January 30, 2020 Blog

It’s a sad day when any business shuts down, but when that closure means the vacations people have been looking forward to for weeks or month are in jeopardy, it is particularly sad. And it certainly makes lots of travel agents sad to think of unhappy clients and lost commissions.

Over the past 12 months the travel industry has seen multiple companies cease operations with little or no notice. Some of these came completely out of the blue, while others were preceded by rumblings of financial difficulties.

My sincere hope is that this never happens to you. In the event it does, here are some tips on how to deal with it.

Stay aware of industry news. If you hear rumblings of a vendor having financial difficulty, don’t assume the worst, but take a look at how it could impact you. Many companies go through short-term issues, but work through them. The first sign of trouble is always late commission payments. At Gifted Travel Network we keep an eye on this as we know this is the canary in the coal mine.

Make a “watch” list. If a vendor you have bookings with are rumored to be having trouble, make a list of any bookings you have with them. If hotel stays are involved (and they usually are), reach out to the hotels directly to confirm the booking is still valid and that it is paid. The same is true for all service providers (tours, transfers, etc,). Do this in writing – not by phone! If you get written confirmation that the reservation is valid and paid, that’s good news! But you will want to stay on top of it because the vendor who made the reservation can still cancel it. I would also ask the person you communicate with to notify you if changes are made to the booking. They may not, but at least you asked.

Reach out to the vendor. If you have booking components that you confirmed with the service providers (hotel, tours, transfers, etc.), but they are not yet paid, reach out to the vendor. Find out when they will pay these in full. Be honest and tell them you are concerned and see how they respond to the rumors. Of course, the people who answer the phone aren’t usually the ones who really know what is going on, but if you ask the question you might get information that makes you feel better or help you know you need to take immediate action.

Consider rebooking. If the booking you made is pretty far out and is refundable, you might want to move it to another vendor. If the vendor does default you will have to rebook anyway, but a lot of this depends on the components involved and how difficult it will be to rebook them. If they are in a one-of-a-kind suite in a hotel, then you won’t be able to just rebook them. It will be more effective to let the hotel know that your intention is to keep the booking and if the vendor defaults you will work directly with them. They don’t want to lose the booking either!

What do if the vendor does close. First, you need to have all the facts about your future bookings and any unpaid commissions. Double-check on all your bookings – even if you just checked out them a week before. Reach out to your host agency for assistance and to let them know you are affected. Your first priority is to get clients rebooked. Sometimes the best way to do that is to get the service provider (hotel, tour, etc.) to reinstate the booking and pay them directly. The reality is when a wholesaler closes there aren’t any assets or any money to pay outstanding commissions so people are usually just left hanging.

Be careful about what you share with clients. There is no need to panic your clients over rumor. You don’t want to loop them in until you have actual facts to share. Your responsibility is to take care of their vacation and that means a lot of behind the scenes activities like investigating what’s really going on. If the vendor does cease operations and their booking is cancelled, let the client know right away and have them contact their credit card company to dispute the charges. In many situations that’s the only way for them to get their money back. Some third-party travel insurance does cover financial default, but not all. And if the insurance was through the vendor, that won’t be covered. Above all else, make sure the client knows you have been on top of this situation and are working hard to correct it.

As my grandmother always said, an ounce of prevention is worth a pound of cure. So next week I will address what you can do to help prevent this from happening.

By Sandy Saburn