By Kristen Vernon
A travel agency lobby group wants compensation and assistance from the federal government to combat lost revenue and lay-offs in the wake of September’s terrorist attacks.
Randy Williams, president and CEO of the Association of Canadian Travel Agents, made a presentation last week to the parliamentary finance committee as part of consultations prior to the December budget.
“We want to be compensated for the fact that we put customers in airplanes and the government told the airplanes they had to land,” says Williams, who represents 3,200 businesses across Canada and 72 in Ottawa.
He says that in the week following the terrorist attacks, travel agencies lost about $20 million in revenue – $16 million in lost commission, $3 million in lost service fees and $1 million in overtime labour costs. The travel agents want the government to establish a $20-million compensation fund.
The amount of compensation doled out to each agency would be based on a comparison to the same week last year.
Williams also asked the government to provide six to nine-month loan guarantees and make changes to the employment insurance program.
Changes recommended include having employment insurance benefits based on income earned before Sept. 15 — when some travel agencies began reducing employee hours — so that employees whose hours are cut before they’re laid off aren’t penalized, says Williams.
Williams estimates 20 per cent of the country’s approximately 30,000 travel agents will be laid off by the end of December.
Employees at some Ottawa travel agencies have already been affected.
Five travel agents and one accountant worked at Handa Travel on Sparks Street in early September. One employee’s hours were reduced and another was laid off, says general manager Jean Arseneau.
The week of the terrorist attacks, Arseneau says he personally lost $1,500 in commission because of trip cancellations.
In September, business was down between 40 and 50 per cent. Business is picking up, but “usually at this time, it’s busier,” says Arseneau.
Because Handa Travel sells a lot of package vacations to southern destinations, such as Mexico and the Caribbean, winter getaway bookings are helping business, Arseneau says.
Hassa Mirchandani, president of Bytown TravelPlus, says that he doesn’t have figures yet, but estimates business was down about 50 per cent in September.
Right now, business is “down about 35 per cent compared to the same time last year,” Mirchandani says.
“If this keeps up another two to three months, I’m done. But so far, I’m okay,” says Mirchandani, who laid off one employee and had two employees job share last month because of the high-tech downturn and the economic slowdown.
“If I can get money for cancellations and refunds, it will help,” says Mirchandani of the request for compensation.
The federal government set up a $160-million fund to compensate airlines for financial loss because airspace was closed following the terrorist attacks. But the airlines also asked travel agents to refund commission made on cancelled tickets.