Travel agency

From Wikipedia, the free encyclopedia

A travel agency is a business that sells travel related products and services to end-user customers on behalf of third party travel suppliers, such as airlines, hotels and cruise lines. Customers of travel agencies include tourists and business travellers. Some agencies also serve as general service agents for foreign travel companies in different countries.

Contents 1 Purpose 2 Travel Agent responsibilities, lawsuits, seller of travel laws in USA 3 Organizations 4 The Internet threat 5 Careers 6 Cargo 7 References 8 See also

[edit] Purpose

The British Company, Cox & Kings is the oldest travel agent in the world, established in 1758 and Thomas Cook was a notable early, pre-flight pioneer after 1841. Travel agencies have been organized mostly since the development of commercial aviation from the 1920s. Some operate with a chain of stores and others are one store operations. A few of the larger travel agencies sell their own products. Agencies without their own product are arguably more impartial and more likely to offer something to suit the traveller; they are known as independent agencies. there are three different types of agencies: these are Multiples, Miniples and independent agencies.

Most travel agencies do not sell airline tickets only; their services vary, and many of them sell more cruise ship packages than airline tickets. Most travel agencies also arrange car rental deals for their customers, and many concentrate on arranging charter or group trips to different destinations. For this, they deal with regular airlines, but many times, they also hire charter airlines. Many travel agencies exclusively represent a small group of supplier airlines, cruise and car hire companies and, often, the logos of the supplier companies are displayed on the windows of the agency's office.

Travel agencies also market and sell train and hotel products. Generally, their goal is to try to fit an ideal schedule onto the requirements of each specific customer.

The phrase travel agency has changed meaning since the emergence of companies like Thomson or Thomas Cook, who are now considered to be tour operators rather than travel agents. The difference is that tour operators manufacture and sell their own holidays whereas independent travel agents sell holidays from all the tour operators without limiting the range they offer to just their own product. The best travel agents deal honestly with a wide range of customers.

[edit] Travel Agent responsibilities, lawsuits, seller of travel laws in USA

Travel Agent duties, responsibilities and travel laws by Zigmund Sepanski Cruise-A-Thon speech, Florida, December, 2006 AuthorizedAgents.com A PowerBusiness Associates Inc. company

Table of Contents Your duties as a travel consultant

Vendor identity disclosure

Duty to warn

Duty to investigate

Duty to confirm

Duty not to misrepresent

Duty to protect client funds

Errors and Omissions

Seller of Travel laws

Copyright PowerBusiness Associates Inc 2006

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Cover your ASSets. Be prepared

Did you know that you can be sued and held liable because you did not inform your client that a hotel is going through renovation? Or that you could pay for a supplier default if you did not disclose the name of your supplier to the client?

States and law enforcement agencies are looking at travel sellers very carefully because millions of dollars have been lost by consumers to shaky or shady travel operators. Because of stricter state laws and litigation you need to be aware of your responsibilities as a travel supplier.

Purpose of this booklet is two fold:      1 To give you brief guidelines as to your duties as a travel consultant in this litigious society;

2 A brief summary how state regulations may affect you as an independent seller of travel. This booklet and the seminar do not take place of legal advice. You need to consult a licensed attorney for that. These are hints based on experience and research for an upcoming book,

“Protect your travel agent ASSets: A guide to a profitable home based business” -What is your duty Court decisions over the last 20 years favor the consumer quite heavily and put a serious responsibility on the travel consultant to inform and disclose.

Primary duties identified by court decisions and state statutes are: 1.  Duty to disclose vendor identity

2.  Duty to warn & inform

3.  Duty to investigate

4.  Duty to confirm

5.  Duty not to over promise or misrepresent

6.  Duty to protect client funds

1. Disclose vendor identity: Court decisions and state statutes are quite clear.  If you fail to disclose to your client who your wholesaler or tour operator is, or through whom you are booking your package, you may be liable for accidents, failures, default etc.

In Van Rossem v Penney Travel inferior accommodations were substituted by the hotel in a honeymoon package. Agent was held responsible because he did not disclose identity of the tour operator.

