What Travel Companies Need To Know When Selling Travel In The COVID-19 Era.
By Kenneth F. Whitman, Esq. and Jeffrey L. Ment, Esq.
A fair amount of the population is now vaccinated. The mask requirements have recently been lifted for vaccinated people. However, the question is still frequently asked: As we resume business again, are there any steps we can take to protect ourselves from situations which may arise out of the COVID-19 pandemic? The answer is yes – travel companies need to adapt to the new environment. Travel advisors and tour operators must make some changes to protect their interests.
First and foremost, as travel professionals, you must provide your customers information that will assist in making it possible for them to have a trouble-free, enjoyable trip or vacation. This often begins with a customer asking if it safe to travel. Please don’t fall head-first into this trap and guarantee a client’s safety. Be savvy. Don’t tell them outright that their travel will be trouble-free with respect to the COVID-19 pandemic and the restrictions put in place based on geography. Encouraging travel is understandable. However, you should be providing them with reasonably available information so they can make an educated decision, without your assurances that everything will be fine. Selecting and offering suppliers that have published new safety standards may seem like a good decision. But remember, you can’t guarantee safety. It is reasonable, however, to inform your customers about the supplier’s new safety standards and protocols and pass on that industry data to the potential traveler. If you have personally traveled, you can share your experiences with a cautionary note — after all, it may not be the same for the traveler.
In the wake of this pandemic, it is now more important than ever that the customer be provided with terms and conditions of travel, waivers, and other information that outline and delineate responsibilities between the travel company and the customer. Put bluntly, travel companies must specifically outline the issues for which they will not be responsible as well as the general rules of booking travel with your company. Disclosure to the customer regarding things that you are not responsible for, nor are able to guarantee, is vitally important to your risk management plan.
Recommendations for Tour Operators
Tour operators not only face the challenge of having proper contracts with their customers during the COVID-19 pandemic, but must also address pandemic related concerns in contracts with their vendors and suppliers.
On the customer side, terms and conditions (“T&C’s”) must evolve based on what we have learned in the past 15 months. To begin, many operators struggle with the proper method of communicating the Terms document to the customer. Courts, when deciding cases involving this type of agreement typically first look to whether-or-not, and how it was it provided to the customer. Since this pandemic has resulted in the need for many new or amended provisions to be added to your documents, there are two potential approaches to handle this new requirement.
First, if you are unable to modify T&C’s because they appear in printed materials or in some way have already been shared with your customers, you may produce a pandemic-related supplement or addendum to the T&C’s already in place. However, the best way may be to have your general T&C’s modified to reflect these changes which may be specific to COVID-19, but should also contemplate future unknown pandemic possibilities.
You may wonder what is the best way to convey your T&C’S to your customer. The best practice is to first have your terms located in a section on your website, assuming you are doing online business transactions. Under this method, prior to any deposit becoming non-refundable, an operator should obtain the customer’s explicit consent to the Terms. Now, this does not necessarily require a written signature (although that remains the “gold standard”). A “click and agree” method is the “silver standard” and simply providing the Terms but not requiring any assent to them comes in third place, nabbing the “bronze” award. Even if using this digital method, it is a good idea to also append your T&C’s to invoices, itinerary and promotional materials. The bottom line is a Court wants to see clear, conspicuous and consented to Terms.
Whether you amend your current T&C’s or you utilize a separate document (paper or digital), operators should include a COVID-19 section that warns customers that there are inherent risks while traveling during a pandemic. Warning language along the lines of “By booking a tour at this time, you acknowledge the highly contagious nature of COVID-19 and voluntarily assume the risk for yourself and any minors traveling with you, that you or they may be exposed to or infected by COVID-19 by traveling and that such exposure or infection may result in personal injury, illness, permanent disability, and death even if such injuries or losses occur in a manner that is not foreseeable at the time you book your tour. You acknowledge that exposure to such viruses or disease is an inherent risk of traveling, that cannot be controlled or eliminated by the Operator” should be included.
Release language, such as “You, for yourself, and any minors traveling with you, and on behalf of your and their heirs, assigns, personal representatives and next of kin (The Releasors), HEREBY RELEASE, AND HOLD HARMLESS the Operator its members, officers, agents, and/or employees, suppliers, and other tour members (RELEASEES), of from and against any and all claims, damages, demands, losses, and liability arising out of or related in any way, in whole or in part to any POSTPONEMENT, CANCELLATION, QUARANTINE, DELAY, REFUSAL OF ENTRY OR DEPARTURE, CHANGES IN ITINERARY OR OTHER, INJURY, DISABILITY, DEATH OR ANY OTHER LOSS you may suffer due to exposure, infection, spread, closure, and travel restrictions related to COVID-19, WHETHER ARISING FROM THE NEGLIGENCE OF THE RELEASEES OR OTHERWISE, to the fullest extent permitted by law. The terms of this HOLD HARMLESS AND RELEASE OF ALL LIABILITY paragraph, shall survive any termination or cancellation of this Contract, whether by operation of law or otherwise” is also valuable to include.
Operators should include language that the components of the tour may change as a result of COVID-19 requirements which may result in additional expenses to the customer and that customers will be required to abide by all supplier rules regarding entry or participation in a particular event. The operator should note that no refunds will be provided if a customer is not able to participate in all facets of the trip.
