Opinion: Whatever your motivation agency status must be defended

Opinion: Whatever your motivation agency status must be defended

Alistair Rowland, group general manager, Midcounties Co-operative Travel

Well, we are all back from the Abta Travel Convention and just about recovered. It was an interesting week.

While the sessions were informative and the speakers of the usual high quality, the size of the agent community taking advantage of the content was weak.

The days of real travel agents filling the conference hall are clearly gone, there were few agents represented, in fact, less than 20% of the audience overall this year.

The Abta convention should be a mix of agents, operators and supporting suppliers, all in balance and there is much to be done to achieve a good representation from all areas of the industry and offer sufficient incentive for them to attend.

The convention was somewhat overwhelmed by the lobbying of the Online Travel Agents on the new (and fast arriving ) Package Travel Directive driven from Brussels which is due to issue a first draft in the first quarter next year.

A full house saw the debate between the tour Operators and the OTA’s, represented in the form of On Holiday Group chief executive Steve Endacott.

Abta reiterated the position taken since a 2009 consultation with members: that the rights for an agent to keep their status intact is maintained, but not quite going so far as to defend the ‘Flight-Plus’ status.

The status quo here is the opportunity the OTA’s need to stay short of paying TOMS (Tour Operator Margin Scheme) VAT.

This, however, is not quite as cynical as it sounds. At present there is no guarantee that airlines will become within the scope of the the PTD, and OTA’s will remain uncompetitive, if made to take principal status, against the click through approach airlines adopt today.

The OTA’s are arguing that the issue is bigger, however, than the TOMS debate and they are right.

It would be folly to think that the OTA’s had suddenly developed a conscience to defend the independent travel agent community.

But the likely regulation will bring all ‘flight and hotel’ bookings into the regulation’s scope and make agents fully responsible as principal for all multiple component sales including the significant risk area of Health and Safety.

Many European Countries operate like this already. The motivation to challenge these proposed changes in Europe, therefore, may be different but all agents should be equally concerned.

Agents, already under immense pressure to find business models which are sustainable will have to add further processes and costs.

Re-insurance products will become the norm along with complex counter indemnities covering risk. As all re-packaged sales will take principal status, the size of agent CAA bonds will also become an issue.

The existing Atol reform did not achieve high take up of Flight-Plus with independent agents. Instead many have found comfort buying packages through third parties who will create the ‘flight and hotel’ transaction, clearly, for a margin.

The question is whether independent agents can sustain this margin in their business models, or whether it is a further step to a quicker consolidation of the independent sector.

The current debate is whether Abta is the optimum vehicle to defend the status quo in Europe, or whether a separate lobbying vehicle would be more effective.

There is much debate as to whether the board structure in Abta allows for a balanced view, or whether the tour operators, who broadly support extension of the PTD, dominate.

An external vehicle could bring in  players not already represented such as TTA and Travel Counsellors, but what will be lost is the excellent lobbying which already takes place through Abta with Luke Pollard and his team.

Personally I hope that the OTA’s can become settled within the structures that already exist, maybe with a separate lobbying vehicle within Abta which could represent the views from within the industry generally.

A breakaway group will do nothing for the focus within the industry to communicate with government.

Abta last asked for feedback of this issue back three years ago – it must consult again now while this issue is fresh in everybody’s minds.

For me, as a large independent, agent status and the currently allowed Flight-Plus mechanisms should be protected at all costs. If you are part of the agent community, please take note.


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