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Identity Crisis! Ontario Planners as Travel Agents?

“I am NOT a travel agent!” has become the mantra of many Ontario planners in the days and months following last summer’s Court of Appeal ruling against David Gray.

For the uninitiated, David Gray is president of Ontario-based All Sport Accommodations (ASA), which specializes in booking hotel accommodation and providing information about tournament venues and local points of interest for sports teams. In short, ASA is what many in the business events industry would call a site selection company.

In the eyes of the Travel Industry Council of Ontario (TICO)—the administration and enforcement body of the Ontario Travel Industry Act, 2002 (TIA) and Ontario Regulation 26/05—Gray was breaking the law because he was facilitating travel services (setting up accommodation, providing travel advice) and therefore acting like a travel agent without being TICO-registered.

Gray disagreed. And so was sparked an intense, three-year court battle that saw two appeals and three different judges, each with their own unique interpretation of the Act and Regulation. This, in itself, speaks to the complexity of the issue, and serves as a foreshadowing of the mass confusion to come.

But before we peel back the layers, let’s finish Gray’s story. The third and final judge declared that ASA was in violation of the Act and was thus “properly convicted.” Today, Gray’s website (bookasa.com) is stamped with a TICO registration number and a bright blue and green TICO logo that glows like a beacon in the right bottom corner of the homepage.

A MURKY MATTER
Ignite was first alerted to the Gray case by a reader who pointed us to a LinkedIn post by Anne Thornley-Brown. The president of Toronto-based Executive Oasis, an executive retreat, teambuilding and incentive travel company, wrote: “What is the difference between an event planner and a travel agency? In Ontario, a recent Court of Appeal decision has blurred that distinction and placed independent event planners in jeopardy.” 

Over the next several weeks I followed the trail including a brief conversation with David Gray himself, who wanted to tell his story, but ultimately decided it would be best for his family’s wellbeing to decline. Many industry people weighed in, several asked for anonymity, and others like Gray declined to be interviewed. I heard some hard-edged anger, but most telling was the confusion and genuine shock: the majority had not heard of the David Gray case, nor were they even aware of the regulation.  meeting planner, event planner, TICO

We posted a poll on ignitemag.ca to get a clear sense of our readers’ knowledge of the TIA: 61 per cent of you indicated having no knowledge of the regulation.

It was time to question TICO.

HELLO?
TICO’s president and chief executive officer answered after the second ring. And while I admit to expecting a bristled response from Michael Pepper, he proved me wrong when, in response to my observation about the industry-wide confusion, he replied, “Yes, I do think there are some grey areas. There may be a need for the Regulation to be changed to clarify some of these issues.”

And that is how the TICO-Business Events Roundtable came to be (attended by the people shown in the images below).

December 13th was a clear, relatively balmy 6ËšC as we gathered at Doug Bolger’s iLearn2 offices in downtown Toronto. With Bolger moderating, the meeting began with Michael Pepper's PowerPoint presentation on the Act and the accompanying Regulation, and ended with us asking the Million-Dollar Question … how does this apply to the business events industry, and more to the point, in what type of circumstances would business events professionals come under the scope of the TIA?

meeting planner, event planner, TICOOur group served up various hypothetical scenarios, and as we did so, the layers began to peel away.

Bridezilla
Annemarie Reininger. “You can take it to the extreme: I’m a bride getting married down in Punta Cana, I’ve arranged a room block for 50 guests and I’ve said to all my relatives, ‘Give me your credit cards because it’s part of my package and I’ll put it through.’”
No action required. This isn’t an ongoing source of business, it’s a one-off.


Inside Job
Terry Manion. “Now let’s take the bride scenario and apply it to a large company with an in-house planner who is organizing travel for their own company.”
No action required. The company/planner is the consumer and they are serving themselves.

Flow of Funds
Katherine Wright. “This came up in discussion with some colleagues. Let’s say the Client ABC signed the contract directly with the Hotel 123. The commission is going to the people who sourced the hotel (not the planner), but the flow of funds is going through the planner. Does the planner have to be registered? In other words, the planner is hired to manage all aspects of the event and pay all the bills. Is that planner required to be registered?”
Yes. TICO registration required. When the corporation hires the planner and the planner is dispersing the money, the corporation is the consumer and must be protected by the TICO fund/regulation.meeting planner, event planner, TICO

Bricks + Mortar
Bob Parker. What if I’m a meeting planner from Alberta with an Ontario-based client? Am I required to be registered with TICO?”
No. If the planner has no bricks and mortar here, TICO has no jurisdiction because the TICO legislation only applies to Ontario. Having said that, both BC and Quebec have similar administration and enforcement bodies but the balance of the provinces do not.

Far Reaching
Bob Parker. “Okay. Now let’s say I’m a TICO-registered planner from Ontario, my client is Sprint in the US, they are going from Kansas to San Diego. If they book through me, are they are covered?”
Yes. They can make a claim.

