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TICO's Gamble with Our Money:
The Largest Hit to the Compensation Fund
is Coming to Your Pocketbook Soon
Toronto, 11 May 2009: ARTA Canada called again today for a thorough investigation of TICO's decision to give Conquest Vacations a long period of remediation to cure its working capital and other financial problems. The call for a review stems from ARTA Canada's continuing position that TICO should have firmly held Conquest to the requirements of the Travel Industry Act, 2002 and Ontario Regulation 26/05 and not allowed Conquest months to fix its fragile financial status.
ARTA Canada's views and call for a probe into TICO's actions and its scrutiny over what Conquest financial data TICO actually reviewed were bolstered last week by bankruptcy trustee revelations that Conquest had financial deficiencies of nearly $20 million, including hundreds of thousands of dollars, if not millions owed to travel agencies for commission. Yet, with the apparent volume of business, including millions owed to hotels and resorts, Conquest's trust account was just over $1 million. TICO's assertion that Conquest was "on side" with its trust account and that Conquest could have cured its financial woes within the period allowed by TICO does not reconcile with the enormous liabilities which Conquest carried, most of which was owed to end-supplier hotels and resorts.
ARTA Canada does not take issue with TICO's after-the-demise handling and repatriation of affected travellers. TICO has always done a good job in cleaning up after industry failures occur. However, ARTA Canada feels that TICO's efforts must be improved at preventing failures in the first place; or at least taking steps to suspend a tour operator when remediation of deficiencies is not moving quickly enough.
"It is exasperating to hear that TICO continues to lean on the compensation fund as the answer and cure-all to industry failures. The compensation fund is a last resort to keep consumers from losing their travel investments. TICO must not be allowed to slack off on scrutiny and oversight of a large operator's financial position. To sit back with complacency and allow the compensation fund to be the magic cure is unfair to every properly-managed and financed travel agency in Ontario", said ARTA Canada president Bruce Bishins, CTC.
The compensation fund seems to be treated by TICO as if it were a limitless endowment from someone's wealthy great aunt. The truth of the matter is that the fund is really the pocketbook of every registered travel business in Ontario. Why should TICO's ineffectiveness in holding travel companies to account and financial compliance be paid for by travel agencies which are operating their businesses properly?
"It is time to stop TICO from gambling with our money. TICO gambled with One Step Travel, and they gambled with Conquest. TICO lost in both cases, and in doing so, drained both money and reputation from Ontario's travel agency community. Next, TICO will be coming to travel agencies asking us to pony up more money in compensation fund contributions. Just let them try!", said Bishins.
For additional information about Conquest's bankruptcy proceedings, please visit the web site of the trustee, Ira Smith, at www.irasmithinc.com/conquest. A meeting of creditors is scheduled for 14 May 2009 at the Hilton Garden Inn in Vaughn, Ontario. A copy of Conquest's assets and liabilities can be obtained by clicking here. A proxy and claim form for travel agencies seeking to be designated as a creditor (for commission) is available by clicking here.
ARTA Canada will continue its efforts to effect changes at TICO and thanks MPP Lisa MacLeod (PC, Nepean-Carleton) for her unwavering support in bringing this matter before the Ontario Legislature.
About ARTA Canada
ARTA Canada is the largest non-profit federally incorporated professional association of travel retailers in Canada, the members of which consist exclusively of travel agencies and travel agents. In addition to advocating fair and equitable treatment of travel consumers, ARTA Canada represents the commercial and strategic interests of its member travel agencies and travel agents in a variety of national and provincial domains including regulatory and legislative matters, automation, technology, sales and marketing, and distribution.
ARTA Canada is the strategic partner in Canada of the U.S.-based Association of Retail Travel Agents (ARTA). ARTA Canada is the Canadian member of UFTAA, the United Federation of Travel Agents' Associations. To join ARTA Canada, complete details and online membership application and secure payment are available on the ARTA Canada web site at www.artacanada.ca/join. | 
