Legal Environment

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  • Topic: Dynamic packaging, Travel agency, Package holiday
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  • Published : April 18, 2011
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Legal Environment of SLT Report

SU MAN
MSc SLT
ETU20100211
ESC RENNES

1. The Legal Differences
There are approximately 80.000enterprises related to Travel agents and tour operators in Europe with 450,000 employees. Package holiday becomes a popular and convenient travelling form attracting more people. Until 2007, 190 million package holidays have been sold. Meanwhile, 29.000 IATA accredited agency have already settled in travel agency. According to the statistics, there were $1.6 billion IATA tickets being sold in 2009, even a $280 billion total turnover of the industry by the year 2009. (Fact Sheet: IATA- international Air Transport Association)

A travel contract signed by travel agent, tour operators and clients is an important part in the process if a customer wants to travel with a travel agency. However, there are some differences between a travel agent and a tour operator, as customers we should know which can ensure the right of us, we should understand.

Package travel directive has one condition to practice as organizer: “the need for a financial guarantee to the benefit of consumers.”(Directive 90/314/EEC[adoption: cooperationSYN/1988/0122]) Package travel instruction aimed at the unity of the European members in laws, regulations and administrative provisions of package travel, package holidays and package tour. By determining the minimal acceptable standards, package travel instruction is planed to establish a minimum level of protection of community members.

1.1 Travel Agent
“A travel agency is a middleman—a business or person selling the travel industry’s individual parts or a combination of the parts to the consumer.”(Charles R. Goeldner, J.R. Brent R, Robert W. and Mcintosh, pp193). Travel agent, working as a middleman, does their work like communicating with suppliers like hotels, tour buses, or tour operators, receiving commission from suppliers.

From legal aspect, travel agency represent the principal, it must be a legal agency in certain geographical position. Communicating between tour operators and clients, travel agency functions as a middleman for suppliers like, what have been mentioned before, hotels, tour buses or tour operators.

Although the travel agency’s sales brochures contains the nonresponsibility of the exemption, for the consumers in terms if contractual obligations, the major liable person is still the travel agent, not the tour operator. Because the travel agents purchased large amount of package tour services, and then turns it as their own products to sell to customers.

According to Directive 90/314/EEC, “travel agent has the liability of completing fulfillment of the contract, enabling the consumer to enter into a contract with a partner in his country of residence who shall be liable for the fulfillment of the said contract and provided for refunding an/or repatriating the consumer in the case of insolvency or bankruptcy of the agency; however, a considerable number of provisions of this Directive allow a wide-ranging interpretation, thus leading to different approaches by national law-makers, without prejudice to a correct transposition into national legislation by Member States. Package travel is often cross-border, and therefore consumer protection must be on a cross-border basis rather than be subsumed under the issue of subsidiarity. As an example of the potential for divergent interpretation under national law, Annex A sets out the various ways in which national legislation has sought to implement Article 7 of this directive.”(SEC [1999 1800] final)

The obligation of travel agency of providing information to consumers is being constantly expanding. The absence of this liability must lead to a travel plan come to nothing. This liability is extended except the predictability and the required information can be obtained. Besides, travel agency must anticipate the needs of customers. For example, travel agency is responsible for the consumer...
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