Concerns by the big banks over the risk of doing business with the travel industry will drive further consolidation Travel Convention delegates were warned.
John Hays, founder and managing director of Hays Travel, told an e-tid briefing: “Regulation will drive some of the consolidation.
“The real problem we have in the industry is risk and perceived risk. Agents want a level playing field.
“What’s happening at this moment is the merchant acquirers, because of some of the failures, have realised they are exposed and quite heavily exposed.”
Hays was speaking after Kane Pirie, managing director of Travel Republic, told the convention that the credit and debit charge charge back regime was adequate to provide universal consumer protection.
But Hays said this would come at a price of greater security demanded by merchant acquirers or payment terms that most firms could not accept.
He believes this will mean more and more agents, including many new online players will have to join larger groups, like his Independence consortium to get access to better payment terms.
Barclaycard, the largest merchant acquirer in the travel industry with around 60% of the business, was particularly exposed to the collapse earlier this year of Sun4U.
It is believed it took a multi-million pound hit due to that failure and it, and other financial institutions have had to reassess their risk profile in the travel sector.
British Airways again underlined its objections to joining any consumer protection regime it might have to contribute towards, it’s director of sales and marketing Andrew Crawley saying:
“At the end of the day someone has to pay for it. If the consumer is going to be protected the consumer is going to have to pay.
“What I do not want is for BA to pay twice. I do not want to pay for other airlines that are higher risk. We cannot do the heavy lifting for the industry. That’s not our job.”
- More from the Travel Convention at travelweekly.co.uk/tc2010