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image courtesy: Austria Tourism, Nationalpark Hohe Tauern Karten/ Franz Gerdi
The discussion paper was produced with industry-wide input and identifies two key areas of reform:
The Council of Australian Tour Operators (CATO) has released a discussion paper with the view of creating a path forward for the Australian outbound travel industry post-COVID.
CLICK HERE to access the discussion paper.
"A few months ago, CATO called for suggestions for industry reform. The aim being to use the COVID crisis to break down some of the industry’s silos and find a way to come out stronger." CATO Managing Director, Brett Jardine
The response was significant with CATO receiving submissions and ideas from all over the industry.
"Two issues in particular were raised time and again. These related to a consumer protection scheme, and reforming ATAS - the AFTA Travel Accreditation Scheme. Our discussion paper is intended to spark debate and discussion on these topics," added Jardine.
The CATO Board developed the discussion paper over a two-month period.
The reform CATO is proposing is two-fold:
Whilst still administered by AFTA, the desire is for such a scheme to be overseen by an independent board with representation from each outbound sector—retail, land supply and cruise—that would sign off on the accreditation criteria for their respective sectors.
"We believe this will significantly broaden ATAS membership and bring many non-accredited businesses into the fold," Jardine said.
CATO believes that, if adopted, the proposals would provide consumer protection against supplier insolvency, industry protection against credit card chargebacks, and a compelling reason for Australians to book with ATAS-accredited entities thereby protecting the local travel industry.
"Our industry is in the biggest crisis it has ever faced. Now is the time to come together. Now is the time to reassess everything and to see if there’s a way for our industry to come out better than we went in," asserts Jardine.
The Council of Australian Tour Operators (CATO) has applied for and been granted access to utilise the World Travel & Tourism Council's (WTTC) recently released "Safe Travel Stamp".
"Our application has now been approved based on our members implementation of enhanced health and safety measures, in line with the WTTC global Safe Travels protocols," said CATO Managing Director, Brett Jardine.
WTTC's global Safe Travels protocols were developed to optimise sector-wide recovery efforts by rebuilding confidence among travellers and ensuring a coordinated approach of the global Travel & Tourism public and private sectors.
WTTC has created and offers the protocols in good faith for use by organisations as they seek to re-open during the COVID-19 pandemic.
CATO Members use of the Safe Travel Stamp is approved based on your acknowledgement and agreement that:
CLICK HERE to review CATO's Safe Travel Protocols.
CLICK HERE to read the WTTC Safe Travel Stamp User Terms & Conditions.
Contact CATO at cato@cato.travel for more information and to request access to the WTTC Safe Travel Stamp.
The usage example below (right) shows the Safe Travel Stamp incorporating the CATO logo.
Liz is Managing Director of Sundowners Overland, and was recently elected to the position of Vice-Chair of CATO. In this quick Q&A, Liz talks about her career, the future of travel, and the role CATO can play in the industry's recovery in Australia.
What was your first 'travel' job, and where does your passion for travel come from?
My first travel job was as a Tour Leader for Sundowners Overland. I had been living in Japan, travelled back to the UK overland on the Trans Mongolian Railway and through Central Asia (booked through Sundowners) and, after a few years working in IT, decided to make the move into the travel industry. I had specialised in Russian history at university, so it was a natural fit.
You've been on the CATO Board for two years, and were recently elected to the position of CATO Vice-Chair, what are you most looking forward to delivering, influencing or achieving during your tenure?
Whilst our sector faces many challenges now, I am optimistic about the future and believe we have the collective capability to create a more cohesive and unified industry.
As a member of the Road to Recovery Committee we are working hard to ensure our members are well positioned to come out the other side of COVID-19. That includes defining more standardised guidance and protocols for operators so that we give customers confidence to get out there and safely travel and experience the many great destinations and experiences our members provide.
CATO is the peak representative body for the Australian travel industry's land supply sector, what role do you see it playing in the local industry's recovery from the global covid-19 shutdown?
As a strong industry advocate, I’d like to see CATO continue to build its profile through a range of trade and consumer channels, so that travellers choose to book their next journey with one of our members knowing that they will not only get a great experience, but also one that is safe and secure.
Building trust and confidence in our sector and members is the most important role CATO can play in the local industry’s recovery.
CATO Members create and supply travel product to Australia's retail travel networks, what role will those members play in helping retail find its feet again?
I am sure that all CATO members will be doing all they can to assist retail with both training and continuing to support and promote booking through a trusted agent to clients. We have all learnt a thing of two about booking conditions over the past few months. Ongoing transparency will be vital to winning the trust and confidence of the customer, which is a collective responsibility.
