Memorandum submitted by Airtrack Services
Limited
Airtrack Services Ltd is a licensed and bonded
sports tour operator. The company has been in existence for 25
years.
Our primary source of income is generated from
selling our own travel and entertaining programmes to the sporting
venue. A necessary pa of the package we sell is event tickets.
We normally sell tickets on at whatever price we buy them for
with a £30 handling fee.
We do not use tickets as a source of income—we
are not a ticket tout.
MARKET FORCES
AND RESTRICTIVE
PRACTICES
Ticket touts make money from buying tickets
at the lowest price and selling them on at the highest price.
All industry works on the same basis. Some industries are more
obvious in their practices than others. An example of this is
the airlines—one airline seat costs the same to a particular
destination as the one adjacent to it given the same conditions
of sale. However, one seat could be sold at 10 times the one next
to it with the same conditions—the difference is that the
market has changed. The market could have changed for a variety
of reasons including time before the flight departure; the number
of seats remaining on the flight and the announcement of increased
business from the production of a special event at the destination.
Of course another example of being able to tell how much extra
the seller is earning from the sale of the product or service
as a result of market forces is ticket touting. Most tickets have
their value printed on them and the tout is usually selling them
at a higher price. The reason why the tout can ply his trade is
exactly the same for the airline.
To restrict the secondary market in ticketing
would arbitrarily restrict one form of commercial activity whilst
allowing another.
FOOTBALL
The commonly accepted reason for restricting
the sale of secondary market football tickets to facilitate crowd
control is based on an incorrect assumption.
Anyone who has been to a large international
football match will know that the crowd control starts off with
gathering all the fans from one side into an area—regardless
of ticket seating. Of course this crowd will have a mixture of
good tickets in the correct area; tickets in the opposing end
(wrong area) and forged tickets. At the appropriate time this
group of people are allowed into the stadium. The entry is mostly
unrestricted—a few tickets are checked but only a sample
number. The result is a totally overcrowded section of the stadium
with often empty seats in the other section. The intention of
the stadium was to segregate the fans—this was achieved
but with a monumental risk of injury and death if there was any
form of fire or requirement for evacuation.
Should we stop the sale of tout tickets—the
answer is no because it restricts everyone's freedom to do business.
The answer is to regulate the ticket sources.
The normal practice for a Champions League match
is for the away team and the home team to have an allocation.
All UK teams run a fans travel section which produces an income
for the club. The club very rarely supplies tickets to any other
tour operator. Of course they consider it bad commercial practice
to allow independent tour operators to compete with their own
travel programme. If the team do not sell all of their tickets
which is often the case they will still not sell these tickets
to the independent tour operator.
What the team does with these spare tickets
needs regulating. We would suggest the tickets should be distributed
via an independent agent, selling them on a first come first served
basis.
I would suggest these tickets find their way
into the ticket touting system either at home or in the away team
country.
THE MARKET
Football tickets normally have a face value
of £20-£80—a top quality tout ticket will sell
for £350-£800 each. This margin does not all go to the
tout. There would be several "agents" in the chain before
it reaches the end user.
Another way of controlling the system is to
make the initial face value more realistic—ie £150-£300.
The resulting much reduced margin would dissuade most touts from
risking their money. The argument of why should the "real"
fan be punished by having to pay higher prices is false. Football
fans pay vast amounts of money to see their teams play. The extra
money generated should be filtered back into the sport to improve
the sport and provide extra facilities for the fan. This could
be achieved by the governing body taxing the team on this type
of championship.
At present the UK team has a monopoly on providing
fans travel to overseas matches—this again is against the
spirit of free enterprise. Allowing independent tour operators
to compete with the team's travel programme will reduce the cost
to the fan. We have never challenged this state of affairs but
in many industries this could be described as restrictive practices.
OLYMPICS
For this event not only is there "restrictive
practices" for the ticketing but also for the travel and
accommodation.
The British Olympic Association have chosen
one operator to handle all the tickets. This operator happens
to also be a tour operator who sells travel and accommodation.
I have been told that this operator has to contribute large sums
of money to the BOA to help and encourage the sport.
To quote from a BOA correspondence to ourselves:
"Any travel agent is of course entitled
to advertise tours to China and Beijing. They may not however
be promoted as tours to the Olympic Games and nor should Beijing
be promoted with undue emphasis on it being host to Olympic Games."
There will of course be tout ticketing for the
Olympic Games because the average ticket cost is around £30.
For the big track events these will be on sale for several hundreds
of pounds.
MOTOR SPORT
The cost of tickets in this sport is very much
higher than most other sports. Ticket touting does still exist
but not to the level of football or many other sports.
THE TICKET
TOUT
I have suggested that the ticket tout is performing
a normal commercial activity, similar in concept to a no frills
airline. The difference between the practices of a ticket tout
compared to an airline is not providing security. When the public
purchase a service in advance they are risking their money by
pre-paying for the service. In the travel and airline business
the public is protected by a bond which secures their money in
the event of the company defaulting. It does not matter if the
ticket tout is a large company or the "scum" as suggested
by one of your committee members—neither provide any security
to the public. Promising 150% back if they do not perform is a
marketing gimmick. Security is the only protection.
On the point of selling a ticket that does not
exist—this is not unusual. We as a tour operator sell airline
tickets, hotel vouchers etc all the time—there is no proof
that we will provide them—we do however stake our existence
on providing them by having in place a bond.
I think you will find that if all ticket touts
were forced to secure their transactions with a bond their numbers
would rapidly fall and their control would be far easier.
August 2007
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