Some industry observers say they had expected Far&Wide’s recent
bankruptcy. Maybe they did, but a lot of travelers and a lot of
agents certainly didn’t.
Company executives probably were still in the courthouse when
Bob Whitley, director of the U.S. Tour Operators Association, got
his first call about some stranded tourists. Luckily, the Irish
Tourist Board agreed to help. Others, however, haven’t been so
fortunate.
Whitley said at the time that he didn’t know the extent of
Far&Wide’s debt, but he doubted its $1 million bond would
stretch to more than pennies on the dollar. And, he added, it would
be months before anyone sees those pennies.
So what’s the big lesson here? Credit cards and service
fees.
Encourage your clients to use credit cards. Think of the
transaction fees as insurance premiums you don’t need the coverage
often but it’s great to have it in an emergency.
The Far&Wide customers who paid by credit card could
challenge the charges that very day and would have a settlement in
a month or two. They may dislike the inconvenience, but at least
they’re not losing their hard-earned vacation money and blaming
you.
And service fees?
Well, when the bankruptcy court ranks creditors, commission
payments are going to be way, way down on the list. That may not be
a fundamental reason to use a service-for-fee operating structure,
but you’ve got to agree that it’s a lot harder to get money from
Chicago or New York or the U.S. Bankruptcy Court of Southern
Florida than it is to get paid by the person sitting in your
visitor’s chair.
