Association of Canadian Travel Agencies

Transcription

1 Association of Canadian Travel Agencies Submission to Ministry of Government and Consumer Services Consumer Protection Ontario Policy, Planning and Oversight Division, Consumer Policy and Liaison Branch Ontario Travel Industry Act (TIA) Review Phase 2 April 14, 2017

2 Table of Contents Introduction... Page 3 Background Page 3 Executive Summary... Page 4 Key Concerns..... Page 5 1. Compensation Fund - Is it Necessary, Who Should Fund it and How Should it be Based. Page 5 2. Regulatory Burden - Review Engagements, Audits..... Page 6 3. Registration - Registering Of Individuals.. Page 7 APPENDIX A ACTA Response to the Ministry of Government and Consumer Services Report Phase 2 Consumer Protection.... Page 9 Regulatory Burden on the Industry.. Page 10 Compliance and Enforcement.. Page 12 Travel Compensation Fund... Page 13 Registration.. Page 15 Other. Page 16 2

3 Introduction The make up the bulk of the business (about 80%) of transacted sales in Canada. The travel industry in Ontario is a $15.8 billion industry with the retail travel agency sector representing the majority of the industry. ACTA is pleased to be a stakeholder in the Ontario Travel Industry Act (TIA) Review and would like to thank the Ministry of Government and Consumer Services for providing ACTA and its members the opportunity for comment during each of the three phases of the TIA Review. Background Phase 1 The goal of Phase 1 by the Ontario government was to identify issues through stakeholder consultations, a public survey, research and direct feedback from stakeholder meetings. ACTA conducted an online survey where we asked members what they believed were the current challenges with respect to the TIA, what they thought was missing from the TIA, and what they believed was important for consumer protection. This feedback was shared in a letter to the Ontario government on November 4, The Phase 1 deadline for receipt of feedback via online survey or written submission was December 3, Phase 2 The goal of Phase 2 by the Ontario government was to hold in-person consultations across the province to examine the issues raised during Phase 1 and discuss how to update the TIA to address these issues. The Review is focused on assessing opportunities to modernize the TIA and include the following goals: Improve consumer protection Reduce regulatory burden Improve regulatory efficiency ACTA conducted extensive research and solicited feedback with respect to the Ontario Travel Industry Act in Phase 2. The following outlines ACTA s involvement: ACTA created a TIA Review Committee of seven individuals (ACTA members and ACTA Senior Management), ACTA conducted a survey, sent to 410 retail ACTA members with a response rate of 12%. ACTA facilitated a meeting with the Canadian Corporate Travel Association (CCTA), ACTA facilitated a meeting with the ACTA Ontario Council, ACTA held three meetings with the Travel Industry Council of Ontario (TICO), ACTA facilitated an ACTA member consultation meeting, ACTA attended TICO consultations in St. Catharines, London, Mississauga and Cambridge, 3

4 ACTA attended Ontario Government consultations in Toronto, London, Ottawa and Markham, ACTA met with ACTA members both corporate and leisure-based retail agencies from small and medium operations to large corporations. ACTA provided members with many opportunities to provide feedback. Our communication included three dedicated articles in our bi-weekly ACTAVision newsletter, inclusion in our Advocacy reports, it has been posted on the home page of the ACTA website since late January, the survey with reminders were sent on five separate occasions, and invitations to the ACTA facilitated consultation meeting was sent on two separate occasions. ACTA is confident in the thoughtful approach, collection and assessment of member feedback that we will share in this submission. The Phase 2 deadline for receipt of feedback via written submission is April 14, ACTA s submission will highlight the key concerns raised by ACTA members throughout the various consultative opportunities mentioned above and our recommendations to the issues identified. ACTA has also added an Appendix of our responses to each of the questions posed by the Ontario government in the Phase 1 summary report of the issues and included any additional issues under the heading Other. Many questions in the report were not widely discussed. Considering this, ACTA recommendations related to the key concerns have been clearly stated in the list of responses and where there are no recommendations, ACTA has provided general member feedback. Executive Summary One of the key questions asked of the members was, given the changes in the marketplace, whether it is still necessary to have an industry-specific approach to regulating travel agents and wholesalers in the province or are general consumer protection laws sufficient. The ACTA member survey response showed 88% in favour of having an industry-specific approach. This was supported throughout the various consultations ACTA participated in and facilitated. The overall message was that the TIA should stay in scope, should be simple, cost effective and refrain from adding an administrative burden on travel agencies and the industry. Another important finding is that, understanding that there is a cost to doing business, the members expressed that all the costs required to be registered has, collectively, imposed a significant financial burden on the Ontario retail industry, making it more difficult to remain competitive in a global industry. From our ACTA member consultations over the past three months, ACTA has highlighted below the top three issues of critical concern to travel agencies under the headings of: 1. Compensation Fund 2. Regulatory Burden 3. Registration 4

