With New Leadership, CATO Continues As ‘Single Voice’ For Tour Ops

Bruce Parkinson, Open Jaw

Brett Walker

With new leadership at the helm, the Canadian Association of Tour Operators continues its 30-year role as the “single voice” for large and small Canadian tour companies. Key issues for the group include the ongoing update of Ontario’s Travel Industry Act and fighting the growing problem of fraud in the travel industry.

WestJet Vacations VP Tim Croyle was announced as CATO’s new chair last month, taking over from The Travel Corporation’s Jeff Element for a two-year term. Brett Walker, GM of Canada for Collette, is vice-chair, while The Travel Corporation controller Richard Edwards continues as the group’s long-time treasurer and Pierre Lepage as Executive Director.

The group met with reporters this week to talk about recent efforts and the continuing importance of its role in a fast-changing travel environment.

A major focus for CATO over the past two years has been providing input as the Ontario government readies to make changes to the province’s Travel Industry Act, which was last updated in 2002 – before the Internet radically changed the way travel is distributed and sold.

“The world was a different place when that legislation was written,” says Croyle. “We’ve been pushing for modernized consumer protection and a reduction of the regulatory burden on our members.”

Croyle says the consultation process with the government has been inclusive and productive, and the new Travel Industry Act will include changes CATO lobbied for, especially around trust accounting and auditing rules that the group says became outdated and burdensome.

What CATO didn’t get is a new funding model for the Ontario Travel Compensation Fund. Both CATO and retail association ACTA have been calling for a co-pay model, similar to that in Quebec, where travellers pay a small surcharge on their package price to fund compensation in case of operator failure.

The Quebec fund is brimming with over $150 million, while Ontario’s industry-paid fund has just $21 million or so in the bank, which Croyle says isn’t enough to cover the failure of a major operator, should such a scenario occur.

On top of that, Croyle and CATO say the current TICO approach of directing consumers to ask credit card companies for a chargeback in the event of travel services not being delivered --before being able to access the Compensation Fund – is onerous and doesn’t inspire consumer confidence.

“We tell consumers to book with TICO members so their investment is protected, but then if there’s a problem refer them to the credit card company. It’s a very unclear message when the Fund becomes the payer of last resort.”

CATO says charging consumers something minimal like $1 per $1,000 of travel purchased would create a fund that would cover most eventualities – and be cheaper than relying on credit card companies, where chargeback coverage can represent an extra cost of 2.3%, rather than the 0.1% proposed in the co-pay model.

It’s not surprising, however, that the Ontario government is reluctant to make a change that could be portrayed as a new ‘tax’ on Ontario residents – however small and rational that might be.

“It is the most economical way to go, and it is to the consumer’s benefit, not the tour operator’s benefit,” Croyle says. “It’s better for the whole market and we’ll keep advocating for the idea. We give full marks to a regulatory environment where major failures have been reduced, we just need a better system that consumers can have confidence in.”

CATO does a lot of “behind the scenes” work, says Executive Director Lepage, liaising with foreign and domestic governments on issues that impact tour operators and their travellers. For example, when the federal government issued a blanket travel warning for Cuba during last fall’s hurricane season, CATO lobbied and got more specificity – while Cayo Coco was badly damaged, Holguin was just fine.

“That’s a simple, clear example of where CATO has influence,” Lepage says.

Bruce Parkinson

Bruce Parkinson Editor-in-Chief

An observer and analyst of the Canadian and international travel industries for over 25 years, Bruce uses the pre-dawn hours to prepare a daily news and information package to keep industry members up to date.

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