Mark Pestronk
Mark Pestronk

Q: In recent columns, you have covered how disclaimers should be changed for advisors and tour operators ("Refund policies will surely be changing," June 15; "Clauses retailers should add to disclaimers," June 22). Our agency specializes in corporate accounts, making us a travel management company, or TMC. For our agency's corporate accounts, we have contracts in place that protect us in various ways. I imagine that, like leisure advisors and others, TMCs ought to have new protections in their corporate contracts during the current crisis. What new protections would you recommend?

A: With corporate travel down more than 80% year over year, some corporate procurement officials and corporate travel managers are taking this opportunity to review their TMC contracts. If you have the opportunity to amend your current contract or enter into a new one with new or existing corporate accounts, here are some changes that will protect you during the current or future crises:

• First, you can try adding transaction fees for processing refunds, handling exchanges and tracking unused e-tickets, all of which the typical TMC does not now charge for, in my experience. So many TMCs spent the spring on non-remunerative transactions such as these that they suffered huge losses as a result.

• Second, you can propose a monthly, quarterly or annual minimum fee, in case travel volume picks up but then dips again in a second wave of the virus. For example, if the account used to have 2,000 annual transactions generating $35 per transaction, you were making $70,000 in fees. If you need at least half of that in order to stay in business, a minimum monthly fee of $3,000 may keep you in business and still be acceptable to the account.

• Third, you could subscribe to a travel-risk warning service such as International SOS, World Aware or Intelliguide and then propose a fee each time you send a risk report along with the itinerary. If that is acceptable to the account, you should also provide that you have no liability for what the service warns or fails to warn about.

• Fourth, although your contract undoubtedly already states that you have no liability for the acts or omissions of travel suppliers, you might want to specify that such acts or omissions include failure to honor future travel credits, bankruptcy and cessation of services.

• Fifth, since the account may try to blame you for negligently recommending a supplier that goes bust after providing a future travel credit, you might want to add a clause stating that you have no liability for recommending a future travel credit in lieu of a refund.

• Sixth, regardless of whether you or ARC are the credit card merchant for your transaction fees, you should provide that you earn the fees when you perform the service and that the account agrees to indemnify you against fee chargebacks. ARC will automatically debit all disputed transaction fees, so you will at least have a claim against the account for reimbursement if the account disputes the card charges.

If the account uses the increasingly common Master Services Agreement and Statement of Work formats, you can add these clauses to either document. 


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