The need for upfront commission payment and commission protection has never been greater, as travel agencies struggle to stay solvent more than 16 months into the pandemic.

ACTA is applauding the decision by many suppliers to pay commission at time of booking / deposit, and to protect commissions on cancelled files. Both approaches are in line with ACTA’s recommended Best Practices, says ACTA President Wendy Paradis.

“The pandemic has illustrated the vulnerabilities for travel agencies and travel agents with regard to former policies on commission recall and commissions paid only when clients travel,” she says.

Paradis adds: “Going forward, we hope to see all suppliers change their policies. Travel agents have been without revenue now for months despite taking bookings – this model cannot continue.”

The issue has become a critical one during the pandemic.

Here’s ACTA’s ask, as per its recommended Best Practices put forth last year:

• Pay commission at the time of deposit and/or when the file is paid in full, regardless of travel date
• Protect commission if the travel is rebooked, cancelled or refunded (especially if the supplier has retained partial payment)
• Pay commission on any prepaid or pre-booked add-on’s, upgrades and excursions and so on

Consortiums are onboard too. Says Christine James, Vice President, Canada, TL Network: “Clearly it’s been an extremely challenging year financially for all travel retailers over the past 16 months. Recognizing the overwhelming cash flow hurdles that travel advisors were faced with, it was a relief to see that the majority of suppliers stepped up to protect commissions on any existing bookings. At the very least, it removed the initial burden of advisors scrambling to deal with commission recalls for their clients that accepted the future travel credits!”

James adds: “TL Network has applauded our preferred suppliers that went beyond standard industry practices to pay commissions upfront on partial payments/deposits was well as at the time of final payment vs. waiting until travel was completed! This is a much-needed benefit to retailers to start seeing cash flow now versus months and even years down the road.”

David Harris, CEO of Ensemble Travel Group says positive moves from many suppliers, “who have stepped up and demonstrated an understanding of how critical advisors are to the entire travel system and recognizing the need to pay commissions in a timely manner upon final payment of trip and protecting them against refunds, has been a bright spot in an unimaginable year and I truly believe that those suppliers will be rewarded in the long term.”

Harris notes that the pandemic “really put a spotlight on one of the critical issues affecting travel advisors specifically – protecting and paying commissions in a timely manner.  While we know that all stakeholders in the travel eco-system were devastated by the COVID-19 pandemic, the recall of commissions hits small independent travel agencies and independent advisors the hardest as that revenue is needed to pay rent, employee wages and general operating expenses.”

And Cathie Lewis-Hardy, VP, Strategic Partnerships, TRAVELSAVERS Inc. says: “TRAVELSAVERS continues to advocate with suppliers for updated commission policies where commission is paid at deposit and/or at final payment, as well as commission protection.  We believe these changes are fair and reasonable and will greatly assist advisors with much needed monthly cash flow.”

Suppliers who look out for their retail partners will see results, she adds. “It is important that preferred partners understand the value of a travel advisor’s role in the sale of their products and services. And during the last 16 months, the multiple reselling of their products and services as products shifted and policies changed. We commend and thank those partners that have already made this change. As a result of these policy changes, we have seen a growth in future sales and a loyalty shift to these partners.”

Source: Travelweek