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Travel Agency Bond

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What is a Travel Agency Bond?

Many people today enjoy planning their vacations with a travel agency. It can take so much hassle and worry out of the entire process, so they are free to just anticipate their days of relaxation. Many states require a travel agency to obtain a bond before they can become licensed to work with the public.

This offers an assurance to the state agency as well as travel agency clients that the money they are investing into a dream vacation is used appropriately.

The travel agency is responsible for putting together vacation itineraries for clients with the money that they receive. Failing to do so through mishandling of funds or deliberate fraud leaves the client without a dream vacation or the money needed to plan another one. Having this bond means that the client is protected.

How does a travel agency bond work?

A travel agency bond is a type of surety bond. With all surety bonds, there are three key entities: the principal, the obligee, and the surety. The principal is the individual or business that needs to have a travel agency bond. The obligee is the state agency that requires a business to purchase the travel agency bond before becoming licensed. The surety is the company that guarantees that the principal will meet the terms of the bond.

If the travel agency does not fulfill its obligations to the client, then a claim is filed against the bond so that the client is compensated for their loss or damages. The surety agency will determine the validity of the claim and issue a payment to the complainant when it is necessary. This amount will not be more than the total amount of the bond. The travel agency will be liable for repaying any money to the surety company that has been paid out for a claim.

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How much will I pay for a travel agency bond?

Each state determines the coverage requirements for travel agency bonds. You will pay a small percentage of that amount as a premium to the surety company. For the most accurate quote, submit your information for a free quote, and we will get you started on the path to bonding your travel agency.

Our licensed agents will help guide you through all of the steps so that you can meet your licensing requirements as soon as possible. We are ready to answer any questions you have about travel agency bonds and any other bonds you may need for your business.

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Understanding The Role Of Seller Of Travel Bonds For Your Travel Agency

Among the many legal requirements and administrative steps that travel professionals need to meet, seller of travel bonds may be one on your list. Some states such as California, Virginia, Illinois, Florida and Iowa include the bonding as a part of the licensing or registration process for travel operators.

If you’ve never had to obtain surety bonds, it’s important to understand the purpose and application of such safety criteria. Seller of travel bonds are also known as travel agency bonds. They represent a guarantee for your business partners that your travel agency will transfer to them any due payments on bookings made via your company. As for your travel business, the bonds are a strong sign that you are safe to work with.

To get to know the bonding in detail, let’s look at how bonds work, what they mean for your travel business, and how much you need to pay for them.

What is a seller of travel bond The seller of travel bonds are a type of surety bonds. Just like the rest of these security instruments, these bonds are required by state authorities that regulate the travel industry.

Travel agency bonds protect the individuals and entities that sell travel products via your business, as well as the customers your agency serves. They ensure that travel professionals will make all necessary payments on bookings they have taken for hotels, resorts, cruise lines and other travel services providers. In this sense, they safeguard the general public from fraud and any contract breaches committed by travel agencies.

In the unlikely event of such actions on the side of travel providers, the bond can be used to provide compensation to affected parties. This is done through filing a claim on the bond. For proven claims, the surety that has underwritten the bond covers the penalties at first. Your bonded travel business is then liable for all costs.

How seller of travel bonds work for your business While the focus of travel agency bonds is to provide a safety net for your partners and customers, they also offer an added value for your own business. It’s useful to understand this aspect and apply it in your company’s interest.

While bonds don’t work like insurance for you, they are a powerful proof that your travel agency is legitimate and safe. In the larger context of the travel industry, bonds ensure that travel operators are held to high standards. This helps protect the image of the business and boost the trust that consumers have in travel professionals.

What is the bonding cost for your travel agency The travel agency bond amount that you need to provide is set by the state authority that regulates the licensing. In Florida, travel agencies need to post a bond between $25,000 and $50,000 to the Florida Department of Agriculture and Consumer Services. Iowa travel professionals have to obtain a $10,000 bond and present it to the Secretary of State. In Washington State, the bond is between $10,000 and 50,000 and is required by the Washington State Department of Licensing.

In California, the bond amount is set on a case-by-case basis by the California Department of Justice. The same goes for Virginia, where the Department of Agriculture and Consumer Services determines the bond amount .

While the bond amount you need to provide to state authorities can be considerable, your bond price is only a few percentages of it. This is called your bond premium. It is assessed on the basis of your personal and business financials. The stronger your credit score and finances are, the lower the bond cost will be.

