By Steve Endacott, chief executive of On Holiday Group
Few UK travel agents will be aware that European bureaucrats, in their Brussels Ivory tower, are in the process of re-drafting the Package Travel Directive and in doing so could effectively outlaw the agency model within the European holiday market.
Yet again it would appear that the opportunity to make the asset holders - the airlines and hotels - responsible for their product, has been passed over in favour of targeting the much more fragmented and therefore weaker travel agency community with increased regulation.
I argued forcefully during the Flight-Plus Atol debate that the best way to give customers financial protection was to charge a flat £1 levy across all flights to cover financial failure and repatriation.
It is simply ludicrous to legislate that customers who buy a hotel stay along with their flight via a travel agent require protection, but if they buy just the flight or the two elements independently, they do not need protection.
Due to a lack of effective lobbying, the UK travel agency community lost this argument and was lumbered with the financial cost and liability imposed by Flight-Plus Atol cover.
Now, the Eurocrats are telling Abta’s lobbying team that Flight-Plus does not go far enough, since its customers can have to sue hotels in the market they operate in, for example Spain.
Online travel agents often feature over 100,000 hotels and cannot practically physically check the safety of each hotel and nor could independent high street agents even if they only sell 10 hotels.
Logically, it must be the hotel themselves that have to be responsible for the health and safety of the product they sell.
How does it make sense to remove the liability from the hotel owner delivering the product and give it to an agent selling it? This is a guaranteed route to reducing the safety focus of hotels, which is not presumably what the Eurocrats want.
If the above points do not show a fundamental misunderstanding of the market, wait until you hear about the plans to impose 14 day cooling off period on holiday sales, but not to impose the same burden on airlines selling flight only.
How can an agent book a low-cost flight as part of a holiday, when the customer can cancel at any time within 14 days, but the airline will still charge agents the full flight price?
The key point being missed by the Eurocrats is that the internet has fundamentally changed how holidays have been purchased over the last ten years and going back to the ’good old days’ of all holidays being sold as packages is just not an option.
If they impose these regulations on travel agents it will kill their ability to compete on price with DIY holidays put together via Google, as it will increase costs by around £20 per person.
When asked what research has been done on the impact of this £20 per person or £80 a family disadvantage, we are met with stony silence.
Neither does it appear that customers have even been asked if they feel the need for more protection and whether they are willing to pay for it. So who decided Europe had a problem that required fixing?
Abta has been told airline ‘click throughs’ will be brought into the scope of regulation, but no practical suggestions on how to do so have been put forward and it’s difficult to see how legally this could be achieved.
Do the Eurocrats intend bringing Google into the scope? I doubt it, yet Google is the main tool used by customers to create holidays.
The first formal drafts of the new regulations are due in March 2013 and implementation will not come into force until 2016; however, if UK travel agents do not form an effective lobbying group now, it’s likely that they will be regulated out of the dynamic packaging market.
I continue to work with Abta and hope they will represent their travel agency members effectively, but I am greatly concerned about the clear internal conflicts with the major tour operators.
These, not surprisingly, would welcome reduced competition from dynamic packaging and are pushing Abta to support the proposed scope of the new regulations if not all of its details.
Agents accepted flight plus as a reasonable compromise to extend Atol protection in the UK, but must fight the Eurocrats over their current intentions to try to revise the Package Travel Directive in such a way that it will undo ten years of progress in terms of customer choice and value for money delivered by dynamic packaging.
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