In Spiro v Delmar Travel agent held liable for tour operator default because operator’s identity was not disclosed. ALWAYS DISCLOSE IDENTITY IN WRITING TO YOUR CLIENT California and other states that have stringent seller of travel laws require full disclosure prior to the sale. And of course, you need to disclose your address, your penalties, your licenses, supplier and your own refund policies etc. --- 

2. Duty to warn and inform Here we will discuss to issues. First issue deals with things you must tell your client if you are aware of them or if you SHOULD BE aware of them. For example, if you know that a cruise line or other provider has problems in cleanliness, customer service, has safety issues or many complaints against it, you may be held liable for failure to disclose.

 In 1994 case Stafford v Intrav, the court ruled that a travel agent has a duty to disclose information if it is not “obvious and apparent” to the client. Basically, if you, because you are a professional with higher access to information, know of something that could potentially adversely affect your client’s trip, you must disclose it.

In another 1994 case the court ruled against an agent in Maurer v Cerkvenik-Anderson Travel because he did not disclose that three students (not their clients) fell of a Mazatlan train in the past and their client died as a result of falling off the same train.

Now, if a consumer should know of a danger because it is public knowledge, because the situation is commonly accepted then the travel consultant has no duty. For example, you do not need to warn a consumer that traveling to Iraq is dangerous.

However, if you were aware or trade media published widely that several tourists were mugged in Acapulco by drug lords and you failed to warn your client you may be liable. Let’s say you sold a Danube River cruise and you knew, because of trade reports, that the river was running low and some ports may be skipped. You have a duty to inform the client. If you did not and the client sued you may be held liable for failure to warn.

In Marcus v Zenith Travel and in Spiro v Delmar a travel agent was held liable for financial loss and default of bankrupt operator because the agent did not investigate financial stability and reliability of tour operator.

In Rodriguez v Cardona Travel agent was held liable because she did not offer travel insurance. In Markland v Travel Travel7 agent was held NOT responsible because she did advise client to buy travel insurance.

Two main lessons here:                   1: You are viewed as a professional, such as a lawyer, a doctor etc. and if you fail to warn of a condition your may be guilty of negligence. So you need to really get familiar with locations and conditions of the tour, resort, cruise line or package that you are selling.

2. Always offer your client insurance and have them initial if they decline. Do not take verbal declines of insurance ever!

This brings up a very important rule.. If you SHOULD HAVE know something because you are held out to be an “expert” (since you represent yourself as a travel agent) and you failed to inform the client of a particular situation you may be held responsible even though you did not know about it. Reasoning is that as an expert you should have known

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---3. Duty to investigate and warn Courts ruled that a travel professional has a duty to check into her client’s vacation to make sure that whatever is booked is up to what was presented and expected.

In Joseph v Fuller Travel agent was held responsible because the hotel was going through construction and the court held that the agent failed to investigate conditions.

And in Rodriguez v Cardona Travel agent held liable because she failed to investigate the airplane charter stability and did not warn the consumer about risks of booking a charter. In 1991 Marcus v Zenith agent was liable because she failed to tell the client of trade articles about financial issues experienced by a tour operator.

Other cases not favorable to the agent included a case where the agent failed to ask a cruise line if it could accommodate a handicapped passenger, and where a tour operator was known to overbook properties and the agent did not investigate and warn the client….you get the picture.

Remember, if you know or should know something better find out and make sure the client knows. You have a duty to provide services that were contracted. Stick with preferred suppliers if you belong to a host agency.  If you choose your own suppliers independently and they do not perform you will be responsible for making things right without anyone’s help.

Keep up on the news about properties, ships, resorts even after your client paid in full. Courts have ruled that you have a duty before the client goes on the trip to keep yourself informed and if you find out something potentially detrimental that will materially alter the trip you have a responsibility to inform the client.

