Posts Tagged ABTA
Why Travel is Failing it’s Public
Posted by murray in Latest News on May 5th, 2009
After writing about stabiliser, which may be a solution to the ills we face, we should take a look at the problem. Here, I am thinking about the recent collapse of Freedom Direct and wish to pose some questions as well as areas where travel is clearly failing to provide reassurance.
Travel is a funny old world and comes complete with it’s own language, it’s own sayings and it’s own way of doing things. In many ways, it is unique; one of which, is that action to any request is usually required now. It’s no good getting around to sorting something out next week, if the client is stuck at Amsterdam airport and should be in Paris. The trouble is, the travelling public are simply not au fait with travel’s unique language and foibles. What is clear, however, from many of those that booked on Freedom Direct is that they are genuine folk from all walks of life and not all from a strata of society that can grasp the basics of rocket science in 10 seconds flat.
One thing the EEC managed to bring was chaos out of order and between them, the fumblings of HM’s Grateful Government, Trading Standards and the FSA, they have managed to create an impenetrable forest of systems and procedures which leave even travel agents dazed and confused. Heavens knows how Jo Public is supposed to understand it – so in turn, Jo Public is left dazed, confused and above all, angry. Very angry.
What do we need?
1. An understaning of what can happen if a modern agent goes down. In the past, we have had to deal with operator crashes and airline failures, where things have, on balance, been fairly clear cut. There is a side issue of bonding of scheduled airlines, but that is a debate for another place. We have had travel agents go down but what we have not seen, is large-ish online agents go down. What we are not prepared for is, say – What would happen if Expedia went down? Or Ebookers? This can never happen, of course. Just like Rolls Royce cannot go bust or Coca Cola cannot make a major cock-up with bottled water or the banking system cannot fail. So let’s get real, can we cope with a major online failure? No. The powers that be need to stress test their systems now.
2. A clear route map for those in trouble. ABTA deals with their bit, the CAA theirs and if one is lucky, another agent comes along and tries to pick up the pieces. Trading Standards could not give a rancid roadkilled rodent, the Financial Standards Authority now holds, in the eye of the Public, about as much respect as one may give, say, a small piece of green goo and the credit card companies try and fob people off by telling Jo Public they should claim from ABTA, the CAA or a little man that runs a road side cafe just off the A34. In his blog, Alex Bainbridge suggested that we (I hope, meaning the travel industry) should make more of an effort to help those who get into trouble, at least to evaluate their booking paperwork and point people in the right direction. This, he suggests, may be a task that could be undertaken by the newly retired or the newly unemployed, though I think the former may be better – in their circumstances, Jo Public, I am sure, would feel better if they were asking a “wise old head” .
3. Make sure that such systems that do exist, work. Certain firms bask in their membership of ABTA. Yet when the chips are down, they seem to forget this. ABTA, inter alia, winds up having to beg, cajoal, shout at and bang heads together in order to make the system work. This is not good. If you accept the mantle of respectability any upright trade body holds, one must act and abide by the precepts that mantle gives – and at all times. And especially when the proverbial hits the fan. One hotel booking company I saw in passing, displays ABTA membership on its front page – even a travel industry award – yet you have to route around to find the number. That said, it is an improvement. Bonding is the big issue. Yet who is bonded and for what? To whom? IATA bonds agents, but that is only to make sure that the airlines, not Jo Public, get their dosh. Advantage bonds agents for their CAPS (a direct debit system for agents to pay the tour operators) which indirectly holds a fair chunk of money which can help Jo Public. ABTA bonds, the CAA bonds – the list goes on.
