Leading independent UK online travel agencies have said expanding the scope of consumer protection threatens their agency status and will push consumers away from the trade.
There are fears ABTA’s response to reform of the European Package Travel Directive (PTD) and changes to the UK law that implement it will be too heavily influenced by the big two, TUI and Thomas Cook.
Just 140 responses were received by ABTA in a consultation on proposed changes to the European PTD which found support for extending its scope to include dynamic packages.
ABTA claimed its stance was also backed by consortia representing thousands of UK travel agents including Worldchoice and Advantage.
However, online travel agents (OTA’s) namely On The Beach and Advantage member Holiday Discount Centre, have concerns about a ‘one-size fits-all’ solution.
Doubts have been expressed about the need to expand consumer protection at all, with the vast majority of bookings now taken on credit cards that offer charge-back cover.
Travel Weekly understands the latest figures from Barclays show that 90% of the payments one leading OTA took in 2009 were on cards with charge-back protection, and other banks will be similar.
OTA’s now also offer supplier failure insurance meaning the consumer is fully protected, they argue. The big tour operators were accused of using the controversy about consumer protection to force through changes that will prevent competition from the independent sector.
Last week it was revealed TUI’s Holiday Hypermarket does not offer protection and it has dropped protection for flight-only sales.
On The Beach finance director Geoff Wood said: “From a consumer protection angle, we believe there needs to be something to protect all consumers and it should not matter how they book.
“In terms of how the regulations are implemented, we believe there is a significant difference in the tour operating and the pure agent models, and that needs to be reflected in how a consistent system is implemented.
“The PTD imposes a number of obligations, but not all of them apply in an agency situation. I think a one-size-fits-all solution has a number of flaws.”
Wood said he thought ABTA has succeeded in representing the views of the OTAs, although he accepted it had a difficult job balancing the different views of members.
However, other independent OTA’s Travel Weekly has spoken to have expressed concerns that their views will not be reflected fully.
The OTAs fear bringing component sales under the PTD will only succeed in pushing more consumers out of the protection regime as they will book flight-only and hotels separately.
Holiday Discount Centre managing director Steve Campion, said the existing regulatory system should not be expanded but ripped up and reformulated to reflect how customers are behaving.
“My concern is ABTA supporting an extension could put the big two as a significant advantage, but could also put the trade at a disadvantage because people are dynamically packaging themselves.
“The failure of Globespan showed there were more people dynamically packaging off their own back than with an online travel agent, and then they have no protection,” said Campion.
He said: “You’ve got to start from scratch and start with the flight. If we’re not going to lobby for universal protection then who else will? Certainly not Ryanair.
“By agreeing to an extension of the regulations we give the politicians the victory they want because they can say they are doing everything they canto protect consumers.
“All the while we go along with it we don’t get what we actually want full protection for everyone. This issue may not come up again for another 20 years.”
Another OTA said: “It’s an uphill struggle for independents to get our views across because we are just not geared up for it against TUI and Thomas Cook’s huge lobbying power.
“If the European changes come in then the notion of a travel agent almost goes out of the window because everyone has got to operate as a tour operator.”
ABTA is keen to formulate a position on consumer protection that will future-proof itself against changes in European law that are not expected to be brought in for at least three years.
More urgently, a separate consultation on proposed Department for Transport reforms of ATOL and the Civil Aviation Authority is about to start, and the OTAs will sit on working groups to consider its response.
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