When FTI Touristik collapsed in June 2024, German consumers were repatriated within days under the Package Travel Directive's insolvency protection requirements. When a US-based adventure operator shut down in 2023, customers in 38 states had no specific travel consumer protection statute to fall back on. Their only option was general contract law and credit card chargebacks.
The problem
The Federal Trade Commission has broad authority over unfair and deceptive business practices, but it has never established travel-specific consumer protection rules. The FTC's guidance on travel applies general Section 5 principles (unfair or deceptive acts) to travel advertising and sales, but does not require insolvency protection, trust accounts, bonding, or mandatory refund timelines specific to packaged travel.
As of 2026, approximately 12 states maintain active seller-of-travel registration or licensing requirements: California, Florida, Hawaii, Iowa, Washington, Nevada, Illinois, and a handful of others with varying scope. Requirements differ significantly. California mandates participation in the Travel Consumer Restitution Fund or alternatives. Florida requires registration and a performance bond. Washington requires registration and trust account options.
The other roughly 38 states have no travel-specific statute at all. A tour operator can sell packages to consumers in those states with no registration, no bonding, no trust account, and no insolvency protection requirement. When that operator fails, consumers rely on credit card chargeback rights (limited to 60 days from the statement date under Regulation Z) or general breach-of-contract claims in civil court.
How the EU and UK handle it differently
The EU's Package Travel Directive (Directive 2015/2302) requires every organiser of packaged travel to provide insolvency protection that covers full refund of payments and repatriation of travellers. This applies across all 27 member states with no gaps. The UK's Package Travel Regulations 2018 (retained after Brexit) impose similar requirements, including mandatory ATOL certificates for packages including flights. Both systems create a baseline that every consumer receives regardless of which member state or country they book from. The contrast with the US is stark: a consumer in Berlin has stronger protections booking a package from a small operator than a consumer in Dallas booking from a billion-dollar company.
Why the federal gap persists
The US travel industry has historically resisted federal regulation of packaged travel. Industry trade groups like ASTA (American Society of Travel Advisors) have argued that state-level regulation and market forces provide sufficient consumer protection. The FTC has periodically examined travel industry practices but has not pursued rulemaking. Congress has not introduced significant legislation targeting packaged travel consumer protection since the 1990s. The DOT regulates airlines specifically but has no jurisdiction over non-air travel components of packages.
What this means for operators
The absence of federal regulation does not mean absence of risk. Operators selling across state lines face a patchwork of requirements. Selling to a California resident triggers California's seller-of-travel law regardless of where the operator is based. Selling to a Florida resident may trigger Florida's requirements. An operator in Texas selling nationally could be subject to a dozen different state regimes simultaneously, each with different registration, bonding, and disclosure requirements. The compliance cost of mapping and maintaining state-by-state obligations is significant, and most small operators simply do not do it.
What to do now
If you sell packaged travel to US consumers, map every state where your customers reside and check whether that state has a seller-of-travel statute. Do not assume that operating from a state without such a law protects you from obligations in states that have one. At minimum, ensure your terms of service address refund timelines, cancellation policies, and what happens if your company ceases operations. Consider voluntary insolvency protection (bonding or trust accounts) as a competitive differentiator and a risk management measure, even where no law requires it.