There are bond cost calculators that you can use to get an estimate of your bond price in advance. If your overall profile is stable, you can expect to pay between $100 and $300 for a $10,000 bond.

Obtaining a seller of travel bond is not only a state requirement that you might have to fulfill. Getting bonded can be beneficial for your own travel business because of the reputational boost that it gives. The bond also ensures that travel operators adhere to a high professional standard in serving customers, which improves the trust in the industry.

Do you have experience with getting a seller of travel bond? Please share your insights in the comments below.

Todd Bryant is the president and founder of Bryant Surety Bonds. He is a surety bonds expert with years of experience in helping travel agencies get bonded and start their business.

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What Are Travel Agency Bonds?

A travel agency bond, also known as a “seller of travel” bond, is a type of license and permit bond required in many states as a condition for getting licensed to operate as a travel agency within the state. The primary purpose of the bond is to protect consumers and companies providing travel services against financial loss due to the illegal or unethical actions of a travel agency.

The bond guarantees that consumers don’t lose out if a travel agency commits fraud, misrepresents a product or service, or misappropriates customer deposits collected for forwarding to hotels, airlines, resorts, cruise lines, or other travel services. It also protects consumers against the loss of such deposits if the travel agency becomes insolvent.

Who Needs Them?

Travel agencies typically purchase these bonds because their state requires them to do so. Without a travel agency bond, travel agencies in states that require bonding will be unable to obtain or renew a business license.

Even in states that don’t require them, many agencies will purchase a bond anyway. Being bonded demonstrates their commitment to ethical business practices. Knowing that a travel agency has voluntarily purchased a bond makes consumers feel confident and safe in doing business with that agency.

How Do They Work?

The three parties involved in the bond are:

• The state agency that licenses travel agencies and requires them to purchase the bond (the obligee)
• The travel agency (the principal)
• The company that issues the bond (the surety)

In buying the bond, the principal is making a pledge to conduct business in accordance with all applicable rules and regulations. The surety is agreeing to investigate any claims against the bond and pay any that are found to be valid. The principal is accepting the responsibility to reimburse the surety for any claims paid out.

What Do They Cost?

Two factors determine the premium cost of a travel agency bond: the required bond amount and the applicant’s credit score and financial condition. The bond amount varies from state to state, and travel agencies choosing to become bonded in states that don’t require it can select their own bond amount.  

Depending on their credit history and finances, applicants may pay as little as 1% or as much as 15% of the bond amount as the annual premium.

Use our convenient online system to apply for a travel agency bond today.

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Travel Agency Bonds (Seller of Travel Bonds)

What are travel agency bonds.

Travel agency bonds, also called seller of travel bonds, guarantee your business partners and customers that your agency will transfer funds as promised for bookings you make on their behalf. Your business partners may include hotels, cruise lines, resorts, etc. 

Various states require seller of travel bonds, including Iowa, Illinois, California, and Florida. These states use bonds to hold travel agencies accountable, ensuring they handle money properly and forward it to the correct service providers for prospective travelers.

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Quick Takeaways

• Your state government may use surety bonds to help regulate the travel industry.
• Seller of travel bonds guarantee business partners and customers that your travel agency will transfer funds as promised.
• A travel agency bond also shows other parties that you are a trustworthy, safe business to work with and will uphold your contracts.
• Your travel agency surety bond may cost as little as $100 if you have good credit.

How do travel agency bonds work?

Travel agency bonds are required at the state level. Your state government may use surety bonds to help regulate the travel industry. The bond guarantees that you will forward the money you receive on behalf of customers appropriately. It also ensures your customers and partners that you will make ethical and legal business decisions and offer legitimate travel options.

Travel agency bonds can also benefit your business. Bonding shows current and potential partners and customers that you are a trustworthy business and will uphold your contracts. It may give them greater peace of mind working with you knowing your business is legitimate and safe.

How do bond claims work?

If you break a contract and cost another party money, they can file a claim against your bond for compensation. If the claim is valid, your surety may cover the costs upfront, then hold you liable for full repayment. To maintain your reputation in the travel industry, follow all applicable laws and fulfill your contracts faithfully.

Travel Agency Bond Requirements for States

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Travel Agency Bond

Travel agency bonds are a type of surety bond required by state authorities in the travel industry as insurance for legal work performance., why work with bonding solutions simple we are different.

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What is a travel agency bond.

Travel agency bonds fall into the category of surety bonds required as a part of licensing or registration for travel operators. They stand as insurance for business partners and clients that a company or a travel agency bond obtainer will comply with laws and regulations and ensure payments and services. Basically, travel agency bonds are there to ensure a company is safe to work with and invest in. They protect individuals and entities that sell travel products via travel agencies as well as the customers of agency services. 

