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Tour operators weigh in on upfront commissions

Tour operators weigh in on upfront commissions

Thursday, November 26, 2020

TORONTO — Since the start of the COVID-19 pandemic in March, travel agents have heard time and time again how tour operators are in full support of the work that they do. The vast majority of suppliers have launched flexible booking, cancellation and refund policies to allow agents to better accommodate clients, provided endless hours of online training and resources, and offered an array of agent incentives that range from rewards points to prizes.

But in terms of financial support that directly benefits agents during this most difficult time, one of the most significant ways tour operators are providing assistance is by paying commissions upfront.

A growing number of companies has announced upfront commissions in recent weeks as a way to show their support for the agent community, which has been hit hard by the pandemic. It’s a complete departure from the industry’s typical payment model, which pays out commissions once the client travels, in the month or quarter following the date of travel.

But desperate times call for desperate measures. Upfront commissions not only provide travel agents with much needed cash flow, they also increase loyalty between the agent and the supplier, a relationship that’s become invaluable these past eight months.

Collette was among the first adopters of upfront commissions during the pandemic. Previously, travel agents had to wait until their clients travelled in order to receive payment; now, through the Travel Agent Advanced Commission Program, Collette is able to pay a portion of the agent’s commission in the month following deposit, for new bookings travelling May 2021 and onward. The program runs from now through Dec. 31, 2021 and is expected to push travel in Q3 and Q4 of next year.

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Collette’s Ron Lonsdale, Vice President of Canada, tells Travelweek that the decision to launch the program was an easy one.

“We quickly realized that we needed to amend our commission payout plans to ensure travel advisors were receiving payment during the month following deposit, as they are an integral part of the industry’s recovery,” he says. “As the community continues to rebuild, we know that every minute and every dollar is crucial to their continued success. We feel strongly about protecting the hard work and time of our travel agent community.”

G Adventures is also dipping its feet into upfront commissions with the launch of a trial incentive that runs through to March 31, 2021. Initially open to a selection of preferred partners, the incentive applies to all new bookings across G Adventures and National Geographic Journeys with G Adventures tours, as well as group bookings. The full commission of any new dollars will be paid within 45 days of payment being received.

“For example,” says David Green, VP Commercial, G Adventures, “if a customer pays a deposit, the commission will be paid on the deposit and when the customer pays the remainder of the balance, or if they pay in full upfront, the remainder of the commission will be paid.”

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When asked whether the trial will extend past March 31, Green says it will depend on agent feedback.

“We anticipate it will be well received by our travel partners and we will take onboard their feedback during the incentive period and then assess our next steps before the trial ends,” he says. “We pride ourselves in doing the right thing, in fact, it’s one of our core values. We feel this incentive is timely and is exactly what agents need right now.”

To read the full article, including feedback from travel agents on whether upfront commissions are worth the risk in the midst of commission recalls, check out Travelweek’s Nov. 26 issue here.

Cindy Sosroutomo
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