How Can Travel Agents Protect Client Relationships with Hotels?

by Paul Ruden
How Can Travel Agents Protect Client Relationships with Hotels?

There is a straightforward way to protect yourself against this kind of client capture. Photo: Shutterstock

I heard recently that an old problem I thought we had vanquished has re-emerged. This is the situation in which the travel advisor has a client looking for meeting/event space or maybe is working with a group that is interested in hotel options before making a commitment. The travel advisor may actually visit the candidate properties with the client for a visual inspection of rooms and conference or other relevant space. Then, an ugly surprise occurs when the hotel contacts the client directly to offer a “better deal” that bypasses the advisor who initiated the contact.

This often led to cries of “Foul,” based on some vague idea of business ethics. While there is merit in doing business in a way that respects the contributions of others, ethics, sadly, is a weak reed on which to depend in this, and most other, highly competitive industries.

There is a straightforward way to protect yourself against this kind of client capture. Forewarning: Using this approach may lead to faux reactions of personal dismay that anyone would possibly think the hotel would do such a thing as divert a client brought by their trusted partners in the travel advisor business.

The response is: “This isn’t about you. It’s a standard business practice I use in every case where I am introducing my clients to suppliers. In the end, the decision to pre-empt me may not be yours. My approach prevents later awkwardness for everyone involved. Why don’t we just execute this short agreement and move on to the revenue opportunity for both of us in our mutual effort to make my client happy?” Or words closely to that effect.

Travel advisors tend to be easy marks for this kind of thing and are sometimes reluctant to show the hotel that they are concerned about the hotel’s management when trying to negotiate an event deal. It’s a tough spot, but you must exercise self-help in these cases and, if the hotel refuses, you should take the client elsewhere.

Execute a preemptive agreement
The technique here is to present the hotel with a short agreement before exposing a client to anyone there. The thrust of the agreement is that the inspection of the property is for the possibility of bringing business to the hotel and that the hotel agrees not to interfere with the agent-client relationship by offering a better deal to go direct.

This agreement does not have to be complicated or use a lot of technical language. The reality is that, in most cases, the travel advisor is not going to sue a hotel for violating the agreement; the advisor will simply stop doing business with that property or company, and, hopefully, let them know why. No, the real point of the agreement is to imprint in the hotel management’s mind that you are bringing them a business opportunity and that you expect to be treated respectfully. In most cases, that will do the trick. If not, you know what to do.

As for the exact content of the agreement, it does not require complex legal language. The essential elements include: a sentence identifying all the parties (but not providing identifying information about the client – don’t become an enabler of the bypass); a few sentences about why you are inspecting the hotel; and a statement that the parties (you and the hotel) agree that the hotel will take no action to circumvent your role in bringing them this business and will pay your commission, as agreed, if the client hires the property. It is, as usual, most wise to consult your counsel to draft the agreement, or at least review your draft.

One last observation: Language matters. When you are guiding a client through a property inspection, be clear to the property management that the client is depending on you for a recommendation. You are not simply along to provide transportation to various hotels. You are an essential part of the deal that will, or will not, be made. Be subtle but clear: I am a “player” in this transaction. Doing this will help management understand that they need to treat you properly or face consequences.

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