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26-02-2010

SPAA AND ABTA PRESENT UNITED FRONT ON THE CHALLENGES AHEAD!


SPAA President and ABTA Chairman confront the issues at 80th Dinner ...

SPAA and ABTA, along with fellow travel sector bodies such as the GTMC, are pledged to present a united front to the incoming Government, whenever the interests of Members co-incide, according to the two principal speakers at the 80th Annual SPAA Dinner.

Proposing the traditional Toast to World Travel and Tourism, SPAA President Brian Potter laid out clearly and concisely the many challenges facing the travel sector – amongst them the threats of terrorism, security, fuel costs, taxation and financial protection – and he was assertive in his view of the Association’s role, and its continuing hard work on multiple fronts.

For him, he said, ‘the C word – commission – is not a bad word. Whether it’s leisure or business travel, I would still advocate it’s the simplest method of remuneration for an agent selling operator product. Of course we need to recognise things have changed dramatically with the growth of internet sales, and it’s right that operators and airlines need a direct sell avenue, especially as there becomes fewer agents distributing products, but these streams should not be at the expense of agents!’

On pricing and discounting, the President referred to the heavy investment by independent agents in making sure shops look good for customers, and in training staff in operators’ products. ‘What’s the point,’ he questioned, ‘if you go and sell it directly at a price we could never match even if we gave away all our commission?’. He appealed to Principals to ‘stop wasting our time and money; and lets work together to sell your product at the price it’s meant to be!’

‘Cruising,’ he said, ‘is doing fantastically well - but there remains an issue with illogical pricing where the same cruise can be advertised at so many different price levels with none reflective of the brochure price.’

Turning to business travel, he highlighted a number of the pressing issues currently challenging this sector, including airlines getting TMCs to sign up mutual customers to airline schemes, only to then email the customers directly with offers for which the TMC’s were denied a sales role.

Some of the charges made by airlines for the smallest of errors were simply unreasonable, he suggested, ‘whether it be a name spelling or a letter wrong on a tour code. We should be partners, and we should be treated as partners and not as an income stream.’

On lobbying and co-operation, the President referred to the SPAA’s mix of both business and leisure agents, and recognised the constant need to state its case in Holyrood and Westminster; to have continuing meetings with other trade bodies such as ABTA and the GTMC, and to open dialogue with Advantage and Worldchoice to help make that case stronger. It was an effort, he said, ‘to stop things from happening before decisions are taken – get in on negotiations and consultations to ensure our voice is heard.’

Over the years, people had asked ‘What does the SPAA do; what does it do for us?’, and the President re-asserted his commitment to communication and inter-action. ‘We want to know from our members what problems they are experiencing in their businesses. so we need more members, and we need more input from those members. Our new website will be the key for us in letting you know what we are doing, who we are meeting, and to get your input.’

Citing the Association’s work on ATOL - its advocacy, for five years or more, of a new financial protection regime covering all flights and holidays - whether an inclusive package or dynamic package, and regardless of how they are booked and paid for - he stated, ‘the message we give is, as aways, "book with your travel agent for the best advice" - at least we will tell the clients when they are covered, or more importantly when they are not.’ Current rules are 'far too confusing for both the trade and the consumer and the SPAA has recently submitted a response to the government consultation. We firmly believe that all customers travelling by air should be protected financially and any halfway house is simply adding to the confusion.'

A third runway at Heathrow was, he asserted, ‘a vital development that both Scotland and the UK needs. Yes, it has to be under strict guidelines to ensure that it does not increase the carbon footprint; in fact part of that case has already been argued that the CO2 emissions saved from delays on the ground and circling Heathrow will be significant. UK business needs this expansion, but if alternative Heathrow rail links "as far North" as Leeds actually happen, business will suffer and Scotland will suffer.’

Turning to British Airways, he reminded guests that the SPAA had made a strong protest when the airline cancelled all domestic flights during the bad weather in December, and again in January; at a time when bmi had almost all flights operating. ‘What sort of message,’ he asked, ‘does this send to Scotland and to BA’s connecting passengers?’ And he went on to question the good sense of those BA employees planning strike action. ‘What planet are these people on,’ he asked, 'when there appears to be very little outside support for strike action?'

APD (Air Passenger Duty), the President said, is a tax without support amongst travel sector bodies. ‘It’s wrong; it’s not green, and it’s simply a tax collected from travellers because it’s easy for the government to do so, and of course we all collect it free of charge!’ He called for a new approach, in which travel agents unite to make it clear to passengers how much they are actually paying directly to the UK Government with every ticket sold, perhaps by means of a jointly funded itinerary or invoice template, showing the fare, UK tax and other taxes separately. 'Government must begin to recognise the value of travel to the UK economy, rather than viewing it simply as a cash cow.'

On the unbundling or separating of charges on air travel, the President asked, ‘What on earth is going on? Separating costs for taxes was the start, but then - fuel surcharges, baggage, seat selection, check in, transfers, booking fees!'

'For me,’ he said, ‘it’s ultimately a way for airlines and operators to make more money. I don’t believe it’s about customers having choice.’ Citing the example of Ryanair he said, ‘they charge you £5.00 to check in online, and then charge you £40.00 if you don’t - how can that be right? How can it be allowed? You can’t fly without checking in!’

Ending with a reference to the positives for travel businesses in the future, Brian Potter pointed to the encouraging early booking figures for holidays, and some improvement in business travel activity. Addressing the question of whether or not travel agents are ‘past their sell by date’ – the topic of a recent forum in London - he re-iterated that the answer in the end was ‘thankfully "no" - agents still are providing excellent customer service, expertise and embracing technology to enhance service. People who want good service will continue to use an agent - it’s a personal service!’

