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TCF paid out $17 million in six years but beware of ATAS

April 16, 2014 Corporate, Headline News No Comments Email Email

egtmedia59While Flight Centre and Mobile Travel Agents (MTA) have each announced they will join the Australian Federation of Travel Agents’ (AFTA’s) proposed Australian Travel Accreditation Scheme (ATAS), critics of ATAS are still far from convinced.

Announcing the MTA decision, co-managing directors Roy and Karen Merricks, both long-time advocates of the scheme, said ATAS was “the right way forward”.

“We have listened to and considered everything put forward throughout the entire consultative process and our decision to join has been made on our belief – and our MTA members belief – that the new ATAS scheme will go a long way to ensuring that the travelling consumer has the necessary protections against things such as insolvency,” Roy Merricks said. Sidebar-Article-Banner-250

TravelManagers, however, continues to have serious misgivings about ATAS, reiterating that many travel agents will lose out if Participant Insolvency Insurance (APII) is not made mandatory under ATAS.

The announcement of Flight Centre’s intention to join the proposed scheme has not altered TravelManagers’ stance.

“This announcement comes as no surprise, given Flight Centre has two directors on the AFTA board,” TravelManagers’ chairman, Barry Mayo, commented.

“It is much easier for a large company like Flight Centre to protect customers if required, but it is much more difficult for smaller and independently-owned travel agents to make the same claim without ATAS Participant Insolvency Insurance. Should an agency without APII collapse it will be consumers who will lose money.”

Mayo said Flight Centre had now joined AFTA in having failed “to address and provide reassuring answers to very simple questions consistently asked by TravelManagers”.

Typical questions waiting to be addressed are:

1.      In what way is “forcing ATAS members to take out Participant Insolvency Insurance” replicating the alleged “uneven playing field” that is supposed to have existed for the travel agent  industry under the Travel Compensation Fund (TCF)?

TravelManagers does not ask this question with the intention of trying to retain the TCF or burden Flight Centre with costs it does not deem as necessary, Mayo says. TravelManagers believes travel agents not wanting to take out APII will then choose not to join ATAS. This stance is based on improving the consumer ATAS’ value proposition, ensuring integrity of the travel agent industry and upholding the high standing Australian tourism is regarded for.

2.      How can Flight Centre claim the new system (ATAS) will “address issues of administrative red tape and provide a level and consistent playing field for the Australian travel industry at large” when no detail of APII cost is available, the conditions relating to this insurance are still unknown and there is little or no information about the other commercial safeguards AFTA has appointed Gow-Gates to bring to market?

Mayor says TravelManagers has to ask how likely is it that the administrative red tape for many travel agents that Flight Centre and AFTA deride will simply transfer from the TCF to Gow Gates/IPP?

3.       What qualifications does AFTA currently have to undertake a ‘purposeful’ quality assessment of intending participants in ATAS to ensure consumers are protected by ‘meaningful’ high standards of business and professional conduct? Does AFTA truly believe the consumer will view this as a better value proposition than an ATAS member having Participant Insolvency Insurance?

TravelManagers is concerned AFTA has the frontline travel consulting experience in its ranks to assess the capability of either long established travel professionals or new entrants encouraged to open shop by less stringent financial requirements to deliver the service quality and professionalism that it claims the ATAS brand will deliver. There is already a very low cost of entry and even these are set to virtually disappear, making the travel agent industry vulnerable to damage caused by inexperienced, under-capitalised or unscrupulous new entrants.

Mayo is of the opinion that State and Territory Ministers responsible for consumer affairs do not recognise the potential size of this issue in terms of consumer dollars or disrupted travellers. Over the most recent six year reporting period (2007-2012) the TCF paid consumers in excess of AUD 17 million for claims received from customers of agents who would have been unable to travel due to travel agent collapse.

“If the seriousness of this issue is not recognised by State and Federal governments it could be argued that they are abdicating their responsibilities for upholding consumer rights,” Mayo says. “Their lack of support and visibility in ensuring that ATAS has some form of consumer protection is a real concern.”

TravelManagers is urging all travel agents, particularly owner/operators and small-to-medium-sized agencies to speak up now to protect their businesses.

“Without more public support to challenge the current ATAS thinking, ATAS as proposed will become a flawed reality in less than 11 weeks,” Mayo says.

“People should be contacting AFTA, writing to trade media in the travel industry, their MP and local State government minister responsible for consumer affairs or by all means contact TravelManagers on atas@travelmanagers.com.au”

Edited by : Peter Needham

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