To help restore what it calls a lack of confidence in the travel industry, the U.S. Tour Operators Association has initiated a consumer protection plan for travelers who buy package tours offered by the association's 40 members.
Introduction of the insurance program on April 1 follows a year in which thousands of travelers could not recoup their money when two airlines, three tour operators and more than 1,600 travel agents went out of business.Operators taking part in the new program arrange transportation, accommodations and the other ingredients of tours, most of which are sold by travel agents.
Under the plan, consumers will be reimbursed for deposits and tour payments if their tour operator declares bankruptcy, becomes insolvent or fails to make a refund within 120 days following the cancellation or collapse of a tour.
The $5 million insurance plan is the total annual coverage for all the association's members.
In addition, five major operators in the organization - American Express Vacations, Classic Hawaii, MTI Vacations, SuperCities-Great Escape Vacations and Tauck Tours - have each posted $5 million security with the association for the exclusive protection of their own customers.
Members of the association say they will absorb the cost of the plan without an extra charge on consumers. Travelers who themselves cancel a tour are not covered. Separate trip cancellation insurance is available.
Bob Whitely, president of the association, said that collecting a claim should take about six months.
The procedure should go like this: After notifying the association that it is closing, a tour company forwards the association a list of clients who are owed money. They are sent claim forms that they return to the association, which then verifies the claim. Forms can obtained from the USTOA, 211 East 51st Street, Suite 12B, New York, N.Y. 10022; 212-944-5727.