Play your cards right

If legislation is introduced, it will be one of many statutes affecting the travel sector this year. This includes the Payment Services Directive 2 (PSD2), which comes into force on January 13, and will mean firms are no longer able to charge fees to clients for using credit cards – so agents will have to swallow the cost of merchant acquirer fees themselves.

Tanzer is frank about the challenges the directive will present for many agents, but he is quick to dismiss suggestions from others that the industry should have lobbied harder in Westminster to prevent PSD2 from being implemented.

I cite comments from Gary Lewis, The Travel Network Group’s chief executive, who accused the industry in October of “dropping the ball” on the issue. However, Tanzer insists Abta has been working hard in Westminster to raise awareness of how agents will be impacted.

“We’ve got our own channels into government… and we’ve been in dialogue with them. The whole premise of scrapping the fee was that interchange fees would come down but that hasn’t happened – we have raised that with the Treasury and we will continue to do so. They [the government] have acknowledged that there’s an issue and we are keeping pressure up on that. I don’t think we’ve dropped the ball,” he insists. “We’ve been aware of this for a long time but it is a directive that comes from Europe. We will continue to pursue this with the government over the coming months,” he adds.

“For travel agents, the inability to recover the commission will damage them, and it’s particularly the travel agent community that are at risk [compared with other sectors].”

Asked how receptive ministers have been to Abta’s lobbying efforts, Tanzer replies: “We’ve explained that this does put a lot of pressure on SMEs in the retail sector and that travel is adversely affected. “Agents around the country are really concerned about this – the government recognises that there’s an issue there and we are trying to get a timetable in due course.”

In the meantime, Tanzer’s advice for agents wondering how to cope with additional costs from the new directive is to introduce a booking fee – “if you can get people to pay that, that’s the safest option” he says, adding though that any fee would need to apply across all forms of payment.

Data and directives

PSD2 is just the first of the significant legislative pieces being introduced in 2017. The General Data Protection Regulation (GDPR) which Tanzer describes as an “evolution from the current data rules”, will come into force on May 25 and will also mean significant changes for the sector. “It’s particularly relevant for travel because it concerns how you handle customers’ data, and in travel we tend to pass on a lot of data – for example to operators and cruise lines,” he points out.

For those concerned as to how GDPR might affect their business, Tanzer says Abta’s website has a checklist of 12 steps for the new regulation – “if you can answer all the questions then you’re a good way to understanding GDPR. The penalties are quite stiff so you need to take this seriously,” he warns.

GDPR will be followed by the new Package Travel Directive (PTD), which the industry will start having to comply with from July 1. Tanzer admits the delay in the Department for Business, Energy and Industrial Strategy’s release of its consultation on PTD will present a “challenge” for the industry – “we’re still unsure what Linked Travel Arrangements are” – he concedes, adding that cross-sector agreement will be crucial to help with implementation of the new regulations.

“It will be a little rushed for us to implement it – that’s the challenge. We and the CAA need to sit down and plan a joint communication… It will be much better if we have the same definitions and language going out.”

Tanzer agrees that the collapse of Monarch highlighted the confusion surrounding Atol and whether holidays and flights are protected.

“Even if a customer was just buying a flight, they assumed that they were Atol protected,” he says. “That’s one of the key challenges for 2018 – how we ensure that the customer is fully informed about these changes [in PTD]. What matters is that the customer is confident they know what they’re buying. We need to figure out the best way to make it clear to the customer.”

If the regulatory challenges weren’t enough this year, there is also the small matter of Brexit, and how the travel industry will be affected. Tanzer insists the government is taking the aviation issue “very seriously”, but concedes the “pressure will be on”.

“I think people [minsters] accept the business argument [of agreeing an aviation deal] – they understand that there are mutual benefits in keeping the trade going. But that’s business,” he smiles wryly. “There is, of course, the politics as well. As we go into phase two of the Brexit negotiations we need to make sure that the politics doesn’t dissolve the business argument… The pressure is going to be on this year.”

Keeping confident

There might be challenges on the horizon, but Tanzer is optimistic there will also be good news for the sector – not least with regards to an easing of pressure on western Mediterranean resorts.

“If we don’t have any more terror attacks in the eastern Med and Turkey then we’ll see a gradual return from western Med to eastern Med. Numbers are creeping up already in Turkey and Tunisia and this will take some of the price pressure off the western Med. That would be good news on all fronts and will bring short-haul capacity down,” Tanzer says.

Key for Abta though will be ensuring consumer confidence remains strong throughout the bumpy road of Brexit in 2018. “Our key message is that customers are in pole position,” Tanzer insists. “We do have a lot of things to go through,” he acknowledges, “but we must keep consumer confidence high because that’s the most important thing. People’s holidays are incredibly important. If there’s going to be a consumer squeeze then we need to make sure the customer’s holiday is still a good experience and
a must-have for 2018.”