Agents: ‘Wait and See’ Approach to TravelBrands’ Creditor Protection

TravelBrands, a major Canadian travel distribution network placed under creditor protection last month, seems to have the support and confidence of the Canadian agent community—at least for now.

The agent community is concerned but still booking with TravelBrands’ companies and will wait and see how the company comes out of the creditor protection.

TravelBrands is restructuring certain areas of its business after being granted creditor protection by an order from the Ontario Superior Court of Justice. The creditor protection lasts 30 days unless the company applies for an extension.

TravelBrands, which acquired Thomas Cook Canada in 2013, retains some of Canada’s most popular wholesale brands booked by agents including Sunquest, Holiday House, Fun Sun Vacations, Encore Cruises, Boomerang Tours, Alba Tours, Exotik Tours, Intair, Carte Postale Tours, and Total Vacations. It also has retail brands which include Sears Travel, Belair Travel and the Wholesale Travel Group.  

‘Business as usual’
In a statement, Frank Demarinis, CEO of TravelBrands, indicated there would be no change and both the wholesale and retail brands will remain open for business as usual.

ACTA sent out a notice to its members after it had contacted TravelBrands.   

TravelBrand’s Demarinis responded to ACTA with the following comment, “As detailed in the documents filed with the Court, we have made arrangements to continue to pay all commissions based upon our schedule and the terms of our contracts. There is no risk to travel agents or their customers.”

David McCaig, ACTA president and CEO, told Travel Market Report, that since the Travel Industry Council of Ontario (TICO) would have access to the books. If it found any problems it would be obligated to alert the industry and consumers.
 
Given that TICO didn‘t  indicate there were any problems, “I would say continue to do business with TravelBrands and can book with confidence,” McCaig advised agents.

‘Uncharted territory’
“This is unchartered territory in Ontario, where I don’t recall seeing a wholesaler in CCCA (Companies’ Creditors Arrangement Act of Canada),” said Richard Vanderlubbe, president of tripcentral.ca.

“Of course it is not at all new with airlines who seem to have a rite of passage through Chapter 11 that becomes a ‘new normal,’ Vanderlubbe said.

“We had a situation in the past where Air Canada was in CCAA and Air Canada Vacations remained onside with TICO.

“To me, the publicity in the CCAA filing creates more watchful eyes on the business, and given the time of year (low season), the non-risk nature of their business, overall, I am not losing sleep over this,” he added.

Vanderlubbe said step one for agents is to check the accounts receivable balances and find that it is clean and that TravelBrands has been good payers and good responders to queries.  

“Given that our consumers are protected with TICO, we are not hesitant to book at this point in time,” he said.

Waiting and watching
Claire Newell, president of Travel Best Bets in Vancouver, B.C., said “We deal with TravelBrands and all of their tour operator partners and will continue to do so.”   

TravelBrands is simply seeking some time and protection from their creditors to operate and maintain business while it restructures its affairs, said Newell. “We are still confident in booking with them.”

Ray Swash, a Hamilton, Ontario-based travel consultant with TPI Dream Vacations, said he has some concerns because he had booked a Mexico hotel for a client the day before the announcement of the creditor protection.   

“Naturally I am watching it closely to make sure there are no issues,” Swash said.  “I’m watching to see where things go from here.”

Reaching out
According to Travel Best Bets’ Newell, TravelBrands has reached out to agents; she received emails from TravelBrands’ national accounts manager and the senior director of sales.  

“Both also said that if I had any questions or concerns over and above what they addressed in their emails that they would set up a private call to discuss them with me.”

Tripcentral.ca’s Vanderlubbe concurred.

“We’ve noticed no change in service levels. Management has been proactive in contacting us and communicating well,” he said.