Normally, I find that it’s much easier to spout prophesies about things after they’ve happened, but when my Christmas TV viewing was hijacked by my four-year-old and we had run out of Quality Streets, there was little else to do but turn my attention to the months ahead. Here are three predictions for 2015…
SBA SOS
In its latest piece of Atol tinkering, the CAA issued a consultation back in June 2014 proposing further changes to the consumer protection scheme. Grabbing the headlines was the CAA’s proposal to scrap the Small Business Atol (SBA) scheme, much to the consternation of the 950 SBA-holders in existence. They were told they would have to meet new financial tests and inject additional capital or find a home among the managed services, such as the Atol Accredited Bodies.
Since the consultation closed in October there has been a softening in the CAA’s rhetoric over scrapping the SBA, which may suggest it is considering alternatives.
We’ll know more when we see a summary of response letters due to be released in the next few weeks, but judging by the apparent change of heart, we can guess most must have had a lot in common.
Prediction: Flushed with New Year cheer, the CAA to retain a scheme for smaller businesses, albeit with some changes to the qualifying criteria.
Deals or no deals?
Last year was definitely the one where investors returned to travel, with many prominent companies changing hands or receiving investment, including Monarch, Travel Counsellors, Saga, Stella Travel Services (Global, Travelbag, Travel 2), Shearings, JacTravel and Elegant Resorts, to name but a few. Phoenix and Inflexion “wrapped up” their respective investments Riviera and Scott Dunn in the final business hours before Christmas.
Private equity investors in particular went crackers for travel in 2014, and as we head into 2015, all the necessary elements are still there for more deals to flow.
Prediction: There should be enough appetite from private equity to keep deal activity flowing at least until June.
Iata ta-ta
In a move worthy of Ebenezer Scrooge himself, Iata announced shortly before Christmas that agents would need to start paying for tickets at least every two weeks in an attempt to limit the airlines’ exposure to a repeat of the AirFastTickets debacle, which cost it £45 million.
The changes will have a crippling effect on cash flow, particularly for those TMCs who issue tickets to their corporate clients on 30-day credit terms. This makes it all the more frustrating that a decision with such profound consequences was taken by Iata’s unelected Agency Programme Joint Council; an unanswerable, opaque decision-making body.
Prediction: Expect a drop in new Iata applications, further mergers in the TMC sector, and a good year for the flight consolidators.
Martin Alcock is director of the Travel Trade Consultancy