An agency that holds a travel agency bond guarantees that it will go through all the payments made on bookings for hotels, resorts, and other travel services. This way, the clients and customers are protected against fraud and other contract breaches. In case that a travel agency breaches the contract, the bond is there to provide compensation to involved parties. The affected party registers a claim on the bond and receives compensation from the company that issued the bond for a travel agency. It’s also important to keep in mind that surety companies issue bonds for travel agencies that can guarantee payment for all the claims made against the bond. That means the company is financially stable and reliable to work with. 

How much will my bond cost?

The travel agency bond price might vary depending on the state authority that regulates the licensing. In most cases, travel agencies need to obtain bonds from $10,000 to $50,000. However, this is the bond amount, and the bond price is only a few percentages of it. The premium depends on several things, including personal and business finances and a credit score. Those who have stable profiles can expect to pay quite a small percentage for their bond premium.

Why is this bond required?

A travel agency bond is required as insurance that will protect travel agency partners and customers from faults in payments and potential frauds. They are required by state authorities to make proof that travel agencies are legitimate and safe to work with. However, these surety bonds are also beneficial for the travel agencies themselves because they demonstrate a commitment to ethical business practices. Clients feel more confident about doing business with an agency that voluntarily obtains a travel agency bond .

Bonding Solutions & Travel Agency Bonds

Bonding Solutions has specialized in surety bonds for over 30 years. Our company primarily focuses on building strong relationships with both contractor clients and sureties that offer them bond support. This way, Bonding Solutions make sure you get a complete surety management solution, not only a well-crafted bond. 

Bonding Solutions offer a wide range of surety bond types , including travel agency bonds. With the help of our experienced team, you can get what you need for your company and protect the business in the best way. Bonding Solutions also give you an option to send a free quote and find out what you need exactly for obtaining a particular bond. 

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Seller of Travel Bond: Requirements, Coverage, and Protection Explained

Navigating the world of travel sales can be a complex journey, with various regulations and requirements that sellers must adhere to. A crucial part of this intricate puzzle is obtaining a Seller of Travel Bond – an essential safeguard for both your business and your clients. But what exactly does this bond entail, and why is it so vital in the travel industry? In this enlightening blog post, we’ll unravel the mystery around Seller of Travel Bonds; from its fundamental requirements to the broad spectrum of coverage it offers, as well as how it provides remarkable protection for your customers and your reputation in this dynamic industry. Buckle up as we embark on a guided tour into the captivating realm of Seller of Travel Bonds!

A seller of travel bond, also known as a travel agency bond or a Florida Seller of Travel Bond, is a form of surety bond that provides financial protection to consumers against fraud, misrepresentation, and financial failure by the travel agency. It is required by certain states for anyone offering prearranged travel or tourist-related services in exchange for a fee or commission. The bond remains in force until canceled and must be renewed annually unless waived by meeting certain requirements.

Understanding the Seller of Travel Bond

The Seller of Travel Bond is a crucial requirement for businesses or individuals that sell or promote travel-related services in the state of Florida. It serves as a form of surety bond that offers financial protection to consumers against potential fraud, misrepresentation, breach of contract, or financial failure by the travel agency. Additionally, it ensures compliance with the Florida Sellers of Travel Act. Understanding the intricacies of this bond is essential for both travel agencies and customers alike.

Travel Agency’s Responsibility : As a travel agency, obtaining a Seller of Travel Bond demonstrates your commitment to ethical business practices and consumer protection. It showcases your financial responsibility and gives peace of mind to your clients when engaging in transactions related to prearranged travel or tourist-related services.

Consumer Protection : The purpose of the Seller of Travel Bond is to safeguard consumers from potential monetary losses resulting from deceptive practices by travel agencies. If an agency fails to fulfill its obligations, such as providing the promised services or refunds, consumers can make claims against the bond to seek compensation for their financial losses.

Bond Amount Determination : The bond amount required varies based on the revenue generated by the business in the prior year. There are four tiers that determine the specific performance bond amount:

• For first-year applicants or businesses with revenue less than $500,000, a $10,000 bond is required.
• Businesses with revenue between $500,000 and $1 Million must obtain a $15,000 bond.
• Revenue between $1 Million and $2 Million necessitates a $20,000 bond.
• Businesses with revenue surpassing $2 Million must secure a $25,000 bond.

