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BY A CORRESPONDENT
March 8, 2007
In a rare happening in Canada’s travel business, a
few big travel companies and an industry association of
Canada have been charged with threatening hotel
operators in Mexico, the Dominican Republic and Cuba. The threat is seen as an effort to wreck low-cost
competitor Go Travel Direct, according to court
documents filed by the federal Competition Bureau of
Canada.
Tours Mont-Royal, Transat A.T., Air Canada Vacations and
Signature Vacations, as well as the Association of
Canadian Travel Agencies and a Quebec-based association
of travel agents are named in a request for a search
warrant filed by the Competition Bureau.
The Bureau has supported its request with copies of
e-mails between some of the parties and various hotels.
The Competition Bureau believes the tour operators, who
collectively control about 86% of Canada’s
packaged-vacation market, did engage in illegal or
anti-competitive behaviour to hurt Ottawa-based Go
Travel, which has less than 4% of the market. The
allegations have not been proven in court.
While traditional tour operators, or wholesalers
assemble flights, ground transportation, hotel rooms and
meals into packages sold through travel agents, Go
Travel sells directly to the public, cutting out the
travel agents and thereby cutting prices by between 15%
and 20%.
Go Travel started its business in Ottawa in 2000 and
entered the Quebec market in September 2004.
The arrival of the low-cost operator immediately created
a commotion in Quebec, with numerous articles posted on
an industry website – www.tourismeplus.com – discussing
the best way to counter Go Travel.
On September 13, 2006, the website reported that the
biggest travel companies were planning to meet to
discuss the state of emergency presented by “Hurricane
Go Travel.”
In an affidavit filed as part of the warrant request, Go
Travel chairman Hugh Boyle said: “While there was some
pressure when we first entered the Ottawa market, it was
nothing compared to the sustained and intense pressure
we experienced once we expanded into the Montreal
market.”
Go Travel sells approximately 82,000 travel packages
annually, including about 22,000 in Quebec.
Hugh Boyle says his company has lost 80% of its
hotel-room suppliers because of pressure from tour
operators and travel agents. In Cancun, a Mexican city,
Go Travel no longer flies “because no hotel will deal
with us.”
Boyle alleges that the large numbers of cancellations
have cost his company hundreds of thousands of dollars
by forcing it to find new suppliers of hotel rooms, thus
making its advertising brochures obsolete.
Among the documents obtained by the Competition Bureau
is a letter sent on October 15, 2005, by Jean Collette,
chairman of the Quebec regional council of the
Association of Canadian Travel Agencies, warning the
Cuban tourism minister that his members “will think
twice before selling a destination, hotel or resort that
supports the Go Travel Direct model.”
And, in the months that followed, four Cuban hotels or
resorts cancelled their contracts with Go Travel.
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