Can a Travel Agency Increase the Price of an Existing Booking?

In the case of a package holiday purchased through a travel agency, the general rule is that the price cannot be increased after the contract has been concluded. However, the law also provides for certain exceptions.

As many people prepare for their holidays, a common question arises: can travel agencies increase the price of bookings that have already been made? Sara Peixoto, a lawyer at Dower Law Firm, explained to Notícias ao Minuto that, "in the case of a package holiday, the general rule is that the price cannot be increased after the contract has been concluded," although the law does allow for specific exceptions.

According to Sara Peixoto, a travel agency or tour operator may increase the price only if both of the following conditions are met:

• The contract expressly provides for the possibility of a price increase and sets out the method for calculating it; and
• The increase results directly from:
• higher fuel or other energy costs affecting transport;
• increased taxes or fees applicable to travel services (such as airport charges); or
• changes in the relevant exchange rates.

A Deadline Must Be Observed

The lawyer points out that it is "important to note that any price increase may only be communicated up to 20 calendar days before the scheduled departure date." Once this deadline has passed, the price can no longer be increased on the basis of these cost variations.

Furthermore, "the law requires that the price increase be communicated to the traveller in a clear and understandable manner and on a durable medium (such as an email), together with an explanation of the reasons for the increase and the corresponding calculations."

She also noted that "the law provides additional protection where the price increase is significant. If the increase exceeds 8% of the total price of the package holiday, the traveller benefits from enhanced rights, including the right to terminate the contract and receive a full refund of all amounts paid, without any charges."

It should be noted that different rules apply if a flight is purchased directly from an airline. "These rules apply only to package holidays and do not apply, for example, to the separate purchase of an airline ticket."

Are Passengers Required to Accept the Increase? Can They Cancel and Receive a Refund?

According to the lawyer, "assuming the legal requirements for the price increase have been met, the answer depends on the size of the increase."

"In summary, where the increase is equal to or less than 8% of the total price of the package holiday, the traveller will generally have to accept it and does not have the right to terminate the contract free of charge solely because of the increase."

On the other hand, "if the increase exceeds 8% of the total price of the package holiday, the travel agency must inform the traveller of the proposed change and of their right either to accept the increase or to terminate the contract without any penalty."

In that case, "the traveller may refuse the increase, cancel the trip, and is entitled to a full refund of all amounts paid, without having to pay any fees or charges."

The traveller may also "choose to accept a substitute package holiday, where available, provided it is of equivalent or higher quality."

"If the traveller does not accept the substitute package holiday, the travel agency must refund all payments made within 14 days of the termination of the contract," the lawyer explained.

Price Increases Due to the Energy Crisis

Regarding price increases linked to the energy crisis, Sara Peixoto added that "although developments in the energy crisis are economically and geopolitically unpredictable, the legal framework governing package holidays already expressly provides for the possibility that fluctuations in energy-related costs may affect travel prices."

However, travellers should be aware that "price increases cannot be imposed arbitrarily." The law requires that they "be calculated in accordance with the rules set out in the contract, communicated clearly and with proper justification, and notified no later than 20 days before the departure date, thereby seeking to strike a fair balance between the interests of both parties while protecting the traveller."