5 The recommendations to the issues identified during Phase 1 are clearly stated under the Key Concerns. Key Concerns 1. COMPENSATION FUND Is it Necessary, Who Should Fund it and How Should it be Based Currently the Ontario Travel Industry Compensation Fund is industry-funded and the clear message from ACTA members is that this is adding significant costs on a travel agency wanting to operate in the province of Ontario and does not provide the consumer with sufficient coverage. Is it Necessary - The response from the ACTA member survey showed 65% in favour of a compensation fund. This response was reflective of leisure-based agencies and supported by this same agency type throughout the consultations. ACTA corporate agency members stated that they do not support a compensation fund and believe it to be unnecessary. Who Should Fund the Compensation Fund If the Ontario government legislated the Ontario Travel Industry Compensation Fund was to continue to exist, the response from the ACTA member survey and consultations showed the vast majority of ACTA members support adopting some form of consumer-funded model. ACTA members would also support expanding coverage of the fund if it were a user-pay model. Coverage of the fund is currently capped at $5 million per major event. This is not nearly enough to cover the insolvency of a major airline, as an example, and consumers would not be compensated for all or any of their dollars spent. The only way to provide sufficient coverage of the fund in its current structure is to increase industry contributions, which is unsustainable and will force registrants out of the market, ultimately diminishing fund contributions. In 2002, the Ontario government amended the Ontario Travel Industry Act to include end supplier failure. This move was implemented as a reaction to the bankruptcy and insolvency of Canada 3000 Airlines. At the time, this rule change protected many agencies also becoming bankrupt as a result of the bookings made on this large national air carrier but this amendment did not fix the overall problem. Air carriers are federally regulated and do not have to pay into the Ontario TIA. This exact point, where Ontario registrants have to pay for coverage that they have no control over, makes the model grossly unfair. If Ontario had a user-pay model (consumer-funded), then the financial burden is spread over many. Should the Ontario Travel Industry Compensation Fund remain as an industry-funded model, then registrants should not have to pay for, nor be liable for, end suppliers. In this case, coverage should only be for the bankruptcy or insolvency of a registrant. 5

6 How Should the Fund be Based If a compensation fund was to continue to exist, the response from ACTA members strongly support that the fund be based on the risk profile of the travel booking. Corporate-based ACTA member agencies underscored that their contributions should not equal that of leisure-based agencies considering how they transact business and consequently do not present any risk to the consumer. Low risk factors include: payments transacted by credit card, bookings made through the International Air Transport Association s (IATA) Banking Settlement Plan (BSP), and travel, which is typically within 14 days from time of booking. While credit cards are cited as being low risk, it is also important to note that credit card companies could change their refund policy regardless of type of purchase. Should this occur, the consumer may not receive a credit on their credit card for services not provided and would have to file a claim against the Ontario Travel Industry Compensation Fund. ACTA Recommendation: The vast majority of ACTA members strongly support a consumer-funded Ontario Travel Industry Compensation Fund. With more participants contributing to the fund, this spreads the burden over many than only a few, namely Ontario registrants. ACTA members strongly support a fund that is based on the risk profile of the travel booking. 2. REGULATORY BURDEN Review Engagements, Audits Currently the requirement for Ontario travel agencies is to remit to TICO financial statements in the form of a review engagement or audited financial statements. The clear message from ACTA members is that this is adding significant costs on a travel agency wanting to operate in the province of Ontario and alternative types of financial instruments should be considered. Review Engagements For travel agencies with sales less than $10 million annually, the current requirement is the remittance of a review engagement to TICO. This represents 97% of all retail registrants. ACTA members have stated that the financial burden of having a review engagement prepared is too costly and onerous on travel agencies. ACTA members supported an alternative method of financial reporting such as basic financial statements prepared by a licensed certified public accountant (CPA) and only request a review engagement if these statements warrant further investigation. ACTA members also pointed out the need for consistency and that the requirement of financial statements should be aligned with those of IATA accredited agencies. Currently, for Canada, IATA requires only review engagements and not audited financial statements. However, ACTA is lobbying IATA to consider an alternative to the costly review engagement. In light of the changes within the Canadian Public Accountant Policies and Procedures, review engagements are more detailed, which has driven up the cost of review engagements. ACTA is suggesting that IATA consider the requirements of the Airlines Reporting Corporation (ARC) in the United States, which is 6