How can CATO strengthen its relationship with travel agents even more deeply, to ensure things are beneficial for everyone on the other side COVID-19?
We have all had to work together over the past few months to try to ensure the best outcomes for impacted clients through COVID-19. Now more than ever the reassurance and assistance that agents can provide their clients will be key coming out the other side.
Whilst there will be, I believe, some rebalancing of the relationship between agents and suppliers this will hopefully lead to careful matching of client needs to the array of product available to them. In turn, suppliers will be keen to hear how we can assist agents going forward with messaging and ways to boost consumer confidence in the coming months; now more than ever we can all learn from each other.
Fundamentally, how changed will tourism be when international borders re-open and people start moving again? Will the travel experiences created and operated by Sundowners Overland, for example, be noticeably different?
I think many things will change, and much will stay the same. The natural curiosity that people have to explore and discover hasn’t changed, and that will mean people will still want to interact and learn from others.
I feel travellers will fall somewhere on the continuum of extremely cautious and wanting to have a highly curated and managed experience through to those who will continue to explore as they have previously. All, however, will want the reassurance that they are going to be looked after at every step of their journey.
I am sure that we will all see an increased interest in the “open air” tours, be it in Mongolia, the Caucasus or the wilds of Kyrgyzstan and perhaps less focus, in the short to medium term, on visiting museums.
At Sundowners Overland we will continue to offer tailored independent journeys, small groups (maximum 15) and private group tours which I believe will continue to grow in popularity. Being able to customise inclusions and offer flexibility on the ground within itineraries will be a feature.
If you could travel to any place on the planet right now, where would it be?
Other than back to the UK to see friends and family I’d quite happily be back in mountains in Georgia with some nice wine and cheese!
The Annual General Meeting of the Council of Australian Tour Operators was held earlier today—Thursday, 25 June 2020—with a record eleven nominations vying for six vacant Board positions.
"Just a few years ago we struggled to fill board positions. So, to have a record breaking field of high quality candidates seeking to join the board now is absolutely fantastic. It speaks to how engaged the members are and how important CATO membership has become, especially during this covid crisis," said CATO's Managing Director, Brett Jardine.
Jardine asserted that, as an organisation, CATO gives every member a voice and, vitally, every member has an equal opportunity be on the board and make a real difference to the land-supply sector and the travel industry more broadly.
Four CATO Board Members are mid-way through their two-year term including current Chair, Dennis Bunnik, along with Brett Mitchell (Intrepid Group), Amanda McCann (Collette) and Julie King (Julie King & Associates).David Walker, Managing Director – Son’n’Ski Holidays, has been returned by CATO members to his third consecutive term on the CATO Board.
Liz Anderson, Managing Director at Sundowners Overland was elected unopposed as CATO’s Vice-Chair for the next two years.
Image: CATO's new Vice-Chair, Liz Anderson with the new-comers to the Board: Brad McDonnell, Lisa Pagotto, Aaron Zoanetti and Peter Douglas.
“The four other successful nominees who will be joining the CATO Board for the next two years are all new-comers and include a strong line-up of youth, capability, and experience from a cross-section of our membership,” said CATO Managing Director, Brett Jardine.
The four new CATO Board Member appointments are:
Acknowledging the efforts of the council's departing board members, Jardine said, "The CATO board is a very active one, and I would like thank the outgoing board members deeply for their considerable contribution and input to CATO."
Board members ending their term at this time are Halina Kubica – Greece & Mediterranean Travel; Matt Cameron Smith – AAT Kings; and Justine Waddington – Encounter Travel.
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As the industry moves from crisis management to recovery, the protocols developed and deployed by tour operators and the land supply sector will play a key role in ensuring the safety, health and security of travellers and the industry's workforce alike.
"By their nature as travel experience creators, tour operators and wholesalers weave all of the industry's moving parts together in their bespoke consumer offerings—airlines, hotels, ground transport, attractions, guides, government regulations and more," says Brett Jardine, Managing Director of CATO.
"And while all CATO Member businesses and their offerings are unique, we believe it's essential that a closely aligned, global approach to COVID-safety is the best way to navigate our way through the industry's recovery," adds Jardine.
Accordingly, CATO has provided members with a set of COVID-safe travel protocols based on those developed by the World Travel & Tourism Council (WTTC) in collaboration with leading tour operators around the world.
"The protocols see the land-supply sector lead the definition of industry best practice as we move from crisis management to recovery and put the health and security of travellers and the industry's workforce at their core" says Jardine.
