JurisdictionUnited States
Publication year2021

§ 5.01 Introduction to the Wholesale and Retail Distribution of Travel Services

Most travel services are delivered to the general public by suppliers. In prior Chapters of this Treatise, the author has examined the responsibilities and liabilities of various travel suppliers, i.e., domestic1 and international2 airlines, cruise ships,3 railroads,4 bus companies,5 rental car companies,6 and hotels and resorts,7 resort time sharing,8 casinos,9 and theme parks and trill rides10 to the consumer who has suffered damages arising from a variety of common travel problems. Each of these suppliers has developed and maintains its own marketing11 and distribution system.12 Prior to the 1940s most travel services were distributed through supplier ticket offices located at transportation terminals or elsewhere.13 In the last sixty years, several different and independent marketing systems, including the Internet, have developed for the distribution of travel services to the general public.

[1] Tour Operators, Wholesalers and Public Charters

Tour operators, wholesalers and regulated public charter tour operators14 purchase travel services in bulk such as round trip air transportation, hotel accommodations, cruises and ground tours, package these services in discrete units of one or two weeks and sell them to the general public at discounted prices.15 There are a variety of tour operators that market specialized tours such as: museum and national park tours,16 student tours,17 adventure tours,18 escorted tours,19 eco-tours,20 special event tours,21 and sporting event tours.22

[2] Travel Agents

At the end of 2002, there were 24,337 ARC approved travel agencies in the United States, down from 27,235 in 2001 and 32,446 in 1992.23 Travel agents market the travel services provided by suppliers, tour operators, wholesalers and public charter tour operators. In addition, travel agents are information specialists held to a relatively high standard of care as fiduciaries of the consumer.24 (Travel agents should not be confused with pseudo travel agents, which are consumers who purchase some form of travel agent credentials.25 ) Travel agents may also sell other travel products such as travel insurance26 and may be regulated by a State's Travel Seller Statute.27 Marketing studies continue to show that travel agents have a profound influence over consumers in their choices of destinations and competing providers of travel services.28

[3] GDS, CRS and Internet Travel Sellers

Global delivery systems (GDS) and computer reservations systems (CRS) are the information backbone for the marketing and sale of air transportation and related services.29 With the decrease in air travel, internet travel sellers have had to rethink their marketing and reconfigure their internet offerings. Acrimonious dealings among sellers and their customers, or among the sellers themselves can lead to liti- gation.30

[4] Trip Advisor and Other Internet Reviews

Internet travel critic relies upon guest reviews and has generated some memorable comments such as "Cradle of Filth: The Worst, Worst, Worst Hotel in the World," "Slept in my clothes" and "Made me think of my own grave." "Those are just a few excepts from reader-generated reviews of various hotels in Britain, culled from the '2010 Dirtiest Hotels' list published recently by . . . TripAdvisor says it has reviews of more than 450,000 hotels around the world."31 While entertaining, there is some concern about the accuracy of the reviews and the intent of reviewers.32 "Fake reviews are drawing the attention of regulators. They have cracked down on a few firms for deceitful hyping and suspect these are far from isolated practices."33 Nonetheless, Trip Advisor "which operates websites in 30 countries and boosted revenue from overseas by 55% last year, continues to launch sites in new countries"34 and continues to add hotel chains "to its stable of hotels that post TripAdvisor reviews on their own sites."35 In addition, hotels have introduced their own user reviews36 and had disputes with Google.37

It has become clear that consumers and travel agents rely on Trip Advisor in making purchasing decisions. Some travel agents may regards review sites such as Trip Advisor to be a competitive source of travel advice, the majority of their clients apparently seek agent counseling and Web review sites as complimentary. Consumers who book through travel agents are more likely than other travelers to visit review sites.38

[5] Informal Travel Promoters

Annually, numerous non-profit organizations sponsor and promote alumni reunions, conventions and group travel, including student tours,39 to their memberships. These organizations, referred to as informal travel promoters, retain the services of tour operators or travel agents to assist in the design, marketing and delivery of tours.40

[6] Common Travel Problems

Millions of consumers travel every year and a number of them sustain some type of injury because they fail to receive the travel services which were advertised and contracted for, or which could reasonably be expected. Generically, there are two, primary, categories of discrete travel problems:

(1) travel problems caused by suppliers; and
(2) travel problems caused by tour operators, travel agents and informal travel promoters.