7 the equivalent to IATA s BSP. ARC requires agents maintain a financial instrument of $10K to $70K with most being $10K or $20K. This can be a bond, letter of credit or cash security deposit (held by ARC) and ARC does not require annual or periodic financial reviews. Audit Level - Recognizing that only 7% of the Ontario retail registrants must submit audited financial statements, should the remittance of audited financial statements remain a criteria (reiterating that this requirement is NOT needed by IATA as noted above), then ACTA s recommendation would be to increase the level of annual sales where audited financial statements would be required from the current level $10 million to a minimum of $20 million. The level to which audited financial statements need to be submitted to TICO should be adjusted to take into consideration changes in the consumer price index over the last few decades. ACTA Recommendation: ACTA members strongly support an alternative to the costly review engagement and audited financial statements. ACTA Recommendation: IF the Ontario government legislated the continuation of the current financial reporting requirements, ACTA members strongly support increasing the threshold or level of annual sales to a minimum of $20 million where audited financial statements would need to be submitted. 3. REGISTRATION Registering Of Individuals Response from ACTA members, while controversial, was mixed with respect to the idea of registering individuals who are still connected to a travel agency registrant. The response from ACTA members in the ACTA member survey showed 57% of respondents did not support this initiative. Corporate ACTA members strongly oppose the registration of individuals for a number of reasons. Corporate ACTA members believe that there is no benefit to the consumer in knowing the agent working in a corporate agency. In a corporate environment, often it is the client that is making their own booking using the corporate agency tools. The client may also work with a team of agents that are fulfilling the travel arrangements and not selling travel. Many of the larger companies noted that having to register or list individuals (in some cases based all over the world for global corporate agencies) would present a significant administrative burden. The 43% of survey respondents that did support the initiative were small to medium leisure-based agencies and this feedback was consistent with leisure-based agencies in attendance at various consultations where ACTA participated or facilitated. ACTA members that supported the idea of registering individuals associated with a travel agency suggested that listing travel agents on the TICO website would help reduce fraudulent activities by rogue travel agents. ACTA members were clear to point out however, that there should not be any significant financial burden to the agency. 7

8 ACTA Recommendation: The majority of ACTA members do not support the registration of individuals. In conclusion, ACTA has invested considerable time and effort into Phase 2 of the TIA Review, and appreciates the opportunity to provide input during Phase 2 of the Ministry of Government and Consumer Services Review of the Ontario Travel Industry Act. We look forward to providing additional information during the next phase. Should you have any questions or concerns to the points our organization has made, please contact Wendy Paradis, ACTA President at wparadis@acta.ca / ext. 121 or Heather Craig-Peddie, ACTA Vice President Advocacy and Member Relations at hcraig-peddie@acta.ca / ext

