Thursday, 26 April 2012

Changes to the industry and what flight-plus will mean for consumers

Britain’s original holiday protection scheme which has lasted 20 years will begin to change from 30th April. The ATOL Scheme was originally set up to protect consumers who booked package holidays in the event of their travel company going out of business or if they need to repatriated when stranded abroad. It would be an understatement to say that there has been some grey area over the rules in recent times. Developments in technology has allowed the dynamic package sector to boom and these packages have proved extremely popular due to the price point that they are sold at and greater flexibility over holiday destinations and durations.

However, problems over dynamic packages have arisen due to operators of such websites selling packages as individual items rather than complete packages. This has meant that although clients think that they have bought a package, they have in reality three individual elements such as flight, hotel and airport transfer.  This has created more problems for consumers rather than the agent as if one element of their trip fails and they are left out of pocket for the other parts of the holiday (as well as the original element in some cases!). Some agents have sought to maintain that elements are individual in order to escape liability and to pay large bonds to ATOL and ABTA where clients perhaps wrongly presumed that they were covered in an old fashioned sense.

The CAA has sought to solve this problem by offering greater clarity of what is and isn’t protected. Known as the Flight-Plus system, it will mean that many more bookings which combine a flight and hotel will be protected by the ATOL scheme in the event of supplier failure. Although the system has sought to offer clarity, there are some key things to look out for in order to avoid being caught out.

One thing to be careful of is if you have booked flight and hotel via an airline in one go. This is because it would require primary legislation in order to implement such a requirement upon airlines. There are some exemptions to this rule however as British Airways and easyJet do protect such bookings if they are all made in one transaction. Are things still clear?

It is also worth pointing out that as with all things governmental, the system has been delayed before being completely rolled out. This means that although from Monday you should be told if you have protection or not, you will have to wait until 1st October before customers receive written confirmation of whether you are covered or at risk. From October all flight-plus arrangements will be accompanied by a certificate from ATOL.

One of the good things to come out of the new scheme for the consumer is that for bookings made via a travel agent with ATOL protection all travel arrangements that combine a flight and a hotel stay or a flight and a hire car booking will be covered – as long as the separate bookings are made, or requested by the customer, on the same day or ‘within a day either side of each other’ through the same website, travel agent or tour operator. I can see these rules driving travel agents mad, but rules are rules!

It is reported that some 50% of holidays booked are now not covered by ATOL whereas 10 years ago around 95% were covered under the scheme. it is about time that the bonding either moved with the times or was phased out completely. It looks like the system will be around for a while yet and this is important for the peace of mind of British consumers once they make their biggest annual expenditure.

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