TravelManagers has reacted critically to sentiments expressed by AFTA marketing and communication manager, accreditation, Jo Tralaggan, about the future of the travel industry.
Tralaggan addressed the Travel Daze seminar at the Belvoir Street Theatre in the inner-Sydney suburb of Surry Hills. See: Confidence in agents high says AFTA accreditation chief
“The reason confidence in agents is high is the result of accumulated hard work and professionalism to which the large majority of travel agents operate at,” TravelManagers chairman Barry Mayo commented.
“In addition, the previous 28 years has provided consumers surety of their funds paid, which resulted in little or no negative consumer media reporting. Whilst this consumer confidence is currently high, it is not guaranteed to continue if the high profile agency failures of recent months continue.”
In particular, Mayo questions Tralaggan’s assertion that failures of some travel agents over the past 18 months have failed to damage the reputation of the travel industry, a finding attributed to research by AFTA.
“There are numerous comments on social media that would challenge this statement,” Mayo said.
He questioned claims that the industry’s reputation has been unscathed, “in particular when it is referenced without any explanation of the research it refers to. How many customers and potential customers will now book their travel arrangements direct with individual suppliers instead of obtaining the professional advice and benefits a travel agent will provide?”
The real risk to the travel agency community, Mayo warned, is that increasing numbers of people will lose confidence in travel agents and opt to book online or directly with suppliers.
“It will be future bookings that will be affected and particularly when the impact of negative press in the consumer realm starts to become apparent,” Mayo said.
Focussing on Tralaggan’s comments about consumer thinking, as evidenced by AFTA research, Mayo asked for the evidence.
“If AFTA is going to rely on research to justify its position it must be prepared to openly share their research. It’s inappropriate to make claims without referencing the research findings. If such claims are to be accepted as credible they need to be substantiated at the very least with detailed explanations of the results – when and how was the research conducted, what questions were asked and in what context were they presented, who was commissioned to undertake it and how many consumers responded together with responder demographics.”
Mayo agrees with Tralaggan that consumers make a high emotional investment in their holiday and want a level of certainty that they will receive what they had booked and paid for, but he has a differing opinion on Tralaggan’s supporting comment that “Our research also shows that this certainty is closely tied with accreditation. Consumers feel more confident that they can rely on businesses with accreditation.”
Mayo says: “This sentiment is only true if that accreditation delivers tangible value and surety for the consumer. Unfortunately this has not been the case for many consumers who have experienced monetary loss due to recent travel agency collapses. Whilst the majority of these travel agency collapses were not ATAS accredited, the fact remains there were two agencies that were ATAS accredited.”
Mayo contests the validity of Tralaggan’s statement that the newly deregulated environment provides travel agents with “the flexibility to conduct business in innovative ways to meet the needs and purchase behaviours of today’s modern traveller and provide the emotional certainty that they desire”.
“I invite AFTA to provide some tangible examples of how the deregulated environment has allowed agents to conduct business in the manner described that they couldn’t do previously,” Mayo says.
He challenges claims that last year’s removal of licensing and the introduction of ATAS had freed the travel industry of “slow moving, out-of-date, difficult-to-change, government regulation” and replaced it with industry-led accreditation “that is commercially rational, nimble, free-footed and absolutely fit for purpose”.
How this has been put into practice to benefit travel agents, the industry in general and most importantly the consumer? Mayo asks.
Mayo also takes issue with Tralaggan’s observations that: “Our industry has come from a compensation mind-set. As a result, in ATAS’ first year we observed that some industry members struggled with the change. The most obvious struggle was to look from consumer’s perspective and understand how they book travel…” and “the fact that some within the industry saw no value in ATAS unless tied with compensation has certainly been a challenge”.
Mayo says: “It wasn’t “the change” or “compensation mindset” that industry members struggled with. It was the reasons given for the change, the late advice about ATAS Participant Insolvency Insurance with its cost, and most importantly the governments’ failure to ensure an effective alternative form of consumer protection was in place before abandoning the Travel Compensation Fund (TCF).
“This was at a time when the state governments were holding about AUD 34 million in funds contributed by the travel agency community and through deregulating the industry delivered an accreditation scheme inferior from both consumer and industry perspectives to what had previously existed.”
TravelManagers has been an advocate for security of consumer funds to be included as part of ATAS. It asks why AFTA believes a compensation component to ATAS does not add to providing validity and assurances to consumers that its members are trusted, expert, professional and reputable.
“I am sure the hundreds of customers out of pocket due to recent travel agency collapses would wholeheartedly support a compensation component being part of the accreditation, and if this was a point of differentiation between agents actively seek out an accredited travel agent,” Mayo says.
Mayo says Tralaggan’s comment “If you want to attract the consumer (after all it is all about sales) then you need to understand the consumers purchase behaviour and appeal to them” that bemuses him the most.
“What AFTA fails to recognise is that understanding the customer is the most important asset for any business,” he says.
He points out that many members of the industry have been successfully in business for decades and have prospered by understanding their clients’ needs and then delivering.
Mayo believes there is a disconnect between AFTA’s view of a travel agent and reality, as highlighted by the claim that “Agents see themselves as advocates for their customers, someone who will always be there at the other end of the line, trying to get the best outcome for them. However, our research shows that for the consumer, the ability to help during a trip is important, but this is secondary to helping create the experience for the consumer.”
Mayo says: “We in the industry know the immense value a travel agent provides its clients in co-creating the most incredible personalised holiday or travel experience, which is definitely much more than just being there at the end of the line to help out. Ask any client however who has experienced the service of an agent during a natural disaster or a terrorism impacted disruption, compared to somebody who booked online or direct with an airline, and they will quickly tell you what their agent being there at the end of the line means to them.”
As for AFTA’s stance on educating the consumer and having them “understand that only qualified travel agents can use the ATAS logo”, Mayo has the following comment:
“I am aware of agents who have chosen not to seek ATAS accreditation not because of cost but because they question its value without some form of guarantee for the security of consumer funds. These non-ATAS agents, in my experience and understanding, are no less qualified or professional than their ATAS accredited counterparts. This obviously doesn’t apply to all non-ATAS accredited agents but should not be ignored to the detriment of these businesses.”
Mayo believes it is unlikely the state governments will admit they were wrong in closing the TCF prior to ensuring an effective and alternative form of consumer protection was in place.
“My greatest fear is that the remaining AUD 25 million in TCF Trust funds distributed to the governments in the New Year will be swallowed up and used as general revenue and that, as consumer losses continue to mount and negative media coverage increases, the governments will eventually in the next couple of years insist on an alternate plan involving some form of compulsory insolvency cover for every agent, at a cost far exceeding what the TCF was costing.”
Mayo urges the industry to lobby the government to ensure these AUD 25 million in funds are used for what they were originally intended for.
“Does it not make more sense to use the residual TCF Trust funds that has been paid in by the travel agent community to reinstate a more robust financial oversight of the industry and provision of consumer protection sooner rather than later? I would have thought so.”
Edited by Peter Needham