‘Bonding costs for agents will rise as insurers fear risk’


Juliet Dennis


Agents are being warned the cost of bonding could rise in 2021 and require more financial paperwork. Insurers have tightened


requirements for travel firms to protect customer money against their business failing. Abta bond renewals are due in March. Heather Harris, head of


Advantage Travel Partnership broker Advantage Financial Services, urged agents to apply early for the “best chance possible” as “few [insurers] are open to negotiations on price”. Agents should be ready to


produce information not previously asked for such as bank statements, cashflows and forecasts, she added. Lawrence Assock, commercial


underwriter and product developer for financial protection provider Atlas Voyage Secure, said travel firms needed to give insurers additional security over managing customers’ funds, such as through trust funds or segregated bank accounts. “With Covid, insurers have run


to the hills,” he said. “Premiums will be higher.” Atlas is working on new solutions for 2021, he added. Graeme Brett, director of Westoe Travel in South Shields, said agencies


said its managed service model, which protects money in a trust


Inset: Abta’s John de Vial


should consider other trading models. He said “it’s going to be much more difficult for agents to get bonding” and called for more impartial advice about alternatives, including those offered by consortia. Brett said Westoe’s bond provider


increased premiums for his tour operation renewal in September and asked for a year of bank statements and details of refund credit notes. He fears his agency business will face similar issues in March, “particularly with substantially reduced turnover”. Advantage Travel Partnership


account, had had “a lot of enquiries”. Abta’s director of membership


and financial services, John de Vial, said Covid had “presented difficulties” for renewing “all kinds of financial protection”, noting higher premiums, additional information and security requirements. “This is simply a reflection of


the fact travel companies currently represent a higher risk,” he said. De Vial said Abta had been


offering assistance and advice and the “majority” of members had renewed, “many without serious difficulties”. He said Abta was likely to begin consulting on trust accounts in 2021.


Scotland hailed for £5m agent aid Ben Ireland


Abta is continuing to lobby governments in Westminster, Cardiff and Belfast to provide sector-specific support for the industry after a breakthrough in Scotland last week. The Scottish government


committed £5 million to travel agencies as part of wider support measures north of the border worth £185 million, with £6 million set aside for tour operators and coach companies. The Scottish Passenger Agents’


Association said it was working with Holyrood and Abta to “develop a fair mechanism for the levels of grants which Scottish travel agents may be


6 17 DECEMBER 2020 This [support]


has to be replicated for travel agencies all across the UK


eligible for”. This will be submitted next week, with cash due to be distributed in January. Abta welcomed the Scottish


government’s decision, but said it was “imperative” travel firms in England, Wales and Northern Ireland had access to “similar schemes”. “We will continue to make the


case,” a spokeswoman said. But as of Tuesday, Abta had not received responses from other nations.


Jacqueline Dobson, president of


Glasgow-headquartered Barrhead Travel, which also has branches elsewhere in the UK, said: “This has to be replicated for travel agencies all across the UK.” Julia Lo Bue-Said, chief executive


SPAA president Joanne Dooey


of The Advantage Travel Partnership, said: “We’re hopeful this stance from the Scottish government will pave the way, and England and the other devolved nations will follow.” Abta said Office for National


Statistics data, published last week, bolstered the case for UK-wide support. It showed the pandemic had hit travel agents and tour operators worse than any other services sector, trading 90% down on February 2020 – worse than the creative arts and hospitality, which Abta pointed out had both had sector-specific support. Chief executive Mark Tanzer said:


“Nine months into this crisis, travel businesses need help to get through the difficult months ahead.”


travelweekly.co.uk


PICTURES: Shutterstock; Paul Chappells


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