TICO working to help registrants in a pandemic world
Reducing The Burden
In the first of a two-part conversation TICO’s president & CEO, Richard Smart talks about the kinds of initiatives it has put in place to reduce the burden on both travel agents and wholesalers as they deal with the impact of COVID-19 on their businesses.
Maybe you can start by talking about how COVID-19 has impacted on TICO’s operations. What kind of changes did TICO have to make to ensure that it was able to operate efficiently and effectively?
Like many registrants, the impact of COVID-19 on our operations has been significant. However, our recent investments in technology has allowed our operations to smoothly transition to a work-from-home environment where staff have been safely working since March.
This environment will likely continue for some time, at least into the new year.
TICO also had to make difficult decisions as a response to COVID-19. Headcount increases were frozen throughout 2019 and management salaries were held at prior year levels; we reduced our planned consumer awareness spending campaign by 36% and we cut all other discretionary spending by a minimum of 10%.
All totalled, TICO was able to quickly reduce its actual operational expenses of $4.6 million, reducing it by 6% on a year-over-year basis.
Compared to our originally planned 2020/21 Budget, the organization reduced its operating expenses by over $700,000 or 13%.
This tight focus on cost control helped the organization to remain lean and nimble as we began a new fiscal year, facing the challenges of COVID-19.
We continue to focus on cost savings where-ever practical while remining committed to our overall mandate.
Can you walk CTP’s readers through the actions/initiatives that TICO has taken so far to help registrants; and to reduce some of the regulatory/financial burden on them?
Shortly after the World Health Organization declared COVID-19 as a global pandemic, the government of Ontario announced an important regulatory update. Effective March 30, 2020, the General regulation under the Travel Industry Act was amended to reduce burden on travel agents and wholesalers and help certain travellers impacted by the COVID-19 outbreak, including:
Eliminated review engagement reports for small registrants with annual sales less than $2 million and required a new and simplified verification statement instead.
Eliminated audit reports for large registrants with annual sales of $10 million or more and required a review engagement report instead.
Removed prescriptive working capital thresholds and required registrants to maintain positive working capital instead.
Provided a time-limited exemption under section 46 until March 31, 2021, which allows registrants to choose to only provide a voucher or similar document for future redemption towards travel services Provided TICO the discretion to grant a travel agent or wholesaler an extension to their financial reporting deadlines.
In addition, the one-time financial support of up to approximately
$4.4 million (provided by the government) means that travel agents and wholesalers (“registrants”) will receive a one-time waiver of their annual registration renewal fees and Travel Industry Compensation Fund payments (“Form-1”) owed to TICO between April 1, 2020 to March 31, 2021, allowing them to focus on their priority businesses needs without the added financial stress of meeting certain payment obligations with TICO.
Since the beginning of 2020, TICO has been closely monitoring the pandemic and the impacts on registrants.
Management continues to advise government and to seek other means to assist registrants during this crisis.
That said, what kind of help are registrants asking for now? And how is TICO responding or planning to respond?
Given drastically reduced revenues for the industry and continued uncertainty, it is understood that registrants are experiencing immense financial pressure along with the stresses of having to manage through a pandemic that we are all struggling through.
TICO, along with the Ontario government recognize the severity and prolonged impact the pandemic is expected to have on the entire travel sector.
Registrants have expressed concern with financial relief along with assistance with such things as continued wage subsidies and commercial rent relief.
TICO staff continue to receive calls from registrants requesting assistance and interpretation of the travel legislation, including questions concerning licensing, consumer disclosures, refund vs. voucher issues and working from home on a more permanent basis.
Our consumer calls, including complaints, have also dramatically increased.
We continue to work with consumers and registrants on fair complaint resolution in accordance with the regulations.
While not all of the above issues fall within TICO’s mandate, we continue to review further options and consult with industry and government on possible additional relief measures … (this response is also applicable to the next question).
During the AGM, a number of registrants were asking whether some of the programs that TICO now has in place could be extended into the spring/summer period of 2021. Can you talk about those programs and if extending them is a possibility that’s currently being discussed?
Management understands that COVID-19 will impact registrants well into 2021 and beyond.
As noted above, we are continuously monitoring the environment and working with the Ontario government on proactive solutions.
In the meantime, TICO staff continue to be flexible and understanding with respect to timeframes concerning compliance.
Obviously, TICO has been working closely with the Ontario government and I’m wondering how the province has been responding to the industry’s current needs. Are they committed to ensuring that the industry doesn’t suffer more than it’s already suffering? Can you talk about that a bit?
The Ministry of Government and Consumer Services (MGCS) have been in constant contact with TICO on the issues caused by the pandemic.
The Minister and her team are in regular contact with TICO and remain committed to helping the sector.
TICO will continue to review further options and consult with industry and government on the possibility of additional relief measures.
NEXT WEEK: Richard Smart talks about the industry’s resiliency and the future and the role that TICO will play going forward.