Released in September 2009, the Australian Federation of Travel Agents (AFTA) Discussion Paper regarding the travel agency regulations and consumer protection is encouraging but  House of Travel Australia believes it falls short in some areas. Chief executive officer Joe Araullo says House of Travel has on behalf of its subsidiaries, TravelManagers and Specialist Holidays, formally registered its thoughts on the paper.

"House of Travel supports the position outlined in the Discussion Paper that fundamental reform to the National Cooperative Scheme for the Uniform Regulation of Travel Agents is overdue."

Mr. Araullo says the industry has changed significantly in the past 10 years particularly with the Internet and consequently there are some good recommendations in the review. House of Travel supports that the regulations should focus on probity and prudential requirements and that state-based licensing should be replaced by uniform federal legislation however House of Travel feels that areas in the Discussion Paper are light on detail. 

"As a member of AFTA it is our view that AFTA's primary undertaking has to be to strengthen the position and role of its constituents i.e. its travel agency members. Consequently any possibility that the review could result in the weakening of financial or mandatory qualification and experience requirements for establishing a travel agency is of grave concern to us."

Mr. Araullo says that having inexperienced operators establishing businesses with little or no capital is not good for the industry as a whole.

"The existing requirements do serve as a barrier to entry but for valid reasons. They are there to ensure someone who is under-capitalised and/or inexperienced doesn't go into business only to fail jeopardising and undermining the reputations and the integrity of the existing travel agency sector. We need to protect this and AFTA should be the main body ensuring this is enforced."

Mr. Araullo believed it was definitely time to look at options for broadening consumer protection via insurance but that more work was required on the AFTA proposal as presently presented.

"It needs to be outlined and explained in detail from consumer, government and industry perspectives. There needs to be detailed discussion with the insurance industry to obtain a reliable understanding of its interest in providing stand alone insolvency insurance against both principle and travel agency collapse and the affordability of this insurance."

Mr. Araullo goes on to say he believes discussion with insurance industry representatives has to evolve into an actuarial study.

"We need facts and figures in order to quantify potential risks and profits and to forecast the likely levels of premiums prior to presenting a submission to the MMCA (Ministerial Council of Consumer Affairs). If there is interest and commitment from the insurance industry, AFTA should enlist the insurance industry's national association to separately lobby the MCCA to endorse consumer protection via insurance."

The issue of Credit Card Chargebacks is another area Mr. Araullo feels needs industry input. 
"There is no allowing for consumer demand or travel agency risk where the agent acts as the merchant for multiple supplier transactions. Industry input is vital. We are the ones dealing with this every day, more information is needed at a deeper level and right now it isn't there."

While it is inappropriate to jump to a final solution without more debate, House of Travel is a strong believer that should the MCCA decide the AFTA's eventual proposal has sufficient merit, the Travel Compensation Find (TCF) should not be lost in the wind up process. 

"It would be such a waste to lose all of the industry knowledge and experience associated with the TCF. We would strongly recommend consideration be given to metamorphosis the TCF into the proposed Australian Accreditation Scheme for the Travel Industry (AUS - ASTI) so that there is continuity and retention of the TCF understanding and experience." 

Mr. Araullo believed more emphasis needed to be applied on understanding how travel will be distributed in the future.

"AFTA supported by input from members should be attempting to foresee the evolving nature of distribution in the future. This is vital in order to understand how the role of the travel agent is going to add value to the transaction process ensuring that any discussion on the regulation of travel agents and consumer protection measures are designed so that they are appropriate for the future of the travel industry and not just the past or present." 

Mr. Araullo reiterated that House of Travel has welcomed the discussion paper and the invitation to submit its views to AFTA.

"The MMCA review is scheduled to get underway this year and we hope that AFTA is successful in generating wide-ranging debate and input from all areas of the travel industry. It is vital that AFTA receives extensive and considered input from both its constituents and other industry participants. We would most certainly support AFTA by encouraging our industry colleagues to ensure they also provide feedback if they haven't already done so."