This week is British Tourism Week which is an excuse for VisitBritain to throw yet another website our way.  According to VisitBritain, tourism was worth £87bn to the UK economy in 2007 and is now worth £114bn, which is pretty impressive  growth over three years.

Yet for an industry that brings four times as much to the UK economy as farming, we still don’t have a minister for tourism. Tourism is still dumped in with the Department for Culture, Media and Sport and in their 30-page annual report last year the DCMS managed to get to page 21 before devoting a full two paragraphs to tourism.

This government has been hopeless where tourism is concerned.  They care little about the outbound sector and they do a good impression of caring even less about inbound arrivals.  Since 1997 the government’s policy (or lack of) towards tourism has resulted in it consistently reducing its contribution to the UK’s tourist board, VisitBritain.

For its part, VisitBritain has received criticism, particularly for its misguided and expensive booking engine. However, British  Tourism Week does attract a fair amount of publicity and coupled with its show at Olympia it does give some small businesses an opportunity to promote themselves.

I’m not sure the best way of spending the ever-dwindling tourism budget is to give it all to a centralised government-run agency. The government should be looking at tourism as a multiplier for the economy, not just another area where they can cut costs. Last week, Shadow Chancellor George Osbourne spoke in Blackpool about the potential growth there is for tourism in the UK economy. His comments ranged from the sensible (reinstating Furnished Holiday Lets tax relief) to the bizarre (suggesting the West Midlands should be a hotspot for tourism). He may only be talking about inbound tourism but at least he’s talking about tourism.

As for the outbound sector, Abta has submitted a manifesto for points it would like to see raised by any incoming government. It’s hard to argue with its contents, but unfortunately I fear in these cash-strapped times, outbound tourism will not be on any government’s list of priorities.

As an industry with no real union presence and relatively few large players, inbound tourism has largely been off the government’s agenda for the last thirteen years while the outbound sector has seen found little empathy from Downing Street. I have no political affiliations, I would just like to see a government in power that gives a damn about tourism.

image courtesy of Taz etc.

The mess the CAA and ABTA have jointly managed to make of the collapse of Freedom Direct seems to get worse and worse.

Many customers trying to get their money back from the CAA were pointed towards ABTA, who then pointed them towards their credit card companies. This has angered the credit card companies and it does beg the question, what is the point of ABTA protection? Also, why is ABTA bonding so expensive if they are going to hide behind the credit card companies in the event of any failure?

ABTA are now saying they are the customer protector of last resort, but this seems to be news to the credit card companies. There is even talk of credit card companies threatening to stop working with the travel industry.  This is unlikely, given how much money they make from travel, but it is not inconceivable that the credit card companies will toughen up the terms offered to travel companies and make it very difficult for travel start-ups to get any terms whatsoever.

The whole mess of financial protection for consumers needs to be sorted and sorted soon.

April saw three well-established tour operators in three different countries go under and leave customers in very different situations. Freedom Direct (UK), Conquest Vacations (Canada) and Happy Vacations (USA) had been trading for 12, 37 and 40 years respectively, but all found April 2009 to be a month too far. So what has been the aftermath in each case?

Hawaii specialist Happy Vacations appear to have had no bonding and have therefore left a large number of customers losing their money. This has resulted in people in resort being asked to pay for accommodation that they had already paid for. Hotels have said they will not honour any Happy Vacation bookings. Happy Vacation customers are left having to go through their credit card company, claim off the bankruptcy cover on their travel insurance or try to file through Chapter 11 bankruptcy.

In Canada, the failure of Conquest Vacations caused a lot of problems initially with hotels in Mexico taking an aggressive approach towards holidaymakers and even changing the locks on rooms with holidaymakers belongings inside and not letting them inside until they pay for their stay (again). Apart from these initial problems, everything looks to have been fairly straightforward. Conquest were bonded through TICO who have said they will cover anyone who cannot claim their money back through their credit card company and have said they will refund anyone made to pay for accommodation in resort. This appears to be the only area where the bonding may have failed with some hoteliers not accepting TICO’s guarantee of payment. Conquest employees even came in to work unpaid after they had been laid off to try and help out customers.

Which brings us to the mess of Freedom Direct. Anyone who believes the current bonding provisions for holidays in the UK are satisfactory only has to take a look at what has happened at Freedom to admit they are wrong. On the face of it, anyone booking through Freedom Direct would have understandably believed their money was safe, with Freedom offering both ATOL and ABTA protection.

However, the initial confusion has now been replaced by anger and resentment as many customers are finding hurdles in their way to achieving a satisfactory settlement. The name and intellectual property of Freedom Direct have now been bought by Hays Travel and they have offered to try and help any Freedom Direct customers. Most of the problems stem from the fact that, as Hays puts it:

Freedom Direct “contracted flights, transfers and accommodation, directly with suppliers but did not bond the holiday with the Civil Aviation Authority as an ATOL package……Subject to a detailed review of your file in conjunction with yourself and one of our consultants it appears that your flight & transfer are safe and you will not be out of pocket. Unfortunately the amount you have paid for accommodation appears to be lost.”

