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When Collaborating with Online Tour Agencies

How to Prevent and Handle Disputes in Contracts

 

STUDENT PAPER

By Erhang Zhou

SKEMA Business Schou

Lille, France

 


 
ABSTRACT

Travel industry has faced many new issues and disputes as the Online Tour Agencies (OTA) has emerged and become a main trend to sales and distributions of tour operators. With new channels to improve sales, many tour operators and providers are willing and eager to work with OTAs. However, as indeed more potential clients are reached through the efforts of OTAs, many disputes also appeared during the partnership. Most of the reasons behind are commissions related, privacy and intellectual property breach or other issues related to interest of either party, which are actually prevented and properly handled through a comprehensive contract.

Therefore the aim of this paper is to find out what kind of disputes clause can be considered and applied in drafting a contract between OTAs and tour operators. By comparisons of several references the muti-attributes decision analysis will be used to see which one is better practice in travel industry.

The findings show that while they all share some common standing in regulating disputes. Some part of each alternative will give some weights on the final preferred options for industrial players to consider when they want to enter a contract to extend their business with OTAs.

In summary, risk attitudes, decision making and disputes procedures compliance will be three major components to reflect to what extend both parties prepare ready to cater for foreseen and unforeseen risks and potentials disputes arising from the risks. Travel industry is changing with the clients’ ideas and habits. So it is necessary to adjust providers and OTAs cooperation in order to provider quality service and responsive after-service to their clients.

Keywords: Online tour agency, tour operators, distribution channels, contractual disputes, Agent-Tour Operator Relations

INTRODUCTION

More and more brick-and-mortar traditional tour agencies extend their distributions channels to online services. It is a smart move to follow the trends with the rise of technological and global economic advances. Mostly people, for personal leisure or business trips, will search a destination on the searching engine and many major online tour agencies will come out.

Online tour agencies (OTAs) is a new norm of e-tourism arises and becomes a trend.  First it is vital to understand the difference between tour operators and online tour agencies (OTA).  A tour operator provides designed or tailored services for customers ‘trip to or at a destination, including the signing contracts or agreements, booking and accommodations either separately or in a  package as a  or more product sold to the end-user, the customer, or the travelers. Tour operator can be a hotel group, a cruise trip provider, a city tour provider, or operator providing services of transportation, guides, meals and airline flights.

The mechanism of online tour products sales channels are booming with great momentum. OTA takes prides in their powerful sales and marketing approaches and serves a platform that sells different tour products and service, and the tour operators or tour providers. Travelers, or the customers benefit a lot from multiple travel products.

Complains by customers happens against either the direct tour operators or the OTAs where the products and services are sold. In most cases customers are the victims that have nowhere to get a refund or a responsible responses. These are dependent on the contractual relations established by the OTAs and tour operators.

Therefore this paper is intended to answer the following questions:

  • What are common clauses for claims and disputes in the contracts between OTAs and tour operators?
  • What are the unresolved disputes and how they arose?
  • How to improve dispute resolutions in contracts?

More…

To read entire paper, click here

 

Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected].

How to cite this paper: Zhou, E. (2018). When Collaborating with Online Tour Agencies, How to Prevent and Handle Disputes in Contracts, PM World Journal, Volume VII, Issue VIII – August.  Available online at https://pmworldjournal.net/wp-content/uploads/2018/08/pmwj73-Aug2018-Zhou-contract-disputes-with-online-tour-agencies.pdf

 



About the Author


Erhang Zhou

Lille, France

 

 

 

Erhang Zhou, CAPM, is a Master of Science student enrolled in Project and Program Management and Business Development in SKEMA Business School, Lille Campus, with 3 years working experiences in hospitality and investment sectors. She is currently residing in Lille, France and can be contacted at erhang,[email protected]