by Marsha Mowers
Last updated: 7:08 AM ET, Fri September 23, 2022
There's been a lot of debate around TICO and its practices over the last few years, something that President Richard Smart is accustomed to in his eight-year run. Concerns about its Compensation Fund and TICO's overall relevance have taken center stage and has become even more prominent during the COVID pandemic and subsequent current recovery.
At a media update Thursday afternoon, Smart outlined TICO's plans for the upcoming year, which include a full review of the Compensation Fund (CF) and a new fee structure after the current hold on fees expires March 31, 2023.
"The elephant in the room is usually comes down to the Compensation Fund," admits Smart. "I remember in my first year on the job, I said, I'm going to fix this compensation fund in my first year and met with the Ministry. And here we are years later, still talking about it."
Smart says it's been made clear that moving forward, they must find a way of getting back to self-funded model. To do so, they've engaged a third-party consultant that does a lot of public sector engagement and has worked with a number of different ministries to provide a full review of TICO's regulatory services, including the CF. The review will look at all activities, including education, individual registration and licensing to figure out what that optimal model looks like.
"We were never busier during the pandemic and yet our revenues were zero. That doesn't make sense to me. I said we should have a model where we can continue to provide our services when consumers have their greatest need."
"All options are on the table. If I had a nickel for every time someone suggested that we just move to the consumer pay model that Quebec has, I would probably be on a beach somewhere."
The review is the most significant largest third-party review in TICO's 25 year history. Smart says at previous reviews, they were only permitted at that time to talk about non compensation funds type services such as registrations, the complaints process, annual renewal fees and education. He says the message was very clear from industry that that it wasn't fair or appropriate only to be talking about parts of the equation.
"There's going to be engagement of the associations and registrants to get their input as to what makes sense. So the consumer pay model will be looked at, but so too will a number of other options."
Timing for the review starts now, with expected completion in Fall 2023. Smart says they have the support of the government who will take a position after they receive the recommendations of the study and then decide whether to change the Travel Industry Act, which is what TICO monitors and enforces, or work with it.
If this sounds familiar, it's because Smart says they've made a number of recommendations to the government to change the Act in the past, most recently in 2016/2017. He says they were very close to sharing those recommendations with the industry when they were paused by the pandemic.
So should agents expect to be paying more in 2023? It's not immediately clear, but it is a possibility.
"Some would maybe pay more, some pay less," Smart explains. "One of the parameters of this study is to find whether to move to more risk-based pricing and risk-based outcomes (similar to home or car insurance). There are some travel agencies and tour operators that ought to pay more because they're a higher risk to consumers through their internal controls and marketplaces they serve. There are also a lot of registrants that are low risk."
"Also, depending on the growth of the industry, if the marketplace gets back to where it was in 2019 and grows, the aggregate amount of revenue collected by TICO may go up. But I think on an individual basis, we hope to get to a more of a risk-based pricing model for the future."
"We have a huge amount of work to do in a relatively short period of time."
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