--- url: 'https://qubit.capital/blog/legal-regulatory-compliance-travel-funding' title: 'Seller of Travel Registration: What Travel Startups Need Before Raising' author: name: Vaibhav Totuka url: 'https://qubit.capital/blog/author/vaibhav-totuka' date: '2026-01-02T04:59:00+05:30' modified: '2026-10-01T17:57:20+05:30' type: post categories: - Industry-Specific Insights image: 'https://qubit.capital/wp-content/uploads/2026/10/legal-regulatory-compliance-travel-funding-banner.webp' published: true --- # Seller of Travel Registration: What Travel Startups Need Before Raising Table of Contents - [Key Takeaways](#key-takeaways) - [Which States Require Seller of Travel Registration](#which-states-require-seller-of-travel-registration) - [Customer Money Is the Funding Question](#customer-money-is-the-funding-question) - [ATOL and Package Rules in the UK](#atol-and-package-rules-in-the-uk) - [Refund Liability Investors Will Ask About](#refund-liability-investors-will-ask-about) - [Before You Raise](#before-you-raise) ## Key Takeaways - Seller of travel registration applies in California, Florida, Hawaii and Washington, based on where customers live, not where you are. - Maryland starts its own registration and insurance rules on 1 October 2026. - Selling flight packages to UK customers needs an ATOL, with £30,000 of paid-up capital for new applicants. - Trust accounts and refund deadlines decide how much customer cash you can spend, and investors test both. Seller of travel registration is a state filing for businesses that sell or arrange travel for people in that state. California, Florida, Hawaii and Washington require it, and the rule follows the customer’s address, not your office. If your startup takes bookings from US travellers, you probably need at least one. For a founder raising money, the fee is the small part. The rules behind it decide where customer deposits sit and how fast refunds must go out. Investors read those rules as limits on your cash, so they check them in diligence. This page covers the US state rules, the UK’s ATOL and package rules, and the refund liability that ties them together. Start with the table if you only need to know where to register. ## Which States Require Seller of Travel Registration Four states run a full registration today, and Maryland joins them on 1 October 2026. Each rule reaches sellers based elsewhere who sell to its residents, unless an exemption fits. Registrations are public, and California runs an online lookup, so an investor can check yours quickly. | State | Regulator | What it asks for | | --- | --- | --- | | California | Attorney General, Seller of Travel Program | Registration at [$100 per business location](https://oag.ca.gov/travel/reg-faqs), a trust account or bond, and a restitution fund for California-based sellers | | Florida | Department of Agriculture and Consumer Services | [$300 a year](https://www.fdacs.gov/Business-Services/Sellers-of-Travel), plus a bond of up to $25,000, or $50,000 if you sell vacation certificates | | Hawaii | Department of Commerce and Consumer Affairs | A travel agency licence and a client trust account | | Washington | Department of Licensing | A seller of travel licence added to a state business licence | | Maryland, from 1 October 2026 | Department of Labor | Registration and professional liability insurance under [House Bill 994](https://labor.maryland.gov/license/op-travel-sellers.shtml) | Florida’s definition reaches anyone who offers prearranged travel or tourist services, including travel clubs. Fines run up to $5,000 per violation, and each sale or attempted sale can count separately. Agencies with three or more years of Airlines Reporting Corporation contracts under the same owners can claim an exemption. Newer models are less clear. Marketplaces, experience platforms and trip planners that take customer payment are the usual cases. Map each state’s definition against what you sell before a raise, because the investor’s lawyer will. ## Customer Money Is the Funding Question In California, money customers pay for travel is not operating cash. The Attorney General’s guidance says a trust account is separate from an operating account. Paying out trust funds for anything other than the travel booked or refunds may be a crime. That changes the cash story in a pitch. A startup that sells trips months ahead can show large deposits it cannot spend. Our view is to show held deposits apart from free cash, and to model runway on free cash only. A bond is the usual alternative to a trust account, but it is not free. Florida’s bond renews every year, and consumers can claim against it within 120 days of an alleged injury. Either way, part of your balance sheet is committed to customers. These travel startup legal requirements sit beside data privacy, payment and platform licensing rules. The [travel tech regulatory checklist](https://qubit.capital/blog/travel-tech-regulatory-checklist) lists those, and investors apply the same diligence to them. ![Customer Deposits in a Travel Startup Pitch: What Investors ](https://qubit.capital/wp-content/uploads/2026/10/customer-money-is-the-funding-question_a16.webp) ## ATOL and Package Rules in the UK In the UK, a business selling flight-inclusive packages needs an Air Travel Organiser’s Licence (ATOL) from the Civil Aviation Authority. The rules also cover businesses outside the UK that sell to UK consumers. Where the flight departs from makes no difference. ATOL is where UK rules reach your cap table. New applicants need [£30,000 of paid-up capital](https://www.caa.co.uk/atol-protection/atol-requirements-for-the-travel-industry/atol-financial-criteria/) and a bond that starts at £50,000. The bond steps down over four years, to £20,000 in the fourth. A Small Business ATOL is capped at 500 passengers and £1 million of revenue a year. Larger licences face a financial assessment built on ratios from your latest accounts. If UK packages are in next year’s plan, put the capital and the bond in the budget for this raise. Packages without flights fall under the Package Travel Regulations 2018 instead. A UK organiser must hold insolvency protection that covers refunds of payments for services not performed. For a startup, that protection is another claim on cash held for customers. ## Refund Liability Investors Will Ask About Refund rules set how fast cash leaves when trips fail. Under the UK package rules, a refund after the contract ends is due [within 14 days](https://www.legislation.gov.uk/uksi/2018/634/regulation/14). The clock runs from the end of the contract, not from when a supplier pays you back. In the US, the Department of Transportation’s refund rule covers ticket agents as well as airlines. Ticket agents must refund on request when an airline cancels or significantly changes a flight. Refunds are due [within seven business days](https://www.transportation.gov/briefing-room/what-airline-passengers-need-know-about-dots-automatic-refund-rule) for card purchases, and within 20 calendar days for other payments. For an online travel agency, a refund can fall due before the airline or hotel repays you. Treat that gap as working capital in the model, next to the [unit economics investors check](https://qubit.capital/blog/travel-market-unit-economics-tam). The gap widens in a bad season, when cancellations cluster. Held cash and refund timing sit behind many of the [fundraising challenges specific to travel](https://qubit.capital/blog/overcome-fundraising-challenges-travel-sector). Sagar Agrawal, co-founder of [Qubit Capital](https://qubit.capital), puts it this way: > “A missing registration can usually be fixed before close. What investors price is the cash tied up in deposits and refunds, so put that number in front of them first.” ## Before You Raise Travel industry compliance for a raise comes down to one question: whose money are you holding, and for how long? Answer it for every market before the data room opens. - List each state and country where your customers live, not only where you are based. - Test each seller of travel definition against what you sell, including hotels and activities. - Check whether a host agency’s registration covers you, or whether you sell under your own name. - Show deposits held in trust or under bond apart from free cash. - Model refund timing under the UK 14-day and US seven-business-day rules. - Budget for ATOL capital and the bond when you sell flight packages to UK customers. ![Travel Compliance Checks Before a Fundraise](https://qubit.capital/wp-content/uploads/2026/10/before-you-raise_a16.webp) A registration costs a few hundred dollars. A surprise in the cash model costs far more once a raise is underway. [Qubit Capital’s travel fundraising team](https://qubit.capital/industries/travel) helps founders get these numbers ready for investors. Talk to us before your data room opens, and our team will take the investor preparation off your hands.