9 APPENDIX A ACTA Response to the Ministry of Government and Consumer Services Report Review of the Travel Industry Act: Summary of Phase 1 At the conclusion of phase 1, the Ontario government produced a report summarizing what was heard from stakeholder consultations and surveys. Key findings were outlined and questions were posed as options for potential changes to the TIA. ACTA will respond to each of the questions outlined under the headings of: Consumer Protection Issues Regulatory Burden on the Industry Compliance and Enforcement Travel Industry Compensation Fund Registration Other ACTA has included any additional issues identified by ACTA members during our consultative process under this heading. Consumer Protection Issues 1) What can Ontario do to strengthen consumer protection requirements for travel agents and wholesalers who are located outside of the province, but market and/or sell travel services to Ontarians through the internet? ACTA Response: ACTA members acknowledged that there are gaps in the current legislation with out-of-province travel agencies, OTA s and wholesalers. The travel industry is global and the legislation does not take into account all of these business models. In the ACTA member survey, 75% responded that the scope of the Ontario Travel Industry Compensation Fund should be expanded to close the current gap protection (e.g. out-of-province tour operators) however, this is only if the fund was consumer-funded. With more participants contributing to the fund, it would make it more affordable. Potentially this would also increase the greater acceptance of a claim and at the full value of the trip. 2) What additional measures can be taken to promote more informed travel consumers in Ontario? ACTA Response: ACTA members suggested increasing the education around the important role travel agents play in the sale of travel. 3) Would a Travellers Bill of Rights help to promote greater protection for Ontario travellers? ACTA Response: In the ACTA member survey, 62% responded that a Travellers Bill of Rights would help to promote greater protection for Ontario travellers however, with consideration. ACTA members comments included: this type of Bill should fall under the Federal government and is therefore out of the scope of the Ontario government; it would depend on what is 9

10 included in the Bill of Rights; only consumer education and responsibility should be the focus; it would be helpful only if it could be enforced; and there is also a need to protect not only consumers but also businesses from instances of credit card chargebacks for example. 4) How should training requirements for registered travel agents and wholesalers be strengthened to enhance consumer protection (e.g., include additional content and/or ongoing professional development requirements)? ACTA Response: In the ACTA member survey, the response was split with only 53% responding that training requirements for travel agents should be expanded to include ongoing educational requirements. While 88% of ACTA members agreed that Education standards enhance the industry s professionalism overall, this approval rating sharply declined if it meant mandatory, ongoing educational requirements. Ongoing training is a business responsibility, not a regulatory responsibility. 5) What are the ways to ensure that consumers have a greater understanding of travel insurance prior to purchasing travel services in Ontario (e.g., additional consumer disclosure requirements related to travel insurance coverage)? ACTA Response: ACTA Members suggested the following ways to ensure that consumers have a greater understanding of travel insurance prior to purchasing travel services in Ontario: more or better consumer education around travel insurance; a mandatory signed waiver if declining travel insurance; simplify the terminology and policies of travel health insurance products; and mandatory educational training for travel agents selling travel insurance. 6) Given changes in the marketplace, is it still necessary to have a sector-specific approach to regulating travel agents and wholesalers in the province or are general consumer protection laws (e.g., the Consumer Protection Act, 2002) sufficient? If not, why? ACTA Response: As mentioned earlier, the ACTA member survey response showed 88% in favour of having an industry-specific approach. ACTA members not in favour cite that there are already consumer protection laws and mechanisms in place to protect the consumer such as: general consumer protection laws, the criminal justice system, travel insurance, and the fact that 97% of travel is currently booked with credit cards, which also provide ample protection. Regulatory Burden on the Industry 7) To what extent should the current financial requirements for registered travel agents and wholesalers be updated to reduce the regulatory burden, while still protecting Ontario consumers? ACTA Response: While the majority of ACTA members support the need for a registration process for travel agencies and wholesalers, collectively all the costs associated with registration under the current structure has become a significant financial burden and has positioned retail agencies as being uncompetitive to remain registered in the province of 10

11 Ontario. One of the primary concerns expressed by ACTA members during the various consultations was the need to find alternative means of financial reporting other than an expensive review engagement. ACTA members also recommended the threshold or audit level (the sales level at which submission of audited financial statements are required) be increased to a minimum of $20 million from the current $10 million. As noted earlier, the level has not been adjusted for inflation in decades. ACTA Recommendation: ACTA members strongly support an alternative to the costly review engagement and audited financial statements. ACTA Recommendation: IF the Ontario government legislated the continuation of the current financial reporting requirements, ACTA members strongly support increasing the threshold or level of annual sales to a minimum of $20 million where audited financial statements would need to be submitted. 8) Should Ontario remove or amend the trust accounting requirements? If so, how? Are there any alternative financial instruments, which the province should require in order to protect consumers (e.g., insurance, bonds, enhanced security, or personal guarantees)? ACTA Response: The ACTA member survey response showed 80% in favour of maintaining the current trust accounting requirements and was consistent with what was heard during the consultations. ACTA members in favour of trust accounting responded that it provides a level of professionalism to the industry with consumers knowing that their funds are being held in trust. ACTA members not in favour cite that the current trust accounting requirements does not require a true trust account and does not prevent the misuse of consumer funds. Proof of working capital in excess of trusted client monies or allow for a bond or security deposit based on sales volume were alternative options that should suffice in lieu of trust accounting. ACTA members pointed out that most transactions are by credit card with payments going straight to the supplier eliminating the need for trust accounting. 9) Should Ontario remove or amend the requirement for a review engagement report for registrants that make less than $10 million in annual sales? If so, how? Are there any alternative methods of financial reporting which could maintain consumer protection, which are less burdensome for registrants? ACTA Response: Review engagements was a key concern identified by many ACTA members due to the cost of having this prepared. The feedback from ACTA members supported an alternative method of financial reporting such as basic financial statements prepared by a licensed certified public accountant (CPA) and only request a review engagement if these statements warrant further investigation. Other suggestions include: a Notice to Reader, an Income Tax Report, or an annual Balance Sheet provided from the agencies accounting system. ACTA members also suggested eliminating this requirement entirely as credit cards, trust accounting, travel insurance and online reputation reviews all provide sufficient protection. 11