Now that we have grasped the fundamentals of the Seller of Travel Bond, let’s explore the requirements associated with prior revenue tiers.

• As per Florida State regulations, sellers of travel with an annual income less than $500,000 are required to obtain a surety bond of $10,000.
• According to industry data, applicants having good credit scores (680 or higher) and industry experience pay as low as 1% of the total bond amount.
• The Florida Department of Agriculture and Consumer Services processes several thousand Sellers of Travel Act Registration Applications along with the surety bond annually.

Prior Revenue Tier Requirements

To ensure appropriate financial coverage, the Seller of Travel Bond requirement in Florida is directly linked to the revenue generated by the travel agency. Each revenue tier represents a different level of financial responsibility and demands varying bond amounts.

For instance, if a travel agency had $800,000 in revenue from selling travel services in the previous year, they would fall within the $500,000 to $1 Million revenue tier. As per the requirements, they would be required to obtain a $15,000 Seller of Travel Bond.

It’s important for travel agencies to accurately determine their revenue tier to meet compliance standards. This determination should be based on the total revenue earned from selling travel-related services during the specified timeframe.

It is worth noting that the cost of the Seller of Travel Bond can vary depending on factors such as personal credit scores and industry experience. Applicants with favorable credit scores (typically 680 or higher) and substantial industry experience may benefit from lower bond premiums, often as low as 1% of the total bond amount.

Understanding your specific revenue tier requirement ensures regulatory compliance and enables you to obtain an appropriate surety bond that aligns with your business operations and financial capabilities.

• Travel agencies in Florida must obtain a Seller of Travel Bond that directly correlates with their revenue tier. Accurately determining revenue tier is crucial to meet compliance standards, and the cost of the bond can vary based on credit score and industry experience. Understanding your specific revenue tier requirement ensures regulatory compliance and enables obtaining an appropriate surety bond aligned with business operations and financial capabilities.

Purpose and Consumer Protection

The purpose of a seller of travel bond in Florida is two-fold: to ensure consumer protection and to regulate the travel industry. By requiring travel agents and tour operators to obtain a bond, the state aims to provide a layer of financial security for consumers who purchase travel-related services. This bond serves as a guarantee that the agent or operator will fulfill their obligations and protect customers from potential financial loss.

When consumers plan their vacations or book travel arrangements, they often entrust their hard-earned money to travel agencies or tour operators. However, there are instances where these businesses may close abruptly or fail to deliver on promised services, leaving travelers stranded or out of pocket. The seller of travel bond offers some recourse by providing compensation to affected individuals if the bonded agent or operator fails to meet their obligations.

Moreover, this requirement helps regulate the travel industry by ensuring that only legitimate and financially sound businesses operate within the state. Before obtaining a bond, sellers of travel must meet certain criteria set forth by the Florida Department of Agriculture and Consumer Services (FDACS). This includes submitting an application, completing necessary documents, and paying any required fees. By enforcing these standards, the FDACS helps protect consumers from fraudulent practices and unscrupulous operators.

Imagine planning your dream vacation, investing time and money into making it a reality. Now envision arriving at your destination only to find out that your hotel reservation doesn’t exist, or worse, that the travel agency you booked with has gone bankrupt. In such situations, having the protection offered by a seller of travel bond can make all the difference in recouping your losses and salvaging your trip.

How to Obtain a Seller of Travel Bond in Florida

Obtaining a seller of travel bond in Florida involves several steps that must be completed to ensure compliance with state regulations. The process begins with registration with the Florida Department of Agriculture and Consumer Services (FDACS), which oversees the seller of travel program.

To register, travel agents operating under a travel agency or business must submit a Sellers of Travel Registration Application, while independent travel agents should complete the Sellers of Travel Independent Sales Agents Application. These applications require providing detailed information about the business structure, ownership, and contact details.

In addition to the registration application, those offering vacation certificates as part of their services have additional requirements to fulfill. This includes completing specific documents such as the Vacation Certificate Disclosure Contract and paying an additional $100 fee.

Once the necessary forms are completed, applicants must gather any supporting documentation required by the FDACS, such as proof of financial responsibility or a copy of their certificate of compliance with Airlines Reporting Commission (ARC) regulations if exempt from certain provisions due to ARC membership.

The final step in obtaining a seller of travel bond is submitting all application materials and fees to the FDACS for review and approval. The department will thoroughly evaluate each submission within 30 days and notify applicants if there are any deficiencies that need to be addressed before approval is granted.

