Courtesy of R Lott of WDCS

FAQs

1. What can ABTOT offer my Organisation?
2. Why would I join ABTOT instead of ABTA or AITO?
3. If my Organisation applies to ABTOT is membership approval guaranteed?
4. What does the ABTOT logo stand for?
5. Does ABTOT have very strict accounts rules?
6. Do I have to protect my entire turnover through ABTOT?
7. If I take bookings from overseas clients will I need to include the turnover for financial protection purposes?
8. Why do I need to have combined liability insurance as a condition of membership?
9. What are my obligations as an ABTOT member?
10. Can ABTOT help if my Organisation has operational or financial problems?

1. What can ABTOT offer my Organisation?

ABTOT is available to a broad range of travel based companies and exists principally to provide a route for operators and agents to comply with the requirements of the 1992 Package Travel Regulations. The typical profile of an ABTOT member is a small to medium sized specialist very often a family owned business, although there are some larger members of ABTOT.

ABTOT offers a means by which members can offer financial failure protection to customers booking travel arrangements with the member. The method of providing financial protection is by bonding - please see Bonding section for details. Cover can be arranged for traditional inclusive holidays, accommodation only and/or other travel related turnover where this may form only a part of the activities of the travel organiser.

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2. Why would I join ABTOT instead of ABTA or AITO?

It depends what you are looking for. ABTA has a high public recognition factor but now offers only a limited financial guarantee. AITO membership is synonymous with specialist operators offering quality holidays as well as a financial protection scheme administered by AITO Trust. ABTOT does not generally promote the holiday products of its members or organise meetings or conventions. As stated in the opening paragraph ABTOT exists to provide an economical route for its members to arrange financial protection on behalf of their customers. There is, however, nothing to prevent a member from joining another association as well as ABTOT.

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3. If my Organisation applies to ABTOT is membership approval guaranteed?

Each application is assessed individually and as the ABTOT financial failure scheme is protected by shortfall insurance the insurers providing the cover vet all applications to ensure that they do not present an unacceptable risk to the scheme. In order to try and avoid applications being made that may eventually be turned down the ABTOT secretariat will review the application beforehand and compile a 'members profile' before the application is submitted. For further details of the application process please see the Membership Application section.

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4. What does the ABTOT logo stand for?

ABTOT is an 'approved body' authorised by the DTI. Membership signifies to agencies such as trading standards offices, newspaper and magazines publishers, Internet Service Providers and, of course, the general public that the member is providing financial protection for the monies it takes in advance bookings.

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5. Does ABTOT have very strict accounts rules?

To some extent this depends on the size of the programme. If members operate on a substantial scale then ABTOT will expect the resources of the member to be appropriate. Alongside the financial review ABTOT carries out a member profile for each applicant to see what risks it might represent to the association in the event of financial failure. This member profile review involves looking at the quality of management, expansion plans, commitments, selling prices and margins, cash balances throughout the year. The general rule is that ABTOT members are expected to maintain and wherever possible improve the financial strength of the travel organiser on a year by year basis.

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6. Do I have to protect my entire turnover through ABTOT?

Where you offer travel products as a 'principal' rather than an 'agent' this turnover will need to be protected. Acting as a principal may involve creating and selling packages as a traditional tour operator or putting together various elements of a package - transport, accommodation, car hire etc via the web and creating a 'dynamic package'. This turnover would need to be covered by ABTOT. If you also act in an agency capacity e.g. earning a commission for selling a Thomson Holiday then this turnover will not be covered by ABTOT as Thomson will have its own protection in place. Part of the conditions of membership is the requirement to advise your client where and when ABTOT is protecting the travel arrangement they have purchased. This is normally effected at the point of sale and then confirmed on the invoice/confirmation.

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7. If I take bookings from overseas clients will I need to include the turnover for financial protection purposes?

As the internet develops as a sales and marketing tool more bookings are being made by overseas clients. This offers additional scope for ABTOT members to increase sales. Whether it is necessary to include turnover from overseas sales for ABTOT protection will depend on the circumstances. If the holiday payment is received in the UK before departure the turnover would be included. If the payments are made after departure (or in some cases return) of the trip the turnover can normally be excluded. If bookings are received via agents the risk will remain with the agent until payment is received by the ABTOT member in the UK. Whether to include or not will be dependent on the contractual arrangements. If you need any advice ABTOT will be able to help - please note repatriation is normally excluded from cover as overseas travellers will have made their own travel arrangements.

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8. Why do I need to have combined liability insurance as a condition of membership?

A point that is often overlooked and receives limited publicity is that under the 1992 Regulations travel organisers can be held liable for loss, injury or death that may be suffered by their clients. This liability may extend to the servants and agents of the travel organiser over whom the travel organiser may have limited control. Successful claims can involve awards involving hundreds of thousands of pounds, and in many cases would bankrupt a small travel organiser which had no insurance cover in place. It is also worth noting that in the situation of a 'dynamic package' it is often claimed that the provisions of the Regulations do not apply in the case of death, injury or loss suffered by the client. However this may not be accepted by the courts in the event of a dispute and there are already cases on record where the courts have ruled that a 'package' has been created. It is obviously a prudent move to protect the future of the business and combined liability cover is in most cases relatively inexpressive.

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9. What are my obligations as an ABTOT member?

The main conditions of membership are as follows:

To tell your customers when ABTOT protection is in force and equally not to include the 'ABTOT promise' on any travel arrangement which is not protected.
To maintain records of your clients' bookings, accurately and up to date as ABTOT may require to see them whilst you are a member and will need a complete record of financial bookings in the event of financial failure. There is a requirement to make declarations of bookings in accordance with the membership conditions. There is also a requirement to pay application fees and shortfall premiums when they are due.
To advise ABTOT if there have been or are likely to be any significant changes to the i) ownership ii) senior management running the business iii) type of programme operated by the member. If any of these eventualities involve a major change to the member's profile ABTOT will need to be advised immediately.
Deterioration in the financial situation. There is an obligation on the member to advise ABTOT in the event that the member seriously breaches its banking covenants, has its credit card/merchant acquiring services withdrawn or suspended, or is the subject of any County Court judgements.

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10. Can ABTOT help if my Organisation has operational or financial problems?

The travel industry is fiercely competitive and most companies will endure some difficult trading periods. ABTOT recognises that events, often outside of the control of the member can have a critical effect on the fortunes of the business. These can include wars, oil price hikes, terrorist attacks or security alerts. Within a business the death or serious illness of a major partner can bring major problems especially for smaller operators. ABTOT cannot help in every situation but there are times when assistance could be available either by finding new investors, merging businesses or simply running down the programme. Sometimes it can help just being able to talk through a serious problem. If the difficulties affecting the business are addressed sufficiently early it may be possible to assist.

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