In the first of a four-part series on the law of travel agency, Fox Williams partner Rhys Griffiths and associate Anna Tindall look at the basics of agency relationships
The concept of ‘agency’ is perhaps nowhere more prevalent than in the travel industry. However, it is a term which is often used imprecisely and to describe relationships which the law would not consider truly to be that of an agency.
What is an ‘agent’?
An agent is someone who has been authorised to act on behalf of someone else (i.e. the ‘principal’), such that the agent can affect the relationship between the principal and a third party. The classic example of an agent is a party which is authorised to arrange for its principal to enter into contracts with third parties, but the concept of agency is a broad one and extends beyond simply contract formation. It can be applied to almost any scenario where someone is doing something for someone else.
What is a ‘travel agent’?
A ‘travel agent’, whether online or bricks and mortar, is used very broadly in the travel industry and often to describe arrangements which go beyond the strictest sense of the word ‘agency’. It is often used to describe any company which acts in an intermediary capacity of some sort, for instance:
- Agents of suppliers: agents which are appointed by third party principals to sell their travel services under written agency agreements (e.g. agents for tour operators, airlines, hoteliers, etc.).
- Agents for the consumer: agents which are appointed by the consumer to purchase travel services on their behalf from third parties (e.g. a travel agent which purchases a low cost flight for the consumer by using the airline’s public-facing website, where the travel agent is doing so on the instructions of the consumer and not as an agent for the airline).
- Booking service providers/platforms: businesses which provide a booking service to the consumer, whereby in return for a fee the business will provide a service to the consumer which enables the consumer to make bookings with third party principals.
- Travel advisors: businesses which provide advice to a consumer as to their holiday arrangements and/or create bespoke package holidays for the consumer (although note that, when it comes to the sale of any travel services, the business may conclude these transactions as an agent for the supplier / consumer or as a principal).
- Principals: the term ‘travel agent’ is also sometimes used incorrectly to describe a business which sells travel services to the consumer in its own name (i.e. a reseller), particularly outside of the UK.
- Introduction agent / marketing agent / marketing affiliate: these terms are often used interchangeably and cover a broad range of different models, such as:
- a company which advertises the travel services of the principal but then refers the consumer to the principal to conclude the sale;
- a travel company which itself sells single travel services (such as hotel only), but which advertises and provides a link through to a third party car hire provider;
- A ‘white label’ model, whereby a travel company will provide a third party (such as an airline) with a package holiday platform to incorporate within its own website. The airline will overlay the package holiday platform with its own branding, but all consumer interactions on that website will be taking place with the white label provider.
It is often the case that travel agents will act in a number of different capacities in a single transaction. For instance, a travel agent may act:
- as a travel advisor in the creation of a consumer’s itinerary;
- as an agent for the consumer in the sale of the flight; and
- as an agent for the supplier in the sale of the hotel.
The next part of Fox Williams’ overview of the law of travel agency will look at some of the legal practicalities of becoming a travel agent and the importance of the impact of the 2018 Package Travel and Linked Travel Arrangements Regulations.
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