Posted on: October 8, 2012
Two Cuba operators to pay agents for referrals
Under current Treasury Department regulations, agents who are not licensed Travel Service Providers cannot handle direct bookings for people-to-people Cuba tours, cannot promote the tours through their agencies or collect money for air and hotel transactions. (The people-to-people requirement means tours must feature interaction with Cuban people.)
But an agent can refer a client who is interested in Cuba people-to-people travel to licensed authorized operators and receive a referral fee in return. The fee is determined by operators, based upon the price and length of the program.
The two companies that plan to offer referral fees are Insight Cuba and Friendly Planet, both of which received their license renewals from the Office of Foreign Assets Control (OFAC) in late September.
In Insight’s case, agents with clients interested in authorized Cuba travel can refer interested clients to General Tours, which in turn will funnel those prospects to Insight.
General Tours will pay the referral fee to the agents, according to Tom Popper, director of Insight Cuba.
“Under the recent OFAC guidelines pertaining to third-party relationships, this will now be permitted,” Popper said.
Fee amounts have not yet been determined, he said.
Insight is featuring more than 100 departures for the remainder of 2012 and 2013 on six itineraries.
The company brought about 3,000 Americans to Cuba between August 2011 and June 2012 but was forced to cancel 150 trips and lay off 22 staff members after its license expired this past summer.
Popper said that some of the laid-off staff found other jobs, “but we have been able to bring some of the staff back.”
Friendly Planet will offer a similar plan, according to President Peggy Goldman.
Friendly Planet recently received a two-year license renewal, valid through September 2014, becoming the only company so far to be approved for two years instead of the usual one-year license.
“The terms of our license require that agents refer their travelers to us and that payments be done directly through Friendly Planet,” Goldman said. “Referral fees will be paid to agents upon the return of their clients to the U.S.”
Friendly Planet currently offers two Cuba itineraries: a four-night Discover Havana tour and a seven-night Colors of Cuba tour. A longer tour is in the works.
Referral fees to travel agents are $150 per person for the shorter tour and $200 per person for the longer one.
Goldman said that despite Friendly Planet’s long wait for the license renewal, “our travelers were patient, and we lost very few. The hotels held the space for us, as did the air charter providers.”
Departures through December are sold out, but numerous departures from January 2013 through September 2014 will be available, Goldman said.
In addition to Insight Cuba and Friendly Planet, other recent licenses have been granted to the Fund for Reconciliation and Development, GeoEx (Geographic Expeditions) and Grand Circle Foundation.
Travel agents who until now have been left out of the Cuba picture will be able to grab a bit of the action through referral fees.
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