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ARTA Urges Suppliers to Pay Commissions Promptly

May 12, 2009 By: George Dooley

The Association of Retail Travel Agents (ARTA) is calling on suppliers to pay commissions promptly and insurance companies to include "cancel for any reason" provision in contracts.

Following last week's meeting in Dallas, ARTA’s Board of Directors said it had agreed that, in light of the current economic situation and health issues, there should be a change in supplier commission payment and in insurance coverage.

ARTA Chairman Lynn Hayes called for travel industry suppliers to pay commissions due travel agencies within two weeks of final client payment.

“Travel agencies in effect are providing loans to travel suppliers by virtue of commissions not being paid until sometimes months after the supplier has taken in all monies due on the sale," Hayes said. "It is a sale, a commission is due, and should be promptly paid by the supplier from the final payment funds received.”

In light of the reorganization of Happy Vacations, ARTA encouraged agents to take steps to insure that the commissions due are protected. “ Suppliers should not be using commissions due to travel agents as working capital,” ARTA said.

ARTA also noted that agencies that belong to different consortia and franchises are required to sell third party insurance.  “Most of these insurance companies do not cover a crisis such as the Swine Flu breakout unless an actual case happens to the insured," ARTA said. "The ARTA Board requests that the insurance companies look into extending their coverage to ‘cancel for any reason,’ as several already permit. This would alleviate many of the problems that have been experienced in the last two weeks.”

ARTA said it will be glad to help member agencies to develop a credit application for suppliers not paying commissions at the time of final payment. “[We are] in the process of compiling a list of suppliers that pay within two weeks of final payment and those that delay beyond that in fulfilling their obligations,” ARTA said.

Agents wanting to advise ARTA of suppliers which in the agent’s experience fall into either category may email ARTA’s executive director, Pat Funk, at [email protected].

Founded in 1963 ARTA is the largest non-profit association in North America that represents travel agents exclusively. ARTA is the strategic partner of Canadian-based ARTA Canada.


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