ANNUAL REPORT & FINANCIAL HIGHLIGHTS FOR THE YEAR ENDED 30 JUNE 2007
CONTENTS
03 THE ROLE OF ABTA
12 SIGNIFICANT ACHIEVEMENTS & KEY STATISTICS
04 PRESIDENT & BOARD OF DIRECTORS
14 AN INDUSTRY IN GOOD HEALTH
05 MANAGEMENT TEAM
16 MOVING TOWARDS A SUCCESSFUL AND SUSTAINABLE FUTURE
06 THE YEAR AT A GLANCE 08 PRESIDENT’S REPORT 10 REPORT OF THE CHIEF EXECUTIVE
22 FINANCIAL HIGHLIGHTS
THE ROLE OF ABTA
BUILDING CONFIDENCE IN TRAVEL
TO PROMOTE THE INTERESTS OF ALL MEMBERS IN THEIR RELATIONSHIPS WITH EACH OTHER AND WITH OTHER SECTORS OF THE INTERNATIONAL TRAVEL INDUSTRY.
TO MAINTAIN A CODE OF CONDUCT GOVERNING THE ACTIVITIES OF PRINCIPALS AND AGENTS FOR THE BENEFIT OF MEMBERS AND THE TRAVELLING PUBLIC.
TO MAINTAIN LIAISON WITH GOVERNMENTS AND ORGANISATIONS CONCERNED WITH THE DEVELOPMENT OF TRAVEL AND TOURISM BOTH IN THE UNITED KINGDOM AND ABROAD.
Annual Report and Financial Highlights 2007
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PRESIDENT AND BOARD OF DIRECTORS
4
JUSTIN FLEMING PRESIDENT
JOHN BEVAN
DANIELE BROCCOLI
STEVEN FREUDMANN
MIKE GREENACRE
NOEL JOSEPHIDES
HUGH MORGAN
JOHN DE VIAL
Annual Report and Financial Highlights 2007
THE MANAGEMENT TEAM
MARK TANZER CHIEF EXECUTIVE & MEMBER OF THE BOARD OF DIRECTORS
SIMON BUNCE HEAD OF LEGAL & MEMBER SERVICES
CAROL HALE HEAD OF OPERATIONS
DAVID MARSHALL HEAD OF POLICY & COMMUNICATIONS
Council of Regions HEATHER FIELDING SUE FOXALL BRIDGET KEEVIL RICHARD LOOSLEY RODDIE MACPHEE SANDY MURRAY
MICHAEL MONK HEAD OF FINANCIAL SERVICES
DOREEN PARKER DARREN PHILLIPS DAVID POWELL JACKIE STEADMAN JOHN STEPHENS
KEITH RICHARDS HEAD OF BUSINESS DEVELOPMENT & CONSUMER AFFAIRS
Annual Report and Financial Highlights 2007
5
2006 – 2007
THE YEAR AT A GLANCE
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n ABTA conducts advertising campaign in the national press explaining changes to its financial protection scheme
August 2006
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n Increased security at UK airports causes widespread delays after terror alert n Turkish terrorist group the PKK targets tourists in Marmaris and Antalya resulting in UK tourist casualties
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July 2006
September 2006 n ABTA withdraws its Code of Conduct from the OFT accreditation scheme following changes to its financial protection requirements
n Fires in Halkidiki Greece result in evacuation of 1,500 British tourists
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October 2006 n ABTA wins Judicial Review on CAA’s guidance note on ATOLs
November 2006 n TUI announces that 50% of its sales will be outside of its ATOL by 2008
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n Two children die of carbon monoxide poisoning at a villa in Corfu while on holiday with an ABTA Member
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Annual Report and Financial Highlights 2007
December 2006 n Bad fog at UK airports causes large scale cancellation of flights and loss and delay of considerable amounts of baggage
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January 2007
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Widespread delays at UK airports n FTO considers a legal challenge to the Government over its doubling of APD n The Prime Minister publicly backs people’s right to fly n The Spanish Government announces requirement for airlines to collect Advance Passenger information for passengers from the UK and Eire
n Thomas Cook and My Travel announce plan to merge
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n Air Passenger Duty doubles-up to £80, on a premium long haul fare n Office of Fair Trading gives deadline for all travel companies to include non optional charges in their website headline prices
March 2007 n Ryanair announces deal with Expedia to provide accommodation deals on ryanair.com n TUI and First Choice file notice of their merger
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April 2007
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February 2007
n Sterling breaks psychological two-dollar barrier boosting sales to USA n ABTA Members vote for restructured association with a slimmed down Board at an EGM
n Travel Weekly and an anti-fraud coalition, including ABTA, launch campaign
Glasgow airport attack
Madeleine McCann abduction May 2007
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n Madeleine McCann is abducted while on a package holiday in Portugal with an ABTA Member n Lastminute.com joins the Federation of Tour Operators n Travel Weekly survey finds that ABTA membership is in the top three requirements for the public when booking a holiday
