Agents Applaud ASTA's Call for Revision in Commission Payments

It would be an understatement to say that travel advisors responded enthusiastically to ASTA’s call for a revision in commission payments.

“Wow! How refreshing to see ASTA campaigning for this,” said James Berglie of Be All Inclusive, who has long advocated for suppliers to do more on the commission front.

While thrilled with the news, Berglie and other agents believe there are caveats in revising commission payments.

“Suppliers need to reevaluate how commissions are paid, but we need to do so in a way that works for everyone,” he said. “The issue I see is that there are many instances of nonrefundable rates, contracted groups under full penalty or future travel credit only cancellation policies that leave the hotel and tour operator with all the guests’ money, and yet still leave the travel agent – who sold the vacation – empty handed, waiting on the rescheduled travel dates to come around.”

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Berglie’s solution? “I would propose that once a rate becomes fully non-refundable to the guest – even if future travel credit would be an option – that the commission be issued to the agent. Since the supplier has their money, with no chance of refunding the customer, it only seems fitting to pay the agent at that time.”

In the view of Richard Turen, senior partner at The Churchill & Turen Industry Consulting Group, “Prompt commission payment within two weeks is an ASTA position that I think could win an election.”

He too, pointed out that the issue is complex and “this is just a first step.”

He added, “We are often dealing with overseas financial entities where local banking laws may prohibit such payment. Paying half a commission will, invariably, double some accounting procedures. It is fine to say that cancellation after final payment is the supplier’s problem, but I am not sure that concept will be embraced.”

While Cal Cheney of Bucket List Tours is in full agreement that the way in which agents are compensated should be amended, he noted that “the request from ASTA is probably not realistic in that chargebacks for cancelations are a part of how business needs to operate.”

“I think travel advisors should expect to be paid half within 14 days of the sale, and the rest within 14 days of travel,” he said. “I think most of us would be happy with that.”

Sarah Klein of Time for Travel noted that “a few” hoteliers and tour operators had been paying commission within 14 days of final payment. “Those companies since the pandemic have changed quietly to now not paying until after the client arrives,” she said.

Tom Brussow of Sunsational Beach Vacations believes that “suppliers should look closer at the options available and get creative in their compensation models and processes.”

“It is the case that some agents don’t want the risk or work of upfront commission payments for fear that clients will cancel and they will be on the hook for commission recalls that would complicate their accounting and business.”

For her part, Jemica Archer of TruBlue Travels believes that when agents are building their books of business and securing reservations they should be compensated on a timely basis. “For example, in 2019 my agency’s secured bookings for 2020, which all got canceled, so all the work I did in 2019 went uncompensated. So basically, I worked for free,” she said.

Added Becky Lukovic of Bella Travel Planning, a Travel Experts affiliate: “The worst is when a client is in full penalty and cancels, and the supplier refuses to pay the commission because there was no travel, but the supplier has their money. No matter what the outcome is in terms of whether the client has traveled yet or not, we’ve made the sale.

“Right now because of COVID, I have several very large bookings where final payment has been made, the clients are not receiving a refund,” Lukovic said, adding that the customers are not receiving a refund yet the supplier is holding onto the commission indefinitely.

“I hate to say it, but it’s even with partners I’ve worked with for years now and I like them as people, but it’s time to be a true partner and pay me. If they are holding the travelers’ money and are not in a situation where they have to pay it back, then I should be paid. Period.”