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15 August, 2019

CATO warns agents of hidden catch in booking direct with overseas suppliers

Travel agents play many roles when it comes to planning a client’s vacation.

But at what point does an agents role morph into that of a tour operator? According to the Council of Australian Tour Operators (CATO), there could be a fine line.

CATO has raised concerns for agents that book directly with overseas operators when packaging itineraries and creating custom tours for clients.

For example, say you’re putting together a private cycling journey of France’s Champagne region and you work directly with a local ground operator, or with a US-based operator to develop a unique New York shopping tour for its own customers. Or it could be as simple as contracting airport transfers directly with a local service provider.

“Where an agent is piecing together components from off-shore suppliers—as opposed to suppliers with a commercial presence in Australia—there is the possibility for unintended consequences like the agent being deemed a tour operator and, therefore, potentially liable in the event of incidents and accidents in destination,” CATO managing director, Brett Jardine said.

“There is nothing to stop anyone from choosing how their business operates in this regard, but retail agents are encouraged to be well-informed from a legal perspective and also confirm their insurances provide appropriate coverage in cases like this.”

CATO associate member spokesperson Aaron Zoanetti, head of the travel and events division at Melbourne based law firm Pointon Partners said that while robust booking conditions are an effective way to protect yourself if something goes wrong, they can also act as a false sense of security.

“If you package up components from different suppliers and sell at an inclusive price on your own terms then, irrespective of what your Booking Conditions say, there is a real risk of crossing over from ‘agent’ to ‘principal’,” Zoanetti said.

“If a customer suffers personal injury due to the negligent actions or omissions of your local supplier or operator, then you could be directly responsible.”

“Once the retailer crosses over from ‘agent’ to ‘principal’, the services the retailer supplies to the customer are not limited to simply arranging the booking. They also extend to the actual operation of the tour including services provided by local suppliers.”

“Things can go wrong. But if you have the right legal documentation in place, you should be able to mitigate the risks associated with the negligent acts of your suppliers.”

CATO urges travel agents who may think they’re exposed to this kind of risk to seek independent legal advice.

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