CATO News

CATO ASKS: WHEN DOES A TRAVEL AGENT BECOME A TOUR OPERATOR?

Fri, August 23, 2019 3:14 PM | Anonymous member (Administrator)
  • Where is the legal line between the two definitions? What are the potential ramifications of stepping over it?
  • Many Australian travel agents might not realise that they have already acted as tour operators.

The Council of Australian Tour Operators (CATO) has today raised concerns for retail agents that look directly to overseas operators when packaging itineraries and creating custom tours for clients.

Examples of this might include an Australian retail agent working directly with a local ground operator in France’s Champagne region to create a private cycling journey; 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.

CATO Managing Director, Brett Jardine said that, “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.”

“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”, added Jardine.

CATO Associate Member spokesperson Aaron Zoanetti, Head of the Travel & Events division at Melbourne based law firm Pointon Partners said, “Whilst having a robust set of Booking Conditions is an effective way to help protect your interests if something goes wrong during travel, Booking Conditions themselves can provide a false sense of security.”

Significantly, Zoanetti added that, “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’. 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.”

According to Zoanetti, “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”, he added.

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

For additional information and inquiries, please contact:

  • Brett Jardine Managing Director, Council of Australian Tour Operators (CATO)
  • T: +61 2 9287 9906 | M: +61 2 419 724 909
  • E: bjardine@cato.travel



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