Principal

In general terms, the principal is the party that's contractually bound to the consumer to provide the travel services. This may be a traditional tour operator, a supplier, or a third party such as an airline or a bedbank. A principal may sell direct to the consumer, or through an agent or agents.

Indications of principal status include but aren't limited to:

• the way you advertise and sell travel arrangements, i.e. if your marketing seems to indicate that you're supplying the services yourself;
• issuing an invoice in your own name;
• the booking being subject to your own terms and conditions;
• any representations made about liability for the actual provision and performance of the contract;
• any representations made about your obligation for health and safety;
• purporting to have insurance cover for liability claims;
• marking up a supplier’s price;
• your supplier agreements specifying your respective roles;
• liability under the Tour Operators’ Margin Scheme for VAT.

Principal business is either licensable or non-licensable. Licensable business is the sale of travel arrangements that are covered by an ATOL - both packages and flight-only arrangements. Non-licensable business is the sale of travel arrangements (packages and single element (non-inclusive), such as accommodation-only) that don’t involve a flight.  

Remember, if you’re selling travel services together, they may form a package within the meaning of The Package Travel, Package Holidays and Package Tour Regulations 1992-SI 3288/1992. In this case, you’ll be acting as a principal.

See Financial Protection for information about what the law requires you to protect.