TUI move will have huge implications

Comment by Jeremy Skidmore (www.jeremyskidmore.com)

As soon as I heard the words ‘Peter Rothwell would like to talk to you, he sees this as a good opportunity’, I knew something significant was going to happen.

Some people have said that TUI’s decision to restructure its business to push dynamic packaging, following the recent Court of Appeal story (see separate story), was no big deal. They were just planning to do more of what they’ve been doing over the past few years.

Believe me, it is a big deal. Not just because of what TUI will do, but because of how others will follow.

There still seems to be some debate about the exact detail of the Court of Appeal ruling, which stated that companies can put together components of a holiday without having an air travel organiser’s licence,.

But Thomson and their lawyers – and independent solicitors that I have spoken to – are convinced that it means companies won’t be liable if travellers on independent trips encounter problems in resort.

This is a huge part of the ruling, because under the package travel regulations, operators can be held to ransom for virtually anything that goes wrong abroad.

The ruling is a green light for anyone who wants to sidestep the ATOL regulations. You can’t blame TUI for restructuring its business – even the Consumers’ Association isn’t critical – after having to compete on an unlevel playing field for years.

Selling dynamic packages is cheaper, it cuts out the liability and, most importantly, a growing number of people want them.

Thomas Cook is considering the situation. I’ll eat my hat if they don’t also hugely increase the number of dynamic packages they sell.

Also, just about every travel agent will be getting in on the act.

Of course, there is a risk to all this. The consumer spin is that millions more people will be travelling without protection.

The big question is whether anyone cares. I envisage some problems with it, because people can be travelling on the same flight and receive different levels of service, depending on what they’ve paid for.

TUI, or anyone else with a brand to protect, is not going to leave people stranded in a tsunami or hurricane, regardless of the type of trip they’ve bought. The saving is not worth the disastrous PR they would get.

But, of course, there are less dramatic issues to consider. If thomsonfly has to cancel flights, then only inclusive tour passengers would be compensated; someone on an independent trip with TUI who injures themselves in a swimming pool would not have a case against the operator.

How much bad publicity would that generate? Probably not enough to justify bonding everything. As Peter Rothwell said, people buying flights on scheduled airlines do not expect to be looked after in resort.

The key will be selling the message to customers who have come to expect hand holding from tour operators. They must be absolutely clear what they are getting for their money with these trips.

Meanwhile, this could turn out to be a godsend for the Association of Independent Tour Operators, who have a unique opportunity to differentiate themselves from the masses offering DIY trips.

What’s your view?