Mark Pestronk
Q: For years, we have been doing business with a small European tour operator. The owner is my friend, and he recently asked me whether his company could legally sell to U.S. consumers through the internet. Could you help me advise my friend about any federal or state requirements that would restrict or regulate such sales?
A: If your friend is used to selling tours to clients in the European Union (EU), he will find that the U.S. is a relative travel seller's paradise. Compared with the laws and regulations in Europe, the U.S. is still the Wild West.
For example, under U.S. law, tour operators can legally disclaim all liability for the acts or omissions of travel suppliers such as airlines and hotels.
In the EU, the operator must often compensate the client for any tour element that was not provided or anything that went wrong, even if the operator was not at fault.
At the federal level, if the operator does not sell air transportation as an included element in the tour price, then there is no applicable law or regulation. As far as the federal government is concerned, he can start selling to U.S. consumers tomorrow with no restrictions.
If he does offer air, either alone or as part of a package, he needs to become familiar with the DOT's full-price and codeshare rules as well as the public-charter rules if he plans to operate charters from the U.S.
The DOT has fined tour operators hundreds of thousands of dollars for violations of these rules.
As you probably already know, the full-price rule prohibits any written or oral solicitation that does not quote the full price, including all taxes and fees. So your friend cannot advertise a tour as "$999 plus 15% taxes and fees."
As you probably also know, the codeshare rule requires that every communication about a codeshare flight must contain the marketing carrier's name, the operating carrier's legal name and any other name under which the flight is held out to the public.
For example, you have to say, "Delta 9991 is operated by Endeavor Air doing business as Delta Connection."
At the state level, your friend has to contend with five states that have seller of travel registration requirements: California, Florida, Hawaii, Iowa and Washington.
Those laws apply to any company that solicits residents of those states, regardless of the seller's location.
Although some of the five states are more serious about enforcing their laws against foreign companies than others, your friend at least needs to make an informed decision about whether to register.
A few more states, notably Illinois, Massachusetts and New York, have statutes and regulations affecting sales of tours, even though registration is not required.
Finally, as a matter of contract law, your friend needs to be aware that merely posting terms and conditions online will probably not bind the consumer to cancellation penalties or the like.
Instead, he must clearly call attention to the fact that it is a binding agreement and give the client a chance to read it before becoming bound.