4. Duty to confirm There are dozens of cases where the agent booked tickets from wrong airport, failed to confirm transfers, airline reservations, failed to confirm that payments were received etc.  Courts have even ruled in Trip Tours Ltd. v Zamani that if you are dealing with a flaky tour operator you will be at fault unless you personally re-confirm client reservations. Did you tell the client that a visa was not needed and it was?  Are you in deep!  Did you forget to check how the construction was going on that hotel you booked? That little error cost a travel agent $25,000 in special damages in Touhey v Trans National Travel. When a supplier causes an itinerary change you make sure that you notify you client. In McCoy v MTI Vacations Inc. the agent lost because he forgot to notify consumer of itinerary change. Lesson here is: Verify, investigate, make sure you gave what you promised and have a disclosure statement that is signed disclaiming certain conditions. 5. Duty not to overpromise or misrepresent Have you ever told a client “Don’t worry, it perfectly safe there?” Or did you promise a client that he will have the best vacation of his life? And, a case we’ve all heard about, did you say that tour operators chosen by a cruise ship are inspected by the ship, adhere to safety standards and are very safe?

If an incident occurs you may be in trouble for negligent or fraudulent misrepresentation.  There are a number of other legal theories you may have to watch out for when making promissory statements. These theories include breach of implied warranty (you implied, as an expert, that your hotel is the best hotel, your cruise ship has the best service, your room is the best room in the resort etc), breach of habitability, reliance on your statements (promissory estoppel).

This means that you have to be very careful when making claims. If the claims you made are based on research, history or experience that a reasonable person of your expertise could make you would be OK in most cases.

6. Duty to protect client’s money Whenever you take money from a client for a vacation or cruise package there is only one destination that you can apply that money to: Your CLIENT’S TRIP.  You can’t use that money for operational expenses, you can’t use that money to pay an employee, and you can’t use that money to cover someone else’s reservation.

Fiduciary statutes and travel of seller laws make it a felony to use client moneys for any purpose other than what it was specifically designed for. Agents get themselves in trouble by taking client payments, using the money to pay current expenses believing they will be able to cover those deposits or final payments in the future. That is a felony in many states.

If you are not paying the vendor immediately you should have a separate bank trust account or host trust account where you park those funds and DO NOT use them for anything. Do not be tempted. It is a quick route to an arrest warrant. In some states that have strict seller of travel laws, such as California , you cannot take your commission until the client has the tickets in hand.

E & O Insurance If you are serious about this business you should look into Errors and Omissions insurance. Most host agencies can now offer   E & O insurance again. You can be covered under their umbrella.  But remember, there is a deductible and there are all kinds of exclusions for your negligence. E & O insurance provided by a host requires that in all advertising, bookings and client correspondence you clearly state that you are an independent agent for that host. You fail to mention in writing and you are not covered. When you make bookings outside the host you are not covered. If you are not an sole individual but have employees or partners then insurance providers will require you to have your own E & O insurance direct, not through a host. Seller of Travel Laws Many home based agents are not aware or ignore of seller of travel laws. Due to rampart abuse states are enacting some tough requirements, with California leading the way. Now you might say to yourself “I am not in California , so it does not apply to me.” Wait a second. It does! If you have a website that could potentially sell to people who are in California at time of purchase or if you have clients who at time of purchase happen to be in California you fall under California laws. With today’s internet travel distribution where boundaries are no longer physical you, the travel seller, must be aware of laws throughout your potential market area. If you are an independent agent in California , Florida , Washington , Hawaii and a few other states and your host is located in some other state you better make sure that you or your host is registered in your state unless you want to be exposed to a potential crime, fines even a felony. Will a state come after you if you are not registered? If you are inside that state chances are good that they will catch up with you and you may accrue penalties for failure to register. If you are outside the state the state that requires registration you are probably OK unless there is a problem with your booking and a client files a complaint. Then you might be hurting. Its better to obey the law. This is one strong argument having a host agency that can meet the state requirements and cover you under their registration for anything you put through that host. Next page has specific state details from representative states with the most stringent state requirements. CALIFORNIA Probably the strictest requirements in the nation. If you sell to anyone in the state, no matter where you are, you must be registered with the attorney general and pay into  TCRC, a fund that is set up to protect consumers from fraudulent travel transactions. Registration requires proof of a bond, usually a trust account and compliance with TCRC deposit. If you are an independent agent for a host registered in the state you do not have to meet the registration requirements but you have to disclose in your advertising that you are an independent agent for xyz host and the disclosures below apply too. Here is the disclaimer required by California in your contract with client -