Supplier travel problems are those caused by airlines, cruise ships, railroads, bus and rental car companies and hotels. These problems include:

(1) physical injuries;41

(2) physical discomfort; 42
(3) delays and cancellations; 43
(4) over-booking 44 and breach of reservations contracts;
(5) lost, damaged or stolen baggage; 45
(6) misrepresentations, false promises and unfair and deceptive business practices in the marketing of travel services; 46 and
(7) misinformation including failures to render accurate information 47 and the failure to render necessary information. 48

Travel problems caused by tour operators, travel agents and informal travel promoters include:

(1) failure to make and confirm reservations (travel agents);49

(2) over-booking (tour operators); 50
(3) misinformation; 51
(4) misrepresentations, false promises and unfair and deceptive business practices; 52
(5) failure to properly investigate destinations 53 and suppliers 54 when recommending them to consumers (travel agents);
(6) failure to keep current on industry developments, 55 particularly, regarding the financial instability oF. Suppliers and tour operators (travel agents);
(7) failure to warn of hazardous conditions; 56
(8) failure to deliver travel services; 57
(9) breach of implied and express warranties; 58 and
(10) failure to guarantee the faithful performance of tour operators and travel agents (informal travel promoters). 59

[7] Liability Shifting

There is much overlap in the responsibility of suppliers, tour operators, travel agents and informal travel promoters for travel problems. For example:

(1) a hotel 60 or tour operator 61 may be responsible for refusing to accommodate the traveler or for delivering inferior or misrepresented accommodations, but the travel agent may also be responsible for failing to properly investigate the conditions at the hotel 62 or the track record 63 of the hotel or tour operator in delivering accommodations and services as advertised;
(2) a tour operator 64 may be responsible for failing to deliver contracted and paid for travel services because it went out of business but the travel agent 65 may also be responsible for failing to read and reveal negative financial reports in the travel trade press to the consumer-client who suffered damages;
(3) a hotel 66 or cruise ship 67 may be responsible for the tainted food or water which caused the traveler to contract typhoid fever or amebic dysentery, but the travel agent may also be responsible for failing to investigate and discover the high incident of typhoid fever at the locale, 68 or failing to discover that the cruise ship failed to meet federal health and sanitary codes prior to the cruise; 69
(4) an air carrier 70 may be responsible for the sixty hour flight delay because of improper maintenance, but the tour operator may also be responsible because it failed to investigate 71 the "on time performance" record of the air carrier, or assumed a duty 72 to deliver timely air transportation or guaranteed the delivery of timely air transportation;
(5) a charter airline 73 or a charter tour 74 operator may be responsible for failing to deliver charter services but the travel agent may also be responsible for failing to warn the consumer of the risks of purchasing charter services 75 or failing to independently verify 76 that the tour operator contracted with suppliers for the delivery of promised services;
(6) a cruise company may be responsible for the cancellation of a promised cruise because the ship was impounded by the sheriff, but the travel agent 77 may also be responsible for not properly investigating the financial stability of the cruise line;
(7) a hotel may be responsible for going out of business but the travel agent 78 may also be responsible for failing to keep in contact with the hotel after the services were purchased but before they were delivered;
(8) a tour operator or travel agent may have been responsible for mismanaging an African Safari but the informal travel promoter 79 may also be responsible because it guaranteed the faithful performance of the tour operator or travel agent;
(9) a tour operator may be responsible for failing to deliver travel services but a depository bank 80 may be liable for failing to properly segregate monies for the flights for which they were paid;
(10) an air carrier 81 may be responsible for failing to properly advise the passenger of the need for a visa but the travel agent 82 may also be liable for failing to make a proper inquiry to establish the need for a visa or other entry documents;
(11) a tour operator may be

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