Small ABTA members are paying a huge rise in subscriptions as the price of retaining the major tour operators as members.
The Federation of Tour Operators merged with ABTA on July 1, when the minimum annual subscription rose from £540 to £750 excluding VAT – nearly a 39% increase.
In an exclusive face-to-face interview, ABTA chief executive Mark Tanzer conceded this week that the FTO had brought additional services and expertise into the association, but no additional revenue.
The overall cost of ABTA-FTO services has gone down for the biggest companies since they no longer fund two organisations. In effect, FTO members have had their FTO subscriptions scrapped and replaced by a 10% increase in the fees they pay ABTA.
Tanzer said: “The FTO is not bringing its subscriptions into the association, but it is bringing services. An element of the increase is to pay for having the FTO in ABTA. We have additional costs – the operating costs of the FTO.”
He added: “You could say ABTA members are paying for FTO members to come in, but FTO members foot part of the bill for smaller members. They pay a substantial amount – the 10 biggest members provide 20% of our revenue.”
Tanzer declined to reveal the biggest companies’ payments, but said: “As part of the amalgamation, the association will carry additional costs. But we want FTO members in. They bring a lot more than just money – they have resources and specialists.
“If they were not in ABTA we would not just lose money, we would lose political weight and expertise that benefits smaller members. The association would be weaker for smaller members without them.”
ABTA board member and Britaly Travel partner Daniele Broccoli agreed: “If we did not get together, the operators would go.”
He added: “It is a big hike [in subscriptions] when times are hard and it has upset a lot of people, but it needed to be done. I am just glad we secured ABTA’s future.”
Tanzer confirmed: “The big guys said: ‘We want one association – these are the services we want, this is what we are willing to pay and we are happy for ABTA to use our subscriptions to pay for other services’.”
However, Stowaway Travel director Paul Stowe said: “The little guys are keeping the big guys afloat. If ABTA cannot keep its house in order, it should start culling services.”