Understanding ATOL Protection For Your Business

The leading consumer group, Which? Found in a recent investigation into 80 travel firms that leading brands are consistently offering inaccurate information to consumers about the level of ATOL protection included in their booking.

80% of British Airways staff told customers, who were booking flight-only, they would be covered by ATOL. This is not correct.

Thomas Cook gave less than 50% of correct answers to consumers and Bravofly answered less than a third of correct answers about ATOL and consumer protection to prospective clients.

What Does ATOL Protection Mean?

Flight only bookings are generally not covered by ATOL. However, package holidays are covered by ATOL. Also, if a client were to book two or more elements, such as flight, accommodation, car hire then the consumer would be protected.

The ATOL Scheme (Air Travel Organiser’s License) is supported by The Air Travel Trust Fund that is currently £145 million in the black, funded by £2.50 per person from every ATOL sale.

Focus on ATOL has been magnified since the recent collapse of Monarch Airlines. Only 20% of its 860,000 customers that had purchased flights before it failed should have been covered by ATOL.

Which? magazine’s editor Rory Boland said: ‘Given the recent chaos caused by Monarch going into administration and Ryanair’s flight cancellation shambles, it’s just not good enough that travel agents don’t understand the rules around holiday protections – especially when they are exaggerating the cover on offer.

‘ATOL-registered companies need to improve the accuracy of the information they are providing to their customers, and companies registered abroad must do more to inform customers in the UK about what protections they will be covered by.’

AT PTS we believe that many tour operators don’t understand the legalities surrounding consumer protection. The Package Travel Regulations are different to ATOL regulations and then we have The New Package Travel Directive to consider too.

The regulations within the travel industry may appear to be a minefield but they truly can be simplified so that they become manageable. Below are very short sharp definitions and solutions but do call The Protected Trust Services Team on 0207 190 9988 for free advice and clarification.

 Short Definitions For Travel Company Compliance

ATOL – AIR TRAVEL ORGANISER’S LICENSE

ATOL protection is only applicable to package holidays that also supply flights. If you don’t sell flights you don’t need ATOL.

• THE PACKAGE TRAVEL REGULATIONS

Any travel company, or travel specialist, that is selling more than one element will be considered to sell a package. Some examples of elements:

• Accommodation
• Food
• Airport Transfers
• Guides
• Activities
• Car hire
• Tickets
• Sports Bookings – i.e. golf course tee times, ski school, tennis academy.

 The New Package Travel Directive

This is currently being finalised by The UK Government and will be implemented in July 2018. The Package Travel Regulations were written before the internet and online bookings were so popular and as such the regulations are being updated to improve consumer protection in today’s world.

In essence, the rules will follow the PTRs but have further classifications such as Linked Travel Arrangements (LTAs) being considered a package.

To ensure your travel company is compliant with Package Travel Regulations and The New Package Travel Directive you have a few different routes you can implement, or join, to ensure consumer protection and Package Travel Regulation compliance.

• Supplier Failure Insurance – Incredibly difficult to get as a stand-alone product and can be expensive.
• Bonding – ABTA is the most well-known solution for bonding in the travel industry. It is an incredibly expensive solution and you do not require ABTA membership if you have an alternative compliance solution.
• Independent Trust Account Solution – Protected Trust Services falls within this section. Client monies are held in a trust account that is managed by independent trustees. You will have full use of a CRM and software system to manage your bookings and all payments. This method to ensure PTR compliance is undoubtedly the most cost-effective and easy to run.

In summary, ATOL is only applicable to package holidays with flights. The Package Travel Regulations are applicable to all holidays that have more than two elements, whether the UK or abroad.

If you’d like to learn more about ATOLs with PTS, please get in contact with one of Protected Trust Services’ (PTS) lovely staff members by calling 0207 190 9988. Or, you can visit our member support and travel trust account pages to learn more about how we protect you.