To join the UK travel trade association for Tour Operators and Travel Agents you must provide an ABTA Bond (Association of British Travel Agent). Membership is available as an Agent, Principal or possibly both (depending on the nature of the business).
ABTA Bonds for travel agents:
As a travel agent, it is a condition of ABTA membership that a bond is provided. The bond is calculated by reference to the level of applicable risk turnover (ART). This is defined as gross retail turnover adjusted by various reliefs where ABTA’s financial risk is reduced. For example, up to 97.5% of flight-only sales made under IATA BSP will be exempt from bonding.
Minimum retail bond is £37,500 for the first £1m of ART under the new Member rate.
If you have been trading for more than three years, have no change of ownership, can show profitability and business strength the minimum retail bond is £25,000.
Principal (non-licensable ABTA Bonds)
As a principal, who organises non-licensable packages (two components of travel arrangements not including flights), you are required by law to have financial protection in place for your customers.
The minimum bond rate is 15% but may increase subject to an analysis of your terms of trade and booking pattern. If you have been trading for more than three years, have no change of ownership, can show profitability and business strength a minimum bond of 10% can apply.
For travel businesses who have a high concentration of turnover within a short timeframe (for example winter sports tour operator) ABTA may require an additional bond to cover the peak period.
If you’re acting as a principal, with single element sales (e.g. accommodation only), the law does not require you to have financial protection in place for your customers, but you can choose to do so.
For more information, please visit ABTA’s website.