What’s the future for ABTA after its USP is axed?

TravelMole Comment by Jeremy Skidmore

ABTA’s decision to withdraw its consumer guarantee has left many people asking the question: What is the point of the association?

Throughout my years in the trade, I have always been told that the ABTA logo has huge recognition among the public – in a MORI poll conducted in 2004, some 83% of people had heard of it.

The poll didn’t ask people what they thought it stood for, but it has become synonymous with safety and protection for consumers. People have always assumed that if they bought something from an ABTA travel agent they would get their money back in the event of a failure (although, of course, if they bought a flight and the airline crashed they wouldn’t be protected).

Now the association has come out boldly and said it will no longer offer that guarantee of protection. It can’t afford to, because it has had to pay out millions to holidaymakers who have been the victims of fraudulent agents.

Of course, the biggest fraudster was its own former legal chief Riccardo Nardi, who pledged to clean up the industry, hatched a clever plan to rip-off ABTA himself to the tune of £1 million over eight years and then wrote a cringe worthy open letter from prison pleading for people to understand the real Riccardo. Oh, we do, Riccardo, we do.

You can understand why ABTA has taken this stance, after being stung badly by a host of crooks.

But, unfortunately, ABTA has killed off its one and only unique selling point. This week, I’ve spoken to lots of companies, both big and small, and many of them are asking what the association has left to offer.

An ABTA spokeswoman told me it still had a big role to play. She pointed out that the Office of Fair Trading had just given its backing to ABTA’s Code of Conduct and that people could book with confidence through its companies.

But how can they when some members could be crooks and if a holidaymaker is unlucky enough to book with a bad apple, it’ll be a case of ‘tough luck’?

ABTA is also relaxing the rules on membership, to allow in all number of internet companies which never make a profit and are never likely to do so. Of course, in 2006, the association needs to have a broader membership than just the traditional companies.

But, with these changes, ABTA has simultaneously opened the door to fly-by-night companies while withdrawing its guarantee to consumers. What do you think the net result will be? Answers on a postcard, please, or rather on this website.

ABTA says that although payouts to cover fraud have been high, the majority of people have nothing to worry about because the numbers affected have been tiny. Well, you can bet your life they’ll increase.

The other thing that will happen is that national newspapers will start to write hard luck stories about people like, for example, Mrs Miggins from Bradford, who lost £2,000 when she booked through an ABTA agent.

They’ll have quotes like this: “I thought my money would be safe when I booked through ABTA, but they refused to help. It’s disgusting and I just want to warn other people not to book with an ABTA company, because you’ll lose all your money if something goes wrong.”

These incidents will be few and far between but, with national coverage, the perception will be that ABTA is worthless. And you know what happens with perception – it soon becomes reality, at least in the minds of holidaymakers.

And where does this leave the poor high street agent? Already struggling to cope with falling commissions and direct bookings, it will now have a logo in the window that counts for nothing. Just for good measure, they may well have to try to explain the complexities of consumer protection to baffled holidaymakers.

Perhaps the £1 levy, which could yet be revived, may ride to ABTA’s rescue. But what if it doesn’t?

There has been a feeling for some time that ABTA is living on borrowed time unless it can modernise and I admire people who are bold enough to make progressive changes.

But I’m not alone in thinking that ABTA has, with these changes, scored a spectacular own goal from which it may struggle to recover.

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