House of Travel’s Chairman, Barry Mayo says he was confused to read MTA’s Roy Merrick’s comments that AFTA had provided detail of what the new industry structure will look like.

“There is no description of AFTA proposed replacement of the TCF in its submission responding to the COAG Legislative and Governance Forum on the Travel Industry Transition Plan so I’m not sure what information he’s received but I would like him to send it to me as I have seen nothing from them.”

Mayo says House of Travel was heavily involved in the consultation process providing three submissions in April 2010, April 2011 and October 2012. Records of each of these submissions are available at www.consumerlaw.gov.au  and have been verbally acknowledged by AFTA.

Mayo stands by his assertion that the Travel Industry Transition Plan (TITP) contained incorrect assumptions and does not accept that the consultation process was adequate or that the opportunity for debate has now passed.

“There is little doubt that the current regulatory framework has its faults and can be improved but with the plan underway to deregulate the travel industry and proceed down the path of winding up the TCF with Federal and State governments claiming the bulk of its funds without any understanding of what the alternative is, would be irresponsible. We need to have open-eyed and robust debate on how the industry is working now and how it will operate in the future so that what we end up with will be an even more stable and efficient industry.”

Mayo firmly believes the Travel Compensation Fund (TCF), while not ideal, currently protects trade and consumers, whereas the Australian Federation of Travel Agents (AFTA) proposal supports an increased reliance on generic consumer protection legislation. They also support creating a voluntary industry accreditation and/or industry specific dispute resolution scheme as an alternative to the TCF.

“Neither of these measures in my view is adequate. To rely more heavily on existing generic legislation doesn’t address how to protect our industry or consumers from under-capitalized or inexperienced start-up businesses operating and then failing. This scenario is precisely what will lead to travel agency failures and generic consumer rules do nothing to prevent that, instead kicking in only once a consumer’s been burnt. That’s no good for our industry. We need to be seen to be front-footing the professional standards within our industry and setting high expectations that consumers can rely on. Existing generic consumer rules are just not sufficient to appropriately support our industry.”

Mayo says the idea that voluntary accreditation or a dispute resolution scheme would also effectively replace the TCF is a knee-jerk suggestion and simply won’t work.

“It will do nothing to protect consumers or currently licensed travel agents from under-capitalized and inexperienced start-ups and does not address the problem of any travel agents who cause loss to consumers and who have not volunteered to be part of an industry accreditation or disputes scheme.  Yet behaviour by such individuals would reflect on us all, accredited or not.”

Mayo believes there is a marketing advantage under the TCF membership.

“By dealing with an Australian licensed travel agent consumers are currently better protected via the TCF over any overseas based online company, under the new scheme it’s likely that advantage will disappear.”

There are calls that the TCF must be disbanded if there is to be a level playing field between currently registered travel agents and their competitors. Mayo says we need to recognize that consumer protection via TCF membership actually contributes to a level playing field.

“While it’s true that the national scheme has been left behind by increasing supplier chain diversity, in particular the purchasing of travel products directly from suppliers, choosing to cut back our consumer and trade protections to near nil and winding up the TCF could in fact disadvantage travel agents and encourage consumers to buy directly from suppliers, because there is no longer the consumer protection offered by TCF membership.”

“At the end of the day, the scope and scale of the problems that existed before the national scheme was implemented have significantly declined or have almost effectively disappeared. We simply have to acknowledge the effectiveness of licensing and the TCF in achieving this outcome if we are going to build on our successes and create an even stronger industry with a solid operational framework.”