12 ACTA Recommendation: ACTA members strongly support an alternative to the costly review engagement and audited financial statements. 10) Should Ontario remove or amend the security deposit requirements (e.g., change the amount of the deposit or the duration in which it is held in trust)? If so, how? Are there any alternative financial instruments, which the province should require in order to protect consumers? ACTA Response: The ACTA member survey response showed 77% in favour of maintaining the security deposit requirements and was consistent with feedback heard during the consultations. Those ACTA members that commented on amending the requirements suggested raising the deposit and extending the period to 5 years for better security, considering that new registrants are a greater risk. 11) Should Ontario remove or amend the place of business requirements in order to minimize gaps in consumer protection while lessening the regulatory burden (e.g., remove the requirement, amend the requirement)? If so, how? How will any changes affect consumer protection? ACTA Response: The ACTA member survey response showed 65% do not see the need to remove or amend the place of business requirements. ACTA is aware, however, of the growth in home-based travel agency models and this requirement does present barriers to entry for the current industry landscape. ACTA members have stated that changes would not affect the consumer, citing some of the reasons previously mentioned: general consumer protection laws, the criminal justice system, travel insurance, and the fact that 97% of travel is currently booked with credit cards, which also provide ample protection. In addition, with less overhead costs, ACTA members have indicated that this would make agencies more competitive with outside markets. Compliance and enforcement 12) What are those activities of travel agents and wholesalers that pose the greatest risk to consumers? ACTA Response: In the ACTA member survey and in consultations, ACTA members stated fraudulent activity as the greatest risk to consumers along with relaying misleading or incorrect information to the consumer and non-compliance of the TIA. 13) What changes should Ontario make to TIA in order to focus on those activities which pose the greatest risk to consumers? ACTA Response: In the ACTA member survey and in consultations, ACTA members offered a number of different suggestions for changes to the TIA in order to focus on those activities which pose the greatest risk to consumers including: more/better consumer education; harsher 12

13 penalties for fraudulent activities by travel agents; stricter monitoring of travel agencies that have a history of financial issues; registration of individual travel agents associated with a travel agency; the ability to revoke a license from a travel agent that is criminally charged; stricter enforcement on non-compliance; hold the security deposit for longer than 2 years. 14) How should Ontario modify the existing enforcement tools available to TICO to promote greater compliance with TIA? ACTA Response: In the ACTA member survey and in consultations, ACTA members offered a number of different suggestions on how Ontario should modify the existing enforcement tools available to TICO to promote greater compliance with TIA including: stricter enforcement of non-compliance; harsher penalties for non-compliance and fraud; greater focus on high-risk agencies. 15) What changes should Ontario make to address concerns from consumers and stakeholders about the limited ability of regulated travel agencies, wholesalers and TICO to address fraudulent activities by individual travel agents or outside sales representatives? ACTA Response: In the ACTA member survey and in consultations, ACTA members offered a number of different suggestions on what changes Ontario should make to address concerns from consumers and stakeholders about the limited ability of regulated travel agencies, wholesalers and TICO to address fraudulent activities by individual travel agents or outside sales representatives including: harsher penalties for non-compliance and fraud; publication of the fraudulent agent. Members have also commented that fraud needs to be taken more seriously by police and as such to let the criminal justice system take action and not TICO. Members in favour of registering individuals have also suggested that listing travel agents on the TICO website would help reduce fraudulent activities by rogue travel agents. In this regard, consumers would feel confident that they are dealing with a bonafide travel agent when they search on the TICO website. The search however, should only be for validating a particular agent and not publishing the full list of agents for a travel agency registrant. Travel Industry Compensation Fund 16) Given changes in the marketplace, such as the increased use of credit cards, to what extent is Ontario s Travel Industry Compensation Fund still necessary to protect consumers? ACTA Response: The existence of the Ontario Travel Industry Compensation Fund was asked at all consultative opportunities that ACTA participated in and facilitated and consequently cited as a key concern highlighted earlier in this submission. The response from the ACTA member survey showed 65% in favour of a compensation fund but was largely reflective of leisure-based agencies. Corporate ACTA agency members have stated that they do not support a compensation fund. Leisure agency members commented that having a compensation fund assures their customer that their monies are protected, lending credibility to working with them as an Ontario registered travel agency. ACTA members have also expressed concern that 13

