ASTA Calls for Travel Agency Compensation on Future Travel Credits

The American Society of Travel Advisors (ASTA) is calling for travel advisor compensation on future travel credits (FTCs) to be made up front. 

Suppliers have been offering guests the options of FTCs to rebook travel, as opposed to simply being cancelled outright. In lieu of issuing refunds when travel plans are cancelled, use of FTCs by suppliers has seen a sizeable uptick during the current global crisis.

Apart from the travel originally booked, ASTA said the FTC itself constitutes a transaction for the promise of future travel, and any commissions earned from an FTC transaction should be payable to the advisor upon the issuance of that voucher, and not at the time of the future travel.

ASTA is urging suppliers for all commissions due for any products sold by the agency – voucher, FTC or otherwise – to be payable upon final and full payment by the traveler, and ideally within 14 days, and not after the client’s travel is complete.

“Analogous to a FTC, when you sell a new home, you pay the realtor’s commission at closing, not when the new owner moves in,” Mark Meader, senior vice president of industry affairs and education for ASTA, said in a statement. “It stands to reason that when a travel voucher or FTC is issued as the result of a sale made by a travel advisor…the corresponding commission owed to the advisor should be paid at the time the voucher is issued, not when the traveler takes the trip.”

In these situations, the supplier has already collected full payment through the advisor, so the compensation owed to the advisor should be paid when that full payment has been received.

The association said with the advisor having completed and closed the sale, “the advisor has fulfilled all of her or his duties with respect to the transaction. Compensating the advisor for that success is the logical follow-on step that should occur at that point without delay.”

“ASTA believes that a travel voucher represents a promise of a seat on an airplane, a cabin on cruise ship, a room in a hotel or a place on a tour,” said Zane Kerby, president and CEO of ASTA. “Accordingly, the agreed compensation or commission due to the agency for closing the sale should be paid when that voucher is issued.”