Opinion: How travel entrepreneurs are being stifled by regulation

Opinion: How travel entrepreneurs are being stifled by regulation

By Chris Photi, partner at White Hart Associates

During the past 34 years the most exciting aspect of acting within travel has been its innovation and ability to adapt to the changing demands of the consumer.

This evolution has been led by entrepreneurs who, through their exciting ideas and willingness to take a risk, have overseen incredible innovation.

However, when was the last really significant innovation?

The chorus response is generally social media, but to borrow a catchphrase from Jerry Maguire “show me the money”.

I do not know of any travel business that makes meaningful cash out of social media.

Innovative ideas come from fresh-thinking young people, but the barriers to entry into the travel industry are now so high that few bright young things see a viable way to start a travel business.

When you apply for an Atol you have to lodge an expensive and sometimes unobtainable bond for four years in addition to paying the £2.50 per passenger Atol Protection Contribution, whereas the established competition does not have to provide any bonding.

How can that be fair? It is simply anti‑competitive.

To run a balanced travel firm, the Civil Aviation Authority and Abta require at least £30,000 in share capital and £77,500 in bonding.

It is not easy for a young person with a bright idea, working within this generally low-paid industry, to accumulate this level of funding.

The result is they become part of the ever-increasing corporate travel world and its regulatory‑advantaged giants, or they just leave the industry.

It was no coincidence the winner and a leading nominee for the young entrepreneur award at this year’s Hall of Fame were Renaldo Scheepers of A2B Transfers and Simon Purchase of Cruising Excursions respectively.

Both of these successful businesses are able to operate in an unregulated environment and were started up with limited capital and no bonding requirements.

The leading trade associations should actively encourage young entrepreneurs and find ways to ensure their flare and innovation is not stifled by an industry that has become top-heavy with regulatory burden and compliance.

Abta, the leading trade association, has to play a role here.

Despite a worthy, hardworking secretariat, one has to ask is the Abta board, which has an average age of approaching 60, open to change and innovation, or has it become an ‘old boys’ club’?

Let us hope the recent changes in personnel bring a fresh view.

The almost hysterical reaction of some board members to the activities of OTAs and bed banks trading outside of the traditional package framework does not bode well for similar innovations.

At 57, I generally don’t like change and no longer think as vibrantly nor have the exuberance I once had.

However, I clearly see the need for youthful energetic innovation and new ideas in travel.

We all have a responsibility to “pass on the baton”, rather than just protect our own fiefdoms.

We all need to encourage and help the future lifeblood of the travel industry.


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