Financial protection is an ongoing battle about which there are as many different opinions as there are people in the travel industry.
While everyone agrees that consumer protection is vital to the industry, there is little agreement as to how best to implement a system that leaves customers secure but also ensures companies share responsibility evenly.
The recent collapses of firms including Goldtrail, Kiss Flights and Sun4U affected about 180,000 customers and threw the issue back in the spotlight.
A debate at this year’s Travel Convention on the matter is therefore timely, especially with the speakers having such opposed, and well-publicised, opinions.
Recently, David Speakman, chairman of Travel Counsellors and an outspoken Abta critic, launched his own website, Ismymoneysafe.co.uk, designed to raise trade and consumer awareness over what financial protection exists.
He also advocates creating a virtual travel bank that would sit between the agent, supplier and consumer and into which money is paid and then only released to the appropriate party once the product has been delivered.
The idea of withholding cash until delivery of the promised goods is one that has the support of Nick Munday, Classic Collection’s managing director. He said: “We’re all so hell-bent on the CAA coming up with a way to protect client’s money, but if we can’t agree on one then let’s get rid of the clients’ money.
“Maybe the best way of doing it is if we can’t have the money and we don’t get it until you’ve delivered the product.”
Should the authorities fail to set up a virtual bank, Munday urged those in charge to find a fairer way of collecting the cash without overburdening operators. He said he had seen his own bonding costs rise from £1 a customer to £2.50 on behalf of the heavily in debt Air Travel Trust Fund that backs Atol.
Simon Bunce, Abta’s head of legal, agreed the current regulations are out-dated and claimed the Travel Convention session would help play a role in the drive for change.
“The whole issue of financial protection in the travel industry is confused and no longer fit for purpose,” he said.
“Changes in booking habits and business models have produced a situation where both customers and too often the industry itself are unsure of what, if any, protection is in place.
“This is far from ideal and recent failures have also risked putting the industry in disrepute and severely damaging customer confidence. Time for a change is well overdue and this debate will be a fascinating contribution towards that process.”
- Date: Tuesday October 19, 4.30pm-5.30pm
- Moderator: John McEwan, Abta chairman
- Panellists: Richard Jackson, CAA consumer protection group director; Andy Cooper, Thomas Cook director of government and external affairs; Kane Pirie, Travel Republic managing director