Perspective – October 2013

A very good deal

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Ian McMahon

ATAS and ‘old thinking’

ADDRESSING this month’s Magellan Travel Group conference, AFTA chief executive Jayson Westbury warned against “old thinking”.

He was talking about the transition from the old regulated system of agent licensing in conjunction with the Travel Compensation Fund to the voluntary ATAS (AFTA Travel Accreditation Scheme).

And no doubt he had in mind several of the critics who have emerged in recent weeks harking back nostalgically to the days of the TCF and/or shunning ATAS.

Respected industry elder statesman, TravelManagers chairman Barry Mayo, lent his prestige to the criticism, asking: “Without accreditation being mandatory, what will be the effect on the travel agency community as a whole, when there is a failure or eventually a number of failures?”

And “What does post-TCF mean for the consumer? How will it impact them and how will it influence dealing with a travel agent?”

Westbury counters that the TCF has scarcely influenced consumers’ decisions to deal with travel agents, citing the PricewaterhouseCoopers consumer insight survey that showed 97 per cent did not know the TCF existed.

He argues that it is “old thinking” to be pre-occupied with whether or not your competitors go broke.

“Instead you should be thinking about how you can win their customers,” he says.

Then there is David Speakman, the internationally successful UK-based entrepreneur who runs Travel Counsellors. He has made it clear that his organisation will be offering its own protection against third party collapse.

Westbury makes it clear that Travel Counsellors is perfectly entitled to do so. It is the approach adopted by Travel Counsellors in the other markets around the world. It has been successful there and can be just as successful in the now deregulated Australian market. So what?
On these issues, I find Westbury convincing.

At the same time it must be said that Mayo has made some telling points about the lack of detail so far available on ATAS. But this is still a work in progress so let’s suspend judgement for the moment.

There is also the cogent case for AFTA to negotiate an insurance deal on behalf of its members argued by Independent Travel Group managing director Tom Manwaring.

This is against the background of the two majors, Flight Centre and JTG, potentially gaining an edge over competitors by offering customer guarantees backed by their balance sheets. (It’s worth noting that the TCF went broke in 2001 because it accepted a guarantee backed by Ansett’s balance sheet – but we’re talking about consumer perceptions here.)

Westbury counters that any group of agents can provide its own guarantees to consumers, perhaps backed by insurance. The issue will become clearer when insurance company, IPP, provides details of the cost and extent of its cover.

And he argues that an agency group rescuing clients of a collapsed retailer has benefits that dealing with a faceless bureaucrat does not have.

What all this boils down to is that Australian travel retailing will be less regulated, as in most other countries. Competent travel agents survive and thrive in those markets. Australian agents will surely be able to do the same.





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