08 October 2009

ABTA in ground-breaking protection move

ABTA is to introduce a new scheme to allow agents to safeguard the money of holidaymakers who buy flights or hotels separately, in a move that will close a massive loophole in financial protection.

Chief executive Mark Tanzer, in his opening address to the ABTA Travel Convention, said it was negotiating with the government and the Civil Aviation Authority to introduce a scheme for the majority of travellers who do not purchase a package.

If successful, the scheme could be one of the most radical developments in the industry for years.

Tanzer said that of the 45 million trips taken by Britons every year, only 18 million were protected package holidays and ABTA believed all holidays should be protected.

"We will have proposals [for a financial protection scheme] on the table soon," said Tanzer.

Co-operative Travel managing director Mike Greenacre backed the move.

"We would support any initiative that seeks to simplify and offer guaranteed financial protection for holidaymakers, whether they buy a package holiday or flights and accommodation separately. This is at the heart of consumer confidence," he said.

Tanzer acknowledged that there was a currently a big debate in the industry on the protection of holidaymakers’ money but made a strong defence of the recent controversial decision to reinforce its articles of association. This will force bed banks to honour payments collected on behalf of retailers if the agent fails and follows the collapse of Freedom Direct, which left holidaymakers exposed.

"We needed to retain the integrity of the ABTA brand and the value to you in delivery consumer confidence," he told delegates.

In his address, Tanzer said industry bookings were this year down 10-15 per cent, but margins had not been hit so badly because companies had held prices after cutting capacity.

He said the travel industry was fraught with uncertainty but the prospect of meltdown had receded.

Tanzer put forward a model of a sustainable future, which he called ‘The Happy Place’, and said that to achieve it, companies needed to offer quality and consumer confidence in the form of financial protection.

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Your Comments (4)

Self serving

ABTA is effectively a barrier to entry for small operators trying to enter the market place. They hide behind this 'protection' and to be fair that is the only reason to bother joining but with fees extortionate newbe's find it hard to play the protection card. I am not surprised they are taking this new line to try and force some sort of position to legislate for protection, after all they have a monopoly on it. Or do they! All they are is an insurance policy and as stated above smaller companies can utilise this to compete. This is the real consumer choice; let them decide if they want it and to pay the additional rather than bundle it with product like ABTA members do. So come off your high horse ABTA and stop trying to frighten all and sundry, you are outdated, fail to move with the times and provide nothing but scare mongering to thousands of tourists each year.

By Andy Parr, Wednesday, October 14, 2009
Insurance is available

I really hope that part of the proposal is that it is made compulsory that the public are told at the time of purchase what is and is not protected as I believe the general consensus is that they're totally in the dark when booking. In the meantime, please remember that insurance companies have already addressed the loop hole with some offering protection in their travel insurance policies or stand alone products such as ProtectMyHoliday.com (amongst others).

By Michael Ward, Thursday, October 8, 2009
Who's protecting who?

ABTA seems very coy on actually giving details of its new protection plan. Maybe the Convention isn't the right place to launch it but with every travel journalist there, why not? Is it because it isn't ABTA that will be offering the protection at all but they hope the CAA Consultation Paper due in a few weeks time will offer second class ATOL's for financial protection? If so, they should be honest instead of hiding behind the truth, crikey they get more like policitians every day...

By Alan Bowen, Thursday, October 8, 2009
Think you missed the point

One loophole about to close but - what about the many clients that book unknowingly a 'dynamic package' only to discover that when their flights are rescheduled (as the industry has been doing almost from the first charter rotation) they then have extra costs in respect of car hire, transfers and overnight accommodation. Or when the chosen hotel is overbooked and there is no suitable alternative, but the client is stuck with unwanted flights etc. This is the scandal the industry needs to address now.

By david Pollard, Wednesday, October 7, 2009