Agents have appealed for Abta to change its policy on how it refunds bookings with failed cruise line Cruise & Maritime Voyages (CMV) and reimburse the commission agents have had to pay back to customers.
Abta provided consumer protection for CMV’s cruise holidays without flights, but the association is refunding some CMV customers on a net basis (minus agency commission) rather than the full gross value of the booking.
This has left agents having to repay their commission to customers to make up the shortfall in their CMV refunds.
Abta has said it will only refund the net value of bookings already cancelled due to Covid-19 before CMV’s parent company South Quay Travel & Leisure collapsed on 20 July last year. It is covering in full those bookings that were cancelled as a result of CMV’s failure.
An Abta spokesperson said the Package Travel Regulations and Abta’s financial protection programme have “never covered, nor been intended to cover, commission payments in addition to proving a refund to consumers”.
But agents told TTG they were “disappointed” by Abta’s decision. There were also concerns that by paying net refunds to customers, the amount of commission earned by agents had been revealed.
Jason Daniels, managing director at Cruise Circle, called for Abta to change its stance and pay the difference between the gross and net booking values, as well as apologise to agencies for “exposing their commissions/margins”.
“Prior to its failure CMV had committed to protecting agent commission on bookings that had been cancelled due to Covid-19 – more specifically, where the balance had already been taken by the agent and the commission earned,” he said.
Daniels added that his company had about 30 affected bookings, which meant losing around £8,000 in commission that would have to be passed back to customers.
“It’s a massive amount of money and it’s money we’ve earned,” he said. “It’s also really frustrating that by doing it like this, it’s exposed our commission to customers at a time when the industry has been under the spotlight from the media.”
Daniels said that he would consider launching a petition to lobby Abta on the issue if there was not a change in policy on the CMV refunds.
Other agencies have also lost commission running into thousands of pounds as they have had to pay to customers to make up the shortfall in their refunds from Abta.
Nick Belger, commercial and operations director at Vision Cruise, said: “It wasn’t until our first settled claim direct to the client was received, and the client contacted us that we realised that Abta was only paying the clients net.”
As a result, Vision Cruise has lost more than £8,000 in commission across 40 CMV bookings.
Belger added the agency had received “no previous notification of this decision” from Abta and it “came as a surprise and shock”.
“Having stated our case to Abta, the response received vindicated their actions, but has left a sour taste that our commissions have not only not been protected but also revealed to our clients,” he said.
Ponders Travel managing director Clare Dudley said the Abta decision had a “colossal impact” as the agency had groups booked with CMV.
Her colleague Megan Webb said all CMV refunds to its clients from Abta had been net refunds, leaving the agency to make up the difference with clients.
“There’s no commission – we’ve not earned a penny,” she said. “We’ve put hours and hours on end into getting money back for customers with no rewards. The claims have taken so long and customers are chasing us for the money.”
Connoisseur Travel Services said it has had to refund around £4,000 in commission to CMV clients across 15 bookings.
“We feel disappointed in Abta and the way these claims have been dealt with, not only have we had our commission levels exposed to our clients, but they have also left us in a position where we have had to refund commission we had banked on being protected,” added manager Michelle Hunter.
“Abta initially advised that agents would be in the same position they would be had CMV not gone into administration, however that is clearly not the case as we have lost a significant amount of commission.”
An Abta spokesperson stressed that it was “doing all we can” to support members through “extremely difficult times”.
“Where Abta is managing claims for refunds that were cancelled before a failure, and not as a result of the insolvency of the operator, and where the bookings were made through a travel agent, customers can generally expect to receive two payments – one from Abta and one from the travel agent,” said the spokesperson.
“This is because of the way that booking payments are typically managed between travel agents and the tour operators.
“More widely, refunds to customers are managed by Abta through various mechanisms depending on the way that the booking was made, how it was paid for and the type of travel services booked. At the end of the day, the intention is that the customer will receive back 100% of the amount they paid for the travel services.”