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AGENT DEREGULATION: THE COUNTDOWN HAS BEGUN And for ATAS agents there are exciting prospects ahead, assure AFTA and CATO

Issues & Trends – May 2014

AGENT DEREGULATION: THE COUNTDOWN HAS BEGUN
And for ATAS agents there are exciting prospects
ahead, assure AFTA and CATO

By Ian McMahon

ATASON your marks, get set … the countdown to the July 1 deregulation of Australia’s travel agents and tour wholesalers has begun with their industry bodies taking an upbeat, optimistic view of an “exciting” future .

The countdown got under way with a final round of workshops detailing the voluntary AFTA Travel Agency Accreditation Scheme (ATAS) and a flurry of agents signing on even before the last workshops were held.

The workshops were packed and additional sessions had to be scheduled in Sydney and Melbourne, signalling that agents are now acutely aware they have little time left to make crucial decisions on how they will adapt to life after licensing and the Travel Compensation Fund.

AFTA chief executive Jayson Westbury depicts deregulation as an era where agents, unfettered by government red tape, will have their future in their own hands with the potential to drive consumers through the doors of accredited bricks and mortar outlets.

With such agencies steadily declining in numbers, Westbury argues “the only long term solution” is to provide them with “a regulatory level playing field” so they can compete with online rivals including supplier-direct websites and global online travel agencies.

And he claims ATAS will enable them to compete very effectively.

Writing in this month’s AFTA View column (page 11), he declares: “ATAS is about leading an industry and supporting an industry in a way that goes well beyond just regulating it. ATAS is voluntary and this is what will set those who choose to join apart.

“As the onslaught of supplier-direct and overseas OTAs heats up, the good thing, the only thing, the most professional thing is ATAS.

“ATAS will elevate travel standards and focus at every opportunity on telling consumers why accredited travel agents are superior to other channels.”

Council of Australian Tour Operators general manager Peter Baily was fully supportive, telling travelBulletin: “Our industry has been given an exciting opportunity to self-regulate. We, as an industry, have got to get behind it (ATAS) and support it.” He expressed confidence that CATO’s mid-June annual general meeting will endorse a proposal to require ATAS accreditation as a condition of CATO membership. There has also been a strong tide of support for ATAS from the major agency chains along with a mixed reaction from the relatively small home-based agency sector.

Of the three main home-based agency groups, MTA is a strong ATAS supporter; Travel Counsellors will not be signing on and will instead offer its own form of consumer guarantee; and TravelManagers, whose chairman Barry Mayo has been an outspoken critic of aspects of ATAS, is awaiting further detail before making a decision.

Mayo was just one of those asking critical questions at the final round of workshops and, while AFTA’s public relations consultants reported “overwhelming” support from workshop attendees, it is undeniable that there were undercurrents of dissension among numbers of them – albeit many, perhaps most, are likely to apply for ATAS accreditation in the end.

Some of the criticism seemed quibbling – like, for example, comp-laints that insurance broker, Gow Gates, is charging a $100 application fee to agents seeking quotes for the insurance products it is offering in conjunction with ATAS accreditation.

The objection was shot down in flames at the Brisbane workshop when an agent pointed out that he, like most of the agents present, charged itinerary preparation fees of up to $250.

A lot of dissension centred on nostalgia for the soon to be defunct TCF system and the assurance it gave consumers that their money was protected when they dealt with a licensed agent.

As one agent put it to travelBulletin during a workshop break: “I really wish we could just stick with the old TCF.” When travelBulletin suggested he was after a “nanny state”, he replied: “This is one instance where I’d like to have a nanny state.”

What particularly concerns those who hanker after the old TCF regime is the reputational damage that will be done when an accredited agent suffers financial collapse. They believe the fall-out will disproportionately hurt small independent agents.

As boutique Tasmanian agent Geoff Batten (Adventures Unlimited) put it to the Melbourne workshop: “If someone goes belly-up, consumers will be on social media bad-mouthing agents and that will disadvantage boutique agents and advantage major chains”.

He added his voice to those – notably TravelManagers’ Mayo – calling for ATAS to mandate Travel Agent and Intermediary Failure Insurance (TAIFI) as a compulsory requirement of ATAS accreditation.

AFTA general manager accreditation Gary O’Riordan said making this insurance compulsory would increase the compliance burden and assured that ATAS has briefed professional public relations consultants, skilled in brand risk management, to handle issues that may arise from an agency collapse.

Issues of substance raised at the workshops included the lack of information on insurance and the amount of money that will be available to fund the marketing campaign planned to drive consumers to ATAS agents (See separate story).

A reassuring summary of what lies ahead for Australian travel agents came from Deb Duncan (Travel Revival) who has worked in both the US and the UK travel industries as well as owning her own travel agency and working for Travel Counsellors in this country.

She told the Melbourne workshop that the Australian travel industry has been “very governed” and while this provided something of a “security blanket”, it has also been “very restrictive and expensive, too”.

She predicted a competitive advan-tage for agents with ATAS accreditation supplemented by insurance and, based on her UK and US experience, she believed it likely they would be able to recoup the cost of insurance from clients.

At the same time she warned that the law of unintended consequences could apply. Travel insurance sales in the UK dropped substantially in the wake of agents taking out TAAIFI policies, she said.

 

 

   

 

 

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