The Association of Canadian Travel Agencies (ACTA) is welcoming "recent announcements by several suppliers" that they will protect agent’s commissions on cancelled files and pay commission at time of booking, according to a release issued on Wednesday (Aug. 4).
“This is exactly in line with ACTA’s recommended Best Practices released last year. The pandemic has illustrated the vulnerabilities for travel agencies and travel agents with regard to former policies on commission recall and commissions paid only when clients travel,” said Wendy Paradis, ACTA president, in a statement. “Going forward, we hope to see all suppliers change their policies. Travel agents have been without revenue now for months despite taking bookings - this model cannot continue.”
ACTA did not name which suppliers it is applauding specifically.
ACTA’s Best Practices, released last year, asked suppliers for the following:
1. Pay commission at the time of deposit and/or when the file is paid in full, regardless of travel date
2. Protect commission if the travel is rebooked, cancelled or refunded (and definitely if the supplier has retained partial payment)
3. Pay commission on any prepaid or pre-booked add-on’s, upgrades and excursions etc.
“Clearly it’s been an extremely challenging year financially for all travel retailers over the past 16 months. Recognizing the overwhelming cash flow hurdles that travel advisors were faced with, it was a relief to see that the majority of suppliers stepped up to protect commissions on any existing bookings. At the very least, it removed the initial burden of advisors scrambling to deal with commission recalls for their clients that accepted the future travel credits!" said Christine James, vice-president, Canada, TL Network in a statement.
David Harris, CEO of Ensemble Travel Group, said the the pandemic "really put a spotlight" on protecting and paying commissions in a timely manner.
"While we know that all stakeholders in the travel eco-system were devastated by the COVID-19 pandemic, the recall of commissions hits small independent travel agencies and independent advisors the hardest as that revenue is needed to pay rent, employee wages and general operating expenses," Harris said in a statement.
He added: “The suppliers who have stepped up and demonstrated an understanding of how critical advisors are to the entire travel system and recognizing the need to pay commissions in a timely manner upon final payment of trip and protecting them against refunds has been a bright spot in an unimaginable year and I truly believe that those suppliers will be rewarded in the long term.”
Cathie Lewis-Hardy, VP, Strategic Partnerships, TRAVELSAVERS Inc. called the changes "fair and reasonable" and will greatly assist advisors with much-needed monthly cash flow.
“It is important that preferred partners understand the value of a travel advisor’s role in the sale of their products and services. And during the last 16 months, the multiple reselling of their products and services as products shifted and policies changed. We commend and thank those partners that have already made this change. As a result of these policy changes, we have seen a growth in future sales and a loyalty shift to these partners," Lewis-Hardy said in a statement.