Website Bookings
Doug Bolger. “How about booking everything through a website? The registration includes my room rate etc., it’s lumped all together.”
Yes. TICO registration is required. You are providing travel services, therefore you must be registered with TICO.

Compensation Fund
• $5 million per event (max.)
• A further $2 million for repatriation expenses (max.)
• $5,000 per person (max.)
• Repatriation of customer if they purchased a “package” from a registered wholesaler and that wholesaler failed while the customer was in the destination
• Reimbursement of some additional expenses when a registrant fails

3 applications

How You Operate                                Specifics                                         Action Required?

You organize and take money from the client and pay the suppliers for travel services.

You are advising, selling agency benefits and possibly signing on behalf of clients. You receive funds and pay them out, similar to a travel agent. You organize travel to and from the destination, and organize transfers on the ground.

Yes. Register with TICO and all aspects of the criteria must be met.

You arrange and book travel services on behalf of clients and the clients pay the suppliers or travel agent.

You are arranging, booking, advising and facilitating travel services.

Yes. Partner with a registered travel agent to function as a contractor. You must also write and pass the TICO exam.

Planner provides travel advice to the client on accommodation and transportation. The client makes the reservations and pays the suppliers or pays the travel agent.

You are advising and facilitating travel services.

No. If you don’t make reservations, no action is required.


meeting planner, event planner, TICO

Final analysis

Side One
While TICO protects consumers — and that’s always a good thing — it falls short for the business events industry and its clients in the following areas:

HOTELS. TICO does protect consumers if hotels go insolvent. But if the planner becomes insolvent, the client can make a claim through TICO.
ACTION: Hotels need to be fully included just as airfare, travel agencies and cruise lines are now. Business Events Industry Coalition of Canada (BEICC) can take a prominent role by requesting inclusion, on behalf of its members, to the Ministry of Small Business and Consumer Services.

BLURRED LINES. While sales teams and corporate communication companies don’t actually sell or manage travel, they may ostensibly provide travel advice/information to clients before handing the file over to the people who ultimately organize travel services.
ACTION: If the business events industry is considered an agent of travel as per TICO’s definition, the regulation should be rewritten with our industry in mind. TICO and BEICC can further assist by clearly defining the term, ‘planner.’

FILTERING OF FUNDS. Procurement sometimes asks planners to divvy meeting planner, event planner, TICOout payment to each and every service provider involved in a given event. If a planner says they cannot disperse funds there’s a chance the business will be taken elsewhere.
ACTION: Limit the definition of the word 'consumers' to individual leisure travellers, and develop a separate set of requirements for corporate business.

BARRIER TO ENTRY. Being TICO registered has a big player advantage because of the cost (see Crunching the Numbers).
ACTION: Associations would do well by their members to approach TICO with data to illustrate the barrier.

Side Two
Being registered with TICO does have benefits:

PROTECTION + COMMUNICATION. Your clients are protected by TICO’s compensation fund and the strict requirements of the TIA. They also have a right to full disclosure.

DIFFERENTIATE FROM COMPETITORS. Tell your clients there’s a risk to signing with a non-TICO company; they are not protected should an airline or cruise line fold or in the event of fraud.

LENDS LEGITIMACY. Our industry is yet to be recognized by the government despite bringing $32.2 billion dollars into the economy. Without recognition, business events can’t lobby the government for infrastructure improvements such as where to build the next convention centre, increased bandwidth for large groups and the like. TICO registration will help pave the way for much-needed recognition.

COMMISSIONS. If you’re not currently making commissions or only making commissions on some aspects, you can do so now by partnering with a travel agent or with a larger, TICO-registered player in the industry.

Side Three
What do you think? Continue the conversation at ignitemeetingsconnect.com

meeting planner, event planner, TICOCrunching the numbers
Travel counsellor exam: $50
Registration fee: $3,000 (head office)
Annual renewal fee (based on sales): $300 ($2,000,000 or less) to $1,800 (over $50,000,000)
Security deposit: $10,000
Working capital: $5,000 to $100,000 based on sales
Contribution to compensation fund: five cents per $1,000, semi-annually (twice per year) or a min. of $25 for each six-month period
Professional accounting fees for financial statements: Review engagement (approx. $4,000 per year) or an auditor’s report (more than $4,000 per year) tico.ca

TICO Glossary
TICO is wholly financed by the compensation fund. The fund protects consumers* from insolvency or bankruptcy of a travel agency, wholesaler or travel service provider. This includes all sellers of travel services*, including travel agents*, travel agencies, airlines and cruise lines (hotels are not covered if they go insolvent). The regulation ensures disclosure to consumers when they purchase travel services, and requires that all money received is put into a trust or that it passes through a trust.

* Consumers—Anyone who purchases travel services, be it for leisure or business, individual or corporation.

* Travel Agent—A person who sells, to consumers, travel services provided by another person.

* Travel Services—Transportation or sleeping accommodation for the use of a traveller, tourist or sightseer, or other services combined with that transportation or sleeping accommodation.

By Sherryll Sobie

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