p4 news Nov6 4/11/09 21:01 Page 4
news
06.11.2009
CONTRACTS.
Demand for reform
‘Walk away from
after client protest
risky agencies’
ACCOUNTANCY firm PricewaterhouseCoopers has
urged tour operators to cut their ties with travel
Martin Ferguson.
this threat, real or implied, agents who make late payments.
A TOUR operator has we are powerless.” Senior manager Russell Class said auditors
called on Abta to reform Maguire said the agency were advising suppliers to evaluate the risk and
its agency payment regu- quoted Abta regulations “walk away” from agencies if necessary.
lations after two clients and implied it would report Glass said incidents such as the clash between
staged a sit-in protest at If Only to the association. If Only and the agency were not surprising given
a travel agency, days “Having apparently used the cash flow problems created by low interest
before they were due to the funds elsewhere then rates. In June PwC estimated the 0.5% base rate
go on holiday. adopted every evasive ploy would lead to an average reduction of 55% in
If Only managing di- possible, this represented pre-tax profits, and could force some agencies
rector Brendan Maguire impudence in the extreme. out of business.
(pictured) said increas-
C
O
“The current procedures “October is the toughest month of the year,”
ingly “a handful” of are urgently in need of re- he said. “Agents will be having cash flow difficul-
agencies were failing to forward
STO
VER
R
Y
view. Surely it was never intended ties. Bookings are low and agencies still have to
cash from bookings, leaving opera- that the agent should hide behind the pay staff and suppliers. But suppliers have to be
tors no choice but to withhold tickets. Abta regulations? There is a very gen- tough with agents. If that means walking away
He acknowledged agency law meant uine need for reform.” from some of them then you have to do so.”
operators were obliged to supply the cus- Maguire predicted more operators would An Abta spokesman said: “Money must be paid
tomers with tickets, but said his company could leave Abta as Medhotels and Hotels4U did last to suppliers when it is due in respect of the
have been left seriously out of pocket had the week if the problem was not addressed urgently. contract, in spite of difficult trading conditions.”
consumers not taken matters into their own TTG contacted the travel agency’s head office, Haslemere Travel managing director Gemma
hands. but a spokesperson there refused to comment. Antrobus said agencies which failed to pay up
Maguire spoke out after a dispute with an Advantage head of corporate Ken McLeod said gave other intermediaries a bad name. “I would
Advantage agent over a “high-revenue booking”. the consortium was investigating the case. stress to operators the importance of choosing
The customers involved entered a branch and Advantage has CAPS, a payment protection your agents wisely and be wary of anyone not
refused to leave for more than five hours until scheme, but neither the agency nor If Only were paying you on time,” she said.
the agency eventually agreed to pay. members, he added. Aito chairman Derek Moore said: “Travel
“In these situations, withholding the McLeod said generally the problem was agents have to watch their cash flow carefully.
tickets is the only way pressure can be applied becoming more common as the recession hit Breaking agreements in this manner affects the
on the agent, albeit via the passengers. Without agency cash flow. very fabric of the travel industry.”
PAYMENT REGULATION.
Jackson said the decision had no “real upside
More bed banks to leave Abta?
or downside” commercially but Abta agents should
back Abta suppliers having voted for new rules.
SOMEWHERE2STAY, one of the two remaining Stuart Jackson (pictured), man- Youtravel.com sales and marketing director
large bed banks in Abta, has decided not to aging director of somewhere2stay, Paul Riches backed calls for a revamp of Abta’s
follow Thomas Cook-owned Hotels4U and said he agreed with Abta “in prin- payment regulations. He compared If Only’s
Medhotels and leave the association. cipal” that bed banks trading as predicament to that of the bed banks. “Agency
The other, Youtravel.com, was due to agents are liable for pipeline monies. law means the supplier is liable to the customer.”
announce its decision imminently after Abta “If any of our sub agents were to MedHotels and Hotels4U sales director Teresa
clarified new rules on honouring bookings even if go bust, the Office of Fair Trading Walsh said Abta rules were “incompatible” with
payment has not been passed on by the agent. would come after us,” he said. their trading models.
04 06.11.2009
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