A big week calls for a different approach to the Weekly Wrap. In this edition, Adam Bishop looks into the proposed CATO/ATIA merger while Damian Francis recaps the budget.
THE MERGER OF THE DECADE?
by Adam Bishop, Editor, Travel Daily
This is a merger, not a takeover.
That was the clear message from the boards of the Australian Travel Industry Association (ATIA) and the Council of Australian Tour Operators (CATO) this week.
In what was a mammoth announcement, the two groups have unanimously agreed to merge, pending a member vote, in a bid to create a powerhouse association with what they described as a stronger, more unified voice to government on key issues facing the industry.
As ATIA Chair Christian Hunter implied in his commentary around the proposal, the travel sector’s crowded advocacy environment has the ongoing potential to derail industry messaging if it lacks proper coordination.
“For too long, the sector has spoken on the same issues from different platforms, and government has been direct with us about what those costs are in terms of collective influence,” he said.
The old expression about a camel being a horse designed by a committee comes to mind, and it certainly rings true that governments find it much easier to fob off the pleas of one or two smaller groups versus a combined entity that wields greater political heft.
Critics will also no doubt point to the reality that within larger groups, it is often the smaller players who get left out of the war room anyway.
Whatever your view on the proposal, it appears both groups have gone to great lengths to ensure the industry understands that this is a merger, not an absorption, with steps taken to ensure CATO’s DNA and brand remain alive and well if it goes ahead.
So let’s take a closer look at what we know so far.
What a merged group will look like
CATO will become a division underneath the ATIA umbrella, where it will retain its own brand, board, committee, and marquee assets like the Touring Academy.
The body will also continue to run its branded events calendar, which includes the high-profile Christmas and International Women’s Day luncheons. ATIA CEO Dean Long stressed that these gatherings will remain CATO-branded and will only receive more investment moving forward, not less.
Five members of the existing CATO board will transition across to a new committee under ATIA, with four additional members to join after its AGM in June. The chair of that committee will also have a guaranteed seat on the ATIA board – chosen by the committee – with the choice unable to be vetoed by ATIA. For any doubters about the longevity of such a move, CATO will be protected and enshrined in the ATIA constitution to ensure the structure cannot be easily unwound.
No future ATIA CEO or chair will be able to jettison the brand under the measures, providing an important layer of security for those who may be sitting on the fence or have long memories about what happened 26 years ago. CATO previously operated as part of ATIA (then AFTA) under the name Australian Council of Tour Wholesalers, before the two organisations in 1999 split following constitutional change at AFTA which dissolved its divisions.
Long told Travel Daily that history will not repeat itself, stating “ATIA can’t do anything to CATO that CATO doesn’t want and CATO can’t do anything to ATIA that ATIA doesn’t want”.
The hot topics
Much of the anxiety from members is likely to revolve around issues such as membership fees and accreditation. On the fees front, it is fortuitous that both CATO and ATIA financial years run on identical reporting windows – 01 April through to 31 March – eliminating one potential complication.
While this area is fairly intricate, the streamlined version is that both groups want to ensure those businesses that have paid two sets of fees in FY27 are supported under the merger. CATO-only members with a TTV less than $100 million will not have to pay any fees until FY29 under the package.
Meanwhile, joint members with TTV under $100 million will not have to pay any fees in FY28, and will also get some fee relief in FY29. While the package is geared towards providing financial relief to smaller businesses, the sell to the larger companies that deliver TTV of over $100 million – which will be paying full ATIA fees from FY28 – is the elimination of dual membership fees.
Additionally, on the issue of accreditation, the approach is to take the best of the CATO accreditation elements that it has created with the external financial health checks and combine it with the established and robust mechanisms that ATIA has in place as well. ATIA CEO Dean Long said that in many areas, the accreditation systems are very similar, with just minor elements to be ironed out.
Important dates
CATO members will vote on the proposal at an EGM on 09 June, and if 75% of members vote in favour of the resolution, it will then need to pass an ATIA members vote at its AGM on 22 June to adopt a new constitution which enshrines CATO as a formal division.
Dennis steps away
CATO chair Dennis Bunnik told Travel Daily that regardless of the outcome of the proposed merger with ATIA, he will be stepping down from his position. He has served for 14 years on the board of the industry body and suggested that, while Bunnik Tours will carry on being a member and support CATO, it was time for fresh faces to lead it, no matter which way the vote fell. Bunnik added that 14 years was a good ending and he would always be an active member of the industry and would be around at many of the future events.
Industry reaction
While it is still very early days to gauge a wider reaction, the initial responses from tour operators has been positive. Managing director APAC for G Adventures Sean Martin said he was “very much in support of the merger”.
“As members of both associations, we see this as getting the best of both without having to pay two sets of fees and doing two separate accreditations. Keeping CATO’s identity and community will be really important and we are confident that the proposed structure will deliver this,” Martin added.
