Noel Josephides, Sunvil managing director and Abta board member
There seems to be fear among OTAs that somehow they are duty-bound to run health and safety checks on the hundreds of thousands of hotels they feature if they came under the Package Travel Regulations.
In fact, the Package Travel Regulations say nothing of the sort. All the regulations say is that, if you are putting a package together, then you simply have to take responsibility for the actions of your suppliers.
No tour operator, however good, can run health and safety checks on all the hotels featured in its brochure or on its website. How often do we hear of class actions against the likes of Tui and Thomas Cook for faulty accommodation?
Of course OTAs obtain their accommodation from a variety of sources and, very often, hotels offered on OTA websites are blissfully unaware that they are featured. They are sometimes even more surprised at the prices at which they are sold by the OTAs.
Generally, the hotels being promoted are fairly standard belonging to chains or of a certain standard which really should not cause the OTAs any problems, as long as the properties in question comply with local regulations.
Public Liability insurance as principals should not present a difficulty to the OTAs to enable them to comply with the Package Travel Regulations and will probably come out at about £1 per person.
Would the public baulk at paying such a small supplement to enable them to sue an organiser in the UK instead of abroad?
So are these worries proclaimed by the OTAs about health and safety simply a red herring?
Is the real reason why OTAs want to continue acting as agents rather than principals so that they do not have to pay the VAT incurred when acting as a principal?
Acting as a principal, and therefore complying with the Package Travel Regulations, will probably add in the region of £15 to £20 per person to their selling prices, but what a benefit to their customers that would represent.
The current tactic, it seems, is to try to convince standard travel agents that their interests are the same as those of the OTAs. Beware travel agents.
The OTAs are your biggest competitors and are taking bookings that would have come to you.
OTAs can neither offer the service that you do or the know-how and they work exactly like direct sell tour operators.
We all know a package when we see one and what the OTAs do as far as many of us are concerned is put packages together, though the UK courts have upheld the fact that they are actually agents.
In the end it is public perception that counts and, sooner or later, the media and the public will come to understand that OTAs simply offer financial protection via the Flight-Plus, £2.50 Atol system, to which they were originally very much opposed, and nothing else.
I believe that acting as a principal is far more important to the consumer than financial protection.
What is going on at the moment is a battle between two cultures. The protection afforded by the legacy tour operator is far superior to that offered by the OTA, which simply acts as an agent.
It really is nothing to do with technology, as the technology can be the same for both business models.
What we should be doing, rather than creating three camps – legacy tour operators, OTA tour operators and airlines – is coming down to two – operators and airlines.
If OTA tour operators decided to play it straight, acting as principals and paying VAT, we could then point out to government and Brussels that legacy tour operators and OTAs have the public’s best interests at heart, and that the real rogues are the airlines with their ‘click-throughs’.
We would then stand a much improved chance of bringing airlines within the system.