By David Speakman, chairman at Travel Counsellors
On exiting Abta eight years ago we knew Travel Counsellors needed to offer financial protection both for our customers and suppliers if we went bust.
It was an opportunity to offer an unequivocal promise to our Travel Counsellors that everything their customers bought from us was financially protected.
To achieve this we set up an escrow account, able to be policed externally 24/7, in which we deposited customer money.
We also insured every scheduled flight and persuaded some suppliers, albeit reluctantly, to accept payment after the customer returned.
At times it has been difficult to live without the cushion of customer money. We had to discipline ourselves to live within our means.
Banks were impressed, although they did not understand that the money in the trust was neither ours nor theirs to use when times got tough.
So being confirmed as the CAA’s first Accredited Body for Flight-Plus Atol was not such a big step for us as our systems and disciplines had been in place for many years.
I have written previously of our concerns about Flight-Plus. In our opinion it does not go far enough.
It will protect customers that were previously unprotected, but it could be a minefield for an agent that fails to insure against one of their suppliers going bust.
It could put that agent or travel organiser in financial jeopardy, impacting customers who fall outside the new scheme.
We don’t believe that agents should be financially liable when airlines are not.
Only last week the Australian travel industry was reeling from Air Australia going bust which will have serious consequences for both customers and agents.
In the UK Flight-Plus, along with its imperfections, becomes law on April 30 and we will embrace it. I believe we have a moral obligation to safeguard customer money.
Each company must follow its own vision and values – at Travel Counsellors they are at the core of who we are.
If it is right that we repay a bank loan, then is it not also right to repay what is booked and paid for in advance? Losing customer money undermines the trust we all have to build with customers.
There have been claims that some companies will attempt to avoid compliance but those that do will be disadvantaged by those who comply and readily issue the necessary Flight-Plus certificates.
The bigger problem is those that claim to comply yet don’t.
“Dynamic packaging”, “tailor-made” or “do-it-yourself” offers untold choice to customers. Agents, unlike operators, offer virtually every flight and every hotel in the world.
Flight-Plus allows agents to sell what is demanded by customers without the legal necessity to inspect for health and safety, but still provide financial protection.
Customers still have all their legal rights and agents are still bound by due diligence and dealing in the utmost good faith.
But Flight-Plus is not the final answer we all require. Rather, I believe that the travel industry should discard its reliance on customer money paid in advance to fund their businesses.
All the complexities, anomalies and cost of bonding and financial controls are a direct result of being paid in advance and the consequent risk of losing that money.
No advance money, no bonding – what a world that would be.
And, in a world that by the day allows customers to more easily book travel, we believe that the successful agent will differentiate themselves by impartial advice, validation and the trust they build with their customers.
Protecting customer money is one more brick in the foundation of building that trusting relationship.
Travel agents need the tools of business and customers need the assurance that financial protection brings, and we are proud at Travel Counsellors to provide that trusted link.