4. Explain in simple English and keep procedures simple. The travel business needs to learn English and a version of English which all can understand. This is, of course, closely tied into number 2, for I have heard it said that instructions on what to do and how to do it, have been issued by all sorts of people – but a lot of it is in travel speak; starting with “a package holiday” – very few, outside (and by all accounts, some inside) the travel industry understand what a “package holiday” is and more importantly, how it is presented to them. People have received a travel agents account for, say an Easyjet flight, yet that money has been debited direct from the clients card by Easyjet, not the agent – we in travel know what is going on, but as far as many are concerned, they are wondering how Easyjet has got their credit card details (Easyjet have done nothing wrong, by the way) Since the demise of ABTA as the “WYSIWYG” one-stop-bonding-shop, Jo Public has to become a travel agent – and quite a skilled one, to boot – to work out, even, whom to call first. It is no good writing reams about catergory this and category that – asking a member of the opublic to see if they hold a holiday booking where Freedom Direct “….acted as agents for other ATOL holders” is the same as asking me if I could go and fix the CERN proton speeder-upper, thingy, device. Keep it simple and clear.
5. Restore Honour. Very important. Company fails and suddenly, up pops the same outfit under a new guise as if nothing had happened. Not good enough. If you fail, you fail. Certain firms have failed and some people treat such failure as no more than an occupational hazard. This is, from an industry point of view, less than constructive and demonstrates a total lack of sensitivity. Those that fail should be required, freely and voluntarily, to help sort out the mess. To man the telphones, to explain. The trade bodies that do exist, do not have enough staff to cope with big, complex failures (see “stress testing”, passim) but what they should have – what we in the industry should have – is a voluntary system that can click into place to, at least, explain to those that have been caught up, where they should go for help. If required, then those in the travel industry that do help (including the frontline troops of the failed company) should be paid a fair sum and such money should come from – and be part of – any bonding system.
6) Bonding should come, once again, under one body. For everything. The old stabiliser system was, effectively, a one-stop-shop. Though I bang on about getting back to this old system which worked, I also recognise that to do such may not be practical. We must, though, co-ordinate bonding under one body (ABTA would be the obvious one). Bonding must be complete and we in the travel industry must stop trying to find ways around it. One of the complaints about the old Stabiliser system was the high entry barrier and many of the larger operators objected to the large bonding sums required. People sort ways out – or rather -ways around it. Some even threatened to leave some trade bodies, if those bodies did not do things their way. This was and is, despicable. The level was high because firms were dealing with large sums and had low margins. Those large sums (as I have said before) would be a hard working famillies biggest single annual outlay. Protection for that money, that outlay, is not something that should be “got around”.
The above may not be a pancea, but it may be a start. As we have progressed the road of regulation since 1992, we have branched out, turned around and that wide open motorway has withered to become tiny lanes through the backwaters of the industry. We do not need more regulation, or laws or instruction. The pieces of the puzzle are already on that broad and open table, we just need someone to fit them together. To understand them and to translate them for a public whose respect and tolerance for an industry that was once hailed as a beacon of self-regulation, has sunk beneath a mire of verbage and confusion to a shameful level.
Getting Travel Stable
Posted by murray in Latest News on May 3rd, 2009
I don’t really “do” holidays. I used to, but nowadays I just stick to business travel. It’s easier and involves none of this reasearching and quoting only to find the client has gone off and booked somewhere else ‘cos it was n pounds cheaper. Fine. Do your own research or get someone else to put in quite a few hours work for nothing.
The failure of Freedom Direct heralded something new, that being an internet travel company going down the tubes. Why this is new, is because, unlike days of yore, there is no immediate ability to achieve face to face contact – something which clients who stood to lose their holidays would much prefer to have. If a tour operator went bust, you marched off down to your travel agent and were able to talk to someone. You could get some sort of satisfaction from knowing that a real human was dealing with your plight. An internet travel outfit may be miles away from you, even in another country and there is no “local” shop to go to. True, people used to book direct before the internet, but these were with companies whose name you did see in the “local” shop and this brought a sort of comfort. The plight of some of those caught in the FD collapse is well reflected in the travel-rants blog.