14 while payment is predominately transacted with credit card and the credit card company will protect those funds, the credit card companies may decide to change their policy on this benefit. Corporate agency members, who pay a considerable amount into the fund based on their sales and are very low risk based on a number of elements of how they transact business, stated that they do not need to offer their corporate customers this same type of assurance. This point will be explained in greater detail by the Canadian Corporate Travel Association (CCTA). While CCTA members are also members of ACTA, the CCTA will be submitting a separate submission for the Ontario government. 17) What changes should Ontario make to address concerns from stakeholders that the fund s scope and/or amount of coverage does not reflect the current marketplace and/or the risks associated with travel? ACTA Response: ACTA members were more supportive of a consumer-funded model in order to support an increase in coverage. ACTA members acknowledge that the current coverage is insufficient and 100% of consumers funds are not necessarily, protected. ACTA members have suggested that they would support an increase in the coverage for an event (currently capped at $5K/person, $5 million/event) but the model or how the fund is funded would have to change in order to support this increase. If the model remains status quo whereby it is industry funded, ACTA members are strongly opposed to any increases in fund contributions as the financial burden is too large on such a small group of registrants. In order to accommodate an increase in coverage, ACTA members recommended that anyone who is marketing to Ontario consumers should have to pay into the fund. 18) Should Ontario consider adopting a consumer-funded model for the fund, with expanded scope and coverage? ACTA Response: If a compensation fund was to continue to exist, the response from the ACTA member survey showed that 78% support adopting some form of consumer-funded model and this message was reinforced at all consultations. With the adoption of a form of consumerfunded model, 75% of ACTA member survey respondents supported expanding coverage of the fund to out-of-province tour operators. However, the process of collection and remittance of these funds should not be onerous. Quebec has a regulated travel industry with a consumerfunded compensation fund. ACTA members commented that Quebec travel agencies have to file a report and remit consumer contributions every 3 months but they are also able to retain 5% of these contributions as compensation for administrative services provided in the collection and remittance of these fees. ACTA Recommendation: The vast majority of ACTA members strongly support a consumerfunded Ontario Travel Industry Compensation Fund. With more participants contributing to the fund, this spreads the burden over many than only a few, namely Ontario registrants. ACTA members strongly support a fund that is based on the risk profile of the travel booking. 14

