Philippe Sureau, Transat President Distribution

Following ACTA’s open letter denouncing the eight per cent commission system, Philippe Sureau, Transat Distribution President, spoke with CTHotNews and said he was happy to see the beginning of an open dialogue between the industry’s main partners on the serious issues facing the travel world. “We are open to dialogue, said Sureau, we say ‘yes’ to discussions.”Yesterday, ACTA declared that an eight per cent commission was not conducive to the industry’s development, but said Sureau, “What is a reasonable commission?”

Up until 2000, airline companies were paying nine per cent on tickets sold. Was it sufficient, he asked? Nowadays, it’s unrealistic to expect a 15 per cent ommission, the average is usually around 10 per cent and often less when you factor in discounting. Another possibility is to work with net prices where agencies figure out their own commissions. “But how do we advertise? Furthermore, are agencies prepared to manage their own markups?” he questioned.

Jean Collette, Chair of the ACTA Quebec Regional Council

The controversy began when Nolitours announced its new eight per cent commission policy to counteract discounters and direct Internet sales. Nolitours’ products are limited, they are not sold by Transat and they are offered at aggressive prices, thus reducing the company’s profit margins and setting agencies’ commissions at eight per cent. It’s important to note that Nolitours’ products cannot be sold at discount prices. “As tour operators, we set the price and the minimum commission,” Sureau continued. “Anyone can sell a package for more and we say good for him! - but he cannot sell it for less. We would immediately find out and stop the deal.”

Sureau is pleased to see ACTA placing the agent at the center of the debate. Agents offer added value to the consumer, he said. Nolitours does not sell directly to the public, only through agencies. Sureau said his company’s initiative has not created the spillover effect feared by many, only a price coordination of products already on the market. “Our approach is designed to clean up Canada’s travel sales market. We offer a good product at a good price and so far our sales have been pretty good.”