|
|
 |
 |
|
The continued pressure on profit margins is of obvious concern to all travel agencies. One "solution" that
has been suggested by a number of sources is that agencies give consideration to charging fees for rendering
services. Since this is a business decision, we will not attempt to discuss the merits or demerits of this
proposal as it relates to revenue loss or gain. Each agency will need to decide for itself, based upon their
own circumstances, whether this is a practice that will have a positive impact on their bottom line.
We will discuss, however, the issue of travel agent liability and how it could be affected by the imposition
of service fees. Of course, this is provided for informational purposes only and is not intended nor should be
considered legal advice. A professional familiar with a company's specific operations should be consulted for
any type of legal counseling.
One of the prerequisites to understanding travel agent liability is having some familiarity with the legal
relationships that can exist between a travel professional and the passenger client. The basis of a travel
agency/client relationship can also be used to justify the amount of liability imposed on a travel company
defendant. Since courts of law can differ to some extent on the exact legal nature of the relationship between
a travel agent and a client, we need to review these various perspectives:
Agent of the Supplier -- Some courts hold that travel agents are 'agents' of hotels, air carriers and
other suppliers, and as such, owe few duties to the passenger. This has often been used as a strategy in the
defense of a travel agent by stressing that they were simply representing the supplier, selling the supplier's
product, and acting much like an order taker. In addition, the income generated from this transaction was paid
by the supplier in the form of a commission, so the travel agent could argue that there should be very little
obligation to a passenger, other than taking the order correctly.
Agent of the Passenger The opposite view of travel professionals being 'agents' of the passenger has
also been put forth in courts. In this situation, it is implied that they owe significant fiduciary duties of
good care, professionalism, etc. toward the passenger. This could be used to hold the travel agent to a higher
standard of care, increase their responsibility to ensure a safe and uneventful trip and assess more liability
should anything go wrong.
General Standards of Care & Responsibilities -- Still other courts and increasingly this appears to be
the majority view, hold that travel agents have certain specific duties to passengers regardless of whether
they are agents of the supplier or of the passenger. While these minimum standards vary, some very basic
examples of what types of things could be expected of a travel agent are as follows:
Being, at the very least, knowledgeable about the suppliers, products and services being sold.
Knowing a supplier's reputation within the travel industry.
Communicating to the client any "bad news" about a supplier, especially if the travel trade may have relatively
easy access to this information but the traveler or general public may not.
Making an appropriate effort to try to book the type of trip that the traveler wishes them to book.
Even in states where courts have held that travel agents are agents of suppliers, the more recent trend in litigated
cases is that agents have an obligation to disclose anything they know which is of material importance to the traveler,
so long as the traveler would not already know the same thing.
For example, if the daily newspapers are full of articles about the financial troubles of a particular supplier,
there may be less of a need for the travel agent to repeat to a client what is already in the public newspapers.
If, however, the travel agent knows that a particular hotel is undergoing extensive renovations or has access to
similar information that the public may not be aware of, it is a good risk management practice to disclose that to
a client.
The reason the existence of these duties is important to the service charge issue is that if a travel agent charges
a service fee, the travel agent, obviously, is expected to provide a service for the fee. That would mean, at a minimum,
that when the travel agent is asked for a recommendation, the recommendation is based on professional knowledge and
experience and is in the best interest of the client.
We do not, however, see a great deal of increased vulnerability from the imposition of service fees, with two distinct
caveats.
First, if this particular client only needs the services of an order taker (e.g. I want to go to Chicago next Tuesday
on XYZ Airlines at 8:00 a.m. and return that evening on the flight at 5:00 p.m.), a travel agent may not have any
materially significant heightened duties, except, of course, to be accurate.
If, however, the traveler asks for a suggestion as to a particular destination, there probably is an obligation to
advise whether there are different fares for different carriers. At a minimum, if the question of cost is raised,
there would be a clear obligation to search out all available information in order to give the client an informed
recommendation. This would probably include advice regarding fares from nearby alternative airports as well.
The second caveat, and the more significant one, relates to leisure travel slightly more so than to business travel.
Honeymooners, inexperienced travelers, and most other leisure travelers might well ask for advice and want to be
steered toward a particular product or destination. It almost goes without saying that a travel agent must find out
what they actually want before selling them something. If the essence of the trip is to play golf and they were sent
to an island where there is no golf course, it is fairly obvious that the travel agent may well be sued.
Travel agents must also beware of offering advice during a sales pitch that may overstate the actual experience of a
trip. It is important to obtain a sense of what the travelers want in their vacation and offer advice accordingly
and in line with what the product actually offers.
Whenever professional travel advice is given, as is often done in the leisure context and sometimes in the business
context, that advice must be provided in a competent manner. Travel agents are held to a standard of having exercised
sound professional judgment after having first ascertained the wishes of the client. And when a service fee is paid,
the duties and obligations expected of a travel agent could be heightened enough to lead to an increase in actual
liability imposed on them.
Notwithstanding the above, we feel that while there are no insurmountable legal obstacles to imposing a service
fee schedule, it is important that all travel business owners tap into available information resources in order
to make an informed decision on this issue.
Back to Top
|
|
|
 |
|
|
|
