Industry financial adviser Chris Photi has described the September 2020 Abta bond renewals as “an ongoing bloodbath”, and suggested travel firms will have little choice but to operate trust models in the future.
Speaking during Tuesday’s Barclays Travel Industry State of the Nation – Part 1 (3 November), Chris Photi of White Hart Associates said: “Abta won’t like my comments I’m afraid but the September 2020 bond renewals continue to be what I can only describe as an ongoing bloodbath.
“There has been a relaxation of the 4% adjusted net current asset testing that Abta applies to their members.
“Nevertheless Abta is fighting to increase bonds as far as its members are concerned – when they can least afford to source them.
“Why? Well simply to protect a beleaguered post-Thomas Cook failure captive insurer.”
The captive insurer underwrites Abta bonding, following the collapse of Thomas Cook.
“I would ask the simple question, where does Abta’s increased bonding requirements come from?” said Photi.
“I would also suggest Abta needs to be more transparent with members in changes to the Abta rules. Their rules are published, but Abta are not applying those rules.
“They have not subjected their membership to any input or consultation.
“They are simply applying different methods based around the maximum protection view in relations of bonds.”