Issues & Trends – June 2011

Deregulation: AFTA’s Westbury celebrates and placates

AFTA chief executive Jay Westbury has hailed the effective deregulation of Australia’s retail industry.

At the same time he has hosed down fears of an influx of shonky operators and assured that the adoption of a voluntary accreditation scheme will not lead agents into a “TCF Mark II” bureaucracy.

Westbury was speaking at this month’s annual general meeting of the Council of Australian Tour Operators (CATO) after state and federal consumer affairs officials cleared the path for a revamped travel agency regulatory regime.

Westbury said they had decided in favour of Options 1A and 2A of a consultation paper presented to their meeting on June 2 and these options substantially reflected the deregulatory approach proposed by AFTA.

Essentially that approach is to ditch mandatory state-based agent licensing, backed by national enforcement of Travel Compensation Fund (TCF) financial criteria, in favour of voluntary accreditation backed by Australian consumer law.

Westbury said the federation had won “the fight of our life”. He told CATO members: “We have had the most amazing win. We’ve effectively had a group of ministers agree to the self-regulatory scheme which has been AFTA’s preferred position for the past three years.”

He acknowledged fears that “every Tom, Dick and Harry” could be free to open a travel agency with the restraints of the TCF’s financial criteria removed. But he discounted the likelihood of financially unsound operators easily gaining entry to the industry – pointing to such barriers as IATA accreditation requirements and consolidator credit checks.

As for the potential of other, more powerful entrants, such as Australia Post, to join the retail travel fray, Westbury poured scorn on their ability to sell sophisticated tour arrangements. Suggesting they would be challenged to do more than sell Jetstar tickets, he commented: “We all know how hard it is to make a profit. If they think they can sell it (a Jetstar ticket) and make money, good luck to them!”

At the core of the new approach to travel industry consumer protection is a voluntary accreditation scheme.

AFTA is now working with the Tourism Quality Council of Australia to devise the minimum standards which its members will have to meet to qualify for use of the TQUAL trade mark (travelBulletin, April).

While TQUAL is a voluntary scheme, the Federal Government has provided $5.5 million over four years to fund a substantial advertising campaign to drive consumers to businesses displaying the trade mark.

• Westbury made it clear that AFTA will not be aggressively pursuing the $28 million of reserves held by the soon-to-be-disbanded TCF. The money has been contributed by travel agents and, seemingly, there is a case for it to be returned to them.

But Westbury said the money belongs to the state governments under the terms of the TCF trust deed and he spoke approvingly of a Queensland proposal for it to be used to compensate consumers affected by travel collapses. He denied that this, along with TQUAL accreditation, will create a “TCF Mark II”