President's Podium: Chiming in on taxes and fees
The issue of taxes and fees has been pushed to the forefront in the trade recently. I have held interviews with with talk radio throughout the country and think that its wonderful that the subject is getting so much attention.
In the trade you may have seen recent articles published by openjaw.com and travelpress.com. The articles were accompanied by comments from agents and suppliers. The most encouraging comments came from WestJet Vacations VP Tim Croyle who addressed the trade at a recent event and suggested that the taxes and fees line is getting out of hand and that operators are placing more and more of the package price into the tax line to be perceived as more attractive to consumers but ultimately less commissionable to agents.
This is an encouraging statement coming from a tour operator. We applaud Westjet Vacations for recognizing that this is a serious issue that has been getting out of hand for a long time now. The lack of transparency and confusion it creates trying to understand and explain the charges to consumers needs to be considered. We are pleased with the leadership position Westjet Vacations has taken on the issue and we want to acknowledge them for stepping up the effort."
ACTA's efforts on the topic of taxes, fees and NCF's is in the area of lobby and education. ACTA consults with the Canadian Transportation Agency as an industry stakeholder to ensure that regulatory requirements are good for consumers and fair to our members. Recent work with the Agency on the matter of all inclusive air price advertising saw new regulations passed for scheduled airlines and we continue to push the CTA to extend these rules of transparency with charter airlines and tour operator packages.
We value our relationship with the CTA and will continue to keep them informed on critical issues in our industry. We are delighted to be a key resource for the Agency on many topics, one of which is taxes and fees.
In response to our concerns about the growing issues with respect to the display of prices for package tours, the CTA has referred us to Section VI of their Interpretation Note which states that ”the Agency considers such bundled services, where the air service cannot be purchased separately, to be excluded from Part V.1 of the ATR." It is in this area where ACTA's efforts are focused. The exclusion cited is the source of the issue and requires further evaluation.
In the meantime what should we do to earn the most commission when searching for travel options for their clients?
When searching for travel options for your clients, try and get away from searching on the criteria of lowest base price and start setting your criteria based on highest commission. You will see a positive difference in your commissionable earnings and a negligable difference on the overall package price for your client. Our research says that the lowest base price includes a higher percentage of NCF's.
Sincerely
