I have never been a shrinking violet in our industry. It’s no simple task to take on the establishment when the need arises, and some say that my style can be aggressive and abrasive. I wouldn’t disagree. Over the years, I’ve seen some pretty incredible injustices and disrespect for the retail travel agent which comes from the outside and, regrettably, sometimes even from within.

While ARTA Canada only began as an association seven months ago, my involvement in travel agency matters has a long and respected history in the Canadian market, and having led two travel agency associations in Canada, I think I have earned the right to speak-up as needed.

The situation with the demise of Conquest Vacations is just such a circumstance where I feel I have something to add to the debate, and no suggestion by ACTA that it reserves such a right exclusively for itself will deter me from saying what needs to be said. ACTA further asserts that just because it has more members than ARTA Canada does that this alone should summarily disqualify me from taking a public position on behalf of ARTA Canada’s members and our industry. ACTA may need a lesson or two about democracy.

ACTA goes on to suggest that it not only approved of TICO’s handling of the Conquest failure, but that it supports TICO’s methods of governance. However, a recent poll in OpenJaw indicates that the industry, including ACTA members, does not share that view. By a
2-to-1 margin, 44% of voters said that TICO should have “blown the whistle” on Conquest with only 22% of voters saying that TICO did the right thing. The remaining 34% of voters took no side but instead are calling for new guidelines, an indication that TICO’s current governance and policy model is lacking.   

ACTA, CITC, CATO: Self-serving and Out-of-Touch

Given the deafening outcry and outrage from consumers and government as to the inequities and mishandling by TICO of Conquest, one can only be baffled by the relentless, unequivocal support which ACTA, CITC,  and CATO have all but simultaneously given to TICO and the praise showered upon TICO for its handling of the Conquest shutdown. It certainly seems that these industry heavy-hitters should be the first to take issue if TICO had not done a proper job. However, upon closer scrutiny, two things may shed some light as to why these self-proclaimed "official spokespersons" of the travel industry seem to be at odds with the media, the public, and Ontario’s Premier.

Firstly, ACTA, CITC, and CATO (along with OMCA) each appoint members to the TICO board of directors; in fact, their collective appointments represent the majority of 8 out of 15 board seats. Their combined influence calls the shots at TICO, and they have done so for years. Therefore, it can’t be much of a surprise to anyone that criticism of TICO is effectively criticism of their very own stewardship and management of the regulator. Their ardent support of TICO, right or wrong, is, by extension, simply self-serving and self-preserving.

Secondly, ACTA and CATO members include most all of the largest tour operator and wholesaler businesses in Canada, a sector of our industry which is now coming under a finely focused microscope to evaluate what went wrong with Conquest and what needs to be done about it. In my view, the “gang of three” likely feels that if they can jointly persuade the public and government that TICO did a superb job with Conquest that perhaps tighter regulations and more government oversight might be avoided. That gambit is destined to fail. To the contrary, the tide of public sentiment has turned so vehemently against TICO that most any support for the regulator by our industry will have the opposite effect, portraying us as uncaring, unconcerned, and only interested in protecting ourselves.

Lessons Not Learned

TICO’s failure to pull the plug on Conquest, despite months of advance knowledge of Conquest’s financial non-compliance, and TICO’s risky permissiveness in giving Conquest way too much time to remediate its working capital, are indicative of similar issues in the One Step Travel debacle. While the underlying issues of financial strife at the two TICO registrants were not at all the same, the common thread which binds them is TICO’s failure to act before it was too late. In the case of One Step Travel, TICO’s handling of which is now under investigation at the Internal Audit Division of Ontario’s Ministry of Finance, years of non-compliance and seven years of insufficient and negative working capital preceded the largest hit in history to the TICO Compensation Fund; a record surely to be broken by Conquest.

And then there’s the case of former TICO board member Simon Parry, a current member of the ARTA Canada board, who was ousted by TICO because he called for a complete investigation into TICO’s role in the One Step Travel failure and, with full disclosure and advance notice to TICO, he participated in the task force of registrants duly constituted at the 2008 TICO Annual General Meeting to look into the matter. Not only did TICO refuse to cooperate with the task force, but TICO retaliated against its own board member who sought to bring urgent change to TICO even in the face of public revelations that the Ontario Provincial Court criticized TICO’s inaction in the One Step Travel matter.

Changes Will Be Made at TICO

There is no question that the Ontario government will step in and make changes at TICO. But if ACTA, CITC, and CATO keep thumping their chests in self-congratulation of TICO’s handling of Conquest, you can be sure that the regulatory changes will be severe and possibly quite onerous, with little interest in providing those who deny the problem a seat at the table to bring constructive and balanced change. Furthermore, we should not seed government indifference to our rightful concern that our commissions should be protected in exactly the same manner as the hotel, transfer company, tour provider, and others who seek to be paid when a wholesaler fails. After all, it is we who contribute to and finance the compensation fund, and we have just as much right to be made financially whole as anyone else does.

A Call for Reform

Making matters worse is that there is little appreciation outside our industry for the different roles and sectors of our business. The public does not see a difference between a travel agent, travel wholesaler, tour operator, consolidator, etc.. As far as the public is concerned, we are all “travel agents”. The last thing we need in these tough economic times is for the entire industry, particularly retail travel agents, to become the fall guy for the poor business practices of a relative few.

It is ARTA Canada’s plan to meet the damage head-on, not by taking ACTA’s stance that all is well at TICO, but rather, by accepting that our industry’s self-regulation needs fine-tuning and equitable change. Specifically, ARTA Canada will work with the Ontario Legislature to advance the following reforms, among others, to TICO's Bylaws, the Travel Industry Act, 2002, and Ontario Regulation 26/05:

1. Specific guidelines and reasonable timetables for financial non-compliance remediation should be established to assure a swift curing of financial and other regulatory irregularities;

2. Requirements should be established to assure that products and services sold below cost are protected with the difference between the selling price and the actual cost being deposited into the registrant’s trust account along with the costs of any "at risk" products or services not sold;

3. A new payment regime should be established to assure that end-suppliers are paid in full before travellers depart;

4. Retail travel agent commissions should be fully protected in the event of a wholesaler failure;

5. Increased monitoring and reporting should be established for registrants which exceed certain levels of financial transactions and sales volumes;

6. A guarantee and assistance system should be put in place to assure that “in destination” travellers have access to both TICO and government resources in times of need;

7. Amendments should be made to TICO’s confidentiality provisions to allow for complete transparency in all TICO’s activities, except where confidentiality is needed to protect personal information in accordance with existing privacy laws;

8. Aside from the four ministerial appointments to the TICO board, the remaining board members should be elected by registrants, eliminating all industry “appointments” to the board.

ARTA Canada will work with its members to develop additional recommendations and reforms to assure more effective travel consumer protection in Ontario and other provinces. ARTA Canada’s long-term objective is to establish a national travel consumer protection administration serving all provinces and territories in Canada.

Thank you taking the time to consider my views.

Best regards,

Bruce Bishins, CTC