Remember, obtaining a seller of travel bond not only demonstrates compliance with state regulations but also signifies your commitment to consumer protection. By fulfilling this requirement, you can gain the trust and confidence of potential customers who are seeking reputable travel agencies or tour operators.

Registration with the Florida Department of Agriculture and Consumer Services (FDACS)

If you’re planning on becoming a seller of travel in the state of Florida, it is crucial to understand the requirements and regulations set forth by the Florida Department of Agriculture and Consumer Services (FDACS). The FDACS oversees the registration process for sellers of travel, ensuring compliance with laws put in place to protect consumers.

To register with FDACS, you will need to complete an application form and pay the necessary fees. The application will require you to provide detailed information about your business, including ownership details, financial information, and any previous legal or disciplinary actions. It is essential to be thorough and accurate in your application submission, as any misleading or false information may result in your registration being denied.

Once registered, you will be issued a Seller of Travel license number by FDACS. This license number must be displayed on all advertising materials and documents related to your travel business. Furthermore, sellers of travel are required to maintain certain records for at least three years, including all transactions and agreements made with consumers.

It’s important to note that while FDACS provides information and regulations regarding sellers of travel, they do not endorse or approve external links or sources related to this industry. However, their website does offer a listing of organizations available within the state of Florida that can assist sellers of travel.

The Impact of Credit Rating on Bond Pricing

When it comes to obtaining a seller of travel bond, one factor that significantly affects pricing is your credit rating . For those unfamiliar with credit ratings, they are evaluations assigned by credit bureaus reflecting an individual or business entity’s creditworthiness. These ratings help determine the risk associated with issuing bonds to that particular entity.

A good credit rating indicates a higher likelihood of fulfilling financial obligations, which is appealing to bond providers as it reduces their risk. On the other hand, a poor credit rating suggests a higher level of risk, which can result in higher bond premiums or even outright denial of coverage.

For instance, let’s say you have a stellar credit rating, indicating responsible financial management and a history of prompt payments. Bond providers would view you as a low-risk client, resulting in more favorable pricing and terms for your seller of travel bond.

However, if your credit rating is lower due to past financial difficulties or missed payments, bond providers may consider you higher risk. This could lead to an increase in premium rates on your bond or additional requirements such as collateral or personal guarantees to mitigate the perceived risk.

The impact of credit ratings on bond pricing emphasizes the importance of maintaining a good credit standing not only for obtaining favorable terms but also for reducing costs associated with bonding requirements. By practicing responsible financial habits and promptly addressing any credit issues, you can improve your credit rating and potentially secure more cost-effective bonding options.

Understanding the correlation between credit ratings and bond pricing gives sellers of travel valuable insight into how their financial history can influence the cost of obtaining the necessary bonds for their business.

Role of Professional Companies in Providing Travel Bonds

When it comes to obtaining a travel bond, professional companies play a crucial role in facilitating the process for travel agencies and other businesses in the industry. These companies specialize in surety bonds and have extensive knowledge and expertise in navigating the complexities of bonding requirements for various states.

Imagine you are a travel agency owner looking to sell travel-related services in Florida. You are aware that obtaining a Florida Seller of Travel Bond is mandatory to comply with state regulations. However, as a busy entrepreneur, understanding the intricacies of surety bonds and dealing with the paperwork can be overwhelming and time-consuming.

This is where professional companies step in to make the journey smoother. They act as intermediaries between the travel agency and the surety bond market , leveraging their experience to guide agencies through the bonding process. Their role includes:

• Expert Guidance: Professional bond companies have in-depth knowledge of the specific requirements for each state’s seller of travel bonds. They stay updated on any changes in regulations and communicate these to their clients, ensuring compliance throughout the bonding process.
• Market Access: These companies have established relationships with numerous surety bond providers, giving them access to a wide range of options for their clients. This enables them to find competitive rates and favorable terms based on factors such as creditworthiness and industry experience.
• Application Assistance: Navigating the paperwork involved in obtaining a travel bond can be complex. Professional companies work closely with their clients to complete applications accurately and efficiently, ensuring all necessary information is provided. This minimizes the chances of delays or rejections.
• Negotiation Skills: The negotiation process plays a vital role in securing favorable terms for sellers of travel bonds. Professional companies possess excellent negotiation skills honed from years of experience working with surety bond providers. They advocate on behalf of their clients, aiming to secure affordable rates tailored to their specific circumstances.
• Claims Support: In the unfortunate event of a claim against the travel bond, professional companies provide support and guidance throughout the claims process. They help their clients understand their rights and obligations, assisting in resolving any potential disputes that may arise.

