Online bookings prompt travel agent changes

Which way? ... one of the first decisions about a big trip is how to book it.
Which way? ... one of the first decisions about a big trip is how to book it.

When was the last time you booked a trip through a travel agent?

Changes in how people are making their travel arrangements have prompted a re-think of how the sector is regulated but opinions vary on what changes should be made.

With more people booking travel online, travel agents are facing increased competition.

The National Government is considering abolishing the licensing system for travel agents and the Travel Compensation Fund which reimburses consumers if a licensed travel agent becomes insolvent or fails to pay for travel after taking the consumer's money.

A draft national plan has proposed these changes, among others.

The plan followed a review carried out by PricewaterhouseCoopers.

The review found that the growth in online bookings by consumers direct with travel providers in Australia and overseas had resulted in the compensation fund applying to fewer travellers.

It also suggested that the current regulations were now anti-competitive and the cost of a licence and contributions to the Travel Compensation Fund were an unfair financial burden on brick and mortar travel agencies.

Managing partner of Broadway Travel in Nedlands, Suzanne Baker said while most travel agents agreed something needed to be done to overhaul the travel agent licensing system and the TCF she did not believe they should be abolished completely.

"Travel agent licences haven't been operating effectively since they came in because there seems to be very little resources to police licence regulations," she said.

"I know there are problems with the TCF that also need to be addressed but it would be a pity if it was dismantled, it should instead be expanded to cover bookings with overseas companies.

"If we book with overseas tour operators, our clients funds aren't protected either."

She said to avoid this she and other companies tried to book with Australian based companies that ran international tours.

"Abolishing the fund throws open a lot of questions in terms of being able to protect our clients' funds."

Ms Baker said she doubted the cost of licensing and membership to the TCF impacted greatly on her company's bottom line.

"The protection of our client's funds is the most important thing."

She admitted that a lot of agencies considered it unfair that they paid fees when online booking engines did not and the impact of the internet on business had been felt in the past five to 10 years.

"There's been a very big shift, we used to do a lot of Australian domestic travel, like air travel and accommodation but there's a trend towards people doing that online," Ms Baker said

She said that trend had also spread to people making booking in places like Bali and Thailand where there may have travelled before and felt comfortable booking themselves online.

Despite Ms Baker's company seeing about a 20 per cent reduction in domestic travel packages as a result of people arranging their own travel online, she said she did not mind having to be licensed and paying fees for the TCF.

Chief executive of the Australian Federation of Travel Agents Jayson Westbury disagreed with Ms Baker and said the additional burden created by the fund and licensing was not worth any perceived advantages.

He said the federation supported abolishing the TCF and licensing system.

Mr Westbury said the structure of the compensation fund was archaic and its coverage was selective.

"Not everybody derives benefit and consumers are not sure what's covered, so it is silly to continue with it."

He said keeping the fund and expanding it would not work, he said that had been done in other countries in the past and in those places, the schemes had gone broke.

"You can't structure a compensation scheme to provide for insolvency or questionable activity, it's a preposterous contemplation.”

Mr Westbury said since the scheme was first introduced 24 years ago, inbuilt protections to afford consumer protection were more common such as those that were provided with credit card payments.

He said the licensing system was no longer fit for purpose and created too much red tape.

Mr Westbury said non-Australian businesses did not have to deal with additional red tape and extra costs associated with licensing and the TCF and therefore it was a disadvantage to Australian travel agents.

"It's not a level playing field."

"Licences are a similar issue, what purposes do they serve other than the government knowing who is operating."

He said the requirements for licensing were low and he did not believe licensing provided any higher standard of service provided.

Mr Westbury said the number of travel agents was depleting while the number of people travelling was increasing dramatically and said this was partially a result of the impact the internet was having.

Tourism Council of WA chief executive Evan Hall said the council was still seeking feedback from its members in order to make a submission on the matter and had not yet formed a position in regard to it.

Submissions can be made online and must be received by October 1.

This story Online bookings prompt travel agent changes first appeared on WA Today.