Technology

UK regulator notes impact of web giants’ transition to operate more like travel agents

Posted by Lee Hayhurston
UK regulator notes impact of web giants’ transition to operate more like travel agents

Moves by some of the big online players into the travel agency sector could have an impact on the more traditional part of the market that is regulated by the Civil Aviation Authority.

The warning comes from the annual report produced by the Air Travel Trust, the funds which sits behind the UK’s Atol scheme that protects customers who buy package holidays.

The ATT notes that government data show that the while the number of departures from the UK that do not fall within Atol has seen a moderate increase, licenced passenger numbers have fallen.

A commentary in the report on the travel market states: “In the wider travel market, technology companies such as Google, Airbnb and TripAdvisor continue to enhance their travel offering.

“These businesses do not sell air travel directly, nor do they sell packages, but in some instances are moving into a travel agency or facilitation role.

“If these new developments continue, changes in how consumers buy holidays could impact the existing licenced and protected sector.”

The ATT collects the £2.50 per passenger Atol Protection Contribution that has seen the fund transformed from being tens of millions of pounds in the red to a healthy surplus.

In 2016/17 the APC netted £62.305 million, before accounting for APC credits, relating to 24.921 million passengers down from £62.970 million the previous year for 25.188 million passengers.

The trust is in the black for the fifth year running with £145,087 million net current assets, up from £139.356 million as of the year end March 31, 2016.

In 2012 APC payment were extended to online travel agents after changes to the UK Atol scheme that introduced a new category of holiday called ‘Flight-Plus’.

However, Atol protection does not cover holidays put together via individual component sales and airlines are not obliged to have a licence even when selling holidays.

It was originally intended to provide customers of operators putting together holidays with a flight the reassurance they will be repatriated or refunded of the firms goes bust.

A revised EU Package Travel Directive which is making its way through the UK parliament will further extend protection to more online sales and introduce a new category known as ‘Linked Travel Arrangements’.

How this new directive will be applied in EU member states remains unclear with German agents having recently appeared to have won the right to sell packages without also taking on the additional responsibilities of tour operators.

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