Trade Associations and Regulatory Bodies. P1

A trade association is an organisation which works in the shared interests for either a particular industry or the customers in general
The different between ATOL and ABTA is that they both exist for different kinds of operators.
ATOL stands for Air Tour Operators Licence. ATOL is managed by the CAA (Civil Aviation Authority) and it is for the tour operators selling flights.
ABTA stands for Association of British Travel Agents. ABTA is for the tour operators who aren’t involved with selling flights. ( Source - http://www.abta.com/ )
AITO is another association. This stands for Association of Independent Tour Operators.  AITO was set up for the smaller travel companies. ( Source- http://www.caa.co.uk/default.aspx?catid=27  ) 
These companies are in place just in case anything goes wrong whilst you are on holiday, all your money is protected. Also if any of the companies go bust whilst you are away, you will be refunded and brought home by the relevant organisation.
If a tourist books a holiday through a company which is a member of AITO or bonded by ABTA they can be sure that the company is reliable and if the company should suffer from finacial problems they will be protected. The traveller would be brought home from their holiday if the company failed whilst they were away.