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UPDATED: Setting the record straight

On Conquest Vacations


 

In the wake of the latest travel debacle, the failure of 37-year-old tour operator Conquest Vacations, there are calls for stricter oversight of the travel industry. Much of the clamour is in Ontario, home to the vast majority of travellers affected by the Conquest closure.

It’s important to know that regulations protecting consumers vary from province to province. In Ontario, B.C. and Quebec, travel agents and operators fall under provinicial regulations that include the provision to compensate consumers under specific circumstances. 

In Ontario, travel agents pay directly into a dedicated fund with a percentage of their sales. This form of insurance does not cost the consumer anything, and it covers anyone who books travel through Ontario-registered travel agents.

The compensation fund in Ontario is administered by a group called the Travel Industry Council of Ontario. In the wake of the Conquest failure questions are being raised both within the media and the provincial legislature as to how well TICO is fulfilling its mandate.

TICO is now at the centre of a storm over whether or not the Conquest situation was handled appropriately, and if the entire system needs to be overhauled.

The industry is split on that all-important first question. TICO boss Michael Pepper admits he was aware of financial difficulties at Conquest nearly six months ago. But he says he was working with the company’s principals and believed they could turn things around.

Pepper was in a tough position – if he sounded the alarm that Conquest was in trouble it would very likely spell the end, as consumers and travel agents would stop booking with the company. He chose the lesser of two evils. Had he decided to sound the alert on Conquest at an earlier date, it is likely that many more travellers would have been affected. As it was, the Conquest failure came near the end of the winter season, with a much smaller pool of travellers in destination or booked to go.

Bruce Bishins, head of the Association of Retail Travel Agents Canada (ARTA) is taking a strong stand, calling for Pepper’s resignation. He has asked Ontario Minister of Small Business and Consumer Services Harinder Takhar “to take personal charge of a full review of TICO, the composition and effectiveness of the TICO board, and the tightening of procedures when financial non-compliance of registrants has been determined.”

Pepper and the TICO board have also indicated that the business model must be addressed in conjunction with the Canadian Association of Tour Operators, the Department of External Affairs and the various tourism bodies in the resort areas to ensure this type of situation does not reoccur.

The key questions coming out of this are whether TICO handled the affair appropriately and what will be done differently next time, if there is a next time. Much of Conquest’s financial difficulty stems directly from credit card companies cranking up the pressure on tour operators by increasing withholding of funds – so they are all feeling the pinch.

The bottom-line for would-be Canadian travellers worried about a recurrence of this situation is that while there are no guarantees in life, if you purchase your travel through a TICO registered travel agent in Ontario or a travel agent in B.C. or Quebec, or if you pay for your travel with a credit card, you will at least get your money back if your trip does not operate and you do not receive the product for which you have paid. In Ontario, if the circumstances involve a travel wholesaler who has failed to provide the service – the wholesaler must also have been a TICO registrant. In the case of Conquest Vacations travellers affected by the failure, the vast majority will get their money back.

When you’re booking your trip, ask your travel agency about provincial regulations, where applicable, including any limitations and restrictions of the provincial travel compensation funds.

This story isn’t over yet. It now appears that Ontario Premier Dalton McGuinty has vowed to take steps to improve consumer protection to vacationers, a process that will include a review of TICO. Industry leaders are determined that the ugly scenes of Canadians being shaken down for cash when they’ve already paid for their trips won’t happen again. But finding a solution to the ongoing dilemma of travel industry failure may take some time.


 
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UPDATED: Setting the record straight

  1. I do the books for a few travel agents. It seems to me that a fair amount of miss-understanding is taking place. When a person buys a package (or any travel product) at their travel agent, the funds (assuming they paid with cash/cheque/debit) must get placed into a trust account. Only once the vendor (the tour operator, airline, etc) gets paid may the travel agent take their commission out of that fund. The same, I’m led to believe is the same deal with the tour operator–such as conquest.

    The fact is that while we as a company are collecting funds from clients–there is no way for TICO to ensure that we pay our bills on time. The fact is that if we don’t submit the payment, the booking is cancelled and our client would be out their trip. But how we pay and when is primarily up to us. The same would be for Conquest. They may not have had the cash to run the basic operation, but even if they had, TICO could not make them “pay” their bills on time.

    TICO’s president was right, he can’t just decide to send out a warning unless he wants to kill the company. The people who were already on vacation should have had their hotel rooms paid for before the passangers left their home. BUT had they some sort of deal–for instance if they were billed after the fact, those funds would stil lhave to be in the trust account. Only if TICO had reason to believe that the trust account was not handled propertly would there be a reason to shut them down right away.

    the only problem I have with TICO is that all travel agencies–including the small little ones are required to make a payment to the compensaiton fund–even if some of the travel is not covered. In addition they are also charged PST on those funds!

    TICO’s job is to ensure that the consumers funds are protected–not to be watching how a company pays their bills.

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