Throughout the COVID-19 crisis, the American Society of Travel Advisors (ASTA) has issued statements asking suppliers to consider more upfront advisor compensation.
There has been an uptick in the issuance of future travel credits (FTCs) for postponed trips, ASTA points out. In lieu of refunds, clients are receiving these vouchers which, according to the association, “constitute a transaction for the promise of future travel.”
ASTA applauds suppliers that have paid advisor commissions upon the issuance of an FTC, and implores that other suppliers adopt this practice, as well.
“It stands to reason that any commissions earned from an FTC transaction should be payable to the advisor upon the issuance of that voucher, and not at the time of the future travel,” ASTA said in a statement.
ASTA urges suppliers to fulfill commissions due for FTCs or any other products sold by an agency ideally within 14 days of final and full payment by the traveler.
Analogous to an FTC, when you sell a new home, you pay the realtor’s commission at closing, not when the new owner moves in; likewise, when you send a gift certificate to a loved one, you pay when you purchase it, not when the certificate is redeemed.
To further explain its reasoning, ASTA drew a comparison between travel advisors and real estate agents.
“Analogous to an FTC, when you sell a new home, you pay the realtor’s commission at closing, not when the new owner moves in; likewise, when you send a gift certificate to a loved one, you pay when you purchase it, not when the certificate is redeemed,” said Mark Meader, senior vice president of industry affairs and education for ASTA. “It stands to reason that when a travel voucher or FTC is issued as the result of a sale made by a travel advisor — whether outright or in lieu of a refund — the corresponding commission owed to the advisor should be paid at the time the voucher is issued, not when the traveler takes the trip."
ASTA points out that in the case of an FTC, the supplier has already collected full payment through the advisor, who has “fulfilled all of her or his duties with respect to the transaction.”
“ASTA believes that a travel voucher represents a promise of a seat on an airplane, a cabin on cruise ship, a room in a hotel or a place on a tour,” said Zane Kerby, president and CEO of ASTA. “Accordingly, the agreed compensation or commission due to the agency for closing the sale should be paid when that voucher is issued.”
The Details
American Society of Travel Advisors
www.asta.org
