There are a number of issues with the latest ABTA initiative to try to deal with dynamic packaging and consumer protection.
Firstly, I applaud ABTA for tackling the problem of maintaining credibility for itself and the ATOL scheme in the eyes of the consumer when everyone knows, that following recent failures, neither was in a position to deal with protecting the consumer.
The first problem with ABTA’s proposal is that it will only capture those bed banks that are ABTA members and will potentially put those members at a cost disadvantage to non-ABTA bed banks.
You could conversely argue it puts ABTA bed bank members at a commercial advantage, giving them greater unique selling points.
This leads me to my second point: the double standards charge that could be levied against those retailers of the ABTA board.
Many ABTA agents book thousands of dynamically packaged holidays through non-ABTA bed banks. Will these board members change the commercial practices of their businesses to conform to the preferred ABTA way of doing business?
I hope so, as I have a vested interest, but they do too – otherwise the cries of hypocrisy will ring loud and clear, especially from this corner of Kent.
My last point is to do with the ABTA retail bond of the third party (if that party is an ABTA member).
The proposal would require the ABTA bed bank to accept responsibility for monies paid to its sub-agents [ABTA agents] by consumers.
So the ABTA bed bank would pay out in the event of its sub-agent going bust and the consumer would get their accommodation.
But would the ABTA bed bank then be left out of pocket, or be able to claim against its sub-agent’s ABTA retail bond?
ABTA claims rules refer to members doing principal business being able to make such claims but do not appear to cover the agent/sub-agent scenario.
The ramifications for the ABTA bed bank in cost terms could potentially be so commercially and financially unattractive that maintaining membership becomes unviable.