A look at exclusivity clauses in corporate travel contracts: Travel Weekly

BySteven I. Green

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Mark Pestronk

Mark Pestronk

Q: Our agency has gained the organization of a midsize corporation whose vacation spending plan was about $1 million right before the pandemic. In our corporate account agreement, we have a clause stating that we will be the exclusive service provider of travel preparations for the phrase of the agreement and that the account will not use any other travel agency. The account refuses to indication the contract since it can’t certainly assure that we will get all the business enterprise. Is there an different formula that could be suitable to the two events?

A: There are numerous option formulation that I have created about the earlier couple many years of creating and enhancing company contracts. Right here, I present them in a hierarchy of exclusivity, likely from most exceptional to minimally exclusive.

I understand the client’s place, because there are usually rogue vacationers who refuse to use vacation companies in typical or the specified company in particular. However, as a common rule, the tighter the exclusivity clause, the less the leakage you will suffer.

Very first, the suitable clause, which I comprehend your customer has presently turned down, would point out a thing these types of as this: “Consumer shall refrain from making use of any other journey company or travel administration company for the enterprise travel of client’s employees and from bypassing agency by earning vacation arrangements immediately with any airline, lodge or vehicle rental organization or by getting into into a GDS deal instantly with any GDS vendor.”

Observe that the clause not only prohibits the customer from working with a different agency but also prohibits reserving instantly with a provider. In situations the place the GDS segments are pretty critical to the economics of the deal, you might also want to prohibit the consumer from acquiring its possess GDS contract, thereby depriving you of GDS incentives.

2nd, you could concede an exception for at-airport modifications and emergencies in which the traveler needs to have the airline reissue a ticket or the place a stranded traveler calls an airport lodge late at evening. Although these arrangements could be created by calling your after-hrs support, some tourists experience the want to operate with the provider straight in an crisis.

So you could include this to the finish of the exclusivity clause: “The foregoing shall not utilize to travelers at airports who would like to offer right with airlines, resorts or vehicle rental businesses for very last-moment adjustments.”

3rd, if none of the earlier mentioned-observed clauses are satisfactory, you could provide that the account ought to amend its journey plan to involve that all vacation bookings go as a result of your agency. The problems is that travel guidelines are often comprehensive of exceptions or supply no enforcement system, but the bulk of employees will absolutely observe the travel coverage.

Fourth, instead of an exclusivity mandate, you could give that the vacation coverage be amended so that your agency is specified as the “most popular vacation company,” “principal travel agency” or “preferred process of booking journey” for staff. Despite the fact that “favored” and “most important” have no apparent indicating, they do at the very least are inclined to make personnel feel that they should be applying your agency.

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