Read and translate the text about the contractual relationship between hotels and travel companies.

In hospitality industry, a contract is an agreement or promise made between two or more parties that the courts will enforce. In other words, it is a set of rules governing the relationship, content and validity of an agreement between two or more persons. Normally, it is related to the sale of goods and provision of services. A valid contract can be considered as the moment that the offer is accepted. In general, a valid contract may be established either in writing or verbally. That means it can be a verbal form of contract, and it also can be a written form of contract.

It has been felt that hotels and tour operators should have a set of standard norms and procedures for working with each other. Although individual units and companies have the freedom to decide on their operating procedures and norms for relationships with other trading partners, there is a practice of setting a Code of Practice for both sides by their respective Associations. Internationally, such an agreement which is called Code of Practice on Hoteliers/Travel Agents relations was signed between International Hotel & Restaurant Association (IH&RA) and Universal Federation of Travel Agents Associations (UFTAA) on July 3rd, 1991.

In the absence of a contract and when non-contractual terms are under dispute, the Code of Practice seeks to provide useful guidance to hoteliers and travel agents with a view to promoting harmonious relations and avoiding possible misunderstandings or disputes. It includes general principles together with a list of definitions, a check-list for individual client and group contracts, arbitration rules, an individual and group cancellation chart, and an explanatory chart for cancellation policy for groups.

Read the text again and find the words or expressions that correspond to these definitions.

a. a set of rules governing the relationship, content and validity of an agreement between two or more persons

b. the moment when the contracting party’s offer is accepted by the party

c. a set of standard norms and procedures for relationships with trading partners

Read the articles of the Code of Practice and answer the questions.

Code of Practice on the Relations between Hoteliers and Travel Agents

Signatories

The signatories are: The International Hotel & Restaurant Association (IH&RA) and The Universal Federation of Travel Agents’ Associations (UFTAA).

Scope of the Code of Practice

The Code of Practice is intended to govern contracts known as "hotel contracts" between travel agents and hoteliers. If any article of the Code of Practice conflicts with national law or international law, the signatories acknowledge that such articleswould not apply.

 

Definition of the Hotel Contract

The "hotel contract" is a contract by which a hotelier agrees with a travel agent to provide hotel services, at a specified price, to a traveller or a group of travellers who are client(s) of the travel agent.

Reservation

Hotel contracts shall be initiated by a reservation request from the travel agent to the hotelier. Verbal reservation requests shall be confirmed immediately in writing (letter, telegram, fax, e-mail, etc.) to the hotelier. Reservation requests shall specify the services to be supplied.

Confirmation

Upon receipt of the reservation request from the travel agent, the hotelier shall confirm the reservation in writing, stipulating in particular the price of the services ordered by the issuance of a reservation number referring to the request. The hotelier shall refrain from accepting reservations which he cannot honour.

Upon receipt of the hotelier's confirmation or within a time-limit fixed by the latter, the travel agent must notify, in writing, his/her acceptance of the hotelier’s conditions.

Reservation Document

Acceptance of the voucher: If so agreed between the hotelier and the travel agent, the hotelier must accept a voucher. The travel agent acknowledges that the voucher issued to his/her client - for the hotelier - is a guarantee of payment, unless clearly specified otherwise.

Services to be specified on the voucher should include: dates of arrival and departure, hotel services to be provided and possibly the means of transport.

Vouchers covering an extension of hotel services are subject to prior written agreement between the hotelier and the travel agent regarding the services to be provided.

 

Questions

1. Who are the signatories of the Code of Practice?

2. What articles shouldn’t be applied by the signatories?

3. What is a hotel contract?

4. What are hotels contracts initiated by?

5. What should the confirmed reservations stipulate?

6. What is a voucher?

7. What are vouchers covering an extension of hotel services subject to?

Rates

The hotelier shall abide by the agreed contractual rates in the currency of the country where the hotel is located or any other currency stated in the contract. However, long-term contracts may contain a clause concerning adjustment of the rates.

Advance Payment

The hotelier may request either total or partial pre-payment. The hotelier may require a reservation fee or "advance payment" (earnest money or guarantee deposit) as a condition of his/her acceptance of the order. If the hotelier considers "advance payment" as "earnest money" it should be specifically stipulated. The reservation fee will be deducted from the final invoice but will not be reimbursed in case of late cancellation.

Any such advance payment may be treated as a "guarantee deposit", except when a cancellation is made in accordance with the hotelier’s written cancellation policy or customary trade practices. Whenever the hotelier requests an advance payment, the hotel contract shall be concluded only on payment of this amount or when proof of payment has been produced.

The hotelier shall acknowledge receipt of the advance payment no later than seventy-two (72) hours thereafter.

 

Payment due to the hotelier

The services payable by the travel agent are those specified in the confirmation document (hotel contract). The travel agent having concluded a hotel contract is responsible for payment of the specified services except when it has been agreed that the invoice shall be paid directly by the client.

In the case of a long hotel stay, the travel agent may be asked to pay the hotelier during the course of the stay for the services already provided, according to the terms of the contract.

In cases where the travel agent reserves hotel services to be paid directly by the client, the hotelier guarantees the travel agent’s commission on the confirmed services. For direct payments, the hotelier will accept only those credit cards for which he is accredited.