According to Travel Industry Council of Ontario statistics, gross retail travel sales in Ontario dropped nearly 10% from the 2008/2009 to the 2009/2010 fiscal year ended March 31st. According to TICO CEO Michael Pepper, such a drop has never been seen before in TICO’s 13 year history, even after the events of 9/11. Are things really that bad?
Gross sales through TICO-registered retailers totalled $8.88 billion in 2008/2009, dropping to $8.075 billion in 2009/2010. Sales reported by TICO-registered wholesalers dropped by an ever larger percentage, from $2.997 billion to $2.64 billion.
Citing the failed GoTravel Direct as an example, retailer Alex Handa of Handa Travel asked Pepper if the falling numbers reflected a move by companies to base their offices in places outside of regulatory jurisdiction, where they could escape both scrutiny and compensation fund levies. Pepper doesn’t believe that is the case.
“I haven’t noticed any exodus,” Pepper replied. He suggested a couple of reasons for the decline, including the rapid growth of WestJet Vacations, which until last month was not a member of TICO, so its sales were not reflected in the wholesaler statistics.
Pepper also pointed to the consolidation that has resulted in a wholesale market comprised of “half a dozen really big players,” as opposed to 15 years ago when there was “maybe a dozen Conquest-sized players.”
TICO board Chair Jill Wykes offered another contributing factor which she is well familiar with through her other role as Senior V.P. Human Resources & Operations with Thomas Cook Canada. “There was a huge drop in pricing over the past year,” said Wykes. “That would explain a lot of it.”
