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As the United States and Canada are enormously connected to each other in so many different ways, it doesn’t seem like breaking news when important collaborations between the two countries take place.
But when the American Society of Travel Advisors and the Association of Canadian Travel Agencies released a joint statement in mid-June calling for the reopening of the U.S.-Canada border, it was more than just another case of entities from each country working together.
The press release symbolized the strong relationship between the organizations, who have successfully collaborated on other issues during the pandemic — two of the most prominent being calling on faster commission payments for travel advisors and obtaining refunds for travelers. The future will likely see more collaborations between ACTA and ASTA despite occasional tensions between officials in the U.S. and Canada.
Which happened earlier this year when ASTA CEO and President Zane Kerby lashed out at Transport Canada’s decision to extend the country’s cruise ship ban to February 2022, fearing it could decimate the U.S. cruise industry as it halted cruises from Washington to Alaska, which were required to stop in Canada due to the Passenger Vessel Services Act of 1886.
The cruise industry — and tourism to Alaska — got a reprieve when President Joe Biden signed the Alaska Tourism Restoration Act, which provided a temporary exception to U.S. law so foreign-flagged ships could sail between U.S. ports. However, numerous Canadian officials have expressed concern that the measure could become permanent, something that could become a bone of contention between ASTA and ACTA. Especially as Kerby came out in favor of Alaska’s elected leaders calling for a suspension of the PVSA.
But certainly, the groups have much in common. “Travel is an international business and while our respective countries have different business environments, many of the issues our members face are not domestic,” said ACTA President Wendy Paradis. “We regularly communicate with ASTA on areas of mutual interests.”
Aside from the push to reopen the border, perhaps the first issue that came to mind relates to commissions for travel agencies and travel advisors. Delayed payments of commissions led to many ASTA members “working harder than ever before but essentially without pay,” said the company’s Senior Vice President and General Counsel Peter N. Lobasso.
How could that happen? Largely because travel advisors are enormously dependent on commission generated from trips they sell, which the pandemic prevented from happening in large numbers due to so many destinations being closed for tourism. Travel advisors fare even worse if a client cancels a trip as the commission is completely lost, Lobasso added.
And the struggles many travel agencies have faced haven’t helped. Sixty-two percent of ASTA members said in a 2020 survey they expected business income to delay the return of travel bookings by at least six months largely because travel suppliers do not issue full commission payments to the booking agencies until their clients finish their travels.
In Canada, travel advisors have to wait quite awhile to be compensated. In fact, anywhere between 139 and 317 days, according to the Association of Canadian Independent Travel Advisors, an advocacy group. That period of time includes several steps: an agent acquiring a client, a booking being confirmed, the client’s departure date and the processing of commission.
While the groups have different opinions on the timeline for securing commission payments — ASTA has recommended that commissions be paid no later than two weeks after travelers pay in full while ACTA called for suppliers to pay commissions to travel agencies at the time of deposit — it’s an issue that Paradis and ASTA Senior Vice President of Industry Relations and Education Mark Meader have raised on a global scale as members of the World Travel Agency Alliance Association.
Paradis has expressed optimism that travel suppliers are open for change in regards to speeding up payments of commission. “The feedback is that there is recognition of this issue with travel suppliers and we are seeing some opening with change,” she said.
While headway has been made in regards to securing faster payment commissions, the other big issue that Meader and Paradis’ groups dealt with during the pandemic pertains to refunds. Especially in regards to airlines.
Meader stated that ASTA has been able to successfully advocate for consumers in several airline-related issues during the pandemic — such as no agency debit memos for credit card chargebacks on canceled flights, another area of collaboration with ACTA. But possibly, one of its most important successes was “ensuring air tickets and all travel components are fully refundable and not merely credited for future travel,” he said.
ASTA’s battle to ensure refunds for U.S. travelers actually involved Air Canada. The group publicly called out the airline in July 2020 for refusing to reverse a policy of not paying out refunds on U.S. flights it canceled, a decision ACTA said was against U.S. Department of Transportation regulations.
But Air Canada rolled out a new policy this April in which it would offer refunds to customers with non-refundable fares whose flights were canceled or voluntarily cancel their flights due to the pandemic after 2020. Furthermore, customers whose future flights are canceled or rescheduled by more than three hours after purchasing their ticket are entitled to a refund.
Exactly, how did the policy come about? It was possible because the Canadian government announced it had reached a deal with Air Canada — in which the carrier was mandated to pay refunds — giving the airline up to $4.6 billion ($5.8 CAD billion) in liquidity, mostly in repayable loans with a $398 million ($500 CAD million) equity stake in the airline going to Ottawa. It was also possible because of the work of ACTA, which had worked with both the Ministry of Finance and Ministry of Transport to fight for passage of the bill, which included provisions to protect travel advisor commissions.
“We were also very pleased to learn in a conversation with the Ministry of Transport that commissions will be protected on both flights and tour packages,” Paradis said.
So what might the future bring about in terms of collaborations between ACTA and ASTA? When asked that question, Meader couldn’t provide any certainties but he sees a future that includes “collaboration where mutually beneficial initiatives are identified of importance to both organizations,” he said.
Regardless, the two groups should have a bright future working together. “We have always enjoyed a good relationship with ASTA and there are many benefits to a common exchange of information and an ongoing dialogue,” Paradis said. “We expect this will always be the case.”