Many operators have inquired about the legality of requiring customers to be vaccinated in order to participate in a trip. The short answer is yes, an operator can mandate that customers be vaccinated prior to participating. The only possible legal implication arises when a traveler, for health reasons, is unable to be vaccinated. For this passenger, an operator should require the passenger to obtain a negative COVID-19 test taken and results received within five days of departure.
Of course, tour operators should continue the time-honored practice of strongly recommending that the traveler purchase a cancel for any reason (CFAR) trip protection plan coverage. Requiring a written declination of coverage can be valuable in the event of dispute later on.
Last, operators should work with suppliers to obtain the most flexible payment terms so that our industry can be nimble in case we need to adapt to a COVID-19 flare up or regulatory changes. T&C’s should clearly set forth how refunds or cancellations with suppliers and vendors will be handled under these circumstances, especially when they are caused by situations that are out of your control as well as the customer’s control. With a detailed refund and cancellation policy that is pre-established between a travel supplier and your company, you can avoid the disputes that many operators are facing today due to the suppliers’ refusals to provide cash refunds.
Recommendations for Travel Advisors
Travel advisors are on the front lines – often the advisor is the only person to whom the customer speaks about the trip. Advisors should onboard a customer by having them sign a Booking Agreement and provide them with the agency’s T&C’s.
With the shifting requirements around COVID-19 rules for entry and quarantine requirements, it is often difficult to stay abreast of current developments. However, advisors must take the time to stay current. No longer should you start your mornings just watching network television; rather, you need a daily morning dose of industry news; you should be aware of what’s happening in our world. Advisors should sign up for daily blasts of industry data. After all, clients can reasonably expect you to be up to date with what’s happening. The potential now for providing misinformation and/or a lack of information or guidance, as an expert, to your customers is tremendous. As a result, your T&C’s should attempt to shift the burden of keeping up with all of the changes to the customer. One recommendation is to include this provision:
- (Travel Advisor) urges Travelers to remain informed on a daily basis as to current news, as well as to review travel prohibitions, warnings, announcements, and advisories issued by the United States Government prior to booking travel to international destinations. Information on conditions in various countries and the level of risk associated with travel to international destinations can be found at http://www.state.gov, and http://www.cdc.gov. In addition, you should consult with government websites to ensure that you are in compliance with all requirements for admittance into that country, including COVID- 19 requirements, as well as understanding local laws that govern travel within a country, such as medical tests and tracking. It is your responsibility to be aware of any and all requirements for admittance to a country or state, including COVID-19 requirements. Should you choose to travel to a country that has been issued a travel
As with operators, advisors too should have a clause devoted to COVID-19 or a separate document (digital and/or paper). T&C’s should describe the cancellation/refund policies with sufficient detail. Your refund policies should clearly state whose refund or cancellation policy is controlling, especially if it’s not your own. For example, you may have no control over airlines, hotels and other vendors’ cancellation policies. Some of their policies may be quite rigid and not customer friendly. It is suggested that you include cancellation provisions which clearly set forth that you are not responsible for a vendors’ or suppliers’ refusal to return sums of money for travel services that have not been provided, regardless of the reason for cancellation or the supplier’s failure to provide those services.
When these types of disputes happen and wind up in court, without this type of clarification ahead of time, it often comes down to a decision as to who should bear the burden of the loss of money due to a pandemic? Who is in the best position to pay? Should it be the travel advisor, the tour operator, the suppliers or the customers? It’s likely that the customer will look to you for a refund. After all, they dealt directly with you and not the actual supplier who is refusing to refund the money. For that reason, courts may favor the customer over all others when these types of disputes are adjudicated.
Advisors should also explore payment options that transfer the risk to the third-party travel supplier. If vendors can be paid by credit card, that is a favorable method of transferring risk. Utilizing your customer’s credit card to pay the vendor is preferable. This will enable your customer to initiate a merchant dispute directly with the vendor, resulting in a chargeback to the supplier, who did not deliver services nor provide a refund.
If you are unable to utilize the customer’s credit card, you may be able to utilize your company’s credit card for payment. When negotiating contracts with your suppliers, arrange for payments to be made by credit card, even if it increases the cost of the services or results in an additional “convenience fee”.
Advisors must continue to strongly urge customers to purchase trip protection plan coverage. “Cancel For Any Reason” (CFAR) trip insurance policies (that don’t contain COVID-19 or infectious disease exclusions), will give the customer peace of mind that if their trip is cancelled or delayed due to COVID-19, they can be made whole once again. Although, it is important that you remind them if the policy only covers a fixed percentage of the lost travel.
These precautionary steps are so important because a travel company’s Errors and Omission insurance policy typically does not cover financial disputes between an insured and its customer, or between the insured and a vendor when the dispute relates directly to a payment or collection issue. If you disclose all the ground rules with your customers and your suppliers ahead of time, it will leave you in a better position should an unhappy customer chose litigation. Generally, the courts are in agreement that parties to a contract are free to negotiate and agree on their own terms, provided they are not illegal or do not violate public policy.
Monday morning quarterbacking is easy. It’s time, however, to act on the lessons learned and be as educated as possible on potential travel restrictions. There have been several acronyms created in connection with this pandemic, most notably PPE (Personal Protection Equipment) and PPP (Paycheck Protection Program), however, I would urge you to remember the original PPP - because Prior Proper Planning is key to managing risk and avoiding liability during these difficult times.