AITO is calling on the Government to create a single licensing scheme for consumer financial protection
It says the current dual-licensing system costs small and medium sized businesses £6,300 a year.
The association says the move would save huge amounts of administrative time and hassle for the industry.
"A change to the system will also rid us all of the lack of clarity that prevails within the industry and, equally, amongst consumers, who simply don’t know for sure which logos will deliver the holiday security they seek," said Alisdair Luxmoore, AITO industry affairs director.
"Plainly, it does not make sense for probably hundreds of UK tour operators in total to waste such a considerable amount of cash in any economic climate, let alone the current situation," said Luxmoore.
In its response to the Department for Transport Call for Evidence, it is also calling for airlines to contribute to repatriation costs.
"When airlines run into difficulties the tax-payer ends up footing the bill for repatriation and AITO members believe that airlines should contribute to this cost, as do tour operators," Luxmoore added.
