Sunny Land Tours of Palm Coast, Fla., has resigned from the U.S. Tour Operators Association, saying that the organization’s $1 million consumer-protection bond required for membership is more than three times the amount necessary to protect its clients.
USTOA's $1 Million Travelers Assistance Program requires that all USTOA members post $1 million in security in the form of a bond or letter of credit. The security is for reimbursing consumers for payments or deposits lost in the event of a tour operator's bankruptcy, insolvency or cessation of business.
Sunny Land CEO Elie Sidawi said that $1 million is far too much for a small operator, and far too little for operators that bring in $100 million in annual sales. Sidawi said he has been asking USTOA to address this issue for 15 years but "to no avail."
"USTOA is probably the best association that provides some assurances to clients because of the consumer coverage that the members are required to post," said Sidawi. "But it is a standard amount that applies whether you are a $100 million company or a $5 or $10 million company."
Sunny Land joined USTOA in 1975, but resigned not long after that. The tour operator resigned once bylaws were established requiring a bond (back then it was much less than $1 million but still a large sum of money for Sunny Land, according to Sidawi). He said he "wasn't prepared to provide coverage to companies that are 10 to 40 times bigger than us."
Sunny Land rejoined USTOA in 1995, deciding it could afford the bond requirement and that it was worth being part of "a prestigious association," according to Sidawi.
Sunny Land has existing $1 million liability insurance and plans to create its own bond equal to about 10% of annual sales.
Sidawi said that Sunny Land would rejoin USTOA if smaller operators were offered a less costly bond. He suggested a bond that is equivalent to 5-10% of tour operators’ annual sales.
USTOA President Terry Dale said travelers and travel agents with Sunny Land deposits or payments made prior to Aug. 1 are fully protected, but that client payments thereafter will not be covered by USTOA.
Founded in 1964, Sunny Land offers tours to Latin America, the Mediterranean, the Middle East, Africa and Russia.