The role of professional companies in providing travel bonds is essential in simplifying the bonding process for travel agencies. With their expertise and industry connections, they streamline the entire journey, allowing business owners to focus on their core operations while ensuring compliance with regulatory requirements.

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• Travel Agent License Requirements
• June 14, 2021

In this post, we’ll cover what it takes to become a travel agent. Here’s everything you need to know about travel agency license requirements.

Surety Bond Professionals is a family owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your travel agency bond needs.

Who Needs a Travel Agent License?

Technically, travel agents aren’t licensed, they’re registered, and only four states impose that requirement: California, Florida, Hawaii, and Washington. These are the only states that have what are called “Seller of Travel” (SOT) laws.

If you plan to operate as a travel agent in any of these “SOT states,” you will need to comply with the state’s travel agency registration requirements in addition to its regular business registration requirements. That is true whether you maintain an office in the state or simply offer travel services to residents of the state. There are only a few exceptions to this rule.

What Are the Steps in the Registration Process?

The registration process varies depending on the state, but there are certain common elements. There is, of course, an application to be completed and submitted, along with the appropriate application and registration fees.

But the biggest concern of SOT states is maintaining the integrity and reputation of their travel industry and promoting tourism.  Specifically, consumers must be confident that the money they give to a travel agency is turned over to the airline, hotel, cruise line, or other business that will be providing them with travel services.

To ensure that payments from travel agency clients are remitted properly, a mandatory step in the registration process is to establish a trust account or provide a surety bond to secure direct payments from clients.

There must be an active travel agency bond in force at all times to prevent suspension or revocation of the agency’s registration as a seller of travel in that state. The required bond amount varies by state and may depend on the specific travel services offered and the agency’s sales volume. This amount, also known as the bond’s “penal sum,” is the maximum amount that will be paid out on a single claim.

Why is a Travel Agency Bond Required?

A travel agency bond is a type of license bond that serves as a travel agent’s guarantee to abide by the state’ laws governing the operations of travel agencies. It specifically guarantees that the travel agency will handle clients’ deposits and payments properly and turn those funds over to the companies to which they are owed. Any violation of the terms of the surety bond agreement that causes a financial loss can result in a claim being filed against the bond by an injured party seeking restitution.

How Are Travel Agency Bond Claims Paid?

The surety bond agreement or a travel agency bond is a legally binding contract that involves three parties. The state licensing/registration authority requiring the bond is the “obligee,” the travel agency is the “principal,” and the company authorizing the bond is the “surety.”

The surety bond agreement makes the principal entirely responsible for paying valid claims, but in practice, things aren’t quite that straightforward. Unless the principal is able to pay a claim right away, the surety steps in and pays it on the principal’s behalf and is then reimbursed by the principal. In essence, the surety is lending money to the principal who must then repay that debt.

How Much Does a Travel Agency Bond Cost?

In setting the premium rate for a travel agency bond, the surety’s main concern is the risk that paying claims on behalf of the principal entails. The best predictor of that risk is the principal’s personal credit score. The better the credit score, the lower the premium rate, and vice versa. Someone with excellent credit may pay a premium as low as 1% of the bond’s penal sum.

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Our surety bond agents will get you the travel agency bond you need at a competitive rate. Contact us today to request a quote.

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Is It Important For Travel Agents to Be Bonded?

The hot topic in the travel industry is, “Is it important for travel agents to be bonded?”. In short, there is a very simple answer to this – No. Any travel business, tour operator or travel agent does not need to be bonded. Bonding is purely a vehicle to ensure Package Travel Regulation compliance.

When a travel agent or travel firm is selling more than one element and creating a package then there is a legal requirement to be Package Travel Regulation Compliant.

The Package Travel Regulations were updated on July 1 st 2018 and now include linked travel arrangements. In essence, the Package Travel Regulations are in place to absolutely protect consumer funds and are applicable whether you are selling domestic or International travel, ground-based or with flights.

The Definition of a Package for Package Travel Regulations

A package is defined by selling, or offering to sell, at least two of the following elements at an inclusive price:  accommodation, transport and other tourist services not ancillary to transport or accommodation and accounting to a significant proportion of the package.

Package Travel Regulations apply to both ground-based and flight-inclusive holidays. Packages including flights would simply require an ATOL as well.

How To Be Package Travel Regulation Compliant

The government has outlined three acceptable routes for travel agents to ensure compliance.

