An important legal issue for you as a travel agent working from home is when you book groups into hotels or resorts. In all cases, I never recommend that you sign the contract on behalf of the group. Instead, the contract should be between the hotel and the group you represent. You should also include specific language about the commission and the payment schedule for that commission you receive.
Some of my clients don’t like to include this language in the agreement, particularly if they have marked up the price. But the liability, in my opinion, far outweighs the potential additional revenue. Historically, hotels have standard agreements for meetings that are provided by the property’s corporate office. The group, meeting planner or travel agent usually signed the contract as it was presented. I don’t believe the situation currently exists in most instances.
It is not unusual for specific clauses to be changed in the agreements, typically through the use of a standardized addendum that has been reviewed and approved by the hotel’s legal department and senior management. Some of the issues usually covered in an addendum to the group and meetings contract include cancellation provisions, food and beverage clauses, fees, surcharges, payment terms and attrition penalties.
Today the hotel industry is moving back towards a seller’s market, but there are still opportunities for travel agents and groups to negotiate favorable agreements. A growing number of properties are willing to accept modified language, even if it conflicts with the language in the hotel’s standard agreement. The only way this can be resolved is to specify in the agreement which party’s language will override the other in the event of a conflict. As with any negotiations, market conditions influence the process, including whether the meeting will be held in a slow or peak season or if the property has a significant number of unsold rooms during that time frame.
The key issue in negotiating these agreements is to avoid disputes that can lead to litigation. That’s why it’s extremely important that terms and conditions of the contract and any addendum be reviewed and agreed to by both parties at the time the contract is signed. As the booking travel agent, you also need to make certain that the group has had an opportunity to review the contact. You also need a representative of the group to sign the agreement, not you.
As an agent working from home you have to remember that if the group has members located across the country, you may encounter state seller of travel licensing issues if members of the group you are booking reside in states that license travel agents, such as California, Washington or Florida. For example, if you and the group leader are located in Maryland, but other members are located in Washington, California or Florida, you and your host agency may have licensing issues with any of these states. In my experience, agents typically don’t have a problem in such situations, but a significant number of group participants residing in those states, so it may become an important issue.
Both you and your host agency should have a provision in the group contract that gives you the right, in the future, to contact individuals who travel with the group even if the group fails to use your services again. Group travel is an excellent source of future individual business. It is not unusual for group leaders to prohibit this type of language in order to restrict future contact with members of the group. If the group involves a significant amount of room nights, it is probably worthwhile discussing the possibility of obtaining insurance to protect the group in the event penalties are incurred as a result of failure to meet the terms and conditions of the contract.
I also recommend that there be language in the agreement that prohibits the hotel from contacting the group directly for some period of time to avoid the possibility of the group booking the same property in the future and the hotel not paying you a commission. I have seen circumstances where an agent negotiated with the hotel, but before any contract was signed the group approached the hotel directly and negotiated a lower, non-commissionable rate.
If you follow the guidelines I set forth in this column you can protect yourself from a liability standpoint as well as enhance your revenue potential in booking groups at hotels and resorts.