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.
This lengthy pause has created an opportunity for meaningful dialogue within the industry about many things, including the future of travel agency – travel supplier relationships.
Over the past several months, ACTA has had ongoing discussions with 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.
In May 2020, ACTA announced the development of the Best Practices Recommendations for Travel Suppliers, an outcome of these Canadian travel agency discussions included Member feedback and alignment with the World Travel Agency Associations Alliance (WTAAA). Of the many challenges faced by travel agencies with respect to future travel vouchers and credit card chargebacks, the need for commission protection remains a significant concern during this COVID-19 reality.
“Many travel agencies and travel agents have been without any revenue for over six months. Clearly this is not sustainable,” said Wendy Paradis, President, ACTA. “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.”
In the area of commissions, we are asking suppliers to consider updating their policies to reflect the following:
Protect and Pay Commission to the Travel Agency
1. At the time of deposit and/or when the file is paid in full, regardless of travel date
2. If the travel is rebooked, cancelled or refunded (and definitely if the supplier has retained partial payment)
3. On any prepaid or pre-booked add-on’s, upgrades and excursions etc.
“This pandemic has shed light on a serious inequity when it comes to the timing of travel agency compensation. 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,” said David Harris, CEO at Ensemble Travel Group. “We believe that the current model is outdated and places an undue burden on agencies and agents.”
“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. If the travel supplier is being compensated, the travel advisor should be compensated at the same time,” said Christine James, Vice President Canada at Travel Leaders Network. “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.”
Cathie Lewis-Hardy, Vice President, Strategic Partnerships, TRAVELSAVERS added, “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.”
We also believe that commission should 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.”
The pandemic has created a lengthy pause that will bring about changes in how companies do business and how people will work in the future. “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 Albert Herrera, Senior Vice President, Global Partnerships at Virtuoso®.
ACTA, travel agencies, travel agents, consortia and host agencies encourage all suppliers to join the discussion and work with us to develop better ways of working together as our business rebounds.
Wendy Paradis, President, ACTA
David Harris, CEO, Ensemble Travel Group
Albert Herrera, Sr. VP, Global Partnerships, Virtuoso®
Christine James, VP Canada, Travel Leaders Network
Cathie Lewis-Hardy, VP, Strategic Partnership, TRAVELSAVERS