Proactively Prepared: TICO taking the lead in uncertain times
If there’s one thing that TICO’s president & CEO, Richard Smart is certain of it’s that “TICO will continue to do its part to promote consumer awareness and education, amplifying the benefits of working with a TICO registrant to fulfill their travel needs.” So, read on and find out why.
How has COVID-19 affected registrant renewals? Have you seen a sharp decline in renewals? Can you put some numbers on this for CTP’s readers? And your expectations of what’s going to happen with renewals going forward?
Registrations have been negatively impacted, which is to be expected during a time of crisis when there has been little if any revenue generated for the bulk of our registrants.
Since the beginning of the pandemic, voluntary license terminations have accelerated.
At TICO’s March 31, 2020 year-end, we reported an overall decline in registrations of 11%, although many of these registrants ultimately renewed.
While we typically do not report on operational matters during the year, we can say that voluntary terminations have already matched prior year levels (after only six months), a trend that is expected to continue for some time.
We are also experiencing a much high level of branch consolidation as registrant head offices seek cost reductions wherever possible.
As we approach what is normally the busiest time of the year, further terminations and consolidation is expected.
This fiscal year is trending to set a record for attrition of travel retailers and wholesalers in the province.
As a follow up, how concerned is TICO about the potential for wide scale closings/bankruptcies as a result of the global pandemic? Has TICO been planning and/or preparing for this kind of scenario? Can you offer some details on this for CTP’s readers?
While it is difficult for anyone to predict, we anticipate the travel industry may take up to 3 years to recover to levels seen prior to the pandemic.
The lack of revenue has severely impacted many travel agents and tour operators’ ability to sustain their businesses. And while some have benefited from such federally funded programs as the CERB, the wage subsidy and rent relief for small businesses, the end of these programs will present them with even greater financial challenges moving forward.
Bankruptcies, or more generally, registrant failures, are difficult to predict. Part of TICO’s role is to prepare and manage through these scenarios.
TICO has a proactive financial inspections and compliance program where increased focus is underway with respect to the possibility of registrant failures. Both the TICO Board of Directors and senior management remain focused on crisis management and preparedness.
During this time, TICO continues to monitor and work closely with registrants and provide guidance as appropriate.
In a pandemic world, what do you see as TICO’s role going forward? And what do you see as the biggest challenge for TICO in fulfilling that role?
TICO has an important leadership role to reassure consumers of the resiliency of Ontario’s’ travel industry, to amplify the Ontario government’s focus on safety and appropriate pandemic protocols, but central to our mandate, to promote the importance of working with TICO registered travel agencies and wholesalers as it applies to future consumer travel purchases.
Consumers need to be reminded of the protections available to them, and the commitment through Ontario’s travel agencies to support this framework.
There may never be a more compelling rationale for consumers to work with travel advisors / professionals.
TICO is committed to delivering on this message, while also working with industry / government on the continued viability of the travel sector.
We all look forward to travelling again but must do so, safely, and within a very different travel environment.
Strange question, perhaps, but is there something that I haven’t asked that you think should be asked? And, if you do, what is it and what’s the answer?
[Editor’s note … Richard Smart did have a question and it is as follows:]
What happened to the comprehensive review of the Travel Industry Act, 2002 and Ontario Regulation 26/05 which was on course for implementation sometime in 2020?
As you may recall, a new Bill: Strengthening Protection for Ontario Consumers Act, 2017 received Royal Asset on Dec. 14, 2017.
Since this time, the Ontario government has been working with stakeholders and TICO to implement the supporting Regulation.
With COVID-19, these regulatory changes have been placed on “hold” for now. However, some of the proposed changes have been considered with recent regulatory announcements on March 30.
We continue to seek ways to enhance consumer protection, but also to reduce burden on registrants during this challenging period.
Last question. What’s your message to the industry? Is it optimistic? Is it pessimistic? And, why?
Ontario is a great place to do business, especially travel.
We have a wonderful and diverse travel sector, innovative and extensive in the offerings and service available to consumers.
The Ontario travel sector has experienced past crises and always survived and thrived as a result.
COVID-19 is devastating, particularly the human toll, but we (TICO) remain confident that the long-term importance of registrants and their travel advisors for consumer protection is only reinforced.
Travel will be complex for the foreseeable future and consumers can only benefit from working with a TICO registrant.
It is the resiliency and innovation demonstrated by registrants that supports an optimistic outlook for the travel sector, even though there are some very tough days ahead.
TICO will continue to do its part to promote consumer awareness and education, amplifying the benefits of working with a TICO registrant to fulfill their travel needs.