Radio 4 research fails to understand bonds and licences, says Aito Agents chair Gemma Antrobus
How many people were as horrified as I was to see reports last week suggesting ‘a third of UK travel agents could go out of business by 2021’?
For those who didn’t, a number of media articles followed a report commissioned by Radio 4’s consumer programme You & Yours. The BBC programme had asked the insolvency firm Opus Restructuring to analyse data from financial risk advisors Company Watch, which looked at the finances of almost 4,000 travel firms.
The findings were that as many as 33% of the 2,584 travel agents analysed, and 29% of the 1,325 tour operators, were in danger of folding within three years. Well, that’s helpful!
Unfair reflection
Please don’t get me wrong: I’m not saying that this report has been fabricated. I suspect it cost a lot of money and took time to conduct.
But what I am sure of is that it is not reflective of our industry – our fabulous, resilient, ever-evolving and forward-thinking industry – as a whole.
Thankfully, Abta was asked for its comment, and was as disbelieving of the so-called ‘facts’ as I am.
According to the study, 15% of travel companies are ‘zombies’ (with balance sheets negative by £5,000 or more) and 25% of travel agents had total assets of £25,000 or less. These and other chunky statistics had the travelling public worried that their hard-earned cash would not be safe when booking through a travel agent. We all know this is totally untrue.
What the study failed to understand, or report, is that the majority of travel business transacted in the UK is done through fully bonded and licensed travel companies, which meet strict regulations to trade. We do this so that our clients’ funds are never affected should any element of the booking fail. Some of us operate trust accounts; some have large bonds in the bank or similar. It all means the same thing: clients’ money is protected. Why was that not mentioned?
Positive message
What was reported, however, was that “this is an industry with a clear lack of financial substance”. A message like this will only push the consumer away from the fully bonded and safer way of booking holidays and lead them to believe that they will be better off booking individual elements themselves. And we all know where that can lead.
Speaking only on behalf of Aito Specialist Travel Agents, in the nearly 30 years since Aito Agents began, not a single independent agency member of ours has become insolvent. How about using that as a headline instead!
To add to this, Aito’s recent Travel Insights report surveyed over 22,000 consumers (via Aito’s travel agent and operator members) and a staggering 91% stated they would take the same number of holidays or more in 2019 – that’s a really strong and positive message for our industry.
Back to the Radio 4 report. As frustrating as distorted news like this is, we won’t let it beat us. I believe 2019 is the year of resilience and the year in which we pull together and prove that the very best way to book your travel is via fully bonded and protected travel companies. We’ve proved it before, and we will prove it again.