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“Like a roller coaster”: Agents, execs speak out about commission recalls

“Like a roller coaster”: Agents, execs speak out about commission recalls

Thursday, November 5, 2020

TORONTO — WestJet Vacations’ new refund policy, and the commission recalls that go with it, has left many agents disappointed, frustrated and wondering if other major tour operators will follow suit with new refund policies of their own, after months of holding the line with future travel credits.

Some agents say they appreciate the limited eligibility for WJV’s refund offer, announced last week and which applies only for WJV bookings cancelled March 10 – April 24, 2020 and more than 45 days prior to departure. TL Network Canada’s VP Christine James says that amounted to just over 30 bookings across the entire TL Network.

But many are concerned that this latest refund news, coupled with pressure from consumer groups demanding refunds, could be a tipping point, especially as the industry waits to hear if the federal government will offer bailout funding to Canada’s airlines after close to eight months of an almost complete halt for Canada’s travel industry in the wake of COVID-19.

At a media Q&A session on Oct. 23, when asked about a possible bailout for the airlines, Prime Minister Trudeau said details “are still very much under discussion.” Trudeau noted that Canada’s airlines have received more than $1 billion in direct aid via programs like the wage subsidy CEWS, but he also acknowledged that “certain industries have been hit harder than others during the pandemic, and travel and tourism is certainly one of them.”

While everyone’s talking about potential airline bailouts, and help for inbound travel businesses, what about the outbound side of things, including Canada’s travel agents?

“We would like to hope that the other airlines and ITCs won’t offer refunds, but there is murmuring that the government is currently working on an airline bailout deal, and that they have gone back to the airlines with a stipulation that they offer refunds in order to receive the bailout,” says Judith Coates, one of the founding members of the newly-formed Association of Canadian Independent Travel Advisors (ACITA).

ACITA continues to meet with MPs across Canada, “and we are stressing that there needs to be a FURTHER stipulation that they MUST ALSO protect agents/agency commissions earned before the bailouts are granted,” says Coates.

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WALKING A FINE LINE

The issue has galvanized the retail travel sector after months of extreme challenges and hardship. “If a supplier chooses to refund our clients eight months after this pandemic began then the commission needs to be a sunk cost,” says Niche Travel Group owner Faith Sproule in Dartmouth, NS.

Canada’s largest retail travel association, ACTA, last month distributed an open letter to suppliers from Canadian travel agents, calling for commission payment and protection no matter the circumstances.

The open letter was issued 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.

TL Network’s James is a member of that committee. Asked if refund policy decisions make it tough for supplier relations, James says: “It clearly presents a challenge to retailers to manage any policy changes that impact their clients and their livelihood.”

Ensemble Travel Group’s CEO David Harris is also on the ACTA COVID-19 Travel Agency Leaders Advisory Committee.

“The announcement by WestJet Vacations certainly has caused some confusion and concern among travel advisors and further underscores the need for the industry to rethink travel agent commissions,” says Harris.

Host agencies and consortiums are walking the fine line between protecting their advisors, and maintaining relationships with supplier partners, at a time when so much is beyond anyone’s control.

There are no easy answers, says TPI President and CEO Zeina Gedeon. “Unfortunately this situation is not black and white – commission recalls are very hard to swallow, supplier policies have been like a roller coaster, up and down, yes, no, future travel credit, and now refund,” she says. “I do understand the pressure that the airlines or tour operators are going through but so are we, maybe not the same magnitude but for us it feels enormous! We need to do this together – we have to work together to come up with the solutions that work for both of us and make sure we take care of our customers.”

“THEY ARE PULLING THE MAT OUT FROM UNDER US” 

Retailers know that WJV isn’t the first supplier to take the refund route, and they know more than most how difficult this pandemic has been for the entire industry. Throughout the pandemic retailers and suppliers have worked together like never before to assist clients.

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But after eight long months of travel restrictions and unprecedented damage to bottom lines, tensions are high.

“We have fielded the overwhelming calls and emails from the public regarding this for the last eight months and have been subject to all of the verbal abuse surrounding it,” says Robert Townshend, President, TotalAdvantage Travel & Tours. He adds: “We have constantly upheld WestJet’s position and supported them. Now, they are pulling the mat out from under us.”

Ayesha Patel, a travel consultant with The Travel Agent Next Door, says she’s concerned other major tour operators will follow WJV, and that has real consequences for agents.

The first impact, of course, is financial. “Any money received from trips sold just before COVID-19 hit has been the only income that many agents have had to rely on,” says Patel. “Even with the government income subsidies that were introduced, many travel agents could not qualify until much later. But now with tour operators refunding and recalling commission, this may bankrupt a lot of people who have to pay back money they have earned and probably already spent so they could keep their head above water.”

Read the rest of this story, including more insight from industry executives and travel advisors, here in the digital edition of Travelweek’s Nov. 5 issue.

Kathryn Folliott
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