Darren, the whole thing is a mess. I agree the government has to play a pivitol role in this, but I doubt anything will get done before the next election. There are a number of problems and one is that the government doesn’t really take tourism very seriously. It doesn’t have its own minister and is dumped in with Culture and Creative Industries. Ministers for this department rarely last long and just see it as a stepping stone to better things. Virtually every other major country in the world has a ministry of tourism.

Add this to the fact that tourism doesn’t really have a voice as much as other industries. I suppose the only real voice is ABTA, but they have a vested interest in bonding. In his recent letter to the government, ABTA’s Mark Tanzer mentioned financial protection, but didn’t come up with any proposals, or offer to work with the government to find a solution. The FTO is now in with ABTA and you look around and there really isn’t an industry body that anyone listens to.

Another point I have raised and would like to know, is why is the ATOL license renewed at the start of April? This brought on the downfall of Freedom Direct, but renewing licenses in April means that a large number of bookings have already been taken. This results in the CAA having to pay more and more consumers being affected. Surely if licenses were taken away in October-December it would mean fewer problems for everyone?

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In Finland most of these has been taken into condideration by the government. It has slowed development of the tourism online business considerably and especially develoment of the dynamic packaging. Lessons to learn: ?

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Darren

Welcome to the concern the government gives travel. ABTA, CAA and FTO have been saying the same thing to all Parties since the government created the current system in 1992, from a simple easy method of bonding. Which to quote the Minister at that time ” Travel protection is a shining example that the rest of the world and other industries have nothing to compare”. So of course it had to be changed from that, to the mess we have now.

Simple put the Government See’s no votes in this (all parties), travel is not a vote winner so nothing much is done till there forced.

Just a quid campaign which would have started down this point made it to Parliament, (after 7 years of trying) only to be squashed at the last minute by the government powers stating “There is no benefit in this”. Keep in mind the first part of this was brought by the trade because the government had run out of money to protect you the customer, instead the government borrowed money from private finance and paid interest to these banks from your money so they could avoid putting that though parliament. Keep in mind as well there was 8 groups lobbing for and no one against.

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Darren, ABTA has been pressing the Government for years to replace the current confused and confusing situation existing in financial protection for travel arrangements. We are continuing to do so and also through the European Union. Criticism would be better directed where it belongs, at the Government for its refusal to take this issue sufficiently seriously. Regarding Freedom Direct, we issued clear guidance on our website to customers minutes after the company failed as well as issuing a press release. This is something that we and the CAA always do when one of our members fails.

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Nick is right, there was naff all wrong with the system until the EEC started interfering with the system. It wasn’t broken, but the EEC decided to fix it anyway. We need to take a step backwards and ask: Why do we need bonding? Why indeed? What other business has such complicated rules? If I buy a car, there is no bonding, or a new kitchen – and both of these are big ticket items. The reason is two almost unique features in travel. First, an awful lot of a famillies’ disposable income goes in one end and has to disappated to many people the other (unlike a car) and second, because travel has such appaling margins. (unlike a car). To counter the first, one needs trust and to counter the second one needs bonding; bonding is beautiful, it covers both aspects quite neatly.

ABTA did this very well. They came about because of the big ’60s crashes, (Fiesta, Omar Khay- thingy, etc) thought about the issues, considered the options and put together a scheme that, on balance, worked. This scheme was refined over time and during its time, no-one was ever left out of pocket.

Along came the EEC and with it (dare one say) certain vested interests, which did not like what they had to do, or more specifically, had to pay. Money talks, merit walks, as they say.

The answer is simple, to gain security, stuff the EEC and put everything back to pre-1992. “That model is broken” people scream. The models were not broken, it’s just that nowadays no-one is prepared to spend time checking the parts, reading the instructons and being careful with the glue. Some very, very wise and experienced heads put together what we had before; some of the real greats of travel and though it was a cartel, it was upheld by the Courts in 1982 – reason: it worked.

Travel makes no money. In a £200 holiday there is £10 for the retailer – any retailer. Even a £500, perhaps still only £40. Commission has gone, more or less, but that distribution cost remains, just shifted about a bit. More importantly, it has gone from a variable, to a fixed cost. The ever increasing cost of internet distribution and of maintaining a presence on the web could soon surpass anything like the old structures (what did some bloke say – how many millions on PPC alone?) That’s a stonk of a lot of £500′s – and no-one has gone anywhere, yet! Firms may say that removing commission has saved them money, but hey! the way things are going – they ain’t seen nothing, yet!

The issues of the high street network of the 1980′s and 1990′s remain today, as a local “summit” revealed – travolution – and have not changed one iota. It’s just that a new generation (who cannot be bothered to see what went on before) think all this stuff is “new”. It isn’t,; not one person (from what I read on your and other’s tweets – thanks, by the way, very helpful!) said anything new or really that interesting – just re-hashed stuff that had gone before – and, depressingly, had, in the greater part, been dealt with before.

Your post comes about at an interesting time; for in this case, the past worked.

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