When things go wrong, who takes care of your customer? Jackie David reports on the big ATOL debate
If you are in the business of dynamic packaging, it seems you have three options: secure your own ATOL, opt for principal status or move away from dynamic packaging altogether.
The case for clarity over ATOLs and consumer protection has been made repeatedly. But with XL Leisure Group going into administration this week and the collapse of Zoom Airlines last month, it seems the industry is no closer to a conclusion.
Do you dynamically package holidays, do you get your own ATOL protection or are you willing to shave a bit off your margins for your peace of mind – and keep your customers – by opting for a supplier that is a principal?
It was bad enough when Silverjet hit the skids, but at least agents could hope the issues surrounding the disastrous collapse of the business airline would serve as some kind of warning.
Sadly, although the spotlight has once again been thrown on the issue of consumer protection and travel, there is still little illumination.
The problem is a combination of consumer ignorance about rights to protection, and their need, or greed, for cheap travel. There is also a lack of clarity in terms of the responsibilities agents have in this new, brave and potentially brilliantly lucrative world of dynamic packaging.
As the industry has witnessed over the last year, suppliers are tired of having to foot the bill for ATOLs while agents look for the cheapest option, which has led to a number of bed banks dumping principal status.
At the same time, hard-pressed agents are only too aware of increasingly price-conscious consumers who have been spoilt by a decade of cheap travel.
Go for ATOL bonding
But for agents who want to do the best for their customers, what is the best option? Go for principal status?
Teleticket managing director Neil Chapman thinks there are plenty of reasons to take your fate into your own hands – so much so that his company offers enhanced commission for ATOL-bonded agents that book with it. But, given the confusion, is there a case to be made for scrapping the scheme?
Chapman said: “Although individual agencies will have to take their own circumstances into account and decide which options work best for them, I don’t think ATOLs will disappear overnight. The travelling consumer has come to expect a level of protection and some transparency for how their protection will work.”
Therein lies the rub. Could consumers who think they are protected and discover they are not, decide to return to the traditional packaging format? “Agents tell us consumers enjoy mixing and matching their holiday requirements and being asked to go back to a traditional package might not be welcomed,” said Chapman.
Freedom Flights managing director Paul Moss also makes the case for getting your own ATOL protection, not least of all because it is a good deal easier now than in the past as the financial criteria are simpler.
“I would say don’t be scared of getting an ATOL, and secondly, make sure you get advice. This is readily available from the Civil Aviation Authority website and it’s free. Otherwise, make sure you buy your flights from a fully bonded ATOL holder – this will mean that, in the event of failure, your clients’ money for the flight element is protected,” said Moss.
Stick with who you know
The alternative is to do your homework, find those suppliers who are offering principal status and stick with them.
Global Travel Group product development director Jason Edwards said: “Our member agents have no need to get an ATOL as we provide this facility for them in a safe, legal and workable solution. Our members will either dynamically package or book ATOL-bonded suppliers. Our aim is to ensure they have the tools and choice to deliver – it’s exactly what they have got and they decide for themselves.”
With consumers demanding even more from their holiday options, be it low-cost flights or cheaper accommodation, it is fair to say that, in order for retailers to compete with the online giants, dynamic packaging is here to stay.
Hotels4u.com head of travel trade sales Andy Baker sums up the position of agents who dynamically package: “With the role of an agent becoming increasingly more of a travel arranger and the recent changes in the law regarding ATOL protection, it is vital that agents seek advice to ensure they are covered. In short, if they are putting a package together, they must make sure it is covered by an ATOL.”