• Joining an independent trust account solution, such as Protected Trust Services.
• Financial Failure Insurance – an insurance that is generally paid on a per passenger basis.
• Bonding – having a bond in place in correlation with the size of your travel firm. Bonds tend to start from £50k and as such is an incredibly expensive option.

Therefore, for travel agents to be bonded is purely a vehicle to adhere to Package Travel Regulation compliance. Bonding is not a legal requirement and for many the independent trust account is the favoured option.

The independent trust solution is the most scalable and affordable option for many travel companies.

The Chairman of the leading UK travel agency, Trailfinders, Mike Gooley, most recently discussed in Travel Weekly that the trust account is the only acceptable route forward in his opinion. “The travel industry has been more fraught with constant financial failure than any other enterprise and this has resulted in not just loss of money, but untold misery.

“The solution is so blindingly simple: the mandatory operation of a trust fund is to ring-fence pipeline funds and prevent their use for any other purpose than that intended.”

In essence, there are different vehicles to ensure Package Travel Regulations compliance and bonding is purely an option. Each vehicle is available to ensure that a suitable fit is available for every travel business. So, in conclusion, bonding is not required but package travel regulation compliance is.

PTS are pleased to offer one of the most cost-effective solutions to you and your travel business in the industry. If this sounds interesting to you, please call 020 7190 9988 to discuss your business requirements, or send us an email to [email protected] .

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How To Become a Travel Agent in Florida

The travel agency industry is projected for continued growth through 2025. According to industry experts, travel agents are finding success focusing on a specific clientele's unique desires. This is something general booking sites like Booking, Expedia, Kayak and others can't provide.

This post will cover the six steps required to obtain your Seller of Travel occupational license in Florida including :

• The definition of a Seller of Travel
• Who is required to obtain a license
• The required verbiage you must include on your advertising
• What a travel agent bond is and how to obtain one
• The requirements if you sell vacation certificates
• The registration length and how to renew your license
• Plus all applicable links

Soon you'll be able to find your niche in the travel agency industry.

The 6 Steps To Become A Travel Agent In Florida

The technical term for a travel agent according the Florida Department of Agriculture and Consumer Services is seller of travel .

Step 1. Determine If You Must Register

How does florida define a seller of travel.

It's important to understand how Florida defines a seller or travel. This definition will determine whether or not you're required to obtain your license from the Florida Department of Agriculture and Consumer Services.

A seller of travel is :

• Any resident or non resident or business entity (company, partnership, LLC)...
• Offering for sale directly, indirectly, wholesale, or retail...
• Prearranged travel packages and/or travel related services, i.e. vacations, tour packages, or vacation certificates for individuals or groups...
• In exchange for a fee, commission, or other consideration...
• Including any business entity offering membership in a travel club or travel service for an advanced fee or payment (even if no travel contracts or certificates or vacation or tour packages are sold by the business entity)

Let's define some of these terms so everything is clear.

Non-Resident

Non-Florida residents have to get licensed in Florida if they sell any Florida based vacations, packages, or certificates.

Indirectly would include selling travel memberships or clubs. You're not directly selling a vacation to a destination. You're selling the ability for the member to purchase a vacation to a destination for a lower cost or included special travel benefits.

Indirect sales of vacation packages require a license .

Opt-Out of The Seller of Travel Occupational License

If you're contracted with the Airlines Reporting Corporation for three years or more under the same ownership and control, you can opt-out of obtaining your occupational license with an exemption issued by the Florida Department of Agriculture and Consumer Services.

If you're selling vacation certificates, you must have been contracted with the Airlines Reporting Corporation for five years or more .

What Is The Airlines Reporting Corporation?

It's a company made up of nine major airlines that provides travel agencies the ability to ticket flights worldwide on more than 200 airlines . This includes processing service fees, making billing and bookkeeping for agencies far easier to manage.

Here's how to join the Airlines Reporting Corporation:

The following details and more can be found on their faq page .

If you're a travel agency, there is a $2,300 nonrefundable application fee to join . Agencies must also purchase a $20,000 surety bond , letter of credit, or cash deposit.

If you're an individual, there is a $195 nonrefundable application fee. Individuals are not required to post a bond, certificate or deposit or cash deposit.

A little further down, we'll talk about what a surety bond is and a surety bonds function for a seller of travel.

Step 2. Pay Applicable Fees

As far as license fees go :

• If you do not offer vacation certificates, there is a $300 nonrefundable application fee
• If you do offer vacation certificates, there is a $300 nonrefundable application fee and $100 vacation certificate document submission fee
• $50 annual filing fee for each independent sales agent within an agency

Remember, membership with Airlines Reporting Corporation (ARC) changes these requirements.

