J UNE 28, 2012

A FTERNOON S ESSION

U.S. D EPARTMENT O F T RANSPORTATION

WASHINGTON , D.C.

T ERRY D ALE

P RESIDENT, U NITED S TATES T OUR O PERATORS A SSOCIATION

Presentation before the

Advisory Committee on Aviation 

Consumer Protection
Overview of USTOA

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 Headquartered in New York, N.Y.

 Founded in 1972 to represent the tour operator 

industry.

 Encourages and maintains the highest standards of 

professionalism, integrity and service.

 Comprised of 45 active members, representing 

almost 150 brands, from iconic names to 

niche/specialized labels.

 Combined, members move 11 million passengers and 

account for $9 billion in revenue annually.
Overview of USTOA (cont’d)

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 All active members are required to participate in 

USTOA’s Travelers Assistance Program.

 each member must post $1 million in security, in the form of a 

bond, letter of credit or U.S. Treasury Bill

 security is held by the USTOA Depositors Trust

 solely for use in reimbursing consumers for tour payments or 

deposits lost in the event of an active member’s bankruptcy, 

insolvency or cessation of business

 USTOA’s Travelers Assistance Program is the only 

consumer protection deposit plan recognized by the 

Attorney General of California under that state’s 

seller of travel law.
Tour Operators Provide a Unique Service

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 Tour operators are regulated by DOT as “ticket 

agents,” but differ significantly from online travel 

agencies and brick-and-mortar retailers. Tour 

operators:

 depend on multiple product suppliers in connection with a single 

tour, including not only airlines but hotel, cruise, rail and motor 

coach operators;

 provide consumers with the flexibility to pay over time, vastly 

increasing access to travel and consumer choice; 

 have booking windows of up to 12 months or more prior to 

departure; and

 are accountable for the customer’s experience, from departure to 

return, and depend on repeat business to succeed, with every 

incentive to care for their customers.
Tour Operators’ Sale of Air Transportation

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 Airline tickets are but one subcomponent of tour 

operators’ packages.

 Between deposit and the time of airline ticketing, 

international airline fuel surcharges—over which 

tour operators have no control—often increase.

 Volatile fuel prices pressure airlines to suspend or 

discontinue unprofitable routes, in some cases 

leaving tour operators and partipants with few 

viable alternate itineraries. 
Tour Operators’ Sale of Air Transportation

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 Tour operators, due to their long booking window, 

must prepare brochures more than a year in advance 

of the travel season, notwithstanding constantly 

shifting airline prices, rules and service patterns.

 Although the sale of air constitutes only a fraction of 

their business, tour operators often struggle with new 

DOT requirements mandating additional airlinespecific disclosures (particularly on e-tickets and 

websites), given technological challenges and the 

frequency of changes to airline rules, policies and fees. 
DOT Consumer Protection Efforts

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 USTOA has been an active participant in DOT’s 

consumer rulemakings, including the second round of 

consumer protection rules and the pending website 

accessibility proposal. 

 During the second round of consumer protection rules, 

USTOA supported DOT’s proposals to:

 ban post-purchase price increases other than increases attributable 

to government taxes; and

 provide consumers with information on airline baggage fees.

 USTOA intends to participate fully in the forthcoming 

proposal for a third round of consumer protection rules. 
Current DOT Requirements

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 USTOA appreciates DOT’s continued efforts to 

adopt enforcement policies that allow sellers to 

utilize a variety of means to comply with its latest 

consumer protection rules. 

 Given the current challenging economic climate, 

DOT should review its existing requirements to 

ensure the stated objectives are achieved through:

 the least burdensome means; and

 in a manner that preserves operational flexibility for all sellers 

of travel. 
Future DOT Rulemakings/Policies

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 DOT must strike an appropriate balance between the 

need to protect consumers and the important objectives 

of the Airline Deregulation Act, including:

 placing maximum reliance on competitive market forces; and

 fostering an air transportation system that relies on competition to 

provide innovation and determine the variety and quality of 

services.

 DOT’s future consumer protection efforts should focus 

on addressing practices that are likely to deceive or 

confuse consumers or otherwise cause substantial or 

significant harm.

 New requirements should be reserved for cases where 

DOT is aware of actual consumer injury. 
Conclusion

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 USTOA looks forward to continuing to work with the 

DOT to ensure:

 USTOA members understand DOT’s enforcement policies and 

expectations with respect to tour operators’ offerings and services; 

and

 DOT understands the unique role that tour operators play in 

arranging consumer air travel, including matters over which tour 

operators do and do not have control. 

 USTOA also welcomes the opportunity to assist the 

Committee with the important task of evaluating and 

recommending opportunities to improve existing 

aviation consumer protection requirements and, where 

necessary, such additional programs as may be prudent. 
Contact Information

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Terry Dale

President

United States Tour Operators Association

345 Seventh Avenue, Suite 1801

New York, NY 10001

212.599.6599 (phone)

tdale@ustoa.com (email)

www.ustoa.com (website)