June 2007 n The Treasury announces that from 2009 the FSA will regulate sales of travel insurance sold by travel agents and tour operators n Thomas Cook Group announces up to 2,800 job losses following merger
n UK Passport Agency announces that first time passport applicants 16 and over will need to attend an interview n Loss of life avoided following abortive terrorist attack at Glasgow airport
Annual Report and Financial Highlights 2007
7
PRESIDENT’S REPORT
THE VOICE OF THE INDUSTRY THE SECOND HALF OF 2006 WAS CHARACTERISED BY A SUCCESSION OF NEGATIVE EVENTS, WHICH IMPACTED ON THE INDUSTRY: INCREASED SECURITY AT UK AIRPORTS, TERRORIST ATTACKS IN TURKEY, FIRES IN GREECE AND A RETURN TO THE PEA-SOUPERS OF THE 1950s WITH HEATHROW AIRPORT VIRTUALLY SHUT DOWN OVER CHRISTMAS BY THICK FOG. OUR CUSTOMERS ARE A RESILIENT BUNCH BUT IT WAS A RELIEF THAT 2007 HAS LARGELY SEEN US ESCAPE FROM DISASTERS, MAN-MADE OR NATURAL.
The British weather gave most ABTA Members’ businesses a massive boost, with 2007 sure to go down in history as the summer that never happened. Talking to my industry colleagues it is clear that this has also had a positive knock- on effect for winter sun and early bookers for next summer. ABTA has continued its metamorphosis this year as we seek to become the voice of the whole industry without diluting the need to protect the interests of our core membership. It is essential that we make membership as attractive as possible, truly adding value to any who join. We are acting on this need by developing new initiatives and services to complement those already on offer from us. At our Tenerife convention we launched our carbon offsetting scheme, Reduce My Footprint, to the public together with a free trauma crisis support service. We are also investigating ways to improve further our communication with Members as well as raising our profile with the travelling public, including web-based media. This will help ensure that ABTA membership continues to be a very important consideration when
customers come to book. This is very much still the case, with a recent survey showing that ABTA membership is one of the top three criteria that people use when choosing their travel company. Often our industry has been criticised for its apparent disjointed approach to lobbying the Government and the European Union. Whether this criticism is always justified or not, it is clear that an industry voice would be a great step forward and, in my view, ABTA is the obvious candidate to take on this role. We have already seen great improvements over the last year in this area and I know that the work being done by ABTA in conjunction with various Government departments will further increase our standing. This will help us immensely when we are confronted with potentially damaging legislation. We have particularly good relationships with the Office of Fair Trading, the Foreign Office and the Department for Business, Enterprise and Regulatory Reform and we are developing our contacts with the Department for Transport and the Financial Services Authority.
Amongst ABTA’s objectives in the coming year will be a greater emphasis on operational support for our Members in areas such as health and safety and crisis management. We have also set up a dedicated Business Support team which will be more Member facing and offer technical support on a range of issues. Lastly I would like to thank my colleagues on the Board of Directors and Members of the Secretariat for their invaluable help and support over the past twelve months. 2008 will inevitably bring a raft of challenges and I feel confident that ABTA is now in a much better position to help our Members overcome any difficulties and successfully grow their businesses profitabally.
Justin Fleming President
Often our industry has been criticised for its apparent disjointed approach to lobbying the Government and the European Union. Whether this criticism is always justified or not, it is clear that an industry voice would be a great step forward and, in my view, ABTA is the obvious candidate to take on this role.
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Annual Report and Financial Highlights 2007
Amongst ABTA’s objectives in the coming year will be a greater emphasis on operational support for our Members in areas such as health and safety and crisis management. We have also set up a dedicated Business Support team which will be more Member facing and offer technical support on a range of issues. Justin Fleming, President
ABTA has continued its metamorphosis this year as we seek to become the voice of the whole industry without diluting the need to protect the interests of our core membership.
