Mark Pestronk
Q: A travel supplier recently presented our agency with a contract for a major group movement. The contract was clearly the supplier's standard form, and quite a few of the clauses were very one-sided. This led me to wonder to what extent the contract could be changed to roll back some of the one-sided clauses and to accommodate our particular needs. In your experience, which kinds of travel suppliers are most likely to agree to changes and which are not?
A: If your agency has sufficient volume, negotiating, ability and patience, all supplier contracts can be changed to some extent. However, some suppliers are more amenable to negotiation than others. From least to most negotiable, my experience is as follows:
- Home and villa rental contracts. These are standard forms, and the vendors don't allow much negotiation, especially on the legal terms.
- Tour operators' participant contracts. Same as above. These contracts are largely "take it or leave it," and they always favor the operator.
- Airline contracts, especially market-share override contracts. Airlines can be arrogant and unwilling to make special deals with travel agencies, and foreign carriers may not have the local staff to deal with contract changes. One exception is charter contracts for large groups, such as college teams, as airlines are more flexible if you or the team is chartering the plane. Another exception is consortium commission contracts, which are negotiated on behalf of many agencies.
- Cruise line contracts. Passenger and group contracts issued by cruise lines are largely unchangeable. However, if you charter an entire ocean or river ship, requests for contract changes will be seriously considered and may well be accepted.
- Hotel group contracts. Practically all of the terms can be negotiated, even the standard legal terms, such as disclaimers and identification. For large groups, including meetings, conventions and destination weddings, agencies find that both chains and individual properties are amenable to making them somewhat more favorable.
- Destination management company and ground handler contracts. These companies are eager for your business, and you will find them amenable to changing many of the contract's business and legal terms.
If the supplier has a standard set of online terms stating that by sending in your deposit, you agree to those terms, don't assume that the terms are non-negotiable. You can change online terms by drafting an amendment with the changes, as long as the amendment can be signed by both parties. Just don't send in your deposit until the supplier has agreed to the amendment's terms.
A piece of advice: When suppliers send their contracts using software that captures your electronic signature, such as Docusign, don't assume that the agreements are any less negotiable than contracts sent to you in any other way, such as by email attachment.
And finally, if a contract requires you to assume a risk of unsolved rules or seats, try to put the contract in the client's name instead of yours so you will not be liable for attrition or cancellation penalties.