Q: Can my CRS vendor prohibit my agency from using another CRS as
we grow? If not, can my vendor cut its bonuses, or even require us
to pay back bonuses already paid, if we use another CRS?
A: The U.S. Department of Transportation's CRS rules prohibit
any CRS vendor from directly or indirectly impeding you from
obtaining or using any other system.
The rules mention three examples of such prohibited behavior:
requiring a minimum level of usage from a system; requiring a
minimum ratio of the vendor's hardware to another vendor's
hardware, and requiring a minimum ratio of bookings to your
bookings on the other vendor.
These rules have been in effect since 1992, and I predict they
will stay in effect once the DOT reexamines and reenacts the CRS
rules next year.
However, since 1992, the vendors have interpreted these rules as
prohibiting only the kinds of clauses under which you would breach
the CRS contract by doing or having less than the minimum.
The vendors believe -- and the DOT evidently concurs -- that
there is nothing wrong with gearing bonuses to minimum usage and
ratios.
For example, Galileo's "financial assistance attachment" (i.e.,
the amendment covering the bonuses) often states that bonuses are
discontinued if your usage of the system falls below a certain
level and that you must then repay certain bonuses, too.
This provision clearly inhibits your ability to use a second
system, but Galileo believes it to be legal.
Another vendor -- which shall remain nameless because it has
been gracious enough to eliminate the offending clause for my
clients -- often insists that, as a condition of receiving bonuses,
you must use the system for at least 95% of all your CRS
bookings.
Because you must sometimes consider taking on a second system to
placate the major airline or account that insists that you use its
favorite system, you should try to eliminate all these minimum-use
and ratio clauses if you can.
Large agencies also have noticed that bonuses can become limited
in a more subtle way if you use multiple systems.
Usually, a travel agency with 500,000 bookings on just one
system will get better bonus offers than another agency with
500,000 on one system and 500,000 on another system.
CRS vendors don't like agencies that play on two teams as much
as they do agencies that are 100% committed to their team.
Mark Pestronk is a Fairfax, Va.-based attorney specializing
in travel law. He answers your questions in the Crossroads' Legal Issues Forum.