03 Feb

ABTA welcomes ATOL reform but Government proposals do not yet go far enough

ABTA today provides its initial response to the Government’s proposals for reform of the ATOL financial protection scheme. 

ABTA believes that:

  • By including in a protection regime all holidays put together by individual travel companies, the Government’s proposals for ATOL reform are a step forward in extending consumer protection.
  • By excluding airlines and website click-through sales from the scheme, they remain flawed.  These exclusions will perpetuate confusion among consumers.

  • Pricing of the scheme is critical.  The costs of the ATOL scheme to the travel trade, and ultimately the consumer, must not be at a level that will: a.) drive consumers to seek out cheaper, unprotected arrangements (such as booking direct with airlines) and b.) wreck successful business models.
  • The proposals must be backed by strong enforcement measures to avoid consumers being left unwittingly high and dry by unscrupulous traders.

Mark Tanzer, ABTA Chief Executive said: “Financial protection should be comprehensive and transparent, otherwise it leads to real confusion and consumer detriment.  British consumers and our Members deserve better than the unfair and unclear structures that we have suffered in recent years. While the Government’s proposals go some way to addressing the problem, we’re disappointed that airlines and online click-through sales have been excluded, as these will create competitive imbalance and leave passengers exposed.  These exclusions will only perpetuate confusion among consumers.  We also believe that key issues such as pricing and enforcement need to be considered carefully.”

In research conducted by ABTA, 93% of the public* said they regard financial protection as essential or important. In their responses to consultation questionnaires, 85% of ABTA Members said that they wanted to see the scope of consumer protection extended to all holidays; 84% that click-throughs from airlines websites should be included; and 100% said that airlines should be included in a scheme of financial protection.

ABTA intends to work closely with its Members to review the proposals in detail and will put forward its full response to the Department of Transport in due course.

* Consumer research was conducted by Arkenford Ltd  who specialise in tourism and leisure market research. The ABTA Consumer Trends survey generated response from a nationally representative sample of 2,028 consumers using an online research methodology and related to holiday booking habits in the 12 months to September 2010.  Fieldwork was conducted in September 2010.