Ettsa to meet DfT over regulation change concerns

by Lee Hayhurst
by Lee Hayhurst
April 18, 2012 01:43 PM GMT

The European Technology and Travel Services Association (Ettsa) was due to see the Department for Transport (DfT) today to express their disappointment at changes to the UK regulations on consumer protection.

New Flight-Plus Atol rules are due to start coming in from the end of this month designed to make it harder for firms to sell a flight plus a significant other holiday component without being licenced.

The new rules come in ahead of changes to the European Package Travel Directive, a draft of which is due to be published in November, and it is hoped this will put the UK ahead of the curve in terms of the changing regulations.

However, the Ettsa, which represents the interests of lastminute.com, Expedia and ebookers among others, remains upset by what it believes was a lack of engagement with its OTA members and a failure to listen to their concerns. It believes the DfT has been put under pressure from the government to implement change.

Christoph Klenner, Ettsa secretary-general, said the association believes the long-term solution for protection is for it to be insurance-based, with the consumer given full information so they can decide for themselves how they want protect their holidays.

"We do not think that the [Flight-Plus] regulations will solve the problem, the essence of which is the deficit in the Atol scheme.

"The government is pressed to no longer oblige the tax payers to pick up the tab when something goes wrong with an agent or airline. But we have question marks as to whether the Flight-Plus rules will address this. Will it really cover many more consumers? Presumably not.

"We have asked our members to look at what additional number of consumers would be covered. One of them said it will only be a couple of thousand on an annual basis. That's not a lot."

Klenner said it has submitted views to the European Commission demanding that new regulations are kept simple and generic so they can be applied across sales channels and bring some uniformity among the 27 EU member states in which many of its members operate. He said Flight-Plus is trying to apply 20th-century regulation to a problem thrown up by 21st-century technology.

"What we have asked for is two things: one is giving the customer the appropriate information on the risk he or she is taking when booking a package.

"The second is then leaving it up to the consumer to decide whether he or she wants to be protected or not - to have optional insurance.

"Then as a consumer you can measure the risk, because the insurance provider will assess the risk of bankruptcy of the particular agent and on the basis of that risk you will have to pay a specific premium. That puts well-capitalised travel agents who represent less risk at a competitive advantage, which is how it should be.

"In any compulsory insurance scheme it's always the stronger that carries the weaker."

This 'free rider' argument against regulation is the one made by airlines against being brought into Atol, and Ettsa believes a non-compulsory insurance scheme would be the best opportunity to achieve what it wants and bring airlines in.

Klenner said he believed the online travel sector should expect further regulation as authorities catch up with advances in technology.

"When you question customers they do not know the nuanced difference between a meta-search website, an online travel agent, a tour operator or an airline. Regulation has to be much more generic. It has to be about the consumer who buys travel and no matter which technology that consumer uses. It has to look at the consumer relationship with the vendor regardless of the technology. I'm concerned we will get more and more regulation that does not fit the bill."

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