Important changes to ABTA’s membership rules

ABTA has recently updated its Membership Rules and Financial Criteria and has made a number of important changes to how bonds are calculated for certain members, as well as changing the financial criteria and reporting requirements.

In summary, the key changes are these:

• There are new financial criteria aimed at establishing minimum financial strength across the entire ABTA membership. These apply with immediate effect to any new members seeking to join ABTA, however existing members have a three-year transition period and must comply by the 1^st July 2026.
• A reduction in reporting requirements for certain members (for example, members with a principal bond of less than £50,000 no longer need to provide quarterly returns).
• A new Bond+ scheme, offering different bonding options for members who protect their non-ATOL principal sales with ABTA which could result in a lower bond amount for some members.
• A new Retail Premium+ scheme for ABTA retail agent members, which means that certain retail agent members will no longer need to provide a bond and can instead pay insurance premiums only. Retail Premium + will formally replace the Travel Agents Bond Replacement Scheme (TABRS) with ABTA aiming to transition all eligible members from TABRS to Retail Premium+ by 1st July 2026.
• Retail agent members will no longer need to protect sales of non-ABTA principals. The updated rules make it clear that any sales which create no apparent pipeline risk for ABTA principals, such as retail sales of non-ABTA principals, can be excluded from the member’s bond calculation. This could result in significant savings for some ABTA members.

What do the changes mean?

On the surface, these changes generally seem to be good news for ABTA members but some of the changes could result in increased insurance premiums for members.

As an Approved Body, ABTA has insurance in place to cover any shortfall in bond cover and as a result ABTA members pay a shortfall insurance premium. This allows ABTA members to provide a bond at a lower amount.

Under Bond+, certain members could be offered a variety of bond amount options and could potentially provide a bond for a lower amount than they have previously. However, where an ABTA member chooses to provide a bond at a lower amount, they will have to pay a higher insurance premium to cover the bond shortfall. 

Therefore, ABTA members will have to decide whether it’s really worthwhile providing a bond for a lower amount taking into account the increase in insurance premiums.

The closure of the TABRS means members using TABRS will transition over to Retail Premium+ (provided they meet the eligibility requirements) and will have to pay increased insurance premiums calculated under Retail Premium+.

Members who are not eligible for Retail Premium+ are given a three-year transition period (during which their insurance premiums will increase each year) within which to meet the eligibility requirements.

The main winners in all of this seem to be ABTA retail agents, who no longer need to protect retail sales for non-ABTA principals or sales of overseas accommodation-only (or indeed any sales which don’t create a pipeline risk for ABTA Principals).

As such, many retail members could find their bond amount reduced significantly (and potentially to zero depending on the member’s retail activities). This change will apply to members from their next renewal date, and it will be interesting to see how these changes are implemented in practice by ABTA.