Noel Josephides, Chairman Sunvil and prospective candidate for the Abta chairmanship
The Package Travel Regulations (PTRs) make no distinction between packages put together using car, train and bus and those that are created using a flight element.
Accordingly, in every other European country, there is no difference in the manner in which these packages are financially protected.
However, in the UK, perhaps because we are an island and perhaps because we had an enormous collapse, in the shape of Clarksons, 18 years before the EU dreamt up the Package Travel Directive, we have two systems running side by side.
We call these systems licensable (with flights) and non-licensable (everything else).
For many years now we have been campaigning to get rid of this distinction, because it means that the many companies which have both licensable and non-licensable turnover have to run two financial protection schemes at the same time.
Non-licensable financial protection is organised through government-approved bodies like Abta, ABTOT and the TTA, and licensable protection is handled via the CAA.
This is one bit of red tape that we finally have a chance to get rid of if we make sure that every one of us replies to the CAA’s call for action on Atol reform and insists that this totally unnecessary dual system is finally abandoned.
At Sunvil, we estimate that the administrative overheads alone of running these two systems costs us about £7,000 per year.
It is quite understandable why some operators, who just cannot understand such a ridiculous distinction, lump the two types of turnover together, especially when they only have a small amount of non-licensable turnover.
Of course they are breaking the law and, if they were to fail, then the CAA would not pay out for any packages where money was received in advance if these packages did not include a flight.
The fact that some operators do not declare non-licensable turnover also distorts competition because, as a rule, it is considerably more expensive to protect small amounts of non-licensable turnover
Let alone the administrative burden of filling in two sets of declaration forms and answering almost identical questions for both the CAA and for one of the government-approved bodies I have mentioned above.
Those that declare small amounts of non-licensable turnover can pay up to £60 per person to provide this cover compared to £2.50 per person for their licensable turnover.
Those who declare nothing, of course, pay nothing and, as a result, their non-licensable packages are so much cheaper.
Abta has been ahead of the game here and has helped bridge the gap by persuading the CAA to allow it to jointly administer licensable and non-licensable turnover, but this can only be done if the tour operator’s licensable turnover is under £1.5 million.
If you think that no one has been working on cost reductions for our members until Roger came along, then you are very much mistaken.
Yes, this is boring stuff; if you have managed to read this far, then congratulations because you will be one of the few. The rest just yawn and say Abta is doing nothing to help them reduce their overheads.
Well, wake up.
Help yourself by making sure you reply to the Department for Transport’s call for evidence consultation, which Abta is co-ordinating for its members, or you may end with something you don’t like and you will then blame people like me for not looking after your interests.
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