FLORIDA What is required for registration? If you are NOT working through a Florida certified seller of travel host then you must meet the following requirements:

”Sellers of Travel that DO NOT offer vacation certificates, must submit a completed registration form, $300 non-refundable fee and proof of assurance in the form of a Surety Bond, Certificate of Deposit or Irrevocable Bank Letter of Credit in an amount not to exceed $25,000. A Seller of Travel that does not offer vacation certificates and that has a history of no unresolved complaints may request a reduction of security by completing the "Security Reduction Application " and submitting it with a copy of the Seller of Travel's federal income tax return or an audited financial statement for the immediately preceding fiscal year. The criteria for deciding the amount of the assurance is as follows:

$10,000 -- Newly established business, business under new ownership, or a business that has been under the same ownership and control for at least one year and has less that $500,000 in gross annual sales. (A newly established business need not provide financial documents.) $15,000 -- Business under the same ownership and control for at least one year with gross annual sales between $500,000 and $1,000,000. $20,000 -- Business under the same ownership and control for at least one year with gross annual sales between $1,000,000 and $2,000,000. $25,000 -- Business under the same ownership and control for at least one year with gross annual sales over $2,000,000.” “Each independent agent shall annually file an affidavit with the department prior to engaging in business in this state. A letter evidencing proof of filing must be issued by the department and must be prominently displayed in the independent agent's primary place of business. As used in this subsection, the term "independent agent" means a person who represents a seller of travel by soliciting persons on its behalf; who has a written contract with a seller of travel which is operating in compliance with this part and any rules adopted thereunder; who does not receive a fee, commission, or other valuable consideration directly from the purchaser for the seller of travel; who does not at any timehave any unissued ticket stock or travel documents in his or her possession; and who does not have the ability to issue tickets, vacation certificates, or any other travel document. NEVADA Requires a registration and a $125 fee plus either an ARC appointment, a bond or a letter of credit. Independent agents must register also but the ARC, bond, letter of credit are waived if they belong to a host that is registered. Registration number must appear on all advertising. WASHINGTON You or your host needs to be registered. See the basic requirements in the next pages. Washington State law requires the following statement: If transportation or other services are canceled by the seller of travel, all sums paid to the seller of travel for services not performed in accordance with the contract between the seller of travel and the purchaser will be refunded within thirty days of receiving the funds from the vendor with whom the services were arranged, or if the funds were not sent to the vendor, the funds shall be returned within fourteen days after cancellation by the seller of travel to the purchaser unless the purchaser requests the seller of travel apply the money to another travel product and/or date. All client funds, regardless of state of residence, are maintained in trust accounts. 

Below are brief summaries of most significant state requirements. For DIRECT LINKS to these and other states Seller of Travel applications go to www.AuthorizedAgents.com and click on STATE REGISTRATION LAWS Laws change frequently in some states. Always check with the department of consumer affairs or attorney general in the target state. If you need legal advice check with a licensed attorney. This booklet is not intended as legal advice. Major state summaries -

Illinois Sellers of travel must provide the usual disclosure statements, including trust account. No formal registration. Trust account: yes IOWA “A travel agency doing business in this state shall register with the secretary of state as a travel agency if it or its travel agent conducts the solicitation of an Iowa resident. The registration statement must be accompanied by the required bond or evidence of financial responsibility and the registration fee. Independent agent falling under registered host does not have to have bond or security. Trust account: Yes Disclosure req: yes E & O: yes

MASSACHUSETTS Disclosures required, including names, address, tour operator, cancellation terms, refund policies, penalties etc in writing

NEVADA All must register. Independent agent must register also but does not need bond if the host is registered. Fee: $125 Penalty: $100 first/$250 second Trust account: Yes Bond: $50,000 Seller ID on all advertising

