BUSINESS NEWS package travel rules, Atol reform and operators’ booking terms. Ian Taylor reports from London event


Alcock: CAA’s plans could be unworkable for agents


A leading industry consultant and former senior analyst in the CAA’s Atol department has slammed the CAA’s Atol Reform proposals, describing parts of them as “unworkable”. Martin Alcock, director of the


Travel Trade Consultancy, described the CAA’s Atol Reform consultation published last year as “moralising” and suggested it contains “lots the CAA didn’t think through or doesn’t understand”. He said CAA proposals for


curbing agents’ use of customer money were “a sledgehammer to crack a nut”. Alcock pointed out the


consultation is already a year old, having been launched “in the middle of the biggest crisis the industry has faced”, and said: “Timetables have slipped massively.” He noted “the real reason” for


the reform is “there is not a lot left in the Air Travel Trust” fund after the failures of Thomas Cook and Monarch Travel Group. Alcock told the Abta Travel Law conference: “The Thomas Cook


Suppliers ‘need clear terms’ for flexible bookings


Increased flexibility on bookings due to Covid is meeting “pushback” from suppliers and “clear” terms and conditions are needed to minimise disputes, say industry lawyers. Jo Kolatsis, director of Themis Advisory, told the Abta Travel Law


travelweekly.co.uk


Martin Alcock


failure brought to light some agents were hanging on to more money than they should have. “That is probably more


widespread than Thomas Cook, but the solution the CAA proposes is a sledgehammer to crack a nut. “There is lots the CAA didn’t


really think through or doesn’t understand and it could end up with something unworkable for the agent


conference: “Flexibility is here to stay. As a consumer, that is great. As a tour operator, it’s not so easy. “Customers are used to


flexibility now and I don’t see it going anywhere. “It is going to be a key driver


for a while. But we’re seeing a lot of pushback from suppliers, particularly around refunds.” She advised: “Ensure booking


terms and conditions are clear and unambiguous. Can customers easily identify their cancellation rights and associated costs? Do they have


the flexibility to make changes? Make liability and compensation options clear.


community. You don’t have to be a genius to see the cashflow challenges of moving the whole industry over to [trust accounts].” He added: “For 10 years I’ve


been having an argument with the CAA. It says if I collect money and use it to buy a flight and hotel, I’m using customers’ money. I don’t see that. If I were using it to pay for the electricity bill, that would be using customer money.” The CAA’s two key reform


proposals aim to reduce Atol- holders’ reliance on customer money by requiring use of trust or escrow accounts alongside bonds or insurance and moving to a new risk-based Atol Protection Contribution (APC) regime. But Alcock argued: “The term


‘trust account’ covers a multitude of different arrangements. Just one or two package organisers keep 100% of the money [in a trust] before a customer goes [on holiday]. “Trusts are being treated as a


panacea, but they wouldn’t have solved the problem with refunds during the pandemic.”


Jo Kolatsis


‘RCNs helped enormously but were a hard sell’


Abta’s introduction of refund credit notes (RCNs) during the pandemic helped businesses “enormously” despite being “a hard sell at times”. But the jury is out on many cases of dispute about whether refunds were due. Travelopia legal director Paul


Milford said: “Without RCNs, I don’t know how bad things would have been. A mechanism whereby customers’ money was protected was critical.” Midcounties Co-operative


travel governance and compliance manager Rich Simpson agreed: “Abta bringing out RCNs helped enormously and the CAA endorsing them helped. At times, RCNs were a hard sell, but lots of customers understood.” However, Milford said: “The


CAA coming late to the table and the shifting dates [of expiry] posed challenges.” Alex Mackenzie, barrister at


2 Temple Gardens, argued “it’s still very early in the process” of claims to know how courts will view FCDO advice in relation to cancellations and refunds.


“If you have insurance, make


sure it’s at a level that mirrors what you’re liable for.” Abta director of legal affairs


Simon Bunce said: “Travel companies were desperate to get bookings. I suspect a lot rushed to get consumer promises out there and they’re wider than some companies intended.” Dublin-based lawyer Anne


Dolan added: “Ensure customers understand what flexibility means but also when it’s ending. That is not necessarily clear to consumers.”


19 MAY 2022 47


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