A group of former Ensemble member agencies has written an open letter to the consortium’s leadership, asking for 2019 incentive payments they say they are owed.
The agencies were members of Ensemble when it was a member-owned cooperative and paid incentives to agencies twice annually. Ensemble has since been acquired by the Navigatr Group and is now privately owned.
“We are now taking this issue public and asking you to do the right thing and honor your obligations to your former members,” the group wrote in its letter. “It is simply the ethical approach to business and can show the industry that you and your organization can be trusted.”
The agencies who signed the letter are 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.
They said “several other agencies” did not want to sign the letter because of fear of retribution. They also estimate that some 50 to 70 other agencies are in the same position of not having received payments, with some having shuttered operations during the pandemic and others leaving Ensemble for another consortium.
Power List agency owed ‘a very large amount’
Ken Gagliano, president of Travel Planners International (No. 33 on Travel Weekly’s 2022 Power List), said his agency walked away from a “very large amount” of money, but the issue is more a matter of principle now.
“We would certainly love to see that money, but the most important thing, I think, is the smaller agencies who got burned,” he said. “They really, really needed that money, and they never got it. And then here, all the people that stayed and signed up, they got it. It’s not right. It’s unethical.”
According to the group, when Ensemble was a cooperative, it would give members two “profit sharing” or “patronage” payments each year based on overrides from suppliers and the agency’s own production. In 2020, they said, Ensemble made the first payment based on 2019 sales, but said it would delay the remaining payment while it secured loans during the beginning of the pandemic.
In September 2020, the group said, Ensemble announced it would pay 50% of the remaining amount owed to each member within 60 days, and a marketing credit equal to the rest would be made available. But, the agencies said, they never received that payment.
In the open letter, they stated that while they have since left Ensemble, they were members in good standing at the time the payment was supposed to be made, and they believe they are still entitled to the funds. Before Ensemble was acquired, however, the group said they didn’t want to apply pressure.
“None of us wanted to take legal action or force the issue, knowing the precarious state of the organization,” they wrote.
They argued that following Navigatr’s June 2022 acquisition, the agency consortium “no longer has the financial instability that caused the delay of those payments.”
“Many of the signatories to this letter have approached you to ask for the payments and have been turned away,” they wrote. “ASTA has attempted to mediate this 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.”
In a statement, ASTA said it was “reviewing the claims made as part of its dispute resolution process, and remains available to assist the parties to reach an amicable resolution.”
Several of the agencies had a virtual meeting this summer with Ensemble president Michael Johnson and executive chairman David Harris, who was CEO prior to the Navigatr acquisition. During that meeting, the agencies said, they were told Ensemble did not believe it was obligated to pay the incentive.
The group also said members who renewed with Ensemble post-acquisition were paid an incentive to do so, which was equal to the unpaid incentives from September 2020, though that payment was never referred to as the unpaid incentive.
In a statement sent to Travel Weekly, Ensemble defended how it handled the situation.
“During Covid, Ensemble had to tackle a series of challenges, as did all travel companies,” Ensemble president Michael Johnson stated. “While we don’t intend to litigate this matter in the media, the pandemic directly impacted patronage and the decisions made by the former board. We fully support the priorities and decisions that were established by leadership at the time.”
In the agencies’ letter to Ensemble, they also urged ASTA and ACTA in Canada to review the membership status of Navigatr Group companies.
“We look forward to you making payment to all former members,” the agencies wrote. “Until then, we encourage all members of the industry to be cautious in their dealings with you and your sister companies.”
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