ABTA and the Federation of Tour Operators become a single organisation on July 1. Ian Taylor reports on the consequences for the travel industry

ABTA and the FTO are set to merge on July 1

News that the Federation of Tour Operators will join ABTA on July 1, announced in April, was hardly greeted by fireworks and there is little reason to think the merger will lead to any now – at least among members.

In a sense, the FTO is rejoining ABTA, since its forerunner the Tour Operators’ Study Group broke away from the association 41 years ago owing to divisions that naturally arise between small retailers and large suppliers.

It is difficult to see the re-marriage making much difference to most members so long as ABTA is seen to represent the interests of all concerned. Most companies in the FTO belong to ABTA and the biggest operators have retained a voice in the association throughout.

Both bodies have stressed the benefits of having a single voice for the trade when it comes to lobbying, but ABTA and the FTO were hardly at loggerheads. FTO director-general Andy Cooper concedes: “I struggle to think of an area in which there has been conflict.”

Keeping the big two on board

The real benefits relate to funding and ensuring the major tour operators stay in ABTA.

The biggest groups have long queried the value of paying two sets of subscriptions and following the TUI Travel/First Choice and Thomas Cook/MyTravel mergers last year, there was a real threat that one or other of the big two would withdraw from ABTA.

Cooper suggested as much when he declared an end to more than two years of talks on bringing the organisations together last October. “Operators would not necessarily want to be in both ABTA and the FTO,” he said then, adding: “There is more that we do that is different than there is in common.”

Concern about future funding allied to perception of the benefits of merger subsequently fuelled the desire to get together after all.

ABTA chief executive Mark Tanzer says there is little difference between the structure proposed now and that on the table last year. “The challenge was to find a way for FTO members to retain their focus, but there is not a huge difference. It is the level of confidence in the proposal that changed. There was a change of mood on both sides,” he says.

Cooper agrees the desire of major operators to pay for one organisation rather than two was a key factor. “The whole purpose is [for FTO members] to pay one subscription,” he says.

The merger will also see them pay less overall, reducing the income of the combined organisation. However, Cooper adds: “There are clearly savings [to be made] and that makes cash available.”

ABTA board member Noel Josephides, managing director of Sunvil Holidays, suggests: “This was driven by money and a desire not to see one of the big two walk away from ABTA. We would not want to lose the biggest players and there was a real risk of that.”

Well received

The merger has been broadly welcomed or at best ignored by members, with few voicing dissent, although Worldchoice commercial director Bill Pickering warns: “Agents are unhappy with ABTA and fear there will not be enough focus on them following the merger.”

This is not a new complaint, and is one Tanzer and Cooper reject.

Tanzer argues differing interests lie at the heart of the association. “Our members compete as individual companies and as classes of companies,” he says. “That is the richness of ABTA – all views are taken into account.”

He also points out that having large members helps the smaller ones: “Smaller independent members do not have legal departments and are more likely to use our facilities, the costs of which are defrayed by the subscriptions of larger members.”

Cooper says: “To be important, ABTA has to reflect the interests of all members. The point is to ensure it is representative and we bring FTO members into what ABTA is saying.”

It is a view backed up by Josephides, one of five elected members of the ABTA board, who says: “I do not believe ABTA will do less [in future] to represent smaller members. If anything, ABTA will be more aware of its smaller members.

“There is recognition that if there is a hint of anything to the detriment of grassroots members, there will be an uprising.”

ABTA’s role

Tanzer sees no change to ABTA’s three-fold role – as a regulator for the trade, as a trade association and as a provider of consumer confidence through the code of conduct and financial protection.

“All three have to be in kilter,” he says. “I think we have the right balance now. Where we can improve is on the policy side. With the FTO inside we can decide on our policy goals.”

Cooper adds: “There will be a clearer structure and recognition of ABTA’s priorities. It should have one objective – that members renew subscriptions because the association is worth it.

“If the FTO were to dominate, ABTA would become less representative – not more.”