Q: In the Sept. 19 Legal Briefs column, “Travelport’s ‘updated’ contract worth a wary read,” you pointed out some of the ways in which Travelport’s new, standard contract for travel agencies is exceptionally one-sided. What about Sabre, which more U.S. agencies have than any other GDS? Has Sabre revised its 15-year-old standard contract, and if so, is it as onerous to agencies as Travelport’s?
A: Sabre does indeed have a new Sabre Subscriber Agreement, which it is sending to some or most agencies that are renewing their contracts. While it contains several changes that turn the screws on subscribers, it is not nearly as oppressive as Travelport’s latest subscriber agreement.
For example, whereas the Travelport agreement has clauses stating that the agency can be declared in default for merely failing to make the expected number of bookings, Sabre has no such clause. Another example: Travelport can raise its monthly fees to whatever it wants as many times as it wants, while Sabre limits itself to 5% per year.
However, both standard agreements allow the vendor to cut incentives, impose fees for existing services that are now provided without charge and otherwise potentially ruin the benefits of a long-term GDS relationship. Sabre’s new form allows it more much leeway than the previous one.
Under the former Sabre standard agreement, Sabre could lower any incentives “due to a reduction in participant booking fees,” but if Sabre did so, then the agency could get out of the contract. Under the new form, Sabre can also cut incentives due to “airline participation levels within Sabre; or alterations in the mix of participants booked by subscriber.” So if an agency shifted from, say, higher-fee-paying airlines, such as foreign carriers, to lower-fee payers, such as domestic carriers, Sabre could lower segment incentives even if the agency’s contract provided for the same incentives for all bookings.
- Related: Getting a handle on your technology contracts
Further, Sabre has deleted the agency’s right to terminate the contract if Sabre cuts incentives, so if Sabre does so, the agency is stuck with the long-term contract.
If you decide to convert systems at the end of your agreement, Sabre then does not have to pay any productivity incentive unless you renew. If you let the contract go month to month, Sabre does not have to pay anything for those months.
If you suffer a deterioration in your “financial circumstances” as determined by Sabre, it can demand a security deposit equal to three months’ worth of future charges, and it can terminate you if you don’t post it.
On the key question of whether NDC bookings will accrue incentives or incur fees, or both, the contract is silent. In fact, the agreement inexplicably fails to mention NDC at all.
These are just some of the ways in which the new Sabre agreement contains traps for the unwary. Whether you will be in a position to do anything about these traps depends on your size, and most Sabre agencies will probably have to hold their noses and sign the contract as is.
Source: Read Full Article