ABTA fights back against the critics

ABTA has come under fire recently for being "irrelevant" and "confused". Here, head of financial protection John de Vial defends the association.

"Each year, typically around our subscriptions renewals process in June, there is an open and healthy debate about what ABTA membership means to our more than 1,200 members. As an organisation, and as individuals, we work very hard to ensure that all members get the best possible return on their subscriptions through a range of services and benefits.

Our members may value different parts of what we have to offer whether this is our financial protection solutions, the ABTA ‘badge’, our legal advice and support services, our lobbying activity or the work we do to raise standards in the industry at home and abroad around health and safety and sustainability. The important job for ABTA is that we constantly review and adapt to the changing needs of this diverse membership.

ABTA represents a broad range of travel businesses – high street travel agents, online travel agents, tour operators large and small, cruise companies, business agents – and it is this breadth and scale that enables us to do much more than provide financial protection. It is why we command such a high level of awareness and authority among both consumers and in Government.

Last year, ABTA’s brand recognition among consumers rose by 8% to 79%, recognition that directly helps our members build confidence with their customers. ABTA is by far the most recognised travel industry trade body among UK consumers – 26% higher than ATOL and 45% higher than IATA. Seven out of 10 people see ABTA membership as essential or important when booking their travel arrangements.

We have a stronger voice in Government today than we have ever had – in research among UK MPs, two thirds agreed that ABTA is an effective advocate and protector of the travelling public. Among conservative MPs, this figure rises to 73%.

In the last 18 months reform to ATOL has been the single biggest challenge facing our industry. We have worked very hard to consult with our members, and to put their views to the DfT and CAA to influence the shape and nature of the reforms. We will continue to do so, striving for a system that is as fair as possible of UK travel businesses.

Many members particularly value the support services that we offer. In the past 12 months, 90% of our members contacted us for advice and expertise on financial and legal issues, customer services, sustainability, health & safety, lobbying, networking, marketing and events. And in the last year, we handled just under 11,000 enquiries and complaints from consumers, reducing the administrative and cost burdens on members.

In recent years we have introduced round-the-clock updates on events worldwide via text and email backed up by the expert knowledge of ABTA staff. This has proved invaluable to members’ operations departments. Our press team is also available 24/7 to support members and destinations with crisis management communications.

Financial protection is undoubtedly a very important part of the ABTA offer. Although ABTA does not provide 100% financial protection (something it never has done), ABTA membership does offer protection for many travel arrangements.

ABTA offers principals the choice of whether to bond and protect arrangements that the law does not require to be protected. We give members the choice to run their businesses as they wish – to compete as they wish – and to only take on the costs that are necessary.

Let’s also remember that ATOL only protects flight-based holidays; the holiday market today is much more sophisticated than this and ABTA remains the UK’s biggest approved body for non-air packages. ABTA also offers protection between members, allowing principals to trade with a wide range of retailers with confidence.

In setting bonding levels, ABTA aims to ensure that these are at a level which is not overly onerous for our members, but also properly reflect the potential risk, so that the scheme of protection works. All members contribute to the ABTA Insurance reserve fund and if the bonding is wrong, then ultimately this would just put premiums up for everyone.

As an example, we work to avoid any double bonding of turnover and we do not bond turnover under an ATOL. This is a key issue at the moment, as the new ATOL Regulations cause a proportion of what was retail turnover to become licensable (ATOL) turnover. As members get or vary their ATOL authorisation, we are working to reduce their retail bonds as the risk reduces.

Retail bonding also provides a benefit to all ABTA members. ABTA principals are protected and can trade with confidence with ABTA retailers, for up to £110K, without taking separate security. ABTA retailers benefit from access to the ABTA Principals, without having to provide separate security to multiple principals. All ABTA members benefit with consumers, who can book with confidence.

ABTA has paid out £32.5 million in claims over the last 10 years and our reserve fund, the ABTA Insurance company, is in a strong position which enables it to offer steady renewal terms to Members, even in these difficult times, without the need for large increases in premiums or sudden changes in bonding levels.

Finally, we are always looking at ways to improve what we do for our members. The launch of our ABTA-ATOL Joint Administration Scheme in April to facilitate ATOL applications, saving members time and money while giving them the flexibility to run their business in the way they want, is a good example of this.

ABTA is about so much more than financial protection, although this remains at the heart of what we do."