One of the most common question we get is “Do I need a Travel Agent License?” and the answer is both yes and no. Most new agents are surprised to find out that there is no federal licensing of travel agents. This is in part because the industry has been self-regulated by the airline appointing bodies over the decades. However, since the Airline Deregulations Act travel agencies have moved away from obtaining airline appointments and now there is no one standard for being a travel agent.
To combat this fact, many states have enacted laws that affect travel agents. The trend towards states regulating travel agents seems to have lost its momentum since few states have enacted legislation during the last decade. So here are some of the laws and states that you will need to pay attention to.
General Business Licenses: Each municipality or county may require you to obtain a local business license in order to operate a travel business. Some licenses are required at the state level, such as Delaware. Since local governments treat the revenue generated by the sale of business licenses they general tend to impose substantial penalties for not obtaining on. To find out what is required for your business just contact your local city hall or county office (if you are in an unincorporated area) and ask what licenses may be necessary to start your business.
Seller of Travel Laws and Licenses: As mentioned above many states have enacted laws regulating the sale of travel. Each State is completely different and may require different action on your behalf to become authorized to sell travel. For complete information regarding your state just click on the state’s name below to access the details of registering.
California: California requires an agent to first join the California Restitution Fund before submitting an application for a California Seller of Travel number. The Restitution Fund is a consumer protection fund that is funded by travel agents to insure that consumers will never lose a dime by dealing with a California based travel agent. The current fee to join the Restitution Fund is $330. There are annual assessments made to replenish the fund. For 2014 – 2015 the assessment is $10.00.
Once you are a member of the Restitution Fund you can then apply for a California Seller of Travel Number (CST#) Your CST number must shown on all consumer advertising. The current cost to apply for a CST# is $100 per location annually.
Delaware: Delaware requires travel agents to obtain a “Travel Agent Occupational License” for $225 each year and there are stiff penalties for not complying.
Florida: Florida requires that travel agents register with the state annually for $300. In addition a bond, irrevocable letter of credit or certificate of deposit may be required, as well.
Hawaii: Hawaii requires travel agents to obtain a state issued “Travel Agent License” for the sum of $140 every two years. In addition to the license travel agents must hold funds in a Hawaii based trust account in a federally insured bank. Out of state sellers of travel selling to Hawaii residents must obtain a “Certificate of authority to do business in Hawaii” at a cost of $25 per year.
Illinois: Illinois does not require registration, but has passed the “Travel Promotion Consumer Protection Act” that basically requires you to hold client funds that are residents of Illinois in trust.
Iowa: Iowa Code chapter 9D — Requires persons who market travel promotions in Iowa to register with the Secretary of State and post a $10,000 bond or alternative form of financial security, such as a letter of credit.
Louisiana: Louisiana requires travel agents to obtain an occupational license before starting their business.
Massachusetts: While Massachusetts does not require travel agents to register, they do have stringent standards for selling travel.
Nevada: While Nevada stopped its registration of travel agents, there is a considerable amount of specific disclosure that needs to be given residents of Nevada.
Rhode Island: Rhode Island travel agents are required to obtain a “Travel Agent License” and post a surety bond to sell travel in Rhode Island.
Washington State: Travel Agents selling travel within the state of Washington are required to register as a Seller of Travel and may also be required to post a surety bond or letter of credit.