enjoy the protection of the mandatory provisions of their home country, provided the tour operator directs its business activities to that country. Therefore, if a German tour operator specifically targets customers in Austria, for example via an Austrian website domain, the strict Austrian consumer protection laws essentially remain in effect. However, regarding insolvency protection, the country-of-origin principle of the Package Travel Directive applies: insolvency protection is governed by the laws of the state in which the tour operator is established. In this case, the Austrian customer is thus protected by the German Travel Security Fund and must address their claims to this German institution in the event of insolvency. The certificate of insurance must be issued to the customer before the first payment, regardless of which EU country they reside in.

Overview of legal regulations by country

The following table summarizes the most important legal parameters for package holidays in the countries studied. The information reflects the legal status as of 2026.