Marginally off-topic, but unfortunately your assumption that people will look to big brands is wrong. Evidence from a Yahoo presentation I heard yesterday in London – using Mintel research – indicated that consumers will not necessarily turn to larger travel organisations or those with brand equity.

They will have some degree of pulling power but not to the extent that people think. Price will continue to be a key determining factor first of all.

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You used to book with just one, (there where others but they had agreements in place with the main one so everyone, just about got the same protection.) but under UK law this is now not allowed.

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Here at Which? Holiday we’d always advise that where possible, book with an ATOL protected provider, and that way you’ll be covered if we have another XL.

But, there’s also a great piece of consumer legislation unknown to many called Section 75 of the Consumer Credit Act, which covers everything bought on a credit card, costing between £100 and £30,000. So, providing you always book on a credit card (and pay off the balance to avoid interest) you will be covered, financially, should anything happen to your airline or travel provider. Visa Debit run a similar scheme, although i don’t think this is covered by the same law, and package holidays are also protected under package holiday regulations.

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I agree with Kevin on the brand issue, and I think smaller players can work on a far more personal level to build up trust with customers – it does take a lot of effort, as they have less reach, but once they have managed do that it can pay off. XL going bust – the huge brand that they were – also showed consumers that opting for a big brand can’t always be relied upon.

I do think there is a lot of confusion around for consumers about financial protection – especially as you point out, different travel trade associations offer different types of protection or bonding.

I’m not sure whether it would be possible to streamline how all the different organisations work but, in terms of the Travel Trust Association, of which I’m a member, it offers a high level of customer protection as it works on 2 levels:

1) By keeping consumer monies safe in a Trust Account, overseen by designated Trustees who need to authorise transactions on the account (so the payments my customers send to me as an agent go directly into this account, and do not enter my trading account, meaning that I cannot spend their hard-earned holiday funds on designer handbags).

2) By protecting all travellers in the event of my failure as an agent by the fact that an insurance guarantee is issued on every booking – meaning that the TTA will ensure a holiday will still go ahead, or the customer will be fully reimbursed, if I became insolvent.

Additionally, unless a TTA member holds their own ATOL, they can only trade with ATOL holders (so can’t put their own dynamic packages together unless ATOL bonded themselves), offering further protection in the event of tour operator failure, rather than agent failure – because the customer is then protected on all levels by the Trust Account, the TTA Guarantee, and the ATOL.

To maintain my member status I have to very strictly operate within these guidelines and if I didn’t, I’d be kicked out of the TTA (which since it joined Worldchoice, is possibly the biggest association of independent, retail agents).

So, I think for the future, the role of trade associations like the TTA will come into their own, once consumers have more understanding of how they operate.

As a small, independent agent, my membership of the TTA very much means that my customers are extremely financially protected – and this undoubtedly helps me to build the trust required for customers to want to book their holidays through my agency.

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“The fact that so many travel companies and airlines have gone bust in 2008 has meant that more of us are looking at large or established brands when booking.”

When i first started in this business one of the biggest was tour operators was Intasun!

“Would it not be simple for everyone that all travel agencies and operators were members of one association, and consumers were protected for their flight and hotel, no matter how they book.”

at the same time as Intasun there was just one association, ABTA. You couldn’t be a travel agent without being a member of ABTA and complying with their strict rules of membership including bonding. ABTA tour operators would only sell to ABTA agents. Companies like (and I’m showing my age here. ATOL licences were mostly held by the Tour Operators and were only needed by agents if they arranged and sold their own Air Based Packages. In effect they were then Tour Operators. Agents who wanted to sell Air Tickets had to be members of IATA and most were.

Ahh memories….

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Opps… Ignore the part that says “Companies like (and I’m showing my age here. ” in the comment above. Bad (rushed) editing on my part. Sorry

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Ah! Yes! Stabiliser! Those were the days. All sort of worked then. Despite Intasun… Court Line… Clarksons …. What about Exchange Travel! Along came some Government egits who decided that it was broken and needed fixing. (or was it EEC, I forget now). It’s all very well for Which? to bang on about credit cards, but credit cards will not take too long to work out that acting as a surrogate bonding company for any Tom, Dick or Harry airline or operator is bad for business and simply stop merchant arrangements with/ for them. This will have interesting consequences as a) how do you then sell on the internet and b) er… how do you sell? Bonds! Yes, bonds! Agents can have a bond for IATA, bond for ATOL, bond for the credit card company…. that will work, so you have about 500 k bonding alll to sell a ticket and earn twixt £10 or £40 …As for the Travel Trust, fine, but what happens if the agent doesn’t pay the money in, in the first place?………

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@Murray -

Unless the customer pays by cash (a rarity these days), it would be very hard for an agent to not pay the money in to the account.

Credit/debit card processing facilities are set up within the agreements so the funds go straight into the Trust Account, and cheques must be made payable to ‘Company Name Travel Trust Account’.

Event if the agent were unscrupulous and did spend all the pennies of a customer who pays with the real stuff, that’s where the TTA Guarantee then insures the customer’s money – which is guaranteed in the event of failure or fraud.

So booking with a TTA agent really is a good bet for a consumer.

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Darren: I forward you a PPT from the event which indicates the brand loyalty element of my comments.

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