Agencies traditionally are paid commission once their clients have set out on their vacation, but now Gogo Worldwide Vacations has decided they should get paid sooner.
Gogo has introduced a payment policy by which travel agency commissions will be paid in full within seven to eight days of their clients' final payment of a vacation, regardless of departure date.
"When you think about it, once a trip is paid in full, a customer is seriously committed to this trip," said Michele Kish, president of Gogo.
"The ratio of people who cancel between full payment and the trip is very small."
In fact, she added, it's less than 5%. The only time it would be more would be due to an unforeseen disaster, Kish said.
If the customer does cancel, Gogo would recall the commission, usually deducting from a future commission payment.
Previously, Gogo paid agencies the week the client departed. And that's they way most packagers operate. Apple Vacations posts commission checks 10 days after client departure. Funjet Vacations pays commission about two weeks after the customer travels.
Regardless of the client departure date, Gogo will now pay commission on all trips paid in full by the 14th of the month, on the 22nd of the month. And commission for all trips paid in full by the 21st of the month will be paid on the 29th of the month.
Part of the reason for the new policy, Kish said, was that Gogo has updated technology to accommodate the new payment schedule.
Additionally, in December, Gogo contracted with Money Direct, a travel payment solutions company, to enable agencies to set up direct deposit for their commission payments. Agencies not signed up with Money Direct will receive a commission check via mail.
The first commission payments under the new policy will start on Jan. 22 for trips that were paid in full by Jan. 14.