Comment: Paul Evans on the future of ABTA

Paul Evans, CEO of lowcosttravelgroup.com, gives TravelMole an exclusive insight into his thoughts on the future of ABTA…

 
"ABTA does many worthy things for the industry: health and safety, lobbying, customer arbitration, environmental work, provides advice, seminars, excellent conferences, and much more.
 
In Mark Tanzer it has a thoughtful, bright and measured leader. I don’t always agree with him, but he is respected.
 
However, when Tropical Sky withdrew its membership, it got us at the lowcosttravelgroup thinking about ABTA’s future and our role within it.
 
ABTA has an extremely diverse membership, which is an advantage, but also a problem, as it can’t be easy to manage such varied views and interests; many members I speak to are frustrated that ABTA has become confused, and continues to subliminally imply it offers consumer protection – when it does no such thing.
 
I was very unhappy at the ABTA change of stance on Flight Plus. ABTA initially stated that airlines needed to be included before it could support Flight Plus; and then, post the Travel Republic sale, changed its position to argue that airline inclusion could be pursued later (the Government incidentally now tells us this could be two years!), which probably means Never, as elections fall in 2014/15, which will most likely mean a change of minister and new priorities.
 
Some would argue this change of tack by ABTA left many of its own agents penalized as airlines won’t have to pay a Flight Plus.
 
ABTA appeared during this whole process to be acting as some sort of champion of consumer protection, to the detriment of many of its own members, rather than the impartial trade body it could have, and should have, been.
 
This brings me to bonding.
 
There already exists a comprehensive scheme for IATA bonding for schedule carriers, and now Flight Plus for dynamic packaging, which we fully support. They offer good protection despite some obvious well documented anomalies.
 
Nowadays the big OTAS sell 90% of their seats with scheduled carriers, not charter airlines. Customers predominantly pay with a debit or credit card, so their money is already protected, possibly twice (with no ABTA).
 
Charter carriers and cruise companies receive their balances or full payment 8-14 weeks before departure, which leaves plenty of time to resell any seats or cabins in the event of a failure of an agent.
 
Also, cruise companies have started collecting final payments direct from customers.
 
Yet there still exists this rather odd scheme of ABTA bonding, which appears to protect only ATOL-holders (not consumers) for up to £100,000 of pipeline monies.
 
The problem is that ABTA bonding is charged, calculated and collected by ABTA, and consequently the bonding levels requested far exceed the value of any potential liabilities that ABTA would ever have to pay out to those very same ATOL holders, by an obscene amount, I am told.
 
ABTA is effectively operating a scheme that is requesting from members far too high bonds that offer very limited and specific protection and, in doing so, putting an undue burden on those same members at a time when there is a declining insurance market and bonding can be difficult to source.
 
I can only assume it does this because it is a profit centre for ABTA, or it simply does not realize realities.
 
All the bed banks, who are an increasingly important sector of the market, have already resigned from ABTA. Why? because ABTA naively insisted that bed banks cover all bookings taken, irrespective of whether they had been paid for or not.

Would you provide a service for which you had not been paid? Mandated by an organization that had itself withdrawn its own protection scheme just a year or two earlier? Of course not!

This irrational position was breathtaking to the bed banks, who promptly all resigned, leaving ABTA weaker for it.
 
So my question is – what is ABTA’s role in this day and age? And what should it do about the increasingly alienated membership?

Whatever it is, it needs to think quickly how it can better help its members in these difficult times.
 
Is its role really to operate bonding schemes that protect only its largest members? I don’t think so.

It should get out of bonding completely, cuts its overheads accordingly, and start to represent the whole industry, not just those historical sectors, players and models that pay the highest fees.

It has a role to play – I want ABTA to succeed – but we need a serious trade body – not a confused one."