TORONTO — Will more suppliers heed the call for upfront commissions as the retail travel sector gets back on its feet? Travel Leaders Group’s John Lovell certainly hopes so.
Lovell, CTC-President, Travel Leaders Group, tells Travelweek that the company is asking its supplier partners to consider compensation strategies that will generate cash for its members in the short-term.
“Specifically, we have been asking for a portion of the overall commission to be paid once a client books the trip,” he says. “For example, if the client pays for half of the trip upfront, with the remaining half due 90 days prior to departure, we would like to see the travel professional earn half of their commission when the client makes their first half payment.”
During a virtual news conference yesterday, Lovell noted that although the company is seeing bookings gain momentum for 2021, 2022 and beyond, travel advisors are still strapped for cash since they only get paid once clients travel. This, he said, puts undue pressure on members and the organization, which is why Travel Leaders Group is working behind the scenes to bring additional cash flow to members on a rapid basis.
“As we exit the pandemic and our suppliers start to see cash coming in the door, I think we’ll have more robust discussions and find a good position for everybody to ensure that the distribution channel stays healthy,” he said.
Having upfront commissions in place will give Lovell even more reason to be optimistic about the future. Noting that high-end luxury and experiential product is “selling extremely well,” Lovell confirmed that the company is in a “very good position” and that he remains hopeful of where it will be in the next six months.
“I don’t think all is lost, I think the industry itself is going to come back a little bit sooner than people anticipate,” added Lovell. “Consumers are really seeking the advice of our travel professionals and I think as we exit this pandemic, which is going to come rather quickly, the travel advisor is in a very unique position.”
Here are some more highlights from yesterday’s conference:
THE CANADIAN NUMBERS & FALL REGIONALS
As vaccinations continue to ramp up across Canada, with over 30% of all Canadians already receiving their first shot, Christine James, Vice President Canada-TL Network, is anticipating bookings to increase at the same time.
“Where we’re sitting today for the rest of the year compared to where we were in 2019, we’re at approximately 30% of where we were in 2019, which was our last normal year that we had,” she said. “Even better news, for 2022 we’re actually sitting flat compared to where we were in 2019 for future bookings, and in some cases – especially on the cruise side – Canada is actually trending ahead of where we were in 2019 for 2022.”
TL Network Canada is also seeing major growth as the Canadian branch of Travel Leaders Group, despite the pandemic. In 2021 to date, 16 new travel agencies have joined the network. In response to this momentum, James confirmed that Fall Regionals, held annually in key markets across Canada, are going ahead this year as live, in-person events. Taking place in November in Toronto, Vancouver and Edmonton, Fall Regions will follow strict safety protocols at venues that are larger than those in previous years, to accommodate the need for social distancing. The Toronto event is expected to see 200 members in attendance, with Edmonton and Vancouver numbers anticipated to be 100 and about 120, respectively.
TL Network Canada is also moving forward with 14 Mixers (regional events held in locations other than where Fall Regionals take place), from August to December. Though this is down from the typical 24 Mixers held annually, James is still encouraged by early response from members, especially as Travel Leaders Group counts down the days until its international EDGE conference on Oct. 18-21, 2021. This year’s conference, postponed from 2020 due to the pandemic, will return to Loews Royal Pacific Resort & Loews Sapphire Falls Resort in Orlando, Florida.
“We’re all looking forward to reunite, not only with our Canadian membership but with our partners in the South,” said James. “We’re really pleased with the attendance that we’ve had so far and the response that we’re getting for our in-person events, which everyone cannot wait to get back to.”
ADDITIONAL REVENUE FOR ADVISORS
You know things are looking up for travel advisors when the majority of new bookings have upgrades that bring in additional revenue.
According to James, 80% of new bookings coming in are seeing upgrades, whether it be hotels going up from three to four stars or four to five, or trips being extended from one to two weeks.
“It’s almost like every booking has additional revenue and additional commission for the travel advisor,” she said. “It’s so rare to see clients take the exact credit they had and stick with that booking because they didn’t spend anything, they didn’t go anywhere. They figure if they’re going to go, they’re going to go all out.”
James also noted that with many clients still uncertain about travel this year, they’re “doubling down” on their bookings, using future travel credits to secure a 2022 trip in addition to booking shorter, less expensive trips closer to home for 2021.
CRUISING & NEW TRENDS
Noting the “tremendous amount of cash” that’s being held by people who have hunkered down this past year and saved their resources, Lovell anticipates a mid-summer restart to North American homeport cruises, which would be most welcome after more than 13 months of cancellations. The CDC, he added, recently declared that some cruising could return by mid-summer.
“I think they are going to be successful because if you look at what’s going on around the world, cruise lines have moved close to 600,000 passengers now. The incident of any breakout on one of the ships is extremely small,” said Lovell. “I think they’ve done a great job in showing they can create a bubble and that they can keep passengers and crew safe, and I think the CDC is starting to realize that.”
Lovell added that Travel Leaders Group will be setting a record number of passengers on 2022-2023 World Cruises and Grand Cruises and that all destinations, from Asia-Pacific to Alaska, are selling well. His advice? To book now as prices are almost sure to go up due to limited space.
Roger E. Block, President of Travel Leaders Network, also warned of early sellouts and lack of product due to an increased number of people booking “vaxications,” a new buzzword to describe vacations being taken by vaccinated travellers. As such, “people are going to places that are currently open like never before,” said Block, with bucket-list destinations doing particularly well.
“While people used to dream about bucket lists, they’re now actually actively booking them. Higher-end product is being booked at an accelerating rate than pre-pandemic, and what we’re seeing is bookings are ahead for 2022 and also 2023,” he added.
James also noted that TL Network Canada is seeing another shift in group travel, with a lot of bookings that were initially made for just a couple or a couple with two kids, snowball into bookings of 10 or more as a way to reconnect with extended families.
THE ROLE OF THE TRAVEL ADVISOR
According to recent surveys by Travel Leaders Group, 82% of respondents are more likely, or same as before, to use a travel advisor. When asked why they are more likely to use a travel advisor now, 65% said it’s because advisors can provide the latest safety information, while 23% said agents can help change or cancel their tickets.
“This just goes to show that people are looking for professionalism and assistance, they’re looking for someone to help guide them through this whole process and keep them safe,” said Block.
Lindsay Pearlman, Senior Vice President International Leisure-Travel Leaders Network, added that even the OTAs are jumping onboard the travel agent bandwagon. He recently saw an Expedia commercial that touted the value and services of an agent.
“I think it’s safe to say that the role of the travel advisor will be significantly different and much more important than it was in the past where we had to compete,” said Pearlman. “Consumers are now looking for safety, a sense of comfort, and they’re going to get that from a travel advisor.”