Travel industry law entails labor relations, international law, contracts, property, liability the standard fare of business law but there are differences. The travel industry has rather unusual agent/client relationships that are only being established in precedent setting consumer suits (such as one in which a travel agency was found liable for the murder by terrorists of an American passenger on the Achill Laure).
Deregulation has raised new legal issues, particularly regarding antitrust. There are suits over rebates and competitive practices. Heightened merger and acquisitions activity has required assistance of attorneys with an understanding of the relative values of the businesses.
The field has emerged in only the past few years. Up until 10 years ago, few specialized in travel law. (Indeed, under bar association rules, lawyers are not allowed to "specialize"; they "emphasize.") Now, there is even an International Forum for Travel and Tourism Advocates, which includes professors who teach travel law. About 40 countries have members.
Alexander Anolik, U.S. delegate to the forum, has made a career of offering what he calls "preventive legal care" to the travel industry and representing its interests. And, he says, he feels as much a part of the travel industry as he does the law.
"We speak differently," Anolik observed, while attending the American Society of Travel Agents' World Congress in Rome. "We use different vocabulary. When you have litigation for the travel industry, we interpret and understand the travel industry issues and present them from a travel law standpoint." He estimated that perhaps only 30 to 50 attorneys deal with travel law more or less exclusively.
"You have to know the industry-the people, relationships," he said. "I can look at the same issue, such as banks in travel, and see what another lawyer cannot. I caught a bank giving illegal rebates."
Anolik has served as general counsel to some airlines (with the proviso that he not be involved in anti-travel-agent litigation). He has also represented a travel agency franchise, a consortium, some tour operators, and a hotel.
Anolik, who started out as a trial attorney working for other lawyers, reflected that the key difference in being a "travel attorney" is not the legal issues but the people themselves. 'Travel people are a more enjoyable group-good people; they know how to enjoy themselves. Not the greatest business people, though- they need more preventive legal care."
The challenge for a travel attorney comes from being in a new field, where precedents are being set. Nonetheless, the law is the law. "You still have to be a good paper man, good antitrust."
There is something challenging about the cases, too, as indicated by the fact that 20 percent of Anolik's clients come via referrals from other lawyers who do not feel qualified. For these clients, a seemingly simple matter like a change in agency ownership is handled well when the lawyer is an expert in travel law.
The change in the regulatory environment has significant bearing on the travel law. The laws we use need finessing. A good antitrust attorney can do a good job on antitrust, but a travel attorney can do the witnessing, ask the questions, take the depositions."
Travel law is a growing field. Besides the formation of an association, the International Bar Association has recently formed a committee on travel.
In preparing for the field, Anolik recommended studying contracts, antitrust, torts, given the present climate, bankruptcy law. If you plan to work with travel agencies, you should also study labor law. Then, get into the industry, affiliate with the trade associations, and go to industry functions. "Read the trade press, get to know the people, spend time with them, and learn what is bothering them," advised Anolik.
Anolik travels extensively, particularly as a speaker on the matter of preventive legal care for industry functions. He also writes articles for the trade press. Other individuals who specialize in travel law include Jeffrey Miller, of Ward, Klein & Miller, Gaithersburg, MD; Pestronk & Associates, Fairfax, VA; and Arthur Schiff, New York.
The "Gray Area"
A constant stream of innovative products, services, and companies is generated in response to changing market conditions and technology. A group of entrepreneurs who tread in the "gray area" between what is legal and what is not is likewise generated.
Off-Tariff Retailers
Deregulation, for example, allowed total pricing flexibility and generated a new market for "off-tariff" tickets (non-published or negotiated fares) and, with it, a new breed of entrepreneur. And, due to changing market and legal conditions, what may technically not be legal (like rebating) can become a perfectly acceptable part of business practice.
Various forms of off-tariff tickets include airline promotional fares, unused frequent flyer coupons, miscellaneous charge orders, bulk fares, and bartered trade-outs. The biggest chunk of this market is in the sale of frequent flyer coupons; about 45 companies (many of which advertise in the Wall Street Journal and USA Today) generate $75 million to $100 million from them. This business is extremely risky, and some of the pioneering companies have gone under by overextending. More significantly, the airlines have been successful in legally preventing companies from reselling frequent flyer coupons (which they claim undermines the whole point of the program), punctuating the point by confiscating tickets at the airport and denying boarding to the passenger (which often results in the broker's having to pay out refunds).
A newly formed trade association of coupon brokers, the American Association of Discount Travel Brokers, with about 14 members, is trying to force the Department of Transportation into requiring the airlines to allow free sale of the coupons by third parties.
Consolidators
Consolidators also tread in the "gray area." These companies enter into special contracts with airlines and cruise lines in order to sell tickets below published rates (a big issue in international tickets, which are still subject to governmental regulation). This is another borderline situation since these companies were designed to tap into ethnic markets and fill up seats that would have gone unsold, but they now sell their products to the public at large in direct competition with their airline sponsors. They also compete with travel agents, but, increasingly, travel agents buy the tickets for their clients in order to pass along savings (and in the process earn higher commissions). In effect, the consolidators function like an alternative distribution network. Among the largest and best established consolidators is C.L. Thomson, San Francisco.
A host of companies have developed to capitalize on the essential fact of travel that unsold product is useless to a travel company. Moment's Notice, New York, for example, sells last minute, distressed, unsold space to consumers. The clients are generally "fairly seasoned travelers" rather than first-timers, who are usually too timid to travel this way. Clients need to be able to pull up and go with only a few days or weeks or a "moment's" notice. Retirees are one group that generally has this flexibility. In exchange for the lack of advance planning and higher risk, travelers get discounts of 50 to 55 percent on most products, including cruises, tours, and airline tickets.
"We act as a safety valve for the travel industry," said a spokesperson. "We generate revenue on what would have been lost revenue. Travel is a completely perishable product."
A division of Matterhorn, Inc., which started out 28 years ago as a membership organization called the Matterhorn Sports Club, Moment's Notice also attaches a $35 membership fee. The company lists eight to ten "specials" on a tape-recorded message. The turnover in product is so fast that the company does not even publish a folder. The company already has 10,000 members nationwide and a host of suppliers (who preferred not to be named).
