Mark Pestronk
Q: I am reviewing GDS contract offers from two of the three GDS vendors, Sabre and Travelport, and I am noticing that a lot of business and legal terms aren't in the contract itself but rather on a website or on documents that don't seem to be part of the contract. Is this a new trend? As a matter of contract law, if key business and legal terms are not in a contract, doesn't their absence make the contract unenforceable?
A: You have identified an unfortunate trend. Hiding the prices and terms is not entirely new, but those vendors are putting more and more key terms in places outside the contract that you sign.
The trend matters because, for large agencies that specialize in corporate travel, such as many of those on the Travel Weekly Power List, GDS incentives remain the largest single source of revenue. For smaller agencies, GDS incentives can still be important, if they use the GDS for most bookings.
Since I have never represented GDS vendors, I don't know the purpose of the trend, but I would speculate that it enables the vendors to more easily lower incentives, raise fees and erase any legal protections that agencies have.
The trend started with Sabre. Some years ago, it put all its numerous fees (which are typically deducted from incentives) on a website called Central.sabre.com, and you can access it only with a password. The contract provides that the fees may also be listed on an addendum to the contract, but if an agency asks it, Sabre reps usually decline to add the addendum.
By listing the fees on a website, Sabre can change them at will. Sabre contracts used to state that fee increases were limited to a fixed percentage per year, but that limitation is missing from new contracts.
Lately, Sabre has put its NDC incentives, if any are offered, and its NDC fees in a separate document called Global Agency New Distribution Capability ("NDC") Program & Other Matters -- General Terms and Conditions. This document appears to be neither a separate contract nor an amendment to an agency's existing Sabre contract but rather just a standalone set of terms. Importantly, one of the terms is that "Sabre may, at any time ...(i) add or remove content sources and/or types from the Global NDC Program Content; and (ii) discontinue offering some or all of the Global NDC Program Content."
Travelport's standard contract is even more one-sided. The agreement incorporates a 56-page set of terms and conditions. They allow the vendor to cut incentives more or less at will. They are also frequently "updated," and the updates bind the agency to the revised terms.
In short, these standard GDS contracts contain some fixed terms but leave many others unspecified and open to unilateral changes by the vendor. Unfortunately, these agreements would probably pass muster as a matter of contract law because they contain enough fixed terms to make them enforceable.