Over the course of the year ABTA’s Press Office handled
130 TV interviews 441radio broadcasts 1,050 media enquiries Annual Report and Financial Highlights 2007
9
REPORT OF THE CHIEF EXECUTIVE
NEW NAME, NEW SERVICES IN SPITE OF INCREASED FUEL PRICES AND LONGER QUEUES AT AIRPORTS DUE TO INCREASED SECURITY MEASURES, THE MARKET SAW A RISE OF ONE MILLION, UP 1% ON THE PREVIOUS YEAR. BOOKINGS TO EUROPE REMAINED FAIRLY STATIC BUT THE CONTINUED POPULARITY OF LONG HAUL WAS REFLECTED BY A 10% RISE.
Members reported a similar picture with the traditional package holiday market still under pressure from the no frills carriers, but cruising and long haul business remained very healthy. Members avoided the spectre of large numbers of unsold holidays by sensible reductions in capacity and this helped to maintain profit margins. Failure levels fell from 47 to 32 compared to the previous year. These figures include Members who trade in both categories of membership. This resulted in £2,690,263 paid out in claims. Changes to ABTA’s scheme of financial protection, plus the ongoing work of our Risk Manager, have helped to remove uncovered failures which had plagued the association over recent years. ABTA’s finances are in a healthy state with the accumulated fund standing at £7,407,250 – a rise of £235,863 on the previous year. We welcomed 38 new Members over the
course of the year but overall numbers declined by 106, largely through consolidation and retirement, to finish the year at 1,515. We will continue our efforts to grow membership and broaden out the base of ABTA membership to include non travel agents and principals. This intention was reflected by our move this year to drop The Association of British Travel Agents as our title in favour of ABTA – The Travel Association. A redesigned and new look logo also symbolises a dynamic forwardthinking organisation intent on truly representing the whole travel industry. The recruitment of David Marshall as Head of Policy & Communications last year has led to a strengthening of our lobbying role. As well as sending submissions on various consultation documents we attended the three main political parties’ conferences. Closer relationships with the appropriate politicians will greatly increase
ABTA’s effectiveness in dealing with Parliament and help us better defend the industry’s interests. We had been in discussions with the Office of Fair Trading for some time over the practice of non-optional prices not being included in website headline prices. These bore fruit this year when the OFT and ABTA jointly announced they would take action against offenders. In spite of at times severe logistical problems, ABTA Members deserve great credit for the speedy way they modified their websites and, with the exception of two non-Member airlines that are still not fully compliant, this misleading and unfair practice has been largely eradicated. The announcement by the then Chancellor Gordon Brown in December 2006 that Air Passenger Duty would double was an example of Government opportunism at its worst. A transparent revenue-raising move was rapidly rebranded as a ‘green’ initiative
A redesigned and new look logo also symbolises a dynamic forward thinking organisation intent on truly representing the whole travel industry.
38 new Members
% Failure rates down 32
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Annual Report and Financial Highlights 2007
We launched a number of new services this year including ABTA Resort Check, Reduce My Footprint, Family Safe Holidays and ABTASure - commissionable travel insurance in conjunction with Citybond. Mark Tanzer, Chief Executive
and was rightly the subject of legal action from the Federation of Tour Operators, fully supported by ABTA. The way in which the rise was introduced is estimated to have cost ABTA Members £40 million. Although the FTO’s action was unsuccessful ABTA will continue to fight any Government action which damages Members’ businesses. ABTA had a notable legal success following a Judicial Review of the CAA’s guidance note on when an ATOL notice is required. The note had potentially very damaging implications for Members’ businesses and the original judgement found that the guidance note should be quashed. The CAA subsequently unsuccessfully appealed the judgement. Certain aspects of both judgements over the exact definition of a package require clarification, which is currently being looked into by the Department for Business, Enterprise and Regulatory Reform.
