Aito officially launches financial protection scheme for SMEs

The Specialist Travel Association (Aito) has officially launched its financial protection scheme, describing it as a ‘game changer’ for small and medium sized travel businesses.

 

Aito Financial Protection Services (AFPS), a wholly owned subsidiary of Aito, will cover non-licensable packages – non-flight packages – as well as single components such as accommodation-only.

 

Executive director Martyn Sumners, announcing the launch at Aito’s general meeting and Summer Away Day, said: “This will be a game-changer for Aito members and prospective members. This is a really exciting time for the association.”

 

The protection will offer cover through bonds and shortfall insurance from September 1 this year, with applications open from July 1. It is only open to Aito members and is tailored to businesses with non-licensable turnover of £5 million or less.

 

It follows Aito’s announcement in November last year that it had been granted approved body status with the Department for Business and Trade (DBT). Aito is only the third travel industry association to have the status with the DBT alongside Abta and Abtot.

 

Since the end of last year Aito has been working out the finer details of the scheme, which follows calls from members to reinstate the previous Aito Trust protection that closed in 2013 after more than 20 years in operation.

 

AFPS is primarily aimed at new members as an extra benefit as part of Aito’s strategy to expand from 100 tour operator members to 150 by 2027-2028. Non-Aito members can apply to join the scheme at the same time as applying to join Aito.

 

Speaking at Aito’s general meeting deputy chairman Martin Garland said: “The objective is to grow membership up to 150 operators and we are being asked [by prospective members] if we can provide a financial protection solution, so this will be a big tick in terms of moving us forward [as an association].”

 

As well as attracting new members, AFPS could also be of interest to existing members as an alternative to their current financial protection that is also compliant under the current Package Travel Regulations, said Garland.

 

He insisted AFPS, as a not-for-profit organisation, would be competitive in the market place and said it represented ‘the start’ of a range of Aito financial services to benefit members.

 

It has been put together with help from Aito business partners White Hart Associates and Fox Williams, both of which have provided ‘invaluable support’ in the process.

 

He added: “It’s been extremely frustrating at times but it’s something I am really proud of. This is a day we thought would never happen.”

 

Christina Brazier, Aito head of industry affairs, will run the scheme, which will have an independent vetting panel to assess membership applications.

 

She urged any members interested in applying to contact her initially for an informal chat prior to submitting application forms, a process estimated to take three to four weeks.

 

The standard bond requirement will be 15% of non-licensable turnover but will depend on the applicant’s business, she added, while the membership fee will be based on the company’s projected revenue, including shortfall contributions.

 

“We are confident this is a cost-effective and competitive scheme,” she said, adding: “We are not in this for commercial reasons, we are in this for your benefit.”