In publishing a list of suppliers that pay advisor commission the quickest, ASTA said it is taking a stand in hopes that it will encourage travel companies to adopt more agent-friendly policies.
ASTA CEO Zane Kerby said the list of nearly two dozen cruise lines and tour operators that pay commission within 30 days of a client’s final payment, released in late August, was born of the pandemic, when advisors were stuck working without the promise of pay until their clients were able to travel.
“Looking at this in the cold light of day, we realized that advisors are bearing a disproportionate amount of risk here because of calcified industry practice,” he said.
Some suppliers take final payment 60, 90 or 120 days before travel, or, in some cases, further out than that, Kerby said. Meanwhile, advisors have already done the bulk of their work in finding and booking the itinerary. Having to wait until the trip date to get paid “didn’t seem right.”
- Related: ASTA’s list might change how commissions are paid
At the same time, Kerby said, there are suppliers with agent-friendly practices that pay advisors within 30 days of receiving final payment themselves. Some even have early-pay initiatives. It’s not only friendly to existing advisors, Kerby said, but the promise of faster compensation makes the profession a more attractive one.
“There is an asymmetry of power between the supplier community and travel advisors,” Kerby said. “I can’t think of a more meaningful way that suppliers can show their commitment to the travel advisor community than paying commissions in a timely manner.”
ASTA debated creating some kind of recognition for those suppliers for some time, Kerby said. Its Consortium Council and Proud Partner Committee took point on the issue alongside Society leadership.
John Werner, president and COO of MAST Travel Network and chair of the Consortium Council, said the council crafted its statement of recognition with two purposes: thank suppliers with advisor-friendly policies and prompt others to follow suit.
“I definitely hope that it will give reason to other suppliers — the suppliers who don’t pay commission in the timeline that the statement encourages,” Werner said. “They will certainly want to be on that list, because it’s public and it is a form of recognition and a way of thanking those suppliers who meet that criteria. We hope it encourages more suppliers to model what we might call good behavior.”
To be added to the list, a supplier’s terms and conditions must reflect that they pay commission “within 30 days of the published, contracted date set by the supplier for final payment, and the payment is made in full,” according to the Society. ASTA’s list only encompasses suppliers that require prepayment. Those who do not, like hotels and car rental companies, are excluded.
Of those suppliers that take prepayments, a number outside of the two dozen already included are very close to qualifying for the list, the Society said.
Kerby expects the list will continue to grow and said the Society will update it continually.
He also acknowledged that there are a number of suppliers that are advisor-friendly in other ways, but aren’t on the list.
“Could we modify perhaps the language slightly to be more inclusive, or to even make acknowledgments of specific supplier policies that are advantageous to travel advisors, but that is not currently reflected in our statement? That’s possible,” he said.
The list will be reviewed in a few months, and feedback will be taken into consideration.
Crafting the current statement and list took time, according to the ASTA chief. The Society sought feedback from many stakeholders.
“I think it’s probably a little long in coming,” Kerby said. “We probably should have taken a stand like this a little sooner.”
Werner hopes the stand ASTA is taking now will result in more commission-pay policies that are beneficial to Society members and the agency community as a whole.
“Everybody feels that this is a very doable thing for the supplier community,” he said, “and we definitely wanted to encourage all suppliers to model this kind of a policy.”
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