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TravelManagers Calls for Straight Talking Over ATAS Issues

April 11, 2014 Mobile travel consulting No Comments Email Email

The Australian Federation of Travel Agents’ (AFTA’s) insistence that under the Australian Travel Accreditation Scheme (ATAS) Intermediary Insolvency Insurance be voluntary is of utmost concern and remains a high priority for TravelManagers.

Footsteps in AsiaTravelManagers has been very open from the outset around its concerns and reservations of ATAS having voiced these concerns directly with AFTA, TravelManagers also feels it is important to engage and encourage further industry discussion on ATAS.

“TravelManagers believes robust discussion and debate is required to deliver real value to both the travel industry and the consumer. We understand and support ATAS is the future, however we do not want to see a flawed ATAS weaken the consumer’s perception of travel agents and their confidence in organizing their travel through a travel agent. We do not feel AFTA has provided satisfactory information in response to concerns and questions. AFTA tends to generalize and criticize with the absence of addressing specific concerns so we have little option but to continue to raise these concerns in a public forum,” says TravelManagers’ Chairman, Barry Mayo.

Last week AFTA issued an ‘AFTA Update’ editorial claiming that TravelManagers concerns regarding ATAS were baseless and in effect trivialising the issues TravelManagers had raised as concerns for all travel agents. TravelManagers respond to AFTA’s comments made in the ‘AFTA Update’ column of the 01 April issue of Travel Daily as summarized below:

1. “It is time to put to bed once and for all the claims and assertions being made by TravelManagers.”

At no point through the AFTA Update is there an argument with substance that demonstrates that any claim or so-called assertion is unwarranted, without support or reason. It’s easy to insinuate inaccuracy or unreliability however such insinuations need to be presented with meaningful evidence.

2. “The assertions made by TravelManagers that ATAS would bring about a back to the future approach … are misleading and false.”

TravelManagers does not make any reference in any correspondence to ‘going back to the future’. Likewise at no stage during the AFTA Update are any of TravelManagers claims demonstrated to be misleading or false. Instead TravelManagers claims are rejected without any evidence to substantiate that they are false.

3. “Insolvency insurance should be mandatory brings to mind … the Grim Reaper of Small Business”.

In TravelManagers opinion, all travel agents will suffer however it will be the small to medium size travel agents who have the most to lose if publicity results from travel agents defaulting and not providing services and product that consumers have paid for.

4.  “ATAS has been designed to underpin and provide a third party endorsement based upon professional standards”.

TravelManagers asks the question, which endorsement will be most effective should consumer media coverage focus on a travel agent collapse and consumers losing their money and are unable to travel?  Is it “an ATAS accredited agent is a trusted professional travel agent, who delivers quality service to consumers” or is it “ATAS accreditation guarantees the viability of your travel agent?” Is there any reason why this could not be further enhanced by combining these two claims into one?

5.  “ATAS is putting in place … a future proof solution”.

There has been no evidence to date that demonstrates ATAS is future proof. The question has to be asked, how can it be future proof when AFTA is on record saying the scheme will change later if the absence of consumer protection from travel intermediary collapses resulting in bad publicity makes this necessary?  TravelManagers strongly believe now is the time for robust discussion and debate to ensure an effective scheme is created initially whilst there is still time.

6.  To suggest that participants of a voluntary scheme be forced to take out an insurance cover which protects the consumer against their own insolvency … gives rise to the beginning of the end.”

TravelManagers view that the beginning of the end for small business will be the collapse of other travel agents resulting in consumer losses which will tarnish the integrity of all travel agents and result in consumers losing confidence in making payments to travel agents.

7.  “ATAS is a voluntary scheme”

TravelManagers wants to know why ATAS would not insist that Travel Agent Insolvency Insurance be mandatory when participation is voluntary? If an agent big or small does not want to provide the consumer with a guarantee of financial security they would have the choice of not joining ATAS, which was not an option under the current licensing/TCF regime.

8.  “Surely the scheme should be launched and given the opportunity to succeed”.

TravelManagers has been an advocate for an effective system that is the best it can be, from its inception, which can be achieved through positive debate and discussion. It does not make sense to launch a scheme that is flawed and puts travel agents’ businesses unnecessarily at risk when it can be avoided and save potential suffering for both consumers and the industry.

9.  “ATAS is not a replacement for the TCF. Why would the industry … impose rules and regulations that simply put back in place what was already there?”

TCF had its faults and TravelManagers has never disputed this. However it served the industry well in minimizing travel agent collapses and protecting the consumer from loss of monies and not being able to travel. The licensing / TCF regime was not voluntary whereas ATAS is voluntary and licensing will no longer exist. Therefore if Travel Agent Insolvency Insurance is a requirement to obtain attain ATAS accreditation, agents who do not want to purchase Travel Agent Insolvency Insurance can choose not to join ATAS and still operate. This is not replacing what was already there and importantly differentiates between an ATAS accredited agent and a non-ATAS accredited agent providing the consumer with greater clarity as to when their money is protected.

10.  “There is no good argument to making insolvency insurance mandatory as all it would do is unfairly burden small agencies”. 

TravelManagers strongly believes all travel agents will be at rick however it will be the smaller agents that are most endangered if ATAS does not insist on mandatory Insolvency Insurance. If an agent does not want to have insolvency insurance they have the opportunity to avoid ATAS accreditation. If there is no consumer protection one must question ATAS’ value proposition and why would any travel agent pay an annual fee?

11.  “If a large travel company can trade … on the back of its consumer brand and marketing and see no benefit in third party endorsement offered by ATAS, they are much less likely to join the scheme” 

Is this the crux of AFTA’s opposition to mandatory insolvency insurance? Earlier in the same Update column AFTA asserted mandatory insolvency insurance is the ‘Grim Reaper of Small Business’ insinuating that this is a cost imposed on small agencies at the same time asserting that “ATAS has been designed to provide a solution particularly for small travel agencies”. If a large travel company e.g. Flight Centre considers itself immune to other travel agency failures, it can trade on the back of its brand and marketing and see no benefit in ATAS endorsement then that’s something we all have to live with. AFTA has a responsibility to all travel agents and should not be unduly influenced by large travel companies who may have indicated they don’t need third party endorsement by ATAS and are not prepared to purchase insolvency insurance. The possibility of a large travel company backing its brand and marketing against the cost benefit of insolvency insurance should not be allowed to compromise the effectiveness of ATAS and put the rest of the industry in jeopardy.

12.  “The notion of mandatory insurance upon a voluntary scheme smacks … of an unlevel playing field” 

Is compromising the effectiveness and clarity of ATAS for consumers and the industry a level playing field? AFTA both in its Update column and in previous communication has, in TravelManagers’ opinion, perhaps unintentionally mislead the industry. The Travel Industry has  blindly trusted AFTA’s assertions because it’s our industry association and there is the belief that AFTA has every members’ interests at heart and would not do anything to jeopardise the travel industry’s integrity and reputation which has been largely unsullied for the past 28 years.

TravelManagers hopes that by continuing to speak out AFTA will play the ball, not the man and address the unanswered issues surrounding consumer protection and industry integrity to ensure an effective ATAS’ value proposition is launched on 01 July 2014.

“TravelManagers has always advocated for the travel agent community to be actively discussing the pros and cons of ATAS with the management of their agency group and with AFTA itself. With less than 12 weeks until ATAS becomes a reality, it is critical AFTA addresses these issues appropriately,” says Mayo.

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