ABTA is split over plans to scrap its cap on
subscription fees and the cost of new compulsory insurance training for agents.
At a tense board meeting on Wednesday,
Newman Street proposed to plug a £250,000 hole in its accounts by scrapping the
£57,000 cap on subscription charges for tour operators.
ABTA subs are worked out on a sliding scale based on
the amount of turnover rising to a maximum £57,000 for the first £231 million
of sales.
ABTA’s plan to scrap this ceiling would leave
operators with significantly higher turnovers facing hikes of £50,000 –
doubling the cost of membership. The big four have told officials to think
again. They have demanded ABTA share some of the pain in making up the
shortfall and are understood to be “weighing up the benefits of membership”.
Board director Andrew Dixon, managing director of
Bolton-based St Andrew’s Travel Group, said there had been “sensible and calm
discussions” but stressed the importance of finding a solution to the impasse.
“ABTA is no different to any other business, it is
facing competition and its income is going down for a variety of reasons. It
has to make adjustments to its budget. But I wouldn’t like the multiples to be
hit so hard they consider walking away.”
It is believed the funding gap comes from companies
buying up agencies or operators which then no longer pay a full fee even though
the work involved for ABTA remains unchanged.
ABTA is understood to be cutting costs by not
replacing staff and is looking at ways to become more commercial.
Chief executive Ian Reynolds refused to reveal details
of the meeting, but said subscriptions are always reviewed at this time of
year.
“It’s no secret we’re looking at subscriptions,” he
said, adding that if there was a change it would have to go before an emergency
general meeting – three weeks before the next board meeting on March 24.
Meanwhile, another row broke out when it emerged
ABTA’s compulsory insurance training – provided by TTC Training – will cost the
big four £400,000 between them.
The scheme – which was agreed by board members last
November – will mean all staff who sell or advise on travel insurance must be
qualified to level one, with at least one member of staff in each office
qualified to level two.
Costs are £25 per student for companies with fewer
than 1,000 staff, £23 for those with 1,000-4,999, and £20 for firms with more
than 5,000 employees.
However, the big four are unhappy with the amount
they’ll pay, especially as they have their own training schemes.
First Choice and MyTravel qualify for the £23 charge
with 3,000 and 4,000 retail staff respectively. Training fees for them come in at
around £69,000 and £92,000.
TUI UK, with more than 5,000 staff, is eligible for
the £20 tariff and faces a bill of £100,000, while Thomas Cook will have to
fork out £140,000 for its 7,000 retail employees.
TTC Training sales and examination support manager
Camilla Nicholls-Wilson said: “We didn’t just pick a figure out of the air –
this is the lowest price we can do it for. They probably didn’t do their sums.”
An ABTA insider claimed the deal with TTC Training
would make it difficult to find a compromise.
“The problem is ABTA has signed a contract with TTC
Training but 80% of the industry is saying ‘we won’t pay these prices’,” said
the source.
Reynolds said the plans had been approved, but
cost-savings could be achieved if companies held exams on their own premises
and only required an invigilator.