Authentic Vacations has resigned its active membership with the USTOA following a "change in its business model," according to a statement released by the tour operators association.
The company's membership status with the USTOA was deactivated as of April 27.
Customers who book after April 27 will not be covered by the USTOA's $1 Million Travelers Assistance Program, which comes with a tour operator's active membership. Clients who booked tours with Authentic Vacations prior to April 27 will remain protected under the USTOA assistance program.
Authentic Vacations CEO Simon Russell said all clients will be financially protected despite the company's break with the USTOA. He said the company does not have plans to rejoin the USTOA or replace it with a different organization.
"We have valued our relationship with USTOA," Russell said. "Authentic Vacations wants to assure our clients that this departure from USTOA in no way leaves their travel unprotected. We are financially stronger than ever, our clients' deposits and payments are secure and they are protected in numerous ways."
Meanwhile, USTOA CEO Terry Dale said, "Authentic Vacations has been a valued partner since 2018 and we appreciate the support the company has provided USTOA."
High membership premiums also played a role in Authentic Vacations' decision to leave the USTOA. Russell said the money could instead be used to grow the company.
"It's a big premium every year to have the bond, and we don't feel we need it," Russell said. "We're financially secure, part of a large U.K. travel group; we got through Covid. Everyone is paying with credit cards, and that provides full protection for all of our clients in the highly unlikely event we went bust. I would rather be investing that annual bond premium in building our team, in building our business back after Covid."
Russell said Authentic Vacations has launched a new business model to streamline their trip-planning services for guests with the creation of its "Trip Planner App" and by introducing a $99 deposit for the initial trip-building process in order to ensure clients book with the company. The deposits, which were introduced in late 2021, Russell said, are used toward a client's trip.
"We've stopped preparing custom quotes for free," Russell said. "Twenty percent of inquiries are good inquires, and then there are 80% of inquires that are just window-shopping. That's how it works. And coming out of the pandemic, that's a massive issue for travel agents we work with and for tour operators like us. We have less than half of the staff that we had before Covid, and there's lots of demand now. So we've made that change and can cope with the demand with a much smaller team."
Authentic Vacations, which specializes in custom vacations, joined the USTOA in 2018. The company was founded in 2001 and is part of leading U.K.-based DMC Tour Partner Group, which offers Group, FIT and MICE services in Ireland, the U.K. and Scandinavia for tour operators around the world. Authentic Vacations is based in Scottsdale, Ariz., and the group also has offices in Dublin, London and Copenhagen.
Active USTOA members participate in the organization's $1 Million Travelers Assistance Program, which requires that a $1 million bond be set aside to protect consumers in the event the company experiences bankruptcy, insolvency or a cessation of business.
UPDATE: This story was updated to add comments from Authentic Vacations CEO Simon Russell.