It appears a lot of customers have been affected by this particular scenario. One of the main problems is that Freedom Direct booked parts of its packages through outsourced suppliers such as Med Hotels. Customers trying to reclaim these elements from ABTA are being told they cannot do so as the supplier should honour the booking and reclaim the money through ABTA. Suppliers are refusing to do this, saying that by the time they have honoured bookings that they have received no payment for, made the claim through ABTA and received the payment, they themselves will be out of business.  The credit card companies aren’t keen to get involved. All of which leaves customers with flights that are valid, but no hotel or transfers and the likelihood of legal action as the only recourse in order to get their money back.

Of the three companies, whose customers have fared the worst? Some may say it is those of Happy Vacations, but many will have booked through Freedom Direct in the belief that their money was safe only now to find out otherwise.

The Telegraph this weekend ran the headline ABTA issues Darling with rescue plan for tourism. But where was the plan? I then re-read the letter from ABTA Chief Executive, Mark Tanzer to the British Chancellor and still struggled to see any “plan”.

The letter basically says Britain is taxing the travel industry too much. I think many within the industry will agree, but a letter of complaint doesn’t constitute a plan. It reads like an employee asking for a pay rise and when asked why, responding by saying “because I want more money”.

Sadly, there is no meat to the letter at all, no real thought in it and no original thinking. There’s no effort to persuade or provide food for thought for Mr Darling, just a vague hope that if you say “please Sir, don’t tax us so much”, Darling will say “Oh, alright”.

Politicians respond to figures and proposals that will have political impact, not just vague requests. If Tanzer had said that the introduction of the APD hike in November 2010 threatens x UK jobs, or will result in a reduction of tax income from UK tourism of £y, his letter might have stood more chance of being listened to.

With APD, don’t just say scrap APD because the Dutch have. It is too soon to see any impact from the Dutch decision, but it would have been possible to highlight some of the political thinking behind the Dutch decision.

With visas, what is the point of saying they cost too much? If they are a deterrent to people travelling, then come up with figures. If Tanzer had said a reduction of 20% in visas costs would result in an increase of x% in inbound visitors and a net gain to UK income of £y then Darling maybe would listen.

Likewise, his point about financial protection is very valid, but saying to the government, “please come up with a solution” isn’t very helpful. Why not offer to work with the government to find a solution, or better still propose various solutions? Everyone complains about financial protection yet nobody seems to come up with many ideas.

The point about TOMS is very valid, but the main point is that messing around with it could result in consumers paying VAT twice and would push more people to book directly with hotels overseas. This would take consumer money directly out of the UK rather than generating tax revenue and UK jobs through booking with a UK operator. Asking Darling for action on this before the EU have even come up with any proposals also seems a bit of a waste of time.

Unfortunately, the letter lacks any real meat and will in all likelihood have no impact. It was probably written quickly and at least Tanzer will be able to say he tried and hopefully for him that will keep the ABTA faithful happy.

I’ve been involved in the travel business, one way or the other, for nigh on 20 years and I’ve never really understood the point of the FTO. If anyone can enlighten me, then I would welcome some help.

With all the consolidation amongst operators last year, the FTO seemed to have even less point, and the subsequent joining with ABTA seemed logical. It would strengthen ABTA on the operator side, where I feel it has always been quite weak and it would loosen its membership restrictions. Except this never happened.

Surely the logical step would be for any operator who was an ABTA member to become a member of the FTO, thus strengthening both bodies?

My view of the FTO is similar to that of an Old Boys Club. You are only allowed in by invitation and you must have a turnover of over £20m. Why is this? On their website they say it is “to ensure that they have appropriate resources to be involved in FTO”. What does this mean? There are many operators out there with a turnover under £20m who are very solvent and secure. It hardly helps the industry to have a trade body that exempts new and smaller businesses.

Today, the FTO said they had drafted a new code of practice covering land transport. This is exactly the sort of thing that would be really useful for smaller operators, as it is a real minefield. Should there be child seats on coaches? What do you do in countries where there are still no seat belts on coaches? How do you vet taxi companies? What are good policies for resort staff driving? etc.

These are the sort of things ABTA and the FTO should be helping operators with and publishing. By providing industry-wide guidelines that members of ABTA should adhere to, it would give people more reason to book with a member of ABTA.

But the FTO will keep the guidelines internal and possibly offer them for sale for non-members at a huge cost with no opportunity for follow-up. At a time when most organisations are becoming more open, the FTO seems as closed as ever.

Maybe I’m being harsh on them, let me know if you think so.