By Bruce Parkinson
The 13th annual general meeting of the Travel Industry Council of Ontario was a quiet, respectful event, in stark contrast to last year’s crowded, contentious affair. But rather than reflecting a decline in interest or issues, the tone appeared to be set by a realization that the group and its board are working to address industry interests.
“Thanks for taking some of our concerns seriously,” said Handa Travel’s Alex Handa, who raised several issues at last year’s AGM. Even frequent TICO critic Bruce Bishins was far less combative this year, withdrawing several proposed motions because their content had already been addressed in presentations by TICO board chair Jill Wykes and CEO Michael Pepper.
Wykes and Pepper reviewed the key developments in a year that saw the release of an independent audit of TICO’s actions in the failure of One Step Travel and continuing efforts by the Ontario regulator to recover funds from the estate of failed Conquest Vacations. The audit generally supported TICO’s actions in the One Step case, while the effort to pry funds from the Conquest trustee continues to slowly wade through the legal system.
As well as the $2 million hit to the Ontario Travel Industry Compensation Fund from the Conquest failure, the 2009/2010 TICO fiscal year also saw nearly $1 million drained from the fund by the low-profile failure of Sunrise International Travels, a company that initiated a high-risk charter flight program to Caribbean and South American destinations, but quickly failed.
The company had been registered with TICO for a decade, but had never operated a flight program before. The Canadian Transportation Agency failed to notify TICO of Sunrise’s successful application to offer the charter program, and the whole thing was over in a matter of weeks.
“This one fell through the cracks. It never should have happened,” said Wykes. “But we’ve closed that gap and an investigation is underway. And the CTA has finally agreed to routinely keep us informed of applications so we can monitor them.”
Wykes told the audience that TICO has “learned a lot from the last few failures,” and benefited from the independent review of the One Step failure, which identified areas where the regulator could do a better job of scrutinizing the financial health of registrants.
A number of other issues were discussed at the AGM, some of which will be expanded on in Open Jaw articles over the next couple of days. Among the highlights:
Commission Protection in Operator Failure
This is a hot topic among retailers, who would like to be able to claim lost commissions from the Compensation Fund when a wholesaler goes under. After what Wykes called “much debate,” the TICO board has recommended against this proposal, in the belief that the fund exists solely for the protection of consumer monies.
Alternative Financing for Fund
Work is ongoing for a TICO committee charged with seeking alternative methods for financing the Compensation Fund, including a proposal to make it a consumer-pay model rather than an industry-funded entity. Consumer focus groups are the next step in the process, TICO says.
No Fee Increases Yet
The TICO business plan refers potential increases for 2011 and 2012 on the levies that retailers and wholesalers pay into the Compensation Fund. But Pepper says the numbers are in the business plan “due to prudence” and there are currently no fee increases on the table. The intention is to use the levies to maintain the fund at a level close to $25 million. It currently stands at nearly $26 million and any changes to fee levels will reflect the amount of claims paid out of the fund in future.
Conquest Claim
The Conquest ‘estate’ includes close to $1 million in funds held in trust accounts. TICO has placed a claim for that money in order to recoup some of the more than $2 million it paid out to Conquest clients. The Conquest trustee disallowed the claim, but TICO has appealed, on the basis that the trust account funds were held on behalf of consumers and should be transferred to the Compensation Fund that paid for the repatriation of Conquest clients. A court decision is still awaited, more than six months after the case was heard.
One Step Review Cost
TICO revealed that the independent audit of the One Step failure cost $42,840.
Education Standards
Nearly 24,000 agents and managers have taken either the counsellor, manager or combo exam that is now required for Ontario travel agents. Pepper says the number is nearly double what was expected.
New Board Member
Jim Diebel of Hanover Holiday Tours is the newest member of the TICO board, taking one of the two elected industry positions. Diebel replaces Brett Walker, who was thanked by the TICO board for nine years of service to the organization.
