Know when and where you can negotiate

Mark Pestronk

Q: Whenever I peruse a travel supplier’s standard contract, I am struck by its one-sidedness. I often wonder whether any of the legal terms are negotiable. However, when I try to propose a change that would benefit our midsize agency, I am usually met with a statement such as, “Our policy is not to change that clause” or some such excuse for saying “no.” In your experience, are some travel supplier contracts more negotiable than others?

A: Over the years, I have developed a hierarchy of negotiability. Here is my list of 10 common kinds of agreements, going from the least negotiable to the most negotiable:

1) ARC and Iatan agreements: These standard agreements are sacrosanct, as I know of no changes that any travel agency has been able to negotiate by itself. Although ARC and Iatan may not always strictly enforce the contracts, they don’t change them unless they or their advisory councils initiate the changes.

2) Airline override agreements: The major U.S. carriers do not entertain changes, even to the most unfair clauses. They treat override contracts as a privilege that the agency should be grateful to get without objection.

3) Car rental commission and discount agreements: Nobody at these vendors seems to have any authority to agree to changes to the standard terms and conditions, so the agreements are generally treated as “take it or leave it.”

4) Airline commission and discount agreements: If an agency is big or strategically important for an airline, the carrier may offer commissions, corporate discounts and waivers, but it is rare that any agency is able to negotiate changes to the legal terms.

5) Hotel commission agreements: These agreements are somewhat rare, as most agencies just settle for industry-standard commissions for hotel bookings. Some large agencies and consortia have their own agreements with large chains, which are sometimes amenable to changes in the legal terms.

6) Cruise commission agreements: In my hierarchy, we now move into the realm of the more amenable suppliers. Some of the legal terms in some cruise line commission agreements can be changed if you make a good case for yourself.

7) Cruise group agreements: More so than standard commission agreements, standard terms in cruise group agreements are often negotiable.

8) Ship charter contracts: When your agency or one of your clients takes all the space on a small or large ship, you often have a lot of leeway to change the standard terms that don’t deal with operation of the vessel.

9) Tour operator commission agreements: Many operators (especially those with in-house attorneys) are amenable to changes in their standard terms and conditions if you are an important source of business.

10) Hotel group contracts: Hotels will often agree to multiple changes and additions to the legal terms of their group contracts, if your group has hundreds or even thousands of room nights and know what changes to request.

There are undoubtedly exceptions to each of my generalizations, so your experience may well differ from mine. 

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