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What about that consumer-pay model? CATO’s Tim Croyle on Bill 166, the Act...

What about that consumer-pay model? CATO’s Tim Croyle on Bill 166, the Act & industry fraud

Monday, February 12, 2018

TORONTO — As the new chair of the Canadian Association of Tour Operators (CATO), Tim Croyle has on his agenda three top priorities: to raise awareness of the organization, to continue to advocate for more changes to the Travel Industry Act, and to work with tour operators across the board to help reduce the risk of fraud.

The industry veteran, who currently serves as Vice President of WestJet Vacations, took over the reins from former chair Jeff Element, President of The Travel Corporation earlier this month, and is joined by newly elected Vice-Chair, Brett Walker, General Manager Canada of Collette. Together, Croyle tells Travelweek that they’re hoping to build on the momentum of 2017, and that he’s “very excited” to represent Canada’s tour operators.

“We have a great organization,” he says, “but I think we’ve been a bit quiet in the past because we’ve been focused on working through the issues. We can do a better job at raising the profile of CATO and letting folks outside of our members know what we’re working on.”

CATO, which celebrated its 30th anniversary last year, works as a unified voice for Canada’s tour operators in dealing with all levels of government in Canada and abroad. It’s currently comprised of approximately 30 members in three different categories of membership: Active Tour Operators, large companies like WestJet Vacations, Sunwing, Transat and Collette; Associate Membership, smaller tour operators in Canada; and Supporting Members, businesses that fall under travel services, destination and marketing organizations.

For the past two years, CATO has been heavily involved in Bill 166, also known as the Strengthening Protection for Ontario Consumers Act, 2017, working alongside TICO to provide recommendations to the Ontario government. Included in this bill are amendments to the Travel Industry Act, 2002, which according to both Croyle and TICO is in dire need of an update. Having passed third reading in the Ontario legislature in December, Bill 166 is currently awaiting Royal Assent.

“The challenge we have is that the Act was written in 2002; the world is a very different place in 2018 than it was in 2002,” he says. “Almost everyone is now paying by credit card for their travel, and there are a lot more consumers buying travel online, travelling in lots of different ways with different products, and dealing with out-of-province providers.”

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According to Croyle, The Act centres around two things: providing enough of a regulatory framework so that industry players are legitimate and behave themselves; and the Travel Compensation Fund, which all tour operators contribute a percentage of sales to.

One of the proposals CATO put forth to the Ontario government is a co-contribution model similar to Quebec’s, in which consumers are also required to pay into the Fund. By having consumers pay a nominal fee of $1 for every $1,000, Ontario’s Fund would increase exorbitantly, from the current $25 million to hopefully a size akin to Quebec’s ($150 million).

Says Croyle, “If you have a fund that’s big enough, you wouldn’t have to bother with credit card charge backs and you can cover more people for more eventualities.”

However, the co-contribution model wasn’t accepted by the Ontario government, which effectively puts the brakes on any major revisions to the fund.

“Any time that there is an ask for consumers to contribute to something, it might be deemed as a tax,” he says, adding that the government is a bit gun-shy when it comes to any perceivable taxes. “We didn’t think it would be overly burdensome, and worth it if we could simplify the process and cover more consumers for more eventualities, which would in turn give them more confidence in the travel industry.”

All was not lost, however; one of the proposals that did make it through was the elimination of trust accounts, which reduces some of the regulatory burden on tour operators. As it stands now, when tour operators accept funds from clients, funds must go into a trust account where it remains until the client travels. It’s only then that the funds are used to pay suppliers out of that account.

CATO also advocated for better tools for TICO to carry out compliance. “They can now go after non-compliant registrants more easily than ever before,” says Croyle.

Aside from Bill 166 and the Travel Industry Act, CATO is also tackling the ongoing issue of travel industry fraud. In 2016, it teamed up with ACTA and IATA to form the Canadian Travel Fraud Prevention Group (CTFP), which aims to share global and regional best practices, raise awareness of fraud prevention tools, and build cases based on shared fraud data and present them to law enforcement. Meeting twice a year and comprising various tour operators, the committee uses Fraud Chasers, an informational tool that provides up-to-date information on security and fraud measures.

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Also, following last year’s turbulent hurricane season, CATO has emerged as the voice of reason during a time of skittishness in the travel industry. Through its close relationship with ACTA, the organization received word that the Canadian government had posted a country-wide travel advisory for Cuba, advising people to not travel to the island post-hurricane Irma. However, with many parts of Cuba unaffected, the advisory had to be updated.

“We got a lot of feedback from our travel agent partners who said it was really spooking people,” he says, adding that Holguin wasn’t affected, and that Varadero was up and running after a couple of days. “We worked with the government to modify the travel advisory, which is just another example of CATO speaking on behalf of the tour operators and the industry.”

Croyle, who referred to last year’s hurricanes as an “unprecedented” back-to-back event, says that the travel industry did a “good job” of pulling out as many people in advance, despite it being a monumental task.

“You’ve got a pretty small window after tracking the hurricane to secure a plan, fly down there and get people out. And this isn’t something that’s mandated by the government – it’s just the right thing to do,” he adds.

Looking ahead to the rest of his two-year term, Croyle is focused on continuing to work on fraud prevention, enhancing consumer protection rights and working alongside all levels of government, especially ahead of Ontario’s upcoming elections.

“We’re all in the same industry – tour operators, travel agents and consumers,” he says. “The more we can have under a united front with the government, the better it is for everybody.”

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