Travel startup shuts down in Ont. over regulator concerns
A passenger is seen walking through Chicago's Midway International Airport on Tuesday, Feb. 9, 2010. (AP / M. Spencer Green)
Aleksandra Sagan, The Canadian Press
Published Monday, October 23, 2017 4:20AM EDT
Last Updated Monday, October 23, 2017 7:56AM EDT
A new website that lets travellers bypass travel agents and pocket commissions has ceased operations in Ontario after the province's travel regulator claimed the site violates provincial laws.
The dispute is the latest in a consistent pattern of regulatory pushback against online businesses disrupting industries that have been slow to modernize.
"We see this type of thing happening everywhere," said Jochem Wijnands, TRVL's founder, pointing to struggles other online platforms, like Airbnb and Uber, have faced for giving amateurs access to previously off-limits worlds.
"The legacy professions hide behind certain rules that they think will give them protection."
The Dutch entrepreneur who also created an app that later became Apple News, launched TRVL this June. Users sign up to become so-called TRVL agents and earn up to 10 per cent commissions on hotels booked by themselves, friends and family. They can also share a link to their site with followers looking for recommendations - making it particularly useful to travel bloggers and social media influencers.
Unlike other online booking sites like Booking.com and Hotels.com, where commissions are built in to the price, he said, TRVL allows its agents to pocket most of that commission - save a cut that the company keeps.
Shortly after TRVL launched, the Travel Industry Council of Ontario sent Wijnands a letter, saying his unregistered company had staff consulting on travel, in contravention of the province's Travel Industry Act.
"Anybody who is selling travel in the province ... must be employed by or otherwise aligned with a registered travel agency in the province of Ontario," Richard Smart, TICO's president said in an interview.
After some back-and-forth correspondence, TICO offered a solution: register with the council through a process that requires an annual fee and setting up a branch office in the province, or stop providing access to the service in Ontario.
Smart said the process allows the regulator to protect consumers by making sure they receive accurate information when booking online, such as passport and visa requirements, and ensuring its roughly 2,400 agents all follow the same rules.
Wijnands steadfastly disagrees with TICO's assessment, arguing the platform's users aren't travel agents; the site's users don't handle money, he said, but rather use the online advertising platform to make bookings with service providers.
The regulator, he said, is protecting registered travel agents rather than savvy consumers, who don't need someone to remind them to bring a passport.
Still, he agreed to pull out of Ontario, saying the growing business can't afford to be destructive at the moment. He believes the company can reposition itself to clarify any confusion, though Ontario's governing body is the only complainant to date.
A message for visitors trying to access the site in Ontario now reads: "Due to restrictions set by the Travel Industry Council of Ontario, TRVL is currently not available in Ontario. We are working to resolve this issue soon."
TRVL's regulatory roadblocks are becoming a familiar story for online disruptors targeting industries that are ripe for change.
The hotel industry raised concerns over Airbnb, saying people renting out their homes don't face the same strict regulatory requirements, such as taxes and safety measures. That's led some provinces to clamp down on the home-rental site. In Quebec, a law requires users to register and pay a hotel tax.
The taxi industry, meanwhile, has battled Uber drivers, leading some cities to ban the company and Canada's real estate industry has taken on the Competition Bureau over websites that aim to give consumers access to more housing market data.
It's possible Ontarians will be able to sign up for TRVL again one day.
The company could write a letter to TICO and the provincial ministry responsible for it, Smart said. While TICO would reply, there's a slim chance the regulator would budge from its position.
"If it's a question of my interpretation of the law, it's going to be pretty tough to change my mind," Smart said.
However, the provincial government is currently working to update the Travel Industry Act, partly to help the 2002 legislation better capture travel and home-sharing services. The new version could swing in TRVL's favour.
Wijnands said he will follow-up with TICO and the government in hopes of finding a solution.