Destinations

Dynamic Packaging: is your agency covered? – 24 May 2007

Since the death of two children from carbon monoxide poisoning at the Louis Corcyra Beach Hotel in Corfu last October, the issue of hotel providers gaining principal status has quickly gathered pace.

Such a shift means accommodation-only suppliers will become financially and legally responsible for incidents, rather than the agent that takes the booking.

As the Louis Corcyra Beach Hotel was booked as part of a package, Thomas Cook is facing a costly legal battle Ð one that could force a smaller, independent agency to fold.

Consequently, from next Friday, Medhotels.com will officially adopt principal status, increasing the legal and financial protection it gives agency customers.

“We are providing agents with the protection they need and giving them a higher level of commitment by setting rigorous standards on health and safety checks,” said commercial director Carl Burrows.

Since the decision by super- consortium Triton – made up of Advantage, Worldchoice and Global – to take all non-principal status companies off its preferred supplier list, Holiday Brokers has also announced it is will act as principal only if agents want the protection.

Unlike many rivals – who will continue to avoid such responsibility by only acting as the booking agent – Medhotels decided to move to principal after research concluded agents wanted the peace of mind.

But Hotels4U.com has already taken a U-turn on adopting principal status.

“The accommodation-only sector works on thin margins,” said sales and marketing director John Harding. “The increased cost is one of the reasons we haven’t adopted principal status but it’s only one of the reasons.”

Lowcostbeds.com chief executive Paul Evans also admitted he had no intention of moving to principal status, suggesting the increased costs would have to be passed on to the consumer, making them uncompetitive in an increasingly competitive environment.

But Medhotels plans to absorb the extra costs by using the buying power of parent companies Lastminute.com and Sabre to make sure prices remain competitive.

“Becoming principal is a strategic business decision on our part and our clients will remain unaffected.” concluded Burrows.

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