Canada’s Travel Execs Look Back on 2014

Reflecting on the status of the travel industry as we enter the New Year, Canadian travel executives weigh in on what they felt were the most important developments of 2014.

From the benefits of airline expansions and the strength of the Canadian economy to the challenges of downward pressures on commissions and a lack of travel health insurance standard licensing requirements, these issues will continue to impact the travel business in the coming year.

POSITIVE DEVELOPMENTS
Increasing attention from suppliers

“One of the things that we’ve seen this year is that suppliers are going back to relying on agents and reaching out more to them. There’s more being done for the travel agent – not a tremendous amount but more than before.” – Flemming Friisdahl, founder, The Travel Agent Next Door

Air Canada commissions
“I would say the most important development was Air Canada reintroducing commissions on domestic fares. Air Canada has always known the importance of travel agents, and reintroducing the domestic commissions shows this very clearly. – Gary Gaudry, president, Maritime Travel

Air carrier expansions
“Interestingly enough I think the most important developments affecting the Canadian travel agency business in 2014 was directly related to the expansion news and plans from three of our Canadian air carriers.

First, the rollout of Rouge and the beginning of 787 deliveries for Air Canada allowed them to start rolling out their expansion plans into North American and International markets.

Second, the continued expansion of WestJet, the addition of their PLUS (Premium) service targeting the corporate market, the growth of Encore, their connector airline network; the growth of their code share and interline agreements; and their trials with a new aircraft type (767s) and International flights to Europe.

Third, the announcement of Porter orders for the new Bombardier C series aircraft and the associated expansion plans to western Canada, eastern Canada and points to the U.S. from the Toronto Island Airport. This growth requires the strong support of the agency distribution channel and this will roll into the next several years. These are all positive developments for the agency community.” – Michael Meritthew, chairman & CEO, Merit Travel Group

Industry holding steady
“2014 was a year about leveling out for the Canadian travel agency business and travel industry as a whole. In previous years our industry saw major consolidation, new entrants, rising costs and fluctuating demand, but 2014 was a plateau that I feel has now set up 2015 to be a banner year.

“We saw a tip of the scales in terms of our business, our peers’ businesses, and our partners’ businesses where the majority of companies were spending the year looking inside themselves at internal efficiencies to be best poised for the next business cycle.” – Tim Morgan, vice president, Travel Professionals International

Increasing agent professionalism
“One of the most important developments affecting the Canadian travel agency business in 2014 was the growth of professionalism within the Canadian travel industry with more and more travel agents enrolling and completing their professional designation and attaining their Certified Travel Counsellor (CTC) and Certified Travel manager (CTM). There has been a 30 percent increase from year past.” – David McCaig, President and COO of ACTA, Association of Canadian Travel Agents

Economic strength
“The overall strength of the Canadian economy continued to give us the opportunity to grow all aspects of our business. Sadly, the sudden, although not totally unexpected, drop in the commodity prices has left our clients with questions as to what their business will be like early in 2015.” – Michael Broadhurst, executive vice-president, Vision Travel Solutions

CHALLENGES REMAIN
Need for more marketing
“I don’t believe that agents spend enough time marketing. They need to go out and remind people that they’re there. They need to make sure that the consumer comes back to them when they’re ready to make a booking. Just because you have a customer for five years doesn’t mean you’re going to have them for the sixth.” – Flemming Friisdahl, The Travel Agent Next Door

Maintaining fair compensation
“Resisting downward pressure on industry commissions remains one of our biggest challenges. The massive increases in capacity, while good from a consumer choice perspective, inevitably lead to more price-centric or last-minute promotions on the part of suppliers. This, in turn, puts pressure on supplier margins.

We know and can prove beyond question that full service travel agencies deliver the best and most valuable customers to suppliers. They travel more frequently, book earlier and spend more on average. We need to constantly make this case so that our services are fairly compensated.” – Joseph Adamo, general manager, Transat Distribution Canada

Confusion caused by tour operators
‘Tour operators (except WestJet) continue to reduce base fares and increase other fees while yet maintaining or even increasing the overall price of tickets. This is very misleading to consumers and causes the travel industry grief, because we are the ones explaining why the price is not as advertised.” – Gary Gaudry, president, Maritime Travel

Standardizing sale of travel health insurance
“With the differing provincial licensing requirements, travel agents are expected to be licensed within each regulated province for the sale of travel health insurance. This is a timely and costly venture for travel agencies and agents who have clients outside of their province. An ACTA insurance committee was formed to work on a strategy that in the long term will, among other things, allow travel agents in each province to sell travel health insurance to consumers from any other province and put some form of compliance standards in place.” – David McCaig, ACTA

Attracting young people
“We continue to struggle to find great young agents that have been properly trained, except in those markets such as Calgary and Toronto where there are excellent colleges training young people.” – Michael Broadhurst, executive vice-president, Vision Travel Solutions