Options for Industry Regulation on the table

The question of regulation received a great deal of airtime at the recent ASATA conference with EXP Regulatory Compliance Consulting providing feedback on a research study into the merits of South Africa’s travel sector becoming regulated.

At the heart of regulation is the need to protect consumers, not only from the standpoint of regulating consultants in their individual capacity, but also TMCs and travel agencies.

EXP Regulatory Compliance Consulting has examined regulation within five other South African industries, as well as regulation within the travel industry in six other countries.

The results have revealed that all of the reviewed overseas travel agency representative bodies are voluntary, but that these have a very high average industry representation. This is achieved by:

  1. Commercial force: Customers and travel service providers will only trade with members, because membership is synonymous with quality.
  2. Value in representation: Effective industry representation with government and other industry stakeholders.
  3. Added Services: Training on how to run a successful business, business tools info and advice, alternative dispute resolution, marketing and network opportunities.

At least 10 out of the 11 bodies studied have accreditation criteria to become a member, these include:

  • Fit and proper requirements (e.g. trade references, background checks)
  • Adherence to the body’s code of conduct
  • A trust account for funds belonging to consumers and service providers
  • Membership of a Travel Guarantee Fund or proof of insurance to protect funds belonging to consumers and service providers against fraud or bankruptcy
  • Customer support and complaints management policies and procedures
  • Accreditation may require that all, or a % of travel agents, must hold a designation
  • Some or all travel agents must have a certain number of years’ experience

The South African bodies that have been interviewed have cautioned against the following:

  1. Beware of anti-competitive behavior
  2. Statutory reforms are slow and labour intensive (and government is in flux)
  3. Litigation against voluntary bodies (typically brought by non-members) can sink them
  4. The implications (and, by implication, the benefits) of accreditation as an industry ombudsman in terms of the Consumer Protection Act is currently under consideration by our courts
  5. Formal dispute resolution by industry bodies can be expensive to administrate

Various options are possible in the travel sector space:

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EXP Regulatory Compliance Consulting will continue their research and stakeholder inputs over the next few months.

Workshops will be held in Cape Town, Durban and Johannesburg for members to provide input, and a survey will be distributed thereafter. After recommendations are presented to the board, voting on the options available will take place at the AGM on 28 September.

This is your chance as a member of South Africa’s travel sector to make your views on regulation heard by attending these workshops, taking part in the survey and voting at the AGM. You are also welcome to provide any other feedback, concerns and suggestions to hannie@asata.co.za