Agents Wavering on Waivers

Suppliers last week reassured travel agents that their clients’ peace of mind in booking is critical for surviving the business downturn caused by the war with Iraq.

Gordon “Butch” Stewart, chairman of Sandals and Beaches Resorts, sent an open letter to the industry stating that the “real work at hand is in assuring travelers that our resorts in the Caribbean are close to home, welcoming to U.S. citizens and flexible in terms of cancellations and rescheduling.”

Comments such as Stewart’s were reverberating throughout the industry.

In setting up a crisis resource center for ASTA members, President Richard Copland said that given the stress the war is having on an already weakened travel industry, “it is our hope that industry leaders will be understanding of Americans’ cautions and change their cancellation and refund policies to be more flexible, encouraging travelers to book now.”

At press time, Main Street travel agents were reporting few cancellations on average, but were experiencing an increase in calls from concerned and sometimes nervous clients about their upcoming trips.

Which begs the question: Are the varied cancellation and refund fee waivers from suppliers helping ease clients’ anxiety? The answers seem to vary, depending on the agency and its clientele.

“At my agency, it all depends on how well-traveled the clients are,” said Ada Brown of Seaside Travel in Long Beach, who added that her experienced travelers usually travel when they want to travel. “I’ve had only one cancellation, and that was from a client going to Hawaii. But this person doesn’t travel much and she said she was afraid of traveling on an airplane.”

Brown said that although business has been slow all year, so far, “it doesn’t mean I don’t have people traveling. I have clients in Hawaii, on cruises, the South Pacific and even Europe.”

Even with the supplier waivers, Brown and other agents are still selling lots of traditional travel insurance, an activity that boomed after 9/11. Recently, agents said they have been busy explaining the particulars of trip-cancellation insurance to their clients. An act of war, either declared or undeclared, is excluded in most, if not all, insurance policies. But terrorism, often defined as a terrorist act recognized by the U.S. State Department, is covered. (ASTA said that insurance policies that cover terrorism often cover only terrorist incidents that occur in a city to which the traveler is scheduled to arrive within 30 days, after the incident.)

Brown said that some of the new waivers are useful, but most are not. “I had a client cancel last minute because he got sick,” she said. “Using American’s new policy, he had one day to rebook. We found that very restrictive.”

George Delanoy of Brea Travel in Brea, Calif., said that the new policies are “maintaining some bookings, but are they stimulating new business? Not really.”

James Whillock of Patterson Travel in Sacramento said the waivers have helped stem some potential cancellations. “It’s a useful tool,” he said, “especially if a client is on the fence about traveling in May and the waiver is still available.”

Meanwhile, agency organizations are mobilizing their members with offers of training, quick access to news and information and, surprisingly, money.

Immediately after the outbreak of war, the GIANTS consortium launched a “Forging Ahead” program that directs members to further utilize its preferred suppliers, expands its training opportunities to agents and offers financial flexibility to help members with potential cash-flow problems.

Jack Mannix, president and CEO of GIANTS, said that members in the United States and Canada will receive early payouts of almost $4 million in member bonuses and profit-sharing. Payments began last week, rather in June, when the audited results are usually completed.

“Unfortunately, no one has a crystal ball to accurately predict what’s ahead from both a miliary and economic perspective over the next few months,” said Mannix. “What we do know, however, is that as a proactive membership organization, GIANTS is well positioned with an extensive, yet realistic plan that not only addresses members’ immediate concerns, but also median and long-term recovery as well.”

Members can also defer their payment schedule for future outstanding dues and fees, as well as allow them to deduct outstanding dues and fees from future profit-sharing and member bonuses.

The training opportunities include a members-only conference call that will focus on “The 10 Most Critical Things to Do for Your Business Right Now,” and a discounted, intensive three-day CTC designation program from Institute of Certified Travel Agents, co-sponsored by GIANTS (Mannix is a former president of ICTA) and Holland America Line. The cost is $400, a savings of 65 percent off the normal fee.

GIANTS said it has opened an online resource center on its Web site, www.giantstravel.com, which includes links to trade, government and news organizations.

And the Caribbean Tourism Organization also started a response center on its site, www.onecarib bean.org, for CTO members, consumers and the media. Included are cancellation waiver information for Caribbean properties, facts and news of destinations, and a response management and communications plan for members only.