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

Q: Our agency has received the business enterprise of a midsize corporation whose vacation funds was about $1 million before the pandemic. In our company account agreement, we have a clause stating that we will be the exceptional provider of journey arrangements for the expression of the agreement and that the account will not use any other travel company. The account refuses to sign the agreement because it are not able to certainly promise that we will get all the business. Is there an option components that may possibly be satisfactory to each functions?

A: There are a number of different formulas that I have produced over the past handful of many years of producing and enhancing corporate contracts. Below, I present them in a hierarchy of exclusivity, likely from most distinctive to minimally exclusive.

I realize the client’s place, mainly because there are usually rogue vacationers who refuse to use vacation organizations in normal or the specified company in distinct. Even so, as a typical rule, the tighter the exclusivity clause, the significantly less the leakage you will go through.

Very first, the excellent clause, which I notice your shopper has already turned down, would condition a little something these as this: “Consumer shall chorus from making use of any other travel agency or vacation management enterprise for the organization journey of client’s employees and from bypassing company by producing travel preparations directly with any airline, resort or vehicle rental corporation or by getting into into a GDS contract directly with any GDS seller.”

Note that the clause not only prohibits the customer from employing another company but also prohibits booking directly with a provider. In circumstances where by the GDS segments are very essential to the economics of the offer, you may possibly also want to prohibit the client from obtaining its possess GDS contract, thus depriving you of GDS incentives.

2nd, you could concede an exception for at-airport changes and emergencies the place the traveler wants to have the airline reissue a ticket or wherever a stranded traveler calls an airport lodge late at night. Whilst these preparations could be produced by calling your immediately after-several hours support, some vacationers really feel the have to have to work with the supplier instantly in an crisis.

So you could incorporate this to the stop of the exclusivity clause: “The foregoing shall not utilize to tourists at airports who want to offer specifically with airlines, hotels or motor vehicle rental companies for last-minute adjustments.”

Third, if none of the previously mentioned-noted clauses are suitable, you could give that the account must amend its travel coverage to require that all vacation bookings go through your agency. The trouble is that journey guidelines are usually complete of exceptions or deliver no enforcement mechanism, but the the greater part of workforce will certainly adhere to the journey coverage.

Fourth, alternatively of an exclusivity mandate, you could present that the vacation plan be amended so that your agency is designated as the “preferred journey agency,” “major journey agency” or “desired method of reserving journey” for employees. Whilst “most popular” and “principal” have no crystal clear this means, they do at least have a tendency to make staff imagine that they need to be making use of your agency.