Supported by medical evidence, the coherent protocols have been developed through a coordinated, collaborative, and transparent approach within the global travel and tourism sector, governments, and public health authorities.
The detailed protocols released by CATO focus on three key areas:
The protocols describe recommendations around signage, staff training and sanitation, health and hygiene, social distancing, contactless payment, contact tracing and communication.
"CATO's COVID-Safe Travel Protocols document will be subject to change as borders begin to re-open and restrictions ease to ensure it remains relevant through every stage of recovery and beyond," says Jardine.
There's been a lot of debate and discussion recently about travel credits over refunds and, where refunds are being issued, why they're taking so long to be processed.
In this video, CATO's Chair, Dennis Bunnik tackles those questions to provide some insight and answers around:
In Australia, some 1-in-13 jobs is impacted directly or indirectly by travel and tourism. So, we all know somebody whose livelihood is dependent in some part on the travel and tourism industry.
CATO members create, supply and deliver the travel experiences that Australians buy through travel agencies, and we're all devastated by the events of Covid-19, and by the fact that none of us can travel.
"None of us like having our wings clipped. And we understand that travel is such an important part of Australian culture. It's who we are, it's what we do, it's as much a part of our culture as going down to Bunnings for a sausage sizzle," says Bunnik.
But for that to continue once this is all over and the borders are open again, we're going to need a strong and vibrant Australian travel industry.
Because without it, our wings are all clipped permanently.
And none of us want that.
Amid the mounting confusion and concern around the rights of travellers seeking refunds from bookings cancelled due to the impacts of the COVID-19 pandemic, Australia’s peak body representing tour operators and travel wholesalers explains to consumers why travel ‘credits’, and not refunds, are the optimal resolution.
CLICK HERE for a downloadable PDF version.
The COVID-19 pandemic has obviously had a profound impact on travel with widespread and ongoing ramifications.
One of the most contentious points being debated in mainstream media right now is consumer rights around refunds for bookings made where travel was not possible due to government restrictions imposed in the efforts to contain the spread of the virus.
The Council of Australian Tour Operators (CATO), the representative body for tour operators and wholesalers that supply travel experiences to Australian consumers, would like to provide deeper context for consumers to better understand the complex issue.
On face value, across-the-board refunds might seem to be a fair and reasonable outcome but CATO Managing Director, Brett Jardine, says it is not a straightforward proposition given the way the travel industry works from the inside.
"Behind every tour or holiday is a complex network of operators that work in unison to deliver the safe, seamless experiences we all expect when we travel," he said.
"Australian based tour operators and wholesalers develop international travel packages that are distributed through retail travel agencies and sold directly to consumers."
"During the development phase, these organisations commit time, money and resources working with independent suppliers based in the destinations where the travel takes place and who will ultimately deliver specific components of each holiday. So, once a booking is made, and even before, contractual commitments to the various parties involved have already been made."
A typical multi-day package may include many individual elements such as:
"CATO members completely understand the frustration and anger some travellers have right now which is why we felt it was critical to get the facts behind the headlines out there," said Mr Jardine.
"Once consumers are fully informed, they are in a much better position to understand why travel credits are the optimal outcome from this difficult and unprecedented situation."
Mr Jardine said in the majority of cases, travel credits for paid services have been negotiated between suppliers and the tour operators. "This is because the payment for international travel services are arranged months (sometimes years) in advance with contracts between tour operators and their suppliers that are binding," he said.
"Returning deposits, is not often an option. In normal times, our members would be hit with a cancellation penalty if they do not proceed with bookings. Hence, when an initial deposit for a holiday is paid, it is generally non-refundable as this is a commitment from the traveller seeking the services of the agent and tour operator to start preparing their future trip."
Travel plans might only involve a small number of components (ie: air and hotel) but a typical two-week tour can involve dozens of individual elements and this is where the complex nature of the international travel ecosystem can become challenging to follow.
"Whilst plans for one future trip may appear simple, virtually every itinerary is slightly different," added Mr Jardine. "Multiply that by the 6.5 million leisure trips taken by Australians in 2019, and a huge amount of time and energy is expended by professionals in every layer of the travel ecosystem or supply chain to be able to deliver the final travel product."
Most participants in the global travel ecosystem are supportive of travellers postponing their trips as opposed to cancelling and seeking a full refund.
There may be circumstances where a refund is a more appropriate course of action and in some instances, operators do offer refunds as part of their booking conditions. However, consumers do need to be aware that if a refund is offered by an operator due to force majeure, each contributor to the travel package (such as those elements listed above) may have the right to deduct any unrecoverable costs.