Unless you're approved exemption because of your ARC membership term, you're required to purchase a surety bond .

• If you do not offer vacation certificates, your surety bond value is not to exceed $25,000
• If you do offer vacation certificates, your surety bond value is not to exceed $50,000

The final value of your bond is determined by the dollar amount of travel you sell on an annual basis . The more travel you book the greater the required bond value.

We will cover the seller of travel surety bond in detail during step 4.

Step 3. Include Necessary Verbiage In Contracts, Advertisements, and Physical Office Space

In contracts given to your customers, this exact verbiage is required :

"(Name of firm) is registered with the State of Florida as a Seller of Travel Registration NO. (registration number)"

In all advertisements, this exact verbiage is required :

"Fla. Seller of Travel Reg.No. (registration number)"

In you're physical office space, you're required to display :

• Addresses of all branch offices if any
• Your certificate (license) issues by the Florida Department of Agriculture and Consumer Services

4. Purchase Surety Bond (Travel Agent Bond)

Even if you exempt yourself from having to obtain your license through the FDACS, the Airlines Reporting Corporation requires a surety bond.

What Is a Surety Bond?

The Florida Department of Agriculture and Consumer Services requires proof of financial responsibility that you will fulfill your services to your clients and customers, including handling customer funds for their intended purposes .

Beyond setting up and booking a vacation, as a travel agent and agency you're responsible for :

• Making accurate claims and statements in advertisements and during client interactions
• Collecting the correct amount of money for trips and packages
• Collecting and handling customer deposits in good faith

It's an unfortunate fact there are unscrupulous travel agents and agencies willing to :

• Falsely advertise or claim false benefits to make sales
• Overcharge or collect fake fees
• Steal from customers deposits

Because of these bad actors, government agencies require licensed businesses to purchase a surety bond  to protect consumers from unscrupulous businesses .

How Much Is A Seller of Travel (Travel Agent) Surety Bond?

The bond values discussed so far are :

• No greater than $25,000 if you don't sell vacation certificates
• No greater than $50,000 if you do sell vacation certificates
• $20,000 if you join the Airlines Reporting Corporation plus you're an agency

These are the bond values, not what you're required to pay to obtain your bond . Remember, your specific bond value is determined by the FDACS based on the number of trips you book during the year.

A seller of travel bond's price is based on your personal credit and the history of your business.

As a new travel agent, your personal credit will determine a premium rate you'll pay for the entire bond for the year . Here's a table show bond costs for a variety of common rates from good credit to bad credit.

Plus you can use our surety bond cost calculator to get an idea of your specific bond purchase price.

How Do You Purchase A Surety Bond?

Learning how to purchase a surety bond is not hard. You must work with a surety bond agent like Surety Bonds Direct. As a business offering surety bond services , we have relationships with most of the surety insurance companies, giving us the opportunity to provide you with the lowest possible price for your bond .

You can use our website and request a free online quote or call one of our bond specialists at 1-800-608-9950 .

5. Special Requirements For Vacation Certificates

If you sell vacation certificates, you must :

• Submit a copy of the certificate contract including all of the rights, obligations, benefits, and privileges of the vacation offer.
• Submit a copy of each promotional brochure, pamphlet, form letter, registration letter, or any written material used in connection to advertising any vacation certificate.

You can find more detailed rules for Florida here .

Vacation certificates require more regulation from the state of Florida because the consumer is purchasing the certificate pays upfront for the future use of a vacation package.

6. Handle Your License and Bond Renewals

Travel agent occupational licenses require renewal on a annual basis along with renewing your surety bond.

The bond requires renewal because the amount of travel you book will hopefully go up each year. Your bond amount is based on the volume of travel you're booking . Remember, the bonds amount will never go above $25,000 or $50,000 if you sell vacation certificates.

If you fail to renew your bond, the FDACS will issue you a cease and desist order plus civil or administrative fines up to $5,000 per violation.

If you've been in business for five or more consecutive years, you can apply for a waiver by filing an Application for Security Waiver and providing the necessary docs.

When You're Ready To Purchase Your Seller of Travel Bond

Use our free online quote request tool and a bond specialist will search for the lowest price for you. You can also call a bond specialist directly ( 1-800-608-9950 ) to start the quote and purchase process.

Get a Free Quote For Your Bond »

Or Call a Bond Specialist 1-800-608-9950

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