| Journal: TWUK | Section: |
| Title: | Issue Date: 14/08/00 |
| Author: | Page Number: 4 |
| Copyright: Other |
Commercial links ‘loophole’ queried
On October 9, new Government legislation will make it compulsory for agencies and operators to display vertically integrated links to the public. Steve Jones and Diane Smith report
COMMERCIAL alliances between consortia and operators have been completely ignored by the Government’s new regulations requiring vertically integrated firms to display their links.Under the new legislation, the consumer will not be aware that Global Travel Group has strong commercial reasons for selling Airtours and ARTAC has a close link with Thomas Cook.
ARTAC Worldchoice managing director Julian Foster said his consortium should have to declare its alliance with Thomas Cook as part of the transparency regulations and added that he would have no problem with ARTAC agents having to display their alliance to JMC.
“We also offer a wide choice of holidays and if it’s appropriate to sell another holiday we will.”
But Global Travel Group founder George Begg strongly refuted claims that Global should declare its alliance to Airtours.
Midconsort managing director Mike Gates said: “It’s obviously a loophole. Worldchoice and Global now come under question. They should be part of the legislation.”
Campaign for Real Travel Agents’ chairman Edwin Doran said: “If you have links with a tour operator then that should be displayed. If you’re going to have transparency, you must have it right the way through.”
He added that Advantage’s franchise with Airtours stopped franchisees being independent as members of Airtours were on the board.
“It’s a question of influence in the central office,” he said.
Global Travel Group signed a five-year deal with Airtours last month to become franchisees. In return for increasing Airtours’ sales, the operator agreed to high-commission payments, bonuses and a multi-million pound investment to develop Global’s “marketing and technology strategies”.
Ties between ARTAC Worldchoice and Thomas Cook were also strengthened this year after Thomas Cook agreed to plough between £2 million and £3 million into marketing the Worldchoice brand.
ARTACchairman Colin Heal insisted the money would not have to be repaid but added: “I don’t see why we can’t double sales of Thomas Cook products.”
Foster: has no problem declaring alliance
DIARY OF EVENTS
n November 1996: Monopolies and Mergers Commission begins itsinvestigation of the industry.
n December 1997: MMC completes its study, making several recommendations. These include making clear the ownership links of travel agencies on shop fascias.
n February 1998: operators invited to comment.
n November 1998: agents are banned from linking insurance with discounted holidays, one of the MMC report’s recommendations. Still no date on transparency. Negotiations “continuing” said the Department of Trade and Industry.
n January 2000: still nothing. Kim Howells admits he has lost track on the issue.