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ACTA’s open letter calls on suppliers to address commission protection

ACTA’s open letter calls on suppliers to address commission protection

Wednesday, October 7, 2020

TORONTO — Many travel agencies and travel agents have been without any revenue for over six months. It’s not sustainable, says ACTA.

And with no end in the sight to the pandemic and its travel restrictions, it’s critical that suppliers and retailers find common ground on the issue of commission protection.

Today ACTA issued ‘A Call for Change – An Open Letter to Travel Suppliers from Canadian Travel Agents.’ The open letter comes after months of discussions between ACTA and travel agency senior leaders, consortia and host agencies, forming the ACTA COVID-19 Travel Agency Leaders Advisory Committee, about critical elements for sustainability and future success.

Normally when the travel industry talks about sustainability, it’s about travel’s impact on the environment. Now in the wake of COVID-19 it’s also about the sustainability of the travel industry itself.

Refunds vs. vouchers disputes have taken a toll on the trade amid the pandemic’s other stresses, and the issue of commission protection takes the issue to a whole other level.

Today’s open letter was signed by ACTA President Wendy Paradis and ACTA COVID-19 Travel Agency Leaders Advisory Committee members including David Harris, CEO, Ensemble Travel Group; Albert Herrera, Sr. VP, Global Partnerships, Virtuoso; Christine James, VP Canada, Travel Leaders Network; and Cathie Lewis-Hardy, VP, Strategic Partnership, TRAVELSAVERS.

“This pandemic has shed light on a serious inequity when it comes to the timing of travel agency compensation,” said David Harris, CEO at Ensemble Travel Group. “Going forward, the travel agency/travel supplier relationship terms need to change in order to ensure a more fair and equitable compensation model for travel agencies and travel agents.”

Added Harris: “We believe that the current model is outdated and places an undue burden on agencies and agents.”

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The early months of the pandemic saw travel agents and suppliers working hand in hand to help get travellers home, or in the case of future travel, rebooked.

Retailers and suppliers have rallied together like never before in the face of the pandemic, however issues remain with commission protection, as the committee outlines in its open letter.

“Many travel agencies and travel agents have been without any revenue for over six months.  Clearly this is not sustainable,” says ACTA’s Paradis. “As our businesses begin to recover, we need a holistic review of the systemic practices and policies that are currently in place between travel agencies and travel suppliers.”

The committee’s letter asks suppliers to consider updating their policies to reflect the following:

PROTECT AND PAY COMMISSION TO THE TRAVEL AGENCY

  • At the time of deposit and/or when the file is paid in full, regardless of travel date
  • If the travel is rebooked, cancelled or refunded (and definitely if the supplier has retained partial payment)
  • On any prepaid or pre-booked add-on’s, upgrades and excursions etc.

“In our view, once a client makes a payment for travel services, the core role of the travel advisor has been performed – to promote, sell, close the sale,” said Christine James, Vice President Canada at Travel Leaders Network. “If the travel supplier is being compensated, the travel advisor should be compensated at the same time. Under the current environment, it is no longer reasonable nor sustainable that the key agency distribution channel should have to wait until the departure date, which could be six months to a year later, to be paid.”

The letter acknowledges that the travel industry is going through an unprecedented crisis due to the global pandemic and it will be affected adversely for much longer than other industries: “Tour operators, cruise lines, airlines, hoteliers, car rental companies and travel agencies have seen their business more or less come to a halt.”

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In May 2020 ACTA announced the development of the Best Practices Recommendations for Travel Suppliers, an outcome of these Canadian travel agency discussions that included Member feedback and alignment with the World Travel Agency Associations Alliance (WTAAA).

“If the travel is rebooked, cancelled or refunded – especially if the supplier has retained partial payment – the travel agent has done the work and should not be faced with having their compensation recalled,” says Cathie Lewis-Hardy, Vice President, Strategic Partnerships, TRAVELSAVERS.

The open letter states that commission should also be paid on all services that are sold by the travel agent or connected with their client’s booking, including services and excursions purchased on-board/on-site.

“We appreciate that some cruise lines including, Celebrity Cruises and Seabourn, for example pay commissions when the booking is paid in full. We also applaud, the recent advances that some tour operators have embraced to work with travel agents in new ways, such as Collette’s new Advanced Commission program,” said Paradis. “This is the type of approach that we encourage travel suppliers to take – collaborative and forward thinking.”

Albert Herrera, Senior Vice President, Global Partnerships at Virtuoso, says the time has come to re-examine retailer – supplier relations and how companies do business going forward.  “We need to examine all aspects of the travel agency/travel supplier relationship now, while we have time, and agree on mutually beneficial terms for how we will work together in the future,” said Herrera.

Tags: ACTA
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