WASHINGTON Registration is required if you sell into state unless you are an independent agent and your host is registered.  Your host needs to list you as an independent agent. If you are not a member of a registered host you must register and pay. Fee: $145 Trust: yes, all funds go to trust or you must have letter of credit or $ 1 million liability Disclosures: yes Seller ID on all advertising ___________________________________________________________

About the author

Zigmund Sepanski was treasurer and director of California Travel Consumer Restitution Corporation set up by the legislature to reimburse consumers in case of seller of travel failure to perform. Zigmund has a Master of Science degree and is in his second year for a Jurist Doctorate law degree.  He was formerly director of strategic markets for Sun Computers Inc., C.O.O for Apple Computers IMC in Europe, senior partner in an advertising agency, President of Intelcom Corporation, taught marketing and sat on a number of State University executive boards. He is sought after as a keynote speaker in conventions and been featured in Entrepreneur Magazine and a guest on Wall Street Week. Zigmund’s articles have been published in American Investor, Personnel and Amcham magazines. Currently he is general manager of Authorized Agents.

[edit] Organizations

On April 20, 1931, the American Society of Travel Agents (ASTA) was formed in New York City, to defend the rights of US travel agents over the power of the growing commercial airline systems of the day. Now headquartered in Alexandria, Virginia, ASTA still represents travel agencies and agents.

The international body for registering travel agents is the International Air Transport Association (IATA), although most travel agents are registered through national bodies such as the Australian Federation of Travel Agents.

[edit] The Internet threat

With the advent of general public access to the internet, many airlines and other travel companies began to sell directly to passengers. As a consequence, airlines no longer needed to pay the commissions to travel agents on each ticket sold. Since 1997, travel agencies gradually became victims of disintermediation, the reduction in costs caused by removing layers from the package holiday distribution network.^[1][2]

Many travel agencies have developed an internet presence by posting a website, with detailed travel information. Full travel booking sites are often complex, and require the assistance of outside travel technology solutions providers such as Travelocity, Patheo and Open Fares. These companies use travel service distribution companies who operate Global Distribution Systems (GDS), such as Sabre Holdings, Amadeus and Worldspan, to provide up to the minute, detailed data on tens of thousands of flight, hotel, and car rental vacancies.

Some of the online travel sites allow visitors to compare hotel and flight rates with multiple companies for free. They often allow visitors to sort the travel packages by amenities, price, and or proximity to a city or landmark.

Travel agents have developed dynamic packaging tools to provide fully bonded (full financial protection) travel at prices equal to or lower than a member of the public can book online. As such, the agencies financial assets are protected in addition to professional travel agency advice.

All online travel sites that sell hotels online work together with numerous outside travel agents. Once the travel site sells a hotel, one of the supplying travel agents is contacted and will try to get a confirmation for this hotel. Once confirmed or not, the customer is contacted with the result. This means, that booking a hotel on a travel website will not get you an instant answer. Only some of the hotels on a travel website can be confirmed instantly (which is normally marked as such on each site). As different travel websites work with different suppliers together, each site has different hotels that it can confirm instantly. Some examples of such online travel websites that sell hotel rooms are Travelmix - http://www.travelmix.com, Expedia, Travelocity, Tablet Hotels, Tripadvisor, Excelloz, or Venere.

[edit] Careers

With the many people switching to self service internet websites, the number of available jobs are decreasing as travel agents. Most jobs that come available are from older travel agents retiring. Counteracting the decrease in jobs due to internet services, is the increase in the number of people traveling. Since 1995, many travel agents have exited the industry, and relatively few young people have entered the field due to less competitive salaries.^[3] However, others have abandoned the "brick and mortar" agency for a home-based business to reduce overheads, and those who remain have managed to survive by promoting other travel products such as cruise lines and train excursions, or by promoting their ability to aggressively research and assemble complex travel packages on a moment's notice (essentially acting as a very advanced concierge).

[edit] Cargo

Although not as involved in the cargo business, some travel agencies also work with cargo airlines and ships. Those travel agencies that do cargo business, however, are not a significant number of agencies.

[edit] References

[edit] See also

• Computer reservations system
• Travel technology