In 2004 ABTA obtained an exclusion from Financial Services Authority regulation for most sales of travel insurance through travel agents and tour operators. This was always subject to a review in 2007 and the exclusion has now been withdrawn to take effect from January 2009. We are now in discussion with the FSA over the form of regulation they will introduce to ensure the resulting arrangements are workable. We launched a number of new services this year including ABTA Resort Check, Reduce My Footprint, Family Safe Holidays and ABTASure - commissionable travel insurance in conjunction with Citybond. These will be supported by our new Product Marketing Manager. The Travel Industry Partner scheme goes from strength to strength and currently stands at 160 Members ably supported by our new Senior Membership Marketing Manager, who has also carried out a more active recruitment
drive as well as visiting many Members and Travel Industry Partners to understand how ABTA can improve our service. ABTA Magazine’s circulation grew over the year by 15% to 16,250 and welcomed back Editor Maria Pieri in a new position as Editorial Director. The Press Office had a busy year with 130 TV interviews, 441 radio broadcasts and over 1,000 media enquiries. Lastly I would like to congratulate Justin Fleming on his re-election as ABTA President and thank him for his hard work and support over the year. The same goes for the ABTA Board of Directors and I am looking forward to working with the new Board in its revised format which will allow for swifter and more focused decision making.
Mark Tanzer Chief Executive
ABTA Magazine circulation
16,250 Annual Report and Financial Highlights 2007
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SIGNIFICANT ACHIEVEMENTS & KEY STATISTICS
ABTA AND ITS MEMBERS ARE FACING NEW CHALLENGES AND A CHANGING MARKET. IN THE FOLLOWING PAGES WE RUN THROUGH SOME OF THE NEW INITIATIVES AND SERVICES THAT ABTA HAS DEVELOPED THIS YEAR.
ABTA is placing an increasing emphasis on its role as a trade association, helping to ensure that it is an organisation that travel companies will aspire to join, and that current Members see as essential and adding significant value to their businesses. Improving communications is key to the work ABTA does so that Members are kept fully aware of everything the association offers them and their customers. Ensuring our industry’s long term future is essential if we are to prosper in the 21st century and so we also set out the work that’s being
done to ensure a sustainable future, safeguarding our Members’ businesses and that’s contributing to the well-being of the planet. On Pages 14-15 we give a commercial overview of 2007 and on pages 16-21 developments at ABTA since last year’s Annual report.
NEW INITIATIVES AND SERVICES FOR A CHANGING MARKET
Value of claims settled during the year including failures pre 1 July 2006
Total enquiries to the Members’ Information line 2006-07
2004-05
2,483,888
2005-06
4,186,040
8,830
2006-07
12
2,690,263
Annual Report and Financial Highlights 2007
enquiries
C
£5.11million Net current assets up 6%
£5.70million Total income up 13%
£7.41million Accumulated fund up 3%
Company failures
Complaints 2006-07
The tables below include companies that traded as both retail and principal Members and so are counted in both categories
2004-05 2005-06 2006-07
7 9
18,151 complaints
13
Members conducting activities as a principal 2004-05 2005-06 2006-07
230 successes at arbitration 26 38
19
Members conducting activities as an agent
Annual Report and Financial Highlights 2007
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AN INDUSTRY IN GOOD HEALTH 2006 WAS ONE OF THE MOST CHALLENGING YEARS IN THE INDUSTRY’S HISTORY, WITH TRADITIONAL BUSINESS MODELS UNDER PRESSURE AND AN UNCERTAIN FUTURE FOR MANY. CHANGE WAS IN THE AIR AND 2007 SAW SOME FAIRLY DRASTIC RESTRUCTURING AND REPOSITIONING.
But how bad were things in reality? A good indication of the state of business is the number of failed companies. At the time of writing ABTA has seen a dramatic decline in failed companies. Of course there is an element of weaker players having been winnowed out of the market but the figures are still very encouraging. ATOL failures also show a decline reflecting the same positive trend. 2006 saw particularly good weather in the UK which inevitably had a negative impact on business. This year history began to repeat itself with UK temperatures in April regularly topping the Costa del Sol, and alarm bells began to ring. However from June almost three months of some of the most appalling weather on record saw some ABTA Members reporting business up to 40% up year on year in July and August. Airports, especially Heathrow, came in for concerted criticism from the media. New security measures, exceptional weather conditions over Christmas and a system under great pressure due to the extreme
difficulty in obtaining planning permission to improve and update facilities, inevitably led to longer queues, delayed baggage and cancelled flights. Regional airports benefited, with 4% growth in 2006 expected to be mirrored in 2007. Aviation also came under attack from the Green lobby and politicians were not slow to jump on the bandwagon with the Liberal Democrats and Conservatives promising to raise aviation taxes substantially. The Government doubled Air Passenger Duty in February. This opportunistic tax-raising move is estimated to have cost tour operators over £40 million and resulted in unsuccessful legal action from the Federation of Tour Operators. The new Chancellor of the Exchequer recently announced a new tax regime to come into force in 2009 which shifts the burden from a passenger-based tax to one based on the carbon emissions of individual aircraft. The no frills carriers have also reacted aggressively to any threat of increased taxation, emphasising their green credentials through the comparative youth of their
airport upgrade and expansion In spite of concerted pressure from local residents and the Green lobby the Government has not back-tracked on its commitment to allow airports to expand and upgrade their facilities.