Examples of unrecoverable costs include:
This amount may vary subject to what has been involved in the development of an itinerary.
CATO believes a better outcome is therefore delivered by a future travel credit because it will generally be provided at up to 100% of the value of the travel originally booked.
"By helping travellers understand this deeply connected supply chain that has delivered outstanding, high-quality and secure travel experiences for decades we hope to see all concerned accepting a future travel credit as the best outcome," said Mr Jardine. "The alternative and potential rush for full refunds could send many parts of this network to the wall and result in further consumer disappointment."
On 05 May 2020, CATO Managing Director, Brett Jardine, discussed credits, refunds and the travel & tourism ecosystem on air with ABC Radio Sydney's Cassie McCullagh.
The nearly hour-long Focus segment explored the 'vexed world of travel refunds and credits', and included contributions from consumers with impacted travel bookings; travel lawyer, Anthony Cordato; and Andrew Paull from law firm Slater + Gordon.
CLICK HERE for the full Focus radio segment.
CLICK HERE for Jardine's seven-minute interview with Cassie McCullagh.
Last Friday 03 March, the NSW Government confirmed thousands of small businesses across the state struggling to cope with the COVID-19 shutdown may receive grants of up to $10,000 under a new assistance scheme.
This is in addition to other Federal Government stimulus measures and will likely only apply to CATO Members in our Tier 1 & 2 categories.
Whilst this is limited to business operating in New South Wales, we are researching if similar initiatives are being rolled out in other States and Territories.
To be eligible, NSW businesses will need to:
Applications for the small business grant of up to $10,000 will be available through Service NSW within a fortnight and remain open until 1 June 2020.
CLICK HERE to read the full NSW Government announcement.
CATO will keep a look out for further updates and advise as they become available.
For formal financial advice about how these announcements might affect your business, please refer directly to your own accountant.
By Aaron Zoanetti, Pointon Partners
LIMITING EXPOSURE TO WORLD EVENTS THROUGH EFFECTIVE LEGAL DOCUMENTATION
No industry is more directly and broadly exposed to world events such as Coronavirus than the travel industry. Many businesses will experience challenging times in the coming months as forward bookings cancel and new bookings come to a halt.
There is not much within the control of tour operators to generate new bookings in this environment. But where customers are cancelling or where the tour operator has taken forward risk on inventory, what can be done at a practical level to mitigate exposure?
Cancellations – do I need to refund my customers?
Turning firstly to cancellations, customers may have rights at law (or potentially under booking conditions) to cancel their booking due to Coronavirus being considered an event of force majeure.
An event of ‘force majeure’ is an unexpected and extraordinary circumstance outside of the control of the parties which prevents the fulfilment of a contract. Usually the parties will be excused from performing their obligations in these circumstances.
Where a customer has the right to cancel or where the operator cancels because of an event of force majeure, a crucial question is whether the operator needs to refund the customer, even if the operator has already paid its suppliers.
This type of fact scenario was considered in the 2015 case of Ferme v Kimberley Discovery Cruises. In this case a cruise operator cancelled a cruise just prior to sailing because of cyclonic weather conditions and sought to rely on a provision in its booking conditions which stated that no refunds would be made if the cruise was cancelled due to ‘unexpected events’.
The court found the 100% cancellation fee provision to be an ‘unfair contract term’ and therefore void because it went further than necessary to protect the legitimate interests of the cruise operator. Because of this, customers were entitled to a full refund, even though the cruise operator had incurred costs that were not recoverable.
The court offered some guidance on a type of condition that would be less likely to be considered ‘unfair’ and would therefore be enforceable: In effect, a condition which limits cancellation fees to amounts which have not been expended or legally committed to be spent would likely be enforceable in a situation where travel is cancelled due to ‘unexpected events’.
Do my suppliers need to refund me?
Whether or not an operator’s suppliers need to refund payments made for future services depends on the agreement between the operator and the supplier.
A supplier agreement should contain a force majeure provision which gives a right to cancellation and refund where services are cancelled due to unexpected and extraordinary events. A useful tip is to ensure that the definition of ‘force majeure’ encompasses a ‘do not travel’ or ‘reconsider your need to travel’ advice issued by DFAT.
Key Takeaways
Properly drafted cancellation/refund terms should mitigate exposure to refund customers for existing bookings where funds have already been paid to suppliers (although profit and potentially administration costs may not be recoverable).
Properly drafted force majeure provisions in a supplier agreement should mitigate the risk associated with forward risk on inventory that is no longer required due to ‘unexpected and extraordinary events’.
CATO Members seeking further advice, please contact us for a direct introduction to Aaron Zoanetti.
