Tom Allen, former Disney Parks and Resorts vice-president and Cadogan Holidays managing director
I have long held that the organisations which run major sports have become dysfunctional, in the sense that they have lost sight of the customer – the fan.
Whether it’s football, rugby, cricket or other major sports, just look at what has happened to ticket prices, kick-off times, venue selections, inconsistent and lenient punishments for misdemeanours, and more – the list goes on.
And while there are lots of good ‘reasons’ given by the organisations involved, mainly involving TV rights and sponsorship, the poor old fan has been forgotten.
To this list I would add Abta and those who purport to run our travel industry.
We, as an industry, face a number of almost unique challenges in what we sell and how we sell it.
We sell a high-value perishable product, which the customer pays for in advance of service delivery, with no ability to see, touch or feel the product.
Therefore it is vital for us that we develop trust, not only in that the customer’s money is safe, but that they will get delivery of what they have bought.
While we try to engender trust through a licensing system, it is so complicated and inconsistent that the poor old customer doesn’t have a hope in hell of understanding it.
Witness the recent BBC Watchdog programme which highlighted some of the issues that are only too prevalent.
(As a sideline, this lack of trust results in virtually no brand loyalty for travel companies, but that is a topic for another time).
The issues are simple:
• Protection for customers’ money – where is the cash if someone in the chain goes bust?
• Protection for customers’ holidays – who is responsible if something goes wrong with the delivery?
Traditional tour operators had more or less got this right. They are covered by an Atol licence for the money and act as principal for service delivery.
Then along came the internet and dynamic packaging, the rise of bedbanks, budget carriers, online travel agents, and traditional agents doing their own packaging.
And many of them found loopholes in the regulations (which were designed for a different model) to set up business models which involve not acting as principal, and so avoiding paying TOMS VAT, which gives them a price advantage against traditional operators.
Then the good old CAA came into play and altered the Atol rules to include Flight-Plus, which brings most travel organisers within its grasp, although omitting airlines which also sell hotel rooms – though as airlines generally cover the financial risk by insurance, the customer is pretty well covered for financial failure.
But it’s complicated and not understood by the public. And service delivery remains a problem.
Meanwhile down in Turkey at the Abta Travel Convention the powers that be are still spouting smoke trying to justify what we do as an industry, covering their own backs, and the OTAs are trying to maintain that they should have an unfair advantage over the rest of the industry – and Abta pays lip service to them.
How would we feel if we bought a sweater from Marks and Spencer only to discover a hole in it, and being told by M&S that we would have to take it up with the manufacturer in China?
Well it doesn’t work like that in other industries (with high customer satisfaction) so why should we think we can go treating our customers the way we do?
The customer buys a holiday from a business, and expects that business to deliver.
Looking like a travel organiser, and presenting yourself as a travel organiser, but putting in the small print that you’re not – is this not misleading?
Treating the customer like the aforesaid football fan probably means you will not have a business in a few years, but quite frankly as our whole industry is doing this, I shudder to think where this is going.
What is the solution? Well, I’m a simple kind of guy (with apologies to Tony Blair).
Forget tour operators and travel agents, we are all travel organisers now in the eye of the customer.
If you put together a flight and hotel you must have an Atol licence and act as principal – no exceptions.
If you sell a package put together by someone else, then the customer is covered by the third party’s Atol and principal status.
However, the customers’ money must be held in trust or covered by a bond until service delivery, or until the Atol holder is paid and responsibility transferred.
And if this requires legislation, let’s make it happen.
I know there are vested interests, and TOMS avoidance which this will hurt, but remember the poor old fan, the customer, and at last let’s put him first.
The above comment is the latest post from Tom Allen’s blog Travelview.