Travel agents would like the Ontario Travel Industry Compensation Fund to compensate them for commissions lost when a wholesaler goes under. Unfortunately, as revealed at TICO’s AGM this week, that’s not something that will happen soon, if ever.
“There was much debate within the Board,” said TICO Chair Jill Wykes. “But the Board position is that the Fund exists for consumer protection only.”
Handa Travel’s Alex Handa wasn’t happy to hear that. He says his company lost $20,000-$30,000 in commissions when Canada 3000 folded 10 years ago, and a similar amount when Conquest Vacations threw in the towel last year. “And we expect it to happen again,” said Handa.
“Most retailers would likely agree with you,” said Wykes. “But the fund has been pretty pure in not paying trade debts. While it might be a nice thing to be able to do, we didn’t feel ethically that it was the right thing to do with the money in the Fund.”
Representing Helen Thomson Travel, Bruce Bishins countered that wholesalers do sometimes benefit when a competitor goes under and they step in to take over bookings or repatriate passengers. “They’re certainly not doing that at cost. There’s a profit margin there. That’s what gets under the skin of retailers.”
TICO CEO Michael Pepper acknowledged that possibility and said the regulator will look at guidelines to prevent tour operators from profiting from the fund.
Jeff Element, President of The Travel Corporation (Canada), offered a tour operator perspective on the issue. “We have the same sort of risk. If we issue documents pre-payment and the retailer fails, we don’t get paid by the fund.”
