Once again, bookings are being cancelled through absolutely no fault of the travel agent.
War. Airspace closure. Government advisories. Political instability.
The reasons change. The outcome does not.
The client is refunded – quite rightly. The supplier protects its balance sheet – understandably. And the agent? Earns nothing.
In some cases, we don’t just earn nothing – we lose money.
When a £3,000 family booking is processed on a credit card and later refunded due to Foreign, Commonwealth & Development Office (FCDO) advice, the merchant fee is rarely returned. That may only be tens of pounds – but with no commission earned, it is still a direct loss.
Scale that up to a £10,000-£15,000 long-haul booking and the agency can lose hundreds in transaction fees before a single pound of income has materialised.
Weeks of work, gone. Revenue erased overnight. Costs still incurred.
We are now several years on from Covid, yet structurally nothing has changed for the retail travel sector. We still operate in a model where commission is only earned if travel happens. If geopolitics intervenes, we are expected to absorb the loss as “part of the business”.
But should we?
Fragility in the retail model
Retail travel operates on deferred income. We invest time, expertise and service upfront in the hope that departure day arrives without incident.
Most of the time, it does.
But when it doesn’t – and particularly when cancellations are systemic rather than isolated – the impact is brutal. Entire destinations disappear overnight. Months of pipeline revenue evaporate. Cashflow tightens immediately.
And ultra-low deposits compound the volatility: £60 short-haul; £99 long-haul.
These figures may drive conversion, but they also reduce commitment and make bookings easier to walk away from when uncertainty rises. Deposits should represent meaningful intent, not placeholders. Stability at the front end strengthens resilience at the back end.
During Covid, agents worked around the clock to repatriate clients, process refunds and interpret ever-changing government advice – often for zero income. Now, as geopolitical tensions once again disrupt travel patterns, the same structural weakness is exposed.
No other part of the travel supply chain operates quite like this.
Airlines hedge fuel. Tour operators hedge currency. Hotels flex pricing dynamically.
Retail agents hedge nothing. We simply hope the world behaves.
My proposal
If disruption is now a recurring feature of modern travel, resilience must be built in.
One option would be the creation of a small, transparent per-booking contribution – perhaps 0.75%-1% of booking value or a modest per-passenger amount – placed into a ring-fenced resilience fund.
Crucially, this would need to be association, government or consortium-led, not agency-led, with strict governance and clearly defined triggers such as FCDO ‘do not travel’ advice or official airspace closures.
When activated, the fund could pay agents a fixed percentage of lost commission and help offset unavoidable merchant service fee losses.
Not full income replacement. Not a windfall. Just recognition that professional time and expertise have value, even if the trip does not proceed.
The cost to clients would be modest. The stabilising effect on the retail sector could be significant.
Sector must evolve
This is not about avoiding refunds. Clients must always be protected.
It is about recognising that when global events intervene, the businesses advising, transacting and managing the crisis should not be financially punished for doing so.
The retail sector cannot continue absorbing unlimited systemic risk while operating on thin margins and delayed income.
If we want independent agents – and the wider retail distribution network – to invest, innovate and recruit, the commercial model must evolve.
Because ‘force majeure’ should not automatically mean ‘zero pay’.
And if we learned anything from the last global shutdown, it should be this: hope is not a business strategy.
Possible mechanisms
1. “Travel Stability Contribution” (TSC)
The concept
A small, transparent per-booking levy (e.g. £3-£7 per passenger or 0.5%-1% of booking value) added at point of sale.
It would:
- Be clearly labelled on invoices
- Go into a ring-fenced client protection/agent resilience fund
- Only activate in officially recognised force majeure events (FCDO no-travel advice, pandemic shutdown, airspace closure, war escalation, etc)
How it works
When a booking cancels due to force majeure:
- Client receives their refund as usual
- The fund pays the agent a fixed percentage of lost commission (e.g. 30–50%)
- This prevents agents earning zero on hours of work
Positioning to customers
Not as “agent protection”, but as: “Travel Disruption Support Contribution – helps protect your booking process and ensures independent agents can continue supporting clients during global disruptions.”
Most clients understand Covid changed the landscape.
2. Association/consortium-wide mutual risk pool
If this was done at a consortium level:
- All members contribute a small % override
- Suppliers could optionally co-contribute
- The pot builds during stable years
- It pays out during industry-wide disruption
- It spreads risk properly and avoids individual agency cashflow exposure
It becomes similar to:
- Abta bonding logic
- Atol pooling
- Insurance underwriting models
But, specifically, it protects retail commission continuity.
3. Opt-in ‘commission protection’ add-on
Instead of a mandatory levy, this would be offered as an optional £5-£10 add-on per booking.
Market it as: “Global Disruption Protection – helps ensure your travel advisor can continue to assist you even if your trip is cancelled due to events outside anyone’s control.”
Pros:
- Transparent
- Commercial
- Customer choice
Cons:
- Uptake may be inconsistent.
4. Micro-insurance model (more sophisticated option)
Partner with an underwriter to create ‘Agent Commission Interruption Insurance’.
Funded by:
- Tiny client contribution
- Small agency contribution
- Possibly supplier override contribution
Triggered automatically by:
- FCDO red list
- WHO pandemic declaration
- Airspace closure
- Sanctions impacting destination
- Note: This professionalises it and avoids legal grey areas around holding ‘levy pots’.
5️. The radical idea: redefine commission timing
The real problem isn’t just cancellation. It’s that commission is only earned if travel happens.
One industry shift proposal:
- 50% of commission earned at ticketing
- 50% at departure
If the cancellation is force majeure, the first half is retained. Airlines already pay some commission upfront in corporate travel models – it’s not impossible.
This would remove the need for a levy entirely.
