By Jonathan Gonzalez
Many individuals in the travel and leisure industry incorrectly believe that their businesses are immune from compliance issues. I recently had a small sports ticket and travel company contact me for advice on how to handle a major compliance issue. Their story is further evidence that compliance professionals need to be educators in the field, and point out areas ripe for compliance problems to our peers in emerging industries.
As a record number of travelers seek to attend sporting events around the world, the sports ticket and travel industry has seen an increased need for compliance monitoring. What once was a cottage industry seeking to assist the very wealthy has turned into a global industry with millions of customers of all ages, genders, and socioeconomic backgrounds. With growth of course comes compliance problems.
The interplay between compliance and travel and leisure is perhaps best displayed by the large number of fraud cases reported in the ticket industry. This issue casts doubt on the industry as a whole, and is the perfect example of a few bad apples spoiling the “bunch” of providers trying to make vacation travel easier for their customers.
As mentioned above, I was contacted by a ticket and travel company who recently contracted with a large European ticket broker to distribute soccer tickets to fans traveling overseas. As part of the arrangement with the travel provider, the ticket broker was to hand deliver season ticket badges to the travel company’s clients, and return them when the matches were completed.
As luck would have it, the ticket broker turned out to be a fraud, and the American travel company was left holding the financial bag on thousands of match tickets. Suffice to say, the company could not afford to repay the hundreds of thousands of dollars in damages suffered to overseas travelers, and sadly had to expend all of its profit to repay its customers.
As compliance professionals it is our job to reach out to emerging industries like sports travel and inquire with them as to what their potential compliance issues may be. We need to be educators in the field so that good companies who try and do right by their clients aren’t spurned like the travel company that was the subject of this blog. Indeed, compliance issues come from unexpected sources and relationships, and we have a duty to engage one another to ensure that all avenues are explored. As the old saying goes, we need to “keep our eyes and ears open.”