Q: I have some questions about the Department of Transportation's (DOT) new consumer-protection rules that went into effect this month. First, if we sell a tour at a price that includes air plus a mandatory hotel stay, can we advertise the trip as "$249 roundtrip air plus $99 per night for hotel plus local lodging taxes"?
Second, I have heard that there is a new requirement relating to what must be printed on the e-ticket confirmations that we email to clients. We almost always just use the confirmations generated by the GDS, so will my agency really be liable if the GDS did not reprogram its confirmations by the January rule deadline?
Third, another new rule requires all airlines to hold reservations for 24 hours without payment or cancel reservations without penalty within that time, so that consumers can change their minds. How can travel agencies comply with this rule, given that we cannot cancel and rebook without risking a debit memo for churning, nor can we refund nonrefundable tickets?
A: These are all good questions that show how complex the new rules can be. Although the new rules are well intentioned and long overdue, they will lead to unintended consequences, especially for agencies.
First, you cannot advertise or quote a hotel stay at "$99 plus local taxes" if the hotel must be bought as part of a package that includes air. You can only advertise the entire package as one price, although you can break down the components as you wish after you have stated the full price.
For example, if the air is $249 and the hotel is $99 plus $15.50 in taxes, you must advertise and quote the price as $363.50. After you do so, you can state and price the components in any way you wish.
Second, the new rule states, "On all e-ticket confirmations for air transportation within, to or from the United States ... a ticket agent that advertises or sells air transportation in the United States must include information regarding the passenger's free baggage allowance and/or the applicable fee for a carry-on bag and the first and second checked bag. ... Agents may provide this information in text form in the e-ticket confirmations or through a hyperlink to the specific location on airline websites or their own website where this information is displayed. The fee information provided for a carry-on bag and the first and second checked bag must be expressed as specific charges taking into account any factors (e.g., frequent flyer status, early purchase and so forth) that affect those charges."
The DOT will not excuse you from adding the required information merely because your GDS does not provide it to you. You need to comply starting now, or you could be fined.
Third, the new rule requires "reservations to be held at the quoted fare without payment, or canceled without penalty, for at least 24 hours after the reservation is made if the reservation is made one week or more prior to a flight's departure." However, the rule does not apply to agencies.
The exemption puts agencies at an unfair disadvantage, as they cannot offer a comparable service of "holding" all reservations, although agencies can void tickets up to midnight on the day after issuance.
Mark Pestronk is a Washington-based lawyer specializing in travel law. To submit a question for Legal Briefs, email him at [email protected].