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Annual Report and Financial Highlights 2007
fleets and slightly higher average load factors than traditional carriers. The rest of the industry emphasised its commitment to the EU’s Emission Trading Scheme and carbon offsetting schemes. In spite of concerted pressure from local residents and the Green lobby the Government has not back-tracked on its commitment to allow airports to expand and upgrade their facilities and we will start to see the beneficial effects of this in the next few years, Terminal 5 at Heathrow being the best example of this. The rise in APD particularly impacted on the no frills carriers with their emphasis on rock bottom prices. Massive expansion, in particular by Ryanair, saw a reduction in load factors and an aggressive price war developing late in the year. This, in tandem with increasing fuel prices, may well see a number of airline failures in 2008, backing up Michael O’Leary’s overdue prediction of a ‘bloodbath’ in the no frills sector. Office of National Statistics figures released in July showed that growth to
The undoubted bombshell of 2007 was the Big Four becoming the Big Two. The mergers of TUI with First Choice and Thomas Cook with MyTravel, although in some ways expected, came shockingly fast and in quick succession.
Europe remained virtually static at 1% up, indicating a potentially saturated market. Conversely, long haul growth increased by 10%. This was reflected by the experience of ABTA Members who continue to see their best and most profitable sellers as long haul, cruising and dynamic packages. North America saw a three per cent increase after a period of decline as sterling broke the psychologically important two-dollar barrier. Conversely domestic tourism was hit as visitors from the USA were put off by inflated costs in the UK. The undoubted bombshell of 2007 was the Big Four becoming the Big Two. The mergers of TUI with First Choice and Thomas Cook with MyTravel, although in some ways expected, came shockingly fast and in quick succession. With the pressure on traditional, short haul, package holidays, these consolidations are welcome and should produce exceptional economies of scale and pool some of the most expert people in the business. Inevitably this has also resulted in branch closures but
reduction in capacity is good news for the whole industry in an ever more competitive and crowded market. How tour operators intend to trade came under the spotlight this year as they have responded vigorously to the decline in packages by boosting tailor made holidays, to the extent that the CEO of TUI predicted that 50% of their sales will be outside of the scope of their ATOL licence by 2008. The Government’s decision to greenlight a replacement of ATOL bonding with a levy scheme was also widely welcomed by tour operators, as this should considerably reduce the financial burden of licensing. As we approach 2008 the prospects for business are greatly improved on 12 months previously. Healthy bookings should have created healthy bank balances and the prospect of more realistic regulatory regimes, as the European Commission reviews the Package Travel Directive and the ATOL levy comes into force, are good reasons for optimism.
Left: ABTA staff dealing with Member queries and supporting Members’ relationships with their clients
Annual Report and Financial Highlights 2007
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MOVING TOWARDS A SUCCESSFUL AND SUSTAINABLE FUTURE IN APRIL ABTA MEMBERS VOTED FOR FUNDAMENTAL CHANGES TO THE ARTICLES OF THE ASSOCIATION. THE BOARD WAS SLIMMED DOWN FROM EIGHTEEN DIRECTORS TO NINE. THIS WILL ENABLE SWIFTER AND MORE FLEXIBLE DECISION MAKING WITH MORE FREQUENT BOARD MEETINGS.
