Travel agents worry they will have to return thousands of dollars in commissions under airline bailout plan

Passenger flights between London and New York could be running by Christmas
November 12, 2020
Travel agents worry they will have to return thousands of dollars in commissions under airline bailout plan
November 12, 2020

Like many across the travel industry, Cheryl Scremin lost her livelihood in an instant when the pandemic hit just as spring break was getting underway. Not only did it grind the global travel industry to a near-complete standstill, but for independent travel advisors like Scremin, it has also meant giving back thousands of dollars — and more — in earned commissions.

As a self-employed travel agent working under a host agency, Scremin did not get a base salary, but was paid entirely through commissions earned. Additional work — like the travel cancellations this past spring and rebooking travel plans through credit vouchers — are unpaid. But when companies like Air Transat began refunding travellers, the situation was exacerbated, with agents having to give back what was earned on those bookings — some of which were made in 2019.

“They’re all going to do the same thing as the government mandates that they have to give a refund in order to get this bailout. And so somebody like me, I’ve already paid back a few thousand, and now that doesn’t even include all the spring break stuff, so it’s literally, it’s just unbelievable,” Scremin told CTVNews.ca from Vancouver, adding she could not think of another sector where employees faced this situation.

“At a time when we have no income, we are now having to pay this money back, or will be once they start (refunding).”

The Association of Canadian Travel Agencies (ACTA), which confirmed Scremin’s account that these independent travel agents have been working without pay to cancel existing trips as well as rebook all future trips with the travel vouchers, is asking that travel agents and travel agencies be part of any government aid package, the organization’s president said in an emailed response to CTVNews.ca.

ACTA, which represents some 14,000 travel agencies and 24,000 travel agents, says the industry is “hurting badly and have had little to no revenue for months”. Commissions, if recalled, should be covered by government aid, either to the airlines or directly to the travel agencies and travel agents, the association said.

“We have had several discussions with the government about the dire financial situation of the entire Canadian travel industry, including travel agencies,” said ACTA president Wendy Paradis.

Even for agents working with a salary, those travel agencies would still be responsible for returning commissions, which could potentially drive them out of business, leaving those agents vulnerable too, Scremin explained.

Airlines should not be allowed to recall commissions when they refund clients, Scremin said. At least one Facebook group made up of agents like herself have been lobbying politicians to ensure if there is a bailout, commissions cannot be recalled. Ideally, she would love to see some kind of retroactive measure as well that would allow agents to recoup what they have had to return.

Transport Canada, for its part, did not address CTVNews.ca queries regarding ACTA’s request and redirected queries on travel agents to provincial, territorial or municipal governments. A spokesperson reiterated that the federal government is developing a package to assist Canadian airlines, airports and the aerospace sector to respond to the challenges caused by the pandemic.

“Protecting Canadians and the public interest remains paramount, and details regarding any financial assistance would be announced in due course,” spokesperson Sau Sau Liu said.

“WEEKS AND WEEKS” OF WORK

In the early days of the pandemic, Scremin said she spent hours upon hours on the phone — sometimes on hold all day on two different phone lines simply waiting to get through — cancelling countless trips for clients. The unprecedented situation was understandable, she said, and because they were issuing credits, travel companies did not ask for the commissions back.

More than half a year later, the process is much more streamlined now, but it does not take into account the “weeks and weeks and weeks” that was spent managing those accounts, she said, and those travel credits will still need to be rebooked. Because the commission was already paid, however, there will be no additional income for the service.

“But that’s fine. We were all willing to do it, obviously,” Scremin said, emphasizing that agents are more than happy to look after clients and provide these services — the issue is not with customers but with travel companies.

“But now … any time there’s a refund, they recall the commission.”

Cruise companies are the only segment of the travel industry that is not recalling commissions, according to Scremin.

Air Transat began issuing refunds on cancellations because there were no options for someone to use a travel credit from Western Canada; now WestJet is also issuing refunds.

WestJet initially told agents they would protect their commissions, but “now they’re not going to,” said Scremin.

“First they said it was their flight, then they said it was their vacation packages, so you can imagine all the spring break trips that everybody had planned. And we know from past experience, when one (airline) does it, they all do it.”

For agents who booked entire travel wedding packages for groups, some say they are expecting to return roughly $20,000 in earned commissions on those bookings alone.

“We value the work of our travel agent partners and we are sympathetic to the situation they are facing where lack of government support also continues to hinder their ability to recover,” WestJet spokesman Morgan Bell told CTVNews.ca in an email.

“We urge the federal government to take action to address these issues and are advocating not only for our airline, but the entire travel supply chain, to ensure our critical industry can help lead Canada’s economic recovery.”

The company did not address specific queries about what its previous and current policy on commissions entailed.

Air Canada told CTVNews.ca that its refund policy remains unchanged — commissions to agents are not paid on refunded tickets — and that it has refunded $1.2 billion in refundable tickets since the start of this year. For those holding non-refundable tickets, the airline reiterated that it was offering travel credit with no expiry or converting the reservation into points with an additional 65 per cent bonus.

With no work coming in, Scremin, who has been a travel agent for 16 years, has picked up a second job selling fixtures in a kitchen and plumbing showroom.

“It’s completely out of my comfort zone, but I had to get a second job because I know I’m going to be paying all this money back,” she said, adding that the federal government has done much to help Canadians during the pandemic, but no one has addressed helping those like her.

“Marc Garneau said, if they’re going to give (airlines) a bailout, they’re going to require them to give a refund. But what about us? And we’re the only segment of the population that had to continue working for free and now pay money back that we were paid eight months ago. And now there’s nothing for us — there’s no subsidy, there’s no wage subsidy, there’s no rent subsidy, there’s nothing that will help us.”