ACTA Joins Four Major Consortia Calling For Changes To Commission Payments
Anna Kroupina, Open Jaw
In an unprecedented open letter to suppliers, ACTA is addressing long-smouldering concerns about fairness in the legacy agency/supplier relationship, one that's been brought to a head by the COVID crisis.
The Association - joined by major retail consortia operating in Canada - is calling for a "holistic review" of the travel agency-supplier relationship, urging suppliers to re-evaluate their commission and compensation policies.
“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.
ACTA consulted with travel agency senior leaders, consortia and host agencies, and says they have collectively decided the solution lies in commission protection. It is asking suppliers to consider revise their policies to protect and pay commission to travel agencies:
At the time of deposit and/or when the file is paid in full, regardless of travel date
If the travel is rebooked, cancelled or refunded (and definitely if the supplier has retained partial payment)
On any prepaid or pre-booked add-ons, upgrades and excursions etc.
The letter is co-signed by the leaders of the four major consortia in Canada: David Harris, CEO, Ensemble Travel Group; Albert Herrera, Sr. VP, Global Partnerships, Virtuoso; Christine James, VP Canada, Travel Leaders Network; and Cathie Lewis-Hardy, VP, Strategic Partnership, TRAVELSAVERS.
In the letter, ACTA and retail leaders reiterate that a travel advisor has fulfilled their duty to a supplier once a client pays for their travel services, and should promptly be paid their commission. They also underline that commissions 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.
The association and agency leadership did acknowledge some suppliers are already 'playing nice' with retail partners.
“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.”
Open Jaw reached out to a number of suppliers for their side of this story. Some declined to be quoted but the general consensus was that most suppliers feel they are upholding their side of the partnership.
On the record, Trafalgar President Wolf Paunic told Open Jaw that The Travel Corporation policies mostly already aligned with the agency requests in terms of both protections and timing.
When asked if some new innovations or changes could help address agency concerns, Paunic provided an example, “Flexibility of booking and payment will be of paramount importance. We have signed an agreement with Uplift, and believe it advantageous for both Travel Advisors and guests. Travel Advisors get the full commission on the booking, while guests enjoy equal monthly payments.”
Open Jaw Retail Analyst, TTI’s Rocky Racco, echoed ACTA’s Paradis, acknowledging, “Many travel partners are already protecting our commissions,” and, “more and more travel partners are compensating us at time of booking.”
But he says it’s about seeing those fair policies applied consistently across the board. “This needs to become common practice with everyone. If travel partners truly value our relationship and that we are ultimately an extension of their sales force then they need to ensure we are fairly compensated for all the work we have performed.”
“If the client later cancels and/or changes plans our commissions need to be protected because we have done the work already,” he reiterated, and added, “I would suggest creating a correlation of compensation with how far out the travel date is. For example, if we are able to book our clients to travel over a year from now then we should be rewarded/compensated for an early booking.”
As everyone in the travel industry looks towards a restart of travel, Trafalgar’s Paunic says the agency/supplier relationship remains vitally important. “It is imperative to continue working together and to preserve existing bookings as they will be the foundation of recovery.”
Anna Kroupina Journalist
Anna is OJ's newest member and she joins the team as a writer/reporter. She co-writes the daily news and covers events. Although she's new to the industry, pursuing a career path in travel/tourism has been a goal since her first family road trip to the Florida Keys sparked a desire to discover the world and this exhilarating, fast-paced industry.
LeAnne Rigsby, MCC- October 9, 2020 @ 11:44
The United States organizations (ASTA, NACTA, USTOA) need to follow Canada's lead on this.
My agency belongs to Travel Leaders Network (US) and I'm hoping their VP US is following this.
Sue Archer- October 7, 2020 @ 16:14
Look at this!