By David Speakman, chairman, Travel Counsellors
Last year Travel Counsellors spent in excess of £400,000 to deliver complete financial protection to all our customers in the UK.
So it was only right that we reported other travel agent members of Abta who incorrectly claimed they, similarly, offered full protection.
We feel it is our duty to defend Travel Counsellors’ livelihoods and protect the integrity of what we sell and of the industry that we, albeit in a very small way, represent.
Every business in the UK faced with similar circumstances would cry foul, and over the last 18 months we have asked Abta, first privately, then publicly, to address these issues.
It is neither our duty nor our responsibility to report individual breaches by Abta members. But the association failed to police its members so we had no choice but to report the issue to the Office of Fair Trading.
Four weeks ago the OFT released general guidance notes to the industry, but failed to address our specific complaints, so the abuse continues.
We have prepared another dossier on misleading advertisements which will be submitted again to the OFT with a view to, hopefully, eliciting a better response
Last week Abta, in a notable but predictably confusing letter to members about proposed changes to its bonding rules, alluded to the lack of clarity for consumers, something we believe stems, at least in part, from misleading statements from the association itself and some of it members.
The letter stated: “The Abta board believes that there could be real competitive advantage for all Abta members in making the changes being considered to the scheme of financial protection.
“All principal members would be able to advertise both their membership of Abta and the financial protection of ALL of their travel arrangements. Abta would also be able to make much stronger and simple statements in relation to financial protection.”
Abta has suggested that operator (principal) members should protect all their products, including those that legally fall outside the scope of Atol, such as accommodation-only, through additional bonding. That would allow that member to advertise that all their products are ‘fully bonded’.
Presumably, however, an agent member would be unable to claim they were ‘fully bonded’ because they would be at liberty to sell non-Abta suppliers, therefore a two-tier membership would be created.
Abta could avoid this by insisting that all members must offer full financial protection. The obvious way to achieve this would be to force agent members to sell only product from principal members of Abta.
In one fell swoop the dominant Abta operators would increase their sales through agent members and see a corresponding decrease in sales through one of their main competitors; the bedbanks who, due to their preference to act as agents, are now largely not in Abta.
Travel agents would no longer be able to sell Flight-Plus Atol packages unless all components originated from an Abta member.
All this, however, is just a distraction from what is really needed to address issues in our industry brought about by the rise of the internet – legislation to ensure everything that is sold is protected.
In 1998 the UK had eight million internet users, in 2012 it had 52.7 million. In 1998 it had 8 million mobile phone subscriptions, last year it had 55m.
This massive growth in information technology has empowered the customer to have more choice and be better informed.
The customer now has direct access to most travel products, what they need is impartial and quality advice from a trustworthy friend or expert.
The role of an agent has changed from being the searcher and finder of product to being the adviser of the suitability of product.
But its essential that the provider is trusted and being unable to offer financial protection does not reflect the trust required.
Customers can now buy the component parts of a holiday and budget to suit their financial circumstances. Dynamic packaging was not created as a fad but in response to customer demand for more choice and flexibility.
The growth of Tripadviser and Facebook has only served to highlight the customers’ need for advice on what to choose, although these websites are increasingly mistrusted because they are open to abuse.
Sadly, what we have governing the providers of impartial, trusted advice is an outdated form of financial protection, the Package Travel Directive which dates back to 1994 and is focused on protecting customers who buy ‘packages’.
Just when customers are empowered with more choice and flexibility and need trusted, impartial advice from experts, Abta suggests a change that will result in either only part of its membership will be able to promote full protection or force agents to limit the choice of products they offer for sale.
The first scenario risks being more confusing than the current situation as most customers don’t know or care about the difference between agent and principal, and the second undermines agents’ freedom to act independently.
There is a need for financial protection and there is a need for good and impartial advice, but every component that is sold should be protected.
The absurdity of the present rules is that airline failure is the element most needed to be protected yet it is this element that lacks protection and yet it is taxed through APD by a Government that does not see the perversity of its moral position.
In exchange for taking customer money so far in advance the industry has a moral responsibility to guarantee they will not lose that money.
Abta’s latest move shows it now realises it is also commercially important to offer that peace of mind to its members’ customers.