A reader recently raised an interesting question about advertising rules related to supplier identity. The particular concern was that once a trip’s supplier is identified in an ad or social media post for a prospective tour, any interested traveler can initiate independent research and may end up booking directly with the supplier. Obviously, once the consumer knows which supplier is providing a particular product, nothing prevents that person from pursuing a booking independently, thus capturing at no cost the value the advisor provided in promoting the package.
As a marketing strategy, absent a specific statute or regulation requiring otherwise, there is nothing objectionable in general about advertising a tour, for example, that does not identify the supplier and invites “call for details.” As a general rule, however, you would not want to accept a consumer’s money that is not fully refundable without having revealed the supplier’s identity. That identity is almost always an important element of the deal from the consumer’s point of view. The consumer should not be asked to give up money irrevocably without being told who the supplier is. Approaching this otherwise is an invitation to conflict, and worse, with that consumer.
The question remains: are there statutes or regulations that apply to such scenarios? There are some. For example, the U.S. Department of Transportation Public Charter regulations require that “any solicitation materials … shall include the name of the charter operator and the name of the direct air carrier.” Part 380.30(a) The California Seller of Travel Law likewise provides that no payment may be accepted for travel services “unless at the time of or prior to the receipt of payment, the seller of travel first furnishes to the person making that payment written materials conspicuously setting forth … (C) The name of the provider of the air or sea transportation….“ Seller of Travel Law § 17550.13.
In Florida, Title XXXIII, Chapter 559, sec. 559.9335 has considerable language about misrepresentation of the terms and conditions of travel service offerings that could be held to preclude offering services without identifying the travel supplier, although that seems to me to be a substantial “reach” based on the statute. One thing is clear, however: you may not “fail to inform a purchaser of a nonrefundable cancellation policy before the seller of travel [accepts] any fee, commission, or other valuable consideration” 559.9335(10).
There are about a dozen other states with some form of travel selling regulations. It’s beyond the scope of this article to canvass and detail all of them. Most have simple registration requirements. All states have general misrepresentation statutes and policies that could, in some odd circumstances, apply to a travel advertisement that does not identify the supplier, though the risk seems small.
The larger question here is whether advertising that promotes details of a travel service but withholds the supplier’s identity is likely to be effective in attracting meaningful new business. Some would argue that clients who will undertake independent research and buy direct are clients that likely would not have bought anything from an advisor anyway. Absent a consultation fee charged before more information is provided, there is little to prevent a prospective client from contacting the advisor to inquire about the ad, then going off on her own anyway. It also seems likely to me, at least, that some consumers may be put off by advertising that looks a little like a come-on, but some advisors have spoken publicly to success with what might be called a cat-and-mouse technique. I have not, however, seen any data that addresses that approach. In the end, this is a judgment each advisor must make in fashioning a marketing strategy.