| Journal: TWUK | Section: |
| Title: | Issue Date: 21/08/00 |
| Author: | Page Number: 13 |
| Copyright: Other |
GUEST
C
olumn§st
Although the recent ruling on transparency and displaying ownership links is a good start, the Department of Trade and Industry still has a fair way to go to cover all the loopholes
roger heape
roger heape
So much has been written during the last week about transparency that it is easy to forget how it all started.The Monopolies and Mergers Commission investigation into foreign-package holidays reported in December l997 and gave the big travel groups a clean bill of health. It said that “directional selling…did not operate against the public interest”. The MMC did recommend increased transparency of ownership but failed to get the integrated groups to agree on specific measures.What followed this green light was an orgy of buying of travel agents and tour operators, particularly specialists, accompanied by a massive increase in directional selling. It was left to the European Commission to override the UK Government when it stopped Airtours buying First Choice last year saying it would lead to collective dominance. It is no exaggeration to say that far from preventing the growth of monopoly, the weakness of the 1997 MMC report actively encouraged it. And so the issue of ownership transparency is more critical today. The final draft order from the Department of Trade and Industry states that: “Notices on the outside of shops are particularly important. Consumers should have information about ownership links before they decide which agency to visit.” But the DTI then eats its own words. The small print does not require notices to state the names under which the linked tour operator trades in foreign-package holidays. In other words, Lunn Poly does not have to display its links to Magic, Crystal or Jetsave – or Going Places its links to Cresta and Panorama, and critically, Thomas Cook its links to JMC or Time Off. In this latter case, the loophole means Thomas Cook is able to get out of displaying any links as group and retail names are the same.Some may argue that the public knows Thomson owns Lunn Poly. But given the recent spate of takeovers it would take an industry nerd to know all the links to specialist operators. Like the Association of Independent Tour Operators, I welcome specialist operators having to show links on brochures and shop notices. But on the DTI’s own criteria of the importance of window notices, this is not enough.So let’s face up to reality – the term travel agent is misleading. Dealerships is a more accurate description. When you buy your BMW or Volkswagon from a car dealership, you know it’s German. Will it take another three years for the names Preussag and maybe C&N to appear on agents’ windows?
So much has been written during the last week about transparency that it is easy to forget how it all started.The Monopolies and Mergers Commission investigation into foreign-package holidays reported in December l997 and gave the big travel groups a clean bill of health. It said that “directional selling…did not operate against the public interest”.
The MMC did recommend increased transparency of ownership but failed to get the integrated groups to agree on specific measures.
What followed this green light was an orgy of buying of travel agents and tour operators, particularly specialists, accompanied by a massive increase in directional selling.
It was left to the European Commission to override the UK Government when it stopped Airtours buying First Choice last year saying it would lead to collective dominance.
It is no exaggeration to say that far from preventing the growth of monopoly, the weakness of the 1997 MMC report actively encouraged it. And so the issue of ownership transparency is more critical today.
The final draft order from the Department of Trade and Industry states that: “Notices on the outside of shops are particularly important. Consumers should have information about ownership links before they decide which agency to visit.”
But the DTI then eats its own words. The small print does not require notices to state the names under which the linked tour operator trades in foreign-package holidays.
In other words, Lunn Poly does not have to display its links to Magic, Crystal or Jetsave – or Going Places its links to Cresta and Panorama, and critically, Thomas Cook its links to JMC or Time Off. In this latter case, the loophole means Thomas Cook is able to get out of displaying any links as group and retail names are the same.
Some may argue that the public knows Thomson owns Lunn Poly. But given the recent spate of takeovers it would take an industry nerd to know all the links to specialist operators.
Like the Association of Independent Tour Operators, I welcome specialist operators having to show links on brochures and shop notices. But on the DTI’s own criteria of the importance of window notices, this is not enough.
So let’s face up to reality – the term travel agent is misleading. Dealerships is a more accurate description.
When you buy your BMW or Volkswagon from a car dealership, you know it’s German. Will it take another three years for the names Preussag and maybe C&N to appear on agents’ windows?
“The term travel agent is misleading. Dealerships is a more accurate description”