On the Beach says its acquisition of an Atol licence and pledge of 100% consumer financial protection is a step out of “the hinterland” of travel.
Chief executive Simon Cooper said the company had embraced the Atol scheme, including the new Flight-Plus proposals, because online travel agencies (OTAs) have suffered from consumers turning to names they know whenever a travel firm fails.
He dismissed any move by rivals to act as agent for the consumer as “exploiting a loophole”.
Cooper said: “Every time we see a failure it drives customers to brands they have seen on the high street for 25 years. You only have to look at who has fallen out of the market in the past three years – Goldtrail, Kosmar, XL, Holidays 4U – companies carrying hundreds of thousands of passengers between them. The failures have driven customers to Thomson, Cook and the Co-op.”
At the end of July, On the Beach announced it had acquired an Atol for 300,000 customers a year and was extending full protection to everything it sells.
Cooper said: “It has been difficult for those operating in our space. We need an Atol to do what we do. We have been in the hinterland.”
He explained: “We spent six to 12 months working with the Civil Aviation Authority (CAA) to come up with something that offered complete protection, so as to send a strong message to consumers and provide complete clarity – something beyond the traditional Atol and package-holiday protection.
“We made the decision [to do it] when we found a way [to protect] money from the moment it leaves a customer’s bank account until they take their holiday.”
He added: “We had enormous help from the CAA.”
The company has already seen the benefit, he suggests, saying: “Those who have been visiting the site and never booked are now booking.”
Cooper declined to give numbers, arguing: “We change things all the time and conversion fluctuates week to week and month to month. But we knew we would see a higher conversion rate. We would not have spent so much time on this and not have gone ahead without a strong business case.”
There is an added reason why On the Beach acted when it did. Cooper argues the extension of consumer protection – planned for January – “is inevitable . . . so we might as well as embrace it”. He said: “Change will come. Why not try to shape the solution rather than react later?”
He is dismissive of the idea of acting as agent for the consumer to avoid Atol reform. “We didn’t consider it,” he said. “We were trying to achieve certainty for consumers.
“Agent for the consumer is essentially exploiting a loophole. It is dodging the inevitable and it is not a long-term solution. We’ve broken new ground. We believe we have achieved the best of all worlds.
“Some of our rivals have an Atol for a proportion of their business and show the Atol on their site.
“We’ve stepped out of the hinterland. We spent too long in it. We have achieved something that has unshackled us.”