March 5, 2024

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It's time to think about Travel.

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

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Mark Pestronk

Mark Pestronk

Q: Our agency has won the organization of a midsize company whose vacation budget was about $1 million ahead of the pandemic. In our corporate account agreement, we have a clause stating that we will be the distinctive supplier of journey preparations for the time period of the deal and that the account will not use any other journey company. The account refuses to indicator the deal simply because it can’t completely guarantee that we will get all the small business. Is there an choice system that could be suitable to both parties?

A: There are many substitute formulas that I have produced over the earlier couple decades of composing and enhancing corporate contracts. Here, I existing them in a hierarchy of exclusivity, going from most exceptional to minimally special.

I have an understanding of the client’s posture, since there are frequently rogue vacationers who refuse to use journey companies in standard or the specified agency in unique. However, as a general rule, the tighter the exclusivity clause, the fewer the leakage you will put up with.

Very first, the suitable clause, which I notice your shopper has already rejected, would state some thing such as this: “Consumer shall chorus from working with any other vacation agency or travel management firm for the organization journey of client’s personnel and from bypassing company by earning travel arrangements straight with any airline, resort or vehicle rental organization or by coming into into a GDS deal right with any GDS vendor.”

Be aware that the clause not only prohibits the shopper from applying a further agency but also prohibits booking straight with a supplier. In scenarios wherever the GDS segments are very crucial to the economics of the offer, you could also want to prohibit the client from acquiring its have GDS contract, therefore depriving you of GDS incentives.

Second, you could concede an exception for at-airport changes and emergencies the place the traveler desires to have the airline reissue a ticket or the place a stranded traveler calls an airport hotel late at night time. While these preparations could be produced by contacting your immediately after-hours support, some tourists really feel the will need to get the job done with the supplier straight in an crisis.

So you could include this to the finish of the exclusivity clause: “The foregoing shall not use to vacationers at airports who desire to offer right with airways, hotels or car rental companies for very last-minute modifications.”

Third, if none of the over-famous clauses are suitable, you could present that the account ought to amend its travel plan to demand that all journey bookings go by means of your company. The difficulty is that vacation procedures are often full of exceptions or give no enforcement mechanism, but the bulk of staff members will certainly follow the journey coverage.

Fourth, as a substitute of an exclusivity mandate, you could present that the travel coverage be amended so that your company is selected as the “favored journey company,” “most important travel agency” or “most well-liked system of booking journey” for staff members. Though “preferred” and “main” have no apparent this means, they do at minimum tend to make personnel believe that they should really be employing your company.

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