‘Often,’ he said, ‘our best advert is when things going wrong for clients, whether that be with strikes, bad weather or whatever - we are only a call away. An internet booking will have limited resources on a helpline, and is unlikely to be as straight forward as using an agent.’

‘Travel is,’ the President concluded, ‘still a great industry, and together I am sure we can overcome at least some of the challenges I’ve referred to this evening!’

In an equally robust response to the Toast, Chairman of ABTA and Advantage boss John McEwan agreed strongly with the need for the travel sector in the UK to face the challenges together, wherever possible and appropriate to the needs of the individual travel bodies’ members.

He spoke of ABTA’s and the SPAA’s ‘common aims, political lobbying ambitions and strategy.’ It was a tremendous achievement, he suggested, that the SPAA had reached nearly 90 years of age while maintaining such an important and pivotal role in the industry. The founding fathers of the SPAA would have had no idea how the industry would grow, from being one for just the privileged few, to one that was today one of the largest employers for UK Plc; a sector that creates huge revenues for the Government of the day and an industry that ranks number four in the UK economy, employing 1.4 million people in Britain and contributing more than £19 billion to the British economy.

Would those founding fFathers of nearly 90 years ago have believed, he asked, that the UK travel industry would, by 2010, have developed into one of the world’s most successful travel and tourism sectors? What would they have made of the fact that in 2009 Britons would make more than 120 million visits in the UK; that more than 32 million people from overseas would choose to visit Britain, and more than 60 million Britons would travel abroad for a holiday? And this despite the worst recession in living memory.

He felt sure that the founding fathers of the SPAA, and indeed the rest of the UK travel industry, back in 1930, would have been deeply impressed at the resilience, strength and sustainability of the British travel industry. Such resilience, strength and sustainability, hardened and tempered over those 80 years, had not been developed without pain – the launch and demise of powerful players - from the collapse of Clarkson Holidays in the 70s and ILG in the early 90s, to XL just two years ago and even Globespan, a few months ago, which left 5000 passengers stranded and seemingly with very little support from the CAA.

There was the threat of the no frills carriers and technology, and the changes they made to the buying habits, perceptions and expectations of the travelling public, and added into that mix, the sector had been buffeted and bruised by events in the outside world, from the credit crunch to 9/11; from turbulence in the Euro and Dollar markets; to the ever increasing taxation on domestic air travel - particularly relevant to Scotland. We had witnessed the sweeping and somewhat arbitrary taxation of elements of the industry, and the environmental concern over travel’s impact on destinations, the massive fluctuations to the price of aviation fuel and petroleum. All these pressures, policies and events had, he suggested, naturally led to a re-evaluation of where the annual holiday sits in the buying criteria of the average holidaymaker.

'So what,' he asked, 'does the future hold for the industry and the marketplace generally? Where will the economy go from here?' He suggested that the people who say they are in the know actually have little or no more insight than the rest of us. He urged the audience not to forget that when the credit crunch was on the horizon the economists were saying we would narrowly avert a recession, and make a soft landing. 'We all knew,' he asserted, 'what was going on, so why on earth didn’t those self proclaimed experts in the City and the Treasury face up to the stark reality?'

On top of that, travel is faced with a Government whose view of the economy could be summed up in a few short phrases - if it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidise it!

Mr McEwan believed that, against the pressures the next administration faces, we would see pressures on own sector intensify, with a Government, regardless of political doctrine, which would see the travel sector as a soft touch for taxation – hiking up APD at every available opportunity.

'The secret to our two organisations reaching such impressive milestones in their existence, has been one of continual evolution. The need to adjust constantly to the ever faster changing landscape of the travel industry, and responding positively to trends and developments, whatever they may be, has been the key ingredient to both the success and longevity of the SPAA and ABTA.' Mr McEwan asserted. It was that positive response to developing trends and circumstances that must be harnessed now as a collective industry. The key to success and indeed survival, was for this industry to increasingly work closer on areas of common interest while at the same time working hard to ensure an effective voice was heard by legislators, regulators, opinion leaders and the opinion formers who impact it.

'ABTA’s focus is,' he said, 'similar to that of the SPAA - a concentration on the areas of consumer protection and that of taxation on the industry; battles that must be taken to both Westminster and Brussels. ABTA and the SPAA were now sharing views and responses to Government consultations – an example being the recent Department for Transport’s consultation on proposals to update the regulatory framework for aviation.'

'Protection must be available to all, regardless of how the ticket is purchased and regardless of any other component being purchased. And ABTA, the SPAA and the rest of this industry must voice that view from every corner of the country, also espousing the need for all scheduled airlines to be brought into a system of consumer protection.'

ABTA would, he said, launch its Manifesto entitled Travel Matters, in Westminster on the 10th March, pulling together all the views of ABTA members into one document for the politicians and their teams. The ABTA manifesto would act as a route map, a blue print for what it believes to be the areas of importance and concern for the customers, members and stakeholders of the UK outbound travel industry. The manifesto would lay out clearly ABTA’s views on the key areas of importance around consumer protection for flights, accommodation and holidays; it would spell out its view on the desperately needed increase in airport capacity, the much needed reforms in airport passenger duty and a need to protect jobs in the industry. It would also encompass a call for a dedicated Minister for Tourism, reflecting travel and tourism’s true worth as the fourth largest industry in the country, to UK Plc.

He acknowledged the challenges ahead as serious, but asserted that the UK travel industry and the individuals that populate it, are amongst the most resourceful and optimistic in British industry, not least those who are members of ABTA and the SPAA.

MTB 26/02/2010


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