The Association was also renamed ABTA Ltd, to more accurately represent the make up of the Association. ‘Agents’ and ‘principals’ also replaced the old membership categories of ‘travel agents’ and ‘tour operators’, as new business models have meant that the lines between the two have become increasingly blurred. Other changes were made to make ABTA a more representative and democratic body. In line with these changes ABTA commissioned a redesign of the ABTA logo. The old ABTA globe had been used by the Association since 1987 but with a new name and changing structure it was time for a change. The new logo keeps a link with the past by retaining the ABTA globe, but by placing much greater emphasis on the name ABTA and with a much stronger graphic, it represents a confident, relevant and modern body. ABTA had a notable legal success in October 2006 as the Court of Appeal dismissed an appeal made by the CAA
against a successful Judicial Review brought by ABTA on the CAA’s guidance note on ATOLs. The Court of Appeal held that the guidance note was misleading, or potentially misleading and should be withdrawn. ABTA sought the initial Judicial Review as it felt the law required clarification and the CAA’s guidance note would have required many ABTA Members to obtain ATOL licences unnecessarily or restrict their ability to sell certain kinds of travel arrangements. Less welcome was the Treasury’s decision in June that travel agents and tour operators would lose their exemption from Financial Services Authority regulation for the sale of travel insurance. ABTA mounted a strong defence of the exemption showing that there was no credible evidence of consumer detriment in this area. However Holiday Which? commissioned a very damaging survey which carried a lot of weight with the Government as part of a concerted campaign to have the exemption removed. ABTA is currently involved in a consultation
process with the FSA with a view to ensuring a light touch when regulation is introduced in 2009. In February ABTA and the Office of Fair Trading launched a joint campaign requiring travel companies to include non optional extras in their website headline prices. The OFT’s decision to take action followed repeated calls from ABTA on this issue and has resulted in a level playing field for the industry and removed an undoubtedly misleading practice. ABTA Members deserve credit for the speedy way in which they achieved compliance in the face of daunting logistical problems. ABTA’s role as a consumer body is one we will never downplay and is fundamentally important to ABTA’s role. It has always been one of our greatest selling points, providing a key reason to join the association as well as marking us out from other travel trade organisations. However, the fact remains that ABTA’s primary function is to defend and promote its Members’ interests. In the
The new logo keeps a link with the past by retaining the ABTA globe, but by placing much greater emphasis on the name ABTA and with a much stronger graphic, it represents a confident, relevant and modern body. Right: Simon Bunce Head of Legal & Member Services
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Annual Report and Financial Highlights 2007
notable legal success Court of Appeal dismissed an appeal made by the CAA against a successful Judicial Review.
Annual Report and Financial Highlights 2007
MOVING TOWARDS A SUCCESSFUL AND SUSTAINABLE FUTURE
One of the shining successes has been the twice-weekly ebulletin, ABTA Today. It was launched at a time when e-mail was opening up an opportunity to provide instant newsflash style information, which ABTA’s other main method of disseminating news stories, ABTA Magazine, was not able to do.
past a lot of the good work done by ABTA for Members has perhaps not been well enough communicated and a great deal of effort and work has gone on in recent years to rectify this. This year has seen some marked improvements and new initiatives. One of the shining successes has been the twice-weekly e-bulletin, ABTA Today. It was launched at a time when e-mail was opening up an opportunity to provide instant newsflash style information, which ABTA’s other main method of disseminating news stories, ABTA Magazine, was not able to do. Inevitably a monthly printed news source will be behind the times but the magazine still provides an ideal forum for more in depth coverage. In July the Trade Association Forum, run by the Confederation of British Industry, awarded ABTA Today ebulletin of the year, a great tribute to the ABTA Today team. ABTA Today was revamped in 2006 and is mailed out to over 3,500 travel businesses. In addition to ABTA Members it
Below & Right: The new Talking Travel identity and the roadshows in action
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Annual Report and Financial Highlights 2007
is a very useful information source for ABTA Travel Industry Partners, travel journalists and public relations companies. After an extensive redesign, the two ABTA websites www.abta.com and www.abtamembers.org saw 23 million and 6.2 million hits respectively. The Legal department in particular, has vastly expanded the information available to Members online. Currently there are 31 guidance notes on the Members’ site, covering subjects ranging from understanding the ATOL regulations, financial protection issues, crisis management and steering a path through the VAT minefield. The guidance notes are intended to provide clear concise advice, but the Legal department is available if further clarification is required. For many years ABTA has travelled out to see the membership face to face at regional meetings. Although these meetings performed a useful and valued function, it was clear that a new, more relevant format was needed with greater content and experts available to deal
with Members’ queries. To answer this need ABTA launched a series of roadshows in March this year, entitled Talking Travel. The roadshow travelled to 13 locations all around the country and were held in conjunction with the Passenger Shipping Association. In contrast to regional meetings the entire ABTA management team and ABTA President Justin Fleming were in attendance and the roadshows were split into three main zones: ‘Selling Destinations’, advice on how to improve your selling technique and increase your knowledge; ‘ABTA Today Live’, an interactive panel discussion and a chance to quiz the President and management team; and ‘A Time to Talk’, networking with the sponsors and meeting up with industry colleagues. The roadshows have continued in the autumn with a further seven regions visited. This year has been characterised by growing awareness and concern over climate change and the steps we can take both as individuals and as corporations to minimise
Reduce my footprint: a tailored response to climate change with options to carbon offset as well as helping people in developing countries in practical ways to reduce their carbon footprint.