15 Registration (who is covered) 19) Are there types of travel services and travel service providers that should be explicitly included within the scope of TIA which are currently excluded? If so, why? ACTA Response: ACTA members stated that Meeting and Incentive companies should be included within the scope of TIA. These companies accept payment a long time in advance of the actual meeting/conference and as such, present a higher risk. ACTA members have also identified the shared economy (e.g. AirBnB) as again, participants within this industry space who are collecting money from consumers in advance of the receipt of service and consumers monies are not being held in trust. ACTA members do not support the recently implemented exemption of one-day tours and so, companies that provide this service, should have to be included in the scope of the TIA. This levels the playing field for registered companies that offer this service in addition to longer stay packages. 20) Are there types of travel services and travel service providers that should be explicitly excluded from the scope of TIA? If so, why? ACTA Response: While ACTA members provided more recommendations for travel services and travel service providers that should be included within the scope of TIA which are currently excluded, corporate travel agencies (who currently are in the scope of TIA) have emphasized that they should not have to pay into the fund but recognized the need to be registered. The reasons why corporate travel agencies believe they should not have to pay are highlighted in Question ) What changes or clarifications should be made to the definition of a travel agent or travel wholesaler? ACTA Response: ACTA members, particularly corporate travel agency members, stated that there should be clarification to the definition of travel agent. The TIA defines a travel agent as a person who sells, to consumers, travel services provided by another person. In the case of corporate travel, the agents are merely fulfilling the service that has already been contracted between the travel management company and the client (the company securing the travel services). The corporate agent is not selling travel services but rather fulfilling the service. 22) Should individual sellers of travel services be required to be registered? ACTA Response: The idea of requiring individual sellers of travel services to be registered was discussed at all consultative opportunities that ACTA participated and facilitated. Consequently, it was cited as a key concern highlighted earlier in this submission. The response from ACTA members in the ACTA member survey showed 57% of respondents did not support this initiative. Corporate ACTA members strongly oppose the registration of individuals for a number of reasons. Corporate ACTA members believe that there is no benefit to the consumer in knowing the agent working in a corporate agency. In a corporate 15

16 environment, often it is the client that is making their own booking using the corporate agency tools. The client may also work with a team of agents that are fulfilling the travel arrangements and not selling travel. Many of the larger companies noted that having to register or list individuals (in some cases based all over the world for global corporate agencies) would present a significant administrative burden. The 43% of survey respondents that did support the initiative were small to medium leisurebased agencies and this feedback was consistent with leisure-based agencies in attendance at various consultations where ACTA participated or facilitated. ACTA members that supported the idea of registering individuals associated with a travel agency suggested that listing travel agents on the TICO website would help reduce fraudulent activities by rogue travel agents. ACTA members were clear to point out however, that there should not be any significant financial burden to the agency. ACTA Recommendation: The majority of ACTA members do not support the registration of individuals. 23) Should there be different classes of registration with varying obligations? If so, how should the classes of registration be divided (e.g., by risk profile, business model, size)? ACTA Response: The ACTA member response to having different classes of registration was mixed with 46% of respondents in the ACTA member survey saying yes and 54% of the respondents saying no. Supporting comments to this question state that everyone selling travel should be subject to the same terms, conditions and cost. However, if there were different classes of registration, 65% of respondents believe it should be based on either risk profile, the business model or size. Supporting ACTA member feedback, in particular from corporate agencies, has recommended that registration should be based on risk profile of the travel booking. Low risk factors were mentioned including: payments transacted by credit card, bookings made through IATA s BSP, and travel which is typically within 14 days from time of booking. Other 24) What can the government do to ensure it has the ability to quickly respond to the constantly evolving business models in the travel sector? ACTA Response: ACTA members suggested that the government work more closely with the retail travel industry and review the TIA on a more regular basis. Some members also suggested that the industry have more self-management abilities and less regulation. 16

17 Additional Concerns Identified by ACTA Members ALL-IN PRICING While all-in pricing was not expressly identified in the Ontario government s Phase 1 report, during ACTA s consultations with members, this issue was raised as a concern. ACTA acknowledges that in previous submissions to the Ontario government, ACTA strongly supported all-in pricing advertising, and that it be aligned with the federal all-in pricing advertising rules that came into effect January 1, The Ontario government implemented this change and the new all-in pricing advertising rules came into effect January 1, Since the change, ACTA members identified issues which should be considered in the overall review of the Ontario Travel Industry Act: ACTA members stated that the professional service fee they charge consumers to counsel and book their travel should not be included in the all-in price, as it is not part of the travel costs (the base fare, taxes and surcharges). The professional service fee charged is transacted outside of the cost of the trip. For national travel organizations with franchise locations, the Ontario all-in pricing advertising is very challenging, in particular where service fees must be included. ACTA members also stated that if a travel company advertises in Ontario, they should have to follow the all-in pricing advertising rules even if they are in another province or country. Recognizing that this is difficult to enforce, it otherwise puts ACTA members at a competitive disadvantage. Response from ACTA members on this matter has been mixed and consequently further discussion would be required to determine a clear recommendation. 17