So, what can be done to get some sort of stability back? A while back (pre-1992) and before the EEC started their usual business or running around, identifying problems that did not exist, analysing them incorrectly and then applying wholly inappropriate solutions, we had something called “stabiliser”. Stabiliser came about in the early years of mass travel after a company called Fiesta (and a few others) went bust in about 1960- something, stranding many holdaymakers abroad and costing many others their holidays, without any form of redress. Why this was important, was because the annual holiday represented a huge chunk of a families’ annual outgoings – in fact probably the largest chunk of peoples’ annual outgoing. Secondly, it was also realised that in holiday travel, you take vast great sums of money and sit on them for quite a while. Given the tight margins, occasioned first, by the desire to offer cheap holidays to a mass market to get the market going and subsequently the “Oh! Dear! We have done this cheap bit rather well and now can’t get the prices up to a realistic level” – wise heads at ABTA realised (rather than the Government of the time, realised) that something should be done about this – PDQ.
What they came up with was “stabiliser” and it worked like this: In order to sell an inclusive holiday, that is, a hotel and a charter flight and all the gubbins together in one lump, you must supply a bond. In order to put together all the gubbins, you must supply a bond. And everyone must be a member of ABTA. An ABTA agent may only sell ABTA bonded opertors and ABTA bonded operators may sell direct or only through ABTA bonded agents. And do you know what? It worked! You did not have to worry about anything, how your holiday was booked, with whom – it could be with a big operator or through a bloke who also ran a small fish and chip shop just south of Hull, if they were ABTA – you were covered.
ABTA policed this vigorously and with real teeth. Failure to perform according to the Code of Conduct meant fines – some quite hefty. No pay and you were slung out and bang went your livelehood. The public were educated that the ABTA logo meant what it said – security – and even though some notable crashes such as Court Line, Intasun and Exchange travel nearly broke ABTA, the trade rallied round and no holiday maker ever lost out. Ever. This was WYSIWYG protection.
“Hang on!” said the Office of Fair Trading, “This is a cartel!” Yes, it was but to so high an eminenence had the cartels’ credit been advanced that the Court of Appeal, in the mid-1980’s ruled that it was in the public interest. It was a cartel that you could, however, get into. It was not an exclusion because people were black-balled – you had to fulfill certain criteria. You had to have a set amount of fixed assets and or capital, you had to demonstrate profitablility, you had to acheive certain standards in your shop or operation, in terms of trained staff and qualifications, you had to make returns to ABTA showing your trading situation and ABTA could (and did) come around to you and check – and unlike, it seems, the FSA, the ABTA people knew what they were looking at. Indeed, even the House of Commons highlighted ABTA’s governance as a shining light of trade self-regulation. Yes, the system worked and it worked very well indeed.
There was a regional system of elected management within ABTA with elected members who were, in the main, our wise heads and some of the greatest luminaries of travel. Some vested interest moaned because bonding was a large cost, which was strange, because the level of you bond reflected how well you ran your business and how stable it was (IATA, at that time, before IATA became an outfit that makes the Stalin regieme look saintly, did pretty much the same thing) and the barrier to entry was high (why not?).
There was another issue that, once a tour operator was a member there was no guarantee that all ABTA agents would sell your product, just that they could . Some moaned that that was unfair. Here, the simple point remained, if your product was good, agents would sell it, if it wasn’t….
There was none of this nonsense about what is a package, what bit is covered by what, who is responsible for what and so on and so forth. One agency for bonding, one point of contact. It was simple, it was effective. Hell! Even the airlines liked it! For selling their discounted air products, they knew they were dealing with (even though they did not come under the ABTA banner as such) a stable and secure agent.
Anyway, we are stuck with the unholy mess we have now, because the simple maxim “If it is not broken, do not try and fix it” was for the EEC and others, to tempting to resist. We could look at a return to stabiliser but there is not, yet, the political will and it would mean telling Brussels to go in the general direction of away. Further, the wise heads of travel have in many cases passed over and what we are left with are people within travel whose motivation may not be so widely directed towards the good of travel in general; more to personal profit and interest. Travel lacks Statesmen; youth took apart the past and threw away the instruction manual. Progress is good and neccessary, new ideas are welcome and we need them, but perhaps we should not go from “new idea” to “full implementation” in less than 5 nanoseconds, not when we are responsible for so much, for so many.