the associated damage. Travel and aviation in particular have come in for heavy criticism from the Green lobby and although there is some uncertainty about the level of that damage, the fact remains that we are a growing contributor to carbon dioxide emissions and other environmental factors. We had been working for some time on presenting to our Members and their customers a tailored response to climate change with options to carbon offset as well as helping people in developing countries in practical ways to reduce their carbon footprint. This was launched this year as ‘Reduce My Footprint’. RMF deals tactically with the problem first by encouraging customers and businesses to understand that everything they do has an impact and that there are many means already available to reduce the impact from our daily activities. RMF then puts the travel decision into context and allows customers to calculate the carbon emissions on any given flight and how much
they would need to contribute to offset these emissions. Strategically, RMF also provides lasting and real benefits to the lifestyles of some of the poorest people on the planet by investing the calculated amounts in projects which include tourism destinations. As well as projects to improve energy efficiency, examples of the kind of schemes that RMF supports, include solar power schemes in Maasai villages in Kenya, wind farm projects in India and tree planting schemes. Carbon emissions are not solely the preserve of aviation, in fact a much greater contribution is made domestically through heating and lighting and other factors. We all need to address these issues in our private life but it is important that companies also do their best to minimise their impact. ABTA has been audited by the Carbon Trust to assess its working practices and their environmental impact. Paper is, wherever possible, obtained from recycled sources and normal waste materials also sent off
for recycling. All the water cisterns contain water savers to cut down on usage, all lighting in the building is provided by energy efficient bulbs and fluorescent tubes. Staff are also encouraged to turn off lights when not in use. All tea and coffee used in the building is obtained from Fair Trade sources. ABTA also encourages its staff to take public transport or cycle to work and when trips are made around the country to visit Members or for Talking Travel roadshows, travel is usually made by train. Travel to the ABTA Convention usually has to taken by plane, but for the last five years ABTA has ensured that all delegates’ flights are offset through an arrangement with Climate Care. From the 2007 Convention the offsets were provided by RMF. Safeguarding the planet is of vital long-term importance to us all. Taking precautions to ensure our customers’ safety whilst on holiday also has to be a number one priority. This year ABTA launched two initiatives to help achieve this. With the
ABTA launched a series of roadshows in March this year, entitled Talking Travel. The thirteen roadshows travelled all around the country and were held in conjunction with the Passenger Shipping Association.
Annual Report and Financial Highlights 2007
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MOVING TOWARDS A SUCCESSFUL AND SUSTAINABLE FUTURE
swifter decision making The ABTA Board was slimmed down from eighteen to nine Directors. This will enable swifter and more flexible decision making with more frequent Board meetings.
ARC is a database of over 20,000 hotels and villas, which have been independently audited to ensure that they meet adequate heath and safety standards.
growth of dynamic packaging, ABTA Members are increasingly offering hotels that do not fall within the scope of a traditional package holiday. ABTA Members want to ensure that the properties meet all necessary health and safety requirements but had no easily affordable way of doing this. The issue needed to be addressed and a possible answer was provided by ABTA with the launch of ABTA Resort Check, ARC. ARC is a database of over 20,000 hotels and villas which have been independently audited to ensure that they meet adequate health and safety standards. ARC is available to all ABTA Members and provides a valuable resource for tour operators to back up their own normal health and safety checks. It should prove an invaluable marketing tool to ABTA agents giving them a marked selling advantage over non-ABTA competitors. The database
is expanding and is currently targeting an extra 10,000 properties for inclusion. The disappearance of Madeleine McCann in Portugal has dominated headlines since May, tragically highlighting child safety whilst on holiday. Although such occurrences are extremely rare, long before her disappearance ABTA had been in discussions with an organisation called Community Alerts to develop a new service, Family Safe Holidays. The service offers families a secure online account where they can store vital information in case of emergencies. The online ‘safety box’ can store all kinds of details, such as family photos, medical conditions, travel itineraries, passport and insurance policy details and emergency credit card numbers. Of particular relevance to the McCann case is a facility to produce a poster of a missing child which can be viewed in six different
languages and made available immediately, on the internet or e-mail.