Meanwhile, Sno’n’Ski Holidays was another strong supporter of the merger, with GM Daniel Walker calling out CATO for the critical role it has played in strengthening the voice of Australian tour operators.
“This merger represents an important step forward for the broader travel industry,” Walker said. “We are proud to stand alongside ATIA members as the industry comes together more closely and collaboratively for the future.
“CATO has done an exceptional job advocating for Australian tour operators through some of the most challenging periods our industry has faced, and we are excited about the opportunities this next chapter will bring.”
BUT WAIT, THERE’S MORE: THE BUDGET BITES TRAVEL.
by Damian Francis, Editorial Director, Travel Daily
There was a very relevant segue between the two biggest stories of the week.
The CATO/ATIA merger story has been building for some time now, mainly as hearsay before things got real this week. Dean Long is likely quite sick of speaking to Adam Bishop and myself now, and no doubt the rest of the trade media.
But there was one thing he said to Travel Daily that was particularly relevant to the other big story of the week – the Federal Budget. That was that the most successful industry bodies were generally the ones where they were the only body representing a particular industry.
The Pharmacy Guild of Australia was used as an example – it’s one our sister publication, Pharmacy Daily, knows well. It represents over 6,000 community pharmacies across Australia, and that count was done in 2024 – I would hazard a guess it’s more now. It is, indeed, highly effective.
One body, more members, more weight. In theory.
Could that have helped the travel and tourism industry campaign more effectively for a better outcome from the budget?
As one industry leader said to me without wanting to put a name to the quote, “we were right royally screwed…. again”.
It’s easy to see how the industry thinks that. For a sector that contributes significantly to the Australian economy, $81.1 billion GDP for 2024/25 according to the Australian Bureau of Statistics (ABS) and 4.4% of filled jobs in Australia, the budget announcements where underwhelming and potentially almost a backhanded slap.
Tourism Australia’s (TA) funding shrank, despite the opportunity that our ‘Switzerland of the South Pacific’ positioning affords us (as in we’re a safe, reliable and generally affordable destination for travellers looking to avoid conflicts, political melees).
More than $50 million has been stripped from TA’s cash pool over the next four years. It’s not enormous in the grand scheme of the cost of a media campaign for what is largely a marketing organisation, but it’s far from nothing.
Australian Tourism Export Council (ATEC) was quick to take a baseball bat to the announcement.
“This Budget reduces support for an industry that is still stabilising post the pandemic, and facing growing pressure around traveller affordability, aviation costs and booking conversion as a result of the Middle East conflict,” ATEC managing director Peter Shelley said.
“Reduced Tourism Australia funding risks Australia’s ability to convert travellers in an increasingly cautious and price-sensitive long-haul travel environment,” he added.
Tourism expert and academic David Beirman told Travel Daily that the budget cut was “a retrograde step and reduces the marketing competitiveness of Australia in the Asia-Pacific region”.
The TA budget cut took a backseat though to the other big travel news to come out of the budget – another increase to the Passenger Movement Charge (PMC) in just a few years.
In 2024 it was raised from $60 to $70, and this week it was announced that the charge would move to $80.
Main media were up in arms – it was a direct hit to the pocket of Australian travellers, akin to being punched in the face while being given a hug.
Federal Treasurer Jim Chalmers had spent much of his Tuesday night budget speech telling Australians that it was designed to help them in a cost-of-living crisis. Apparently, that didn’t extend to their travel plans.
Margy Osmond, CEO of The Tourism & Transport Forum (TTF) went hardest, labelling it an “absolute shocker”.
“We are outraged that the government has decided to make travel even more expensive when operators are already under enormous pressure from the ongoing fuel crisis and surging operating costs,” Osmond fumed.
“The government talks constantly about supporting tourism and growing visitation, yet the budget makes Australia more expensive to visit and more expensive for Australians to travel.”
Australian Airports Association was a little less outraged but still disappointed. CEO Simon Westaway highlighted the lack of investment in border management. He said, “If passengers are being asked to pay more, it is essential that the additional revenue is reinvested in tangible border upgrades rather than being absorbed into consolidated revenue”.
The Cruise Lines International Association (CLIA) joined in that tune with a statement that read, “Increasing the Passenger Movement Charge places yet another burden on travellers at a time when the tourism community is working hard to overcome challenges at home and overseas”, and called for PMC revenue to be reinvested in the modernisation of Australia’s border processes for aviation and cruise.
Will consumers notice the additional charge or care? It was a question genuinely asked by some pundits.
Wins? There were some. A commitment to introduce a low carbon liquid fuel demand-side measure was announced, along with confirmation of the introduction of the Cleaner Fuels Program to support local SAF production – measures warmly welcomed by Sydney Airport.
Enjoy the weekend.
