What's Happening?
TravelManagers, an Australian travel company, has developed a $1.4 million protection fund to safeguard customers and personal travel managers (PTMs) from potential supplier failures. The fund, known as the TravelManagers Customer Fund (TCF), was established in 2019 and is designed to reimburse clients and PTMs if a preferred supplier collapses. The fund covers the full booking value and PTM commission, providing a financial safety net in the event of supplier insolvency. The TCF is independently audited and held in a separate legal entity, ensuring transparency and accountability. This initiative addresses a significant risk in the travel industry, where customer money is often transferred to suppliers well in advance of travel dates.
Why It's Important?
The establishment of the TCF represents a proactive approach to risk management in the travel industry, offering a level of protection that is rare among travel companies. By creating this fund, TravelManagers is setting a benchmark for consumer protection, potentially influencing other companies to adopt similar measures. This move is particularly significant in light of the abolition of the government-run Travel Compensation Fund in 2014, which left many travelers vulnerable to financial losses. The TCF not only protects consumers but also enhances the reputation and reliability of TravelManagers, potentially attracting more clients and strengthening its market position.
What's Next?
TravelManagers plans to continue growing the fund through monthly contributions, aiming to cover all preferred suppliers in the future. This ongoing commitment to financial security may encourage other travel companies to implement similar protective measures. Additionally, the Australian Travel Industry Association's (ATIA) plan to create a national compensation scheme by 2030 could further enhance consumer protection across the industry. As the travel sector recovers from the impacts of the COVID-19 pandemic, initiatives like the TCF may become increasingly important in rebuilding consumer confidence.
