A group of former Ensemble members have penned an open letter to the consortium's leadership, asking for incentive payments dating back to 2019.
In a Nov. 10 letter addressed to leaders Michael Johnson, David Harris and Jeff Wilner, nine retail travel groups – including the Travel Agent Next Door, Travel Best Bets and Uniglobe Travel Center – say they were in good standing with Ensemble in 2019 and therefore are owed their cut of that year’s production.
“We are now taking this issue public and asking you to do the right thing and honour your obligations to your former members,” the letter reads. “It is simply the ethical approach to business and can show the industry that you and your organization can be trusted.”
The group says there are “several other agencies” that did not want to sign the letter for fear of retribution.
They also estimate that some 50 to 70 other agencies are similarly affected.
“Following a COVID-related delay of incentive payments in spring 2020, David Harris communicated to all members in September 2020 that the board approved the incentive payments which would be processed within 60 days, pending final loan approvals. Over 2 years later, no such payments have been made,” the letter reads.
Ensemble was acquired by the Navigatr Group in June of this year – a deal that transitioned the company from a cooperative to a privately-held company.
The group says that when Ensemble was a cooperative, it would give members two "patronage" payments each year.
In 2018, Ensemble moved from a single annual payment to a split payment structure (half in early April, the remainder in late May).
In 2020, Ensemble made the first payment based on 2019 sales, but announced it would delay the rest while it solidified loans at the start of the COVID-19 pandemic, the group says.
In September that same year, Ensemble said it would pay 50 per cent of the remaining amount owed to each member within 60 days while awaiting loan approvals and a marketing credit equal to the portion that will not be paid out would be offered, the group asserts.
More than two years later, the agencies say they never received that payment.
“While each of us have since left Ensemble following the non-payment, our status at the time entitles us to be paid,” the group argues in their letter.
The complaint has not been taken to court. The group says they didn’t want to force the issue or take legal action “knowing the precarious state of the organization.”
“Many of the signatories to this letter have approached you to ask for the payments and have been turned away," the letter reads.
The agencies say the American Society of Travel Advisors (ASTA) has attempted to mediate the situation, “but you maintain there is no obligation to pay.”
“You have claimed that the board-approved payment was contingent upon loan approvals to help you survive COVID. You have not shown a copy of those board minutes to any of us,” the letter reads.
“More importantly, your financial position is solidified by both the robust COVID recovery and the acquisition by Navigatr – which is also parent to Travel Edge, TripArc & Kensington Tours.”
“Entirely without merit”
In a statement to PAX, Michael Johnson, president of Ensemble, said the allegations are “entirely without merit.”
“While we will not litigate these claims and false narratives through the media, extensive legal review and advice were provided by our legal teams to ensure compliance with all applicable law during the execution of the acquisition,” Johnson said.
The complete list of companies that signed the letter is Around the Globe Travel, ConsortiaX, Diplomat Travel Agency, Go Travel, The Travel Agent Next Door, Travel Best Bets, Travel of America, Travel Planners International and Uniglobe Travel Center.
The Travel Agent Next Door (TTAND), for one, was a long-time Ensemble member until it announced in October 2021 that it was exiting the consortium to join TL Network.
Speaking with PAX, company founder Flemming Friisdahl called the situation “unfair.”
“It was our money,” Friisdahl said. “We were counting on that money to operate our company.”
Friisdahl said TTAND was in good standing when the host agency officially left Ensemble in November 2021.
“That money was earned in 2019. It should have been paid out by middle of 2020, and they kept us on the line…It’s disappointing,” Friisdahl said.
He said the high costs associated with court proceedings are preventing the group from taking legal action.
PAX reached out to the Association of Canadian Travel Agencies (ACTA) for comment.
President Wendy Paradis said ACTA is aware of the situation and, “at this time, in our view, it appears to be a matter between the parties involved.”