ABTA Resort Check designed to address potential risk to Members
Left: Michael Monk, Head of Financial Services, meeting Members at one of the Talking Travel roadshows
Annual Report and Financial Highlights 2007
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ABTA FINANCES
FINANCIAL HIGHLIGHTS SUMMARY FINANCIAL STATEMENTS The following Balance Sheet and Income and Expenditure account are a summary of the information that appears in the full financial statements, which have been audited and on which the auditors have given an unqualified opinion and did not include any statements under Sec.s 237(2) or 237(3) of the Companies Act 1985. The Board of Directors approved the full financial statements on 14 November 2007 for issue on 22 November 2007. The summary financial statement may not contain enough detail to allow for a complete understanding of ABTA's financial affairs and do not constitute full statutory accounts within the meaning of s.240 of the Companies Act 1985. For further information, the full financial statements, including the auditors report, should be consulted. They can be obtained from: ABTA Ltd 68-71 Newman Street, London W1T 3AH Telephone: 020 7637 2444 and online at www.abta.com
Summarised Balance Sheet at 30 June 2007 Fixed assets Current assets Creditors: amounts falling due within one year Net current assets Total assets less current liabilities Provisions for liabilities and charges Net assets excluding pension liability Net pension liability Net assets and accumulated fund Summarised Income & Expenditure Account for the year ended 30 June 2007
£
2007
2006
5,047,561
5,221,377
6,900,467 (1,790,492) 5,109,975 10,157,536 (77,166) 10,080,370 (2,673,120) 7,407,250
6,259,707 (1,437,758) 4,821,949 10,043,326 (115,339) 9,927,987 (2,756,600) 7,171,387
2007
2006
Income Membership income Dividends from subsidiaries
4,158,712 516,000
4,084,041 230,000
Other income and interest Total income Expenditure - see below for detail Operating surplus Taxation Surplus for the year after taxation
1,026,030 5,700,742 4,551,093 1,149,649 (985,066) 164,583
723,186 5,037,227 4,982,895 54,332 (30,138) 24,194
Statement of Total Recognised Gains & Losses Surplus for the year Actuarial gain/(loss) on defined benefit pension scheme Movement in related deferred tax asset Total gains relating to the year Expenditure Secretariat Costs Committee Costs Member Services Costs Other expenditure (Writeback)/provision for claims Net pension financing cost Total expenditure
22
£
Annual Report and Financial Highlights 2007
2007 164,583 99,000 (27,720) 235,863 3,600,134 148,232 261,457 494,270 (150,000) 197,000 4,551,093
2006 24,194 179,000 (53,900) 149,294 4,009,040 164,820 218,918 294,408 147,709 148,000 4,982,895
Independent Auditors’ Report to the Members of ABTA Ltd We have examined the summary financial statement (opposite) for the year ended 30 June 2007 which comprises the Summarised Balance Sheet, Summarised Income and Expenditure Account and the Statement of Recognised Gains and Losses of ABTA Ltd. This report is made solely to ABTA’s Members, as a body. Our audit work has been undertaken so that we might state to ABTA’s Members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than ABTA and ABTA’s Members as a body, for our audit work, or this report, for the opinions we have formed. Respective responsibilities of directors and auditors The directors are responsible for preparing the Annual Report and Financial Highlights. Our responsibility is to report to you our opinion on the consistency of the summary financial statement within the Annual Report and Financial Highlights with the full annual accounts and directors’ report. We also read the other information contained in the Annual Report and Financial Highlights and consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the summary financial statement. Basis of opinion We conducted our work in accordance with Bulletin 1999/6 ‘The auditors’ statement on the summary financial statement issued by the Auditing Practices Board. Our report on the Company's full financial statements describes the basis of our audit opinion on those financial statements. Opinion In our opinion the summary financial statement is consistent with the full annual accounts and directors’ report of ABTA Ltd for the year ended 30 June 2007. CHANTREY VELLACOTT DFK LLP Chartered Accountants Registered Auditors LONDON 14 November 2007
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