CATO dinner and a serious side to Christmas

With the vast majority of Christmas parties rather jolly affairs with a great deal of imbibing, while there was that at the Council of Australian Tour Operators’s Christmas celebration dinner last night at Sydney’s Sofitel Wentworth, there was also a rather unexpectedly serious side to the event.

In his keynote speech, Simon Hills, Chairman of CATO, warned travel agents they were playing with fire by booking product direct with suppliers based overseas rather than through wholesalers in Australia.

He said that he believed it incredible that travel agents would risk the safety and security offered by a wholesaler in Australia by booking direct just to save a few dollars, adding, “Retailers are booking with companies overseas that they don’t know and who also are not members of the Travel Compensation Fund which exists to protect their clients, with the agent carrying the risk should the operator go bust.”

Hills said that he recognised that booking direct could sometimes be cheaper, but that was not always the case, adding that CATO members spent $22 million on marketing, placing hundreds of thousands of brochures on agency shelves, forking out for consumer protection and paying almost $200 million in commission and overrides and that is was no wonder that pricing through a wholesaler may occasionally be a little more expensive.

He added, “Every time an agent books directly with an overseas supplier, without going through a wholesaler, they immediately forgo our experience, our knowledge, our research and the material health of our business.”

Hills added that he believed the role of the wholesaler was being diminished by both agents and airlines who did not understand the role of wholesalers and what they achieve on behalf of the agent’s and airline’s businesses”.

He added, “It is high time that all agents recognised the enormous support provided to this industry by members of CATO,”

In his presentation, Mike Hatton, CEO of AFTA took the opportunity to tell the industry it would be “stupid and lazy” if it failed to take advantage of last weekend’s change of Government to make sure changes to the consumer protection rules in Australia were secured.

He added that that with Labour the one political party in power at both state and federal levels, he believed these was an opportunity to force change, adding, “There will be no more crap between the States and Federal Governments, which he said had previously blocked the progress of any independent review.

He said, “We’ve been stymied, stonewalled and stopped by the last Government,” adding, “We now have the same Government at State and Federal levels and if we as an industry don’t take advantage of that to bring about change, then we are stupid, lazy and not doing ourselves justice.”

Hatton said that he believed that Australia should have a consumer protection scheme which should be paid for by the  consumer, very much like the recently introduced scheme in the UK.”

Glenn Wells closed off the formal part of the evening’s proceedings highlighting that the Travel Compensation Fund paid out $4m in 2007 as 25 companies went bust with San Michelle Travel being the biggest with 75 claims.

Wells added that TCF had handled over 6,000 claims in 2007, totalling nearly $5.3m million, where as in 2006, it received 700 claims and paid out $1m.

As one CATO member told The Mole, “The CATO Christmas dinner is always an excellent mix of business and pleasure and it is appropriate that we take stock and look at the year that is about to end”, adding though that one year Mike Hatton had painted such a bleak picture everyone felt they should go home and slash their wrists………….but this year he was spot on.

A CATO Report by The Mole