by Mia Taylor
Last updated: 4:55 PM ET, Wed December 4, 2024
Update: December 5, 2024, at 9:30 a.m. ET
The American Society of Travel Advisors (ASTA) issued a
statement expressing its concern over certain contract terms in Disney’s 2025
Travel Agency Designation Agreement, particularly, the enhanced insurance
coverage requirements.
ASTA is grateful to learn that Disney intends to revise the
terms of their 2025 Travel Agency Designation Agreements in line with the
recommendations that we set forth.
“We appreciate Disney’s swift action on this matter, and for
recognizing the need to accommodate one of their most essential sales channels,
the travel advisors who bring Disney's magic to life,” Zane Kerby, President
& CEO.
Original Text
Disney is scrapping a highly unpopular requirement in its 2025 Travel Agency Designation Agreement that called for much steeper minimum insurance policy coverage for travel agencies.
A letter sent by Disney this afternoon to members of its EarMarked program, which was shared with TravelPulse, says the entertainment giant is updating its proposed 2025 Travel Agency Designation agreement.
The letter goes on to explain that in the coming days travel agencies would “receive an updated version of the contract, which will include a reduction of Commercial General Liability and Network & Privacy insurance minimum limit requirements and additional paths to satisfy these requirements.”
Disney also makes clear in today's letter that the new contract will also address an equally unpopular “waiver of subrogation endorsement requirement, as well as the requirement that Disney and its affiliates be included as additional insureds” - issues that were also concerning to the travel agency community.
Multiple agency owners, who asked not to be named, told TravelPulse they felt this change is a big win for travel advisors.
"When countless owners stood firm and refused to sign, Disney Destinations recognized the need for change and committed to issuing a revised contract," Jennifer Kellum, owner and destination specialist with Neverland & Main Travel, told TravelPulse this afternoon.
The announcement from Disney comes on the heels of criticism from the travel agency and advisor community for what was largely viewed as onerous insurance coverage requirements for travel agencies.
Earlier this week, the American Society of Travel Advisors (ASTA) issued its own statement on the matter, expressing concern over the new insurance coverage minimums.
"While ASTA appreciates Disney’s need to mitigate its business risk, the new requirements place disproportionate financial and operational burdens on smaller travel agencies," the organization said in a statement, which goes on say that “the new substantially higher minimum policy coverage limits seem excessive and unduly burdensome as they fail to consider an agency’s size, sales volume, or other individualized factors that might impact the likelihood or risk of a claim."
ASTA also pointed out that the 2025 agreement no longer exempted agencies that do not maintain a storefront location from such requirements.
"Similarly, the additional requirements that the policies be primary, non-contributory, and include an expansive list of additional Disney-insured entities significantly drive up costs and add operational complexity for travel agencies. Further complicating matters, the required waivers of subrogation and strict policy rating minimums exceed the standards typically required in similar agreements across the travel agency industry,” the ASTA statement continued.
Before concluding, ASTA called the heightened requirements unjustified and urged Disney to revert to 2024 agreement language regarding insurance requirements.
Disney appears to be moving in that direction, stating in its communication to agencies today that it "will void all previously distributed 2025 Travel Agency Designation Agreements."
Kellum said that while it's not likely ASTA's involvement directly influenced Disney's announcement today and its decision to modify the contract—given
that the organization's statement urging Disney to make changes wasn't issued until weeks
after the contract was distributed—she does believe the unified stance of the industry against the proposed terms was important to the final outcome.
"ASTA’s advocacy highlights its role in representing the travel industry as a whole and its understanding of the complexity and financial challenges posed by imposing uniform requirements on agencies of varying sizes and business models," said Kellum.
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