Tour operators will switch from selling package holidays to Flight-Plus ‘dynamic packages’ if the European Commission fails to extend the package-travel rules, says Sunvil managing director Noel Josephides.
The EC is expected to publish proposals for revising its Package Travel Directive within weeks, leading to subsequent changes in the UK Package Travel Regulations.
Josephides told Travel Weekly: “If the EC comes forward with full approval for the methods of some online travel agents [OTAs], a lot of companies will look at operating in the same way – including Sunvil.”
Tour operators pay VAT on sales under the Tour Operator’s Margin Scheme (Toms) and Josephides said: “Why should we pay tens of thousands of pounds in VAT when the EC condones a way of not paying?”
He said: “If Brussels decides there is nothing wrong with Flight-Plus it will mark a sea change in the way the industry works.
“We would all think about changing our operating methods. The reason most of us don’t [at present] is that we don’t feel it [Flight-Plus sales] complies with the Package Travel Directive.
“It could also give a commercial edge to say you take full responsibility for your suppliers.
“Flight-Plus was always an interim step. But if the EC says it’s OK, Sunvil – along with hundreds of tour operators – will say ‘this is how we have to go’. A lot of companies will take that approach. We would be mad not to save tens of thousands of pounds in VAT.”
Josephides, who is standing for election as Abta chairman, added: “At the moment we feel Brussels is likely not to condone it [Flight-Plus]. But a lot can change.”
All Leisure Group chairman Roger Allard will stand against Josephides in the election for chairman.
Abta came under fire from leading OTA members over its lobbying stance towards package travel revision in Brussels late last year. A group of members set up the Association of Travel Agents (ATA) as a rival lobby group.
However, a leading figure in ATA, Travel Republic managing director Kane Pirie, recently stepped down from his role having earlier quit the Abta board.
Josephides said: “At the moment Abta is not appreciated by everyone. One of my aims is to change that.”
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