In a quick Travel Weekly poll carried out last week, seven out of 10 agents said they knew what it meant if an accommodation-only supplier acted as a principal. Three admitted it meant very little to them.
Obviously, this was not an exhaustive test of agent knowledge. And clearly, being a good seller of holidays does not hang on whether you know the difference between working with bed banks acting as principals and those acting as agents.
So how important is it? Companies have been quick to wave the ‘principal’ flag at agents to drive sales, but how many agents are clear on exactly what they are booking and the terms and conditions?
In Travel Weekly’s straw poll most agents identified companies with principal status as those that take on the responsibility should something go wrong in resort, so the agent is not liable.
But most were vague on detail, and simply knew whether it was their particular company’s policy to only book bed banks acting as principals.
This meant knowing thedifference was less relevant on a day-to-day basis than being able to identify which had principal status and which did not.
“There are so many bed banks now. We only use approved ones that are principals but it would help agents if there was a logo to show if they are a principal or not,” said Peter Buckell, managing director of Global Travel Lounge, Sprowston, Norwich.
Tana Travel’s Philip Mannion said it was unlikely most agents would know the difference in bed bank status.
“A principal accommodation-only supplier will take on the responsibility for the whole booking. Not all agents realise that,” he said.
But according to Somewhere2stay.com, agents who do not understand the difference could get themselves in some serious hot water as liability depends on whether they book the accommodation as a one-off component on a separate invoice or with other elements to create a package.
“If agents book a bed with us, put it together with a low-cost flight on one invoice and sell it as a package, then they need to understand they could be liable,” said sales director Andy Washington.
However, given the choice, only 23% of Somewhere2stay’s agents are currently booking the company as a principal, with the rest choosing to book the company as an agent. This suggests the issue is not considered vital by many agents.
“We have seen volumes increase from those agents who don’t care about principal status but a lot of call centre agents are very clear and it is the customers who make the decision,” he said.
But he admitted: “With consortia it does boil down to individual agents and whether they know the difference.”
Group trade director Carl Burrows is concerned that many agents are not clear what principal status entails and the potential ramifications this could have on sales. “We will be educating agents on what being a principal means,” he said.
He claimed searches need to reflect the difference so agents don’t automatically choose a lower-priced company without principal status. “Technology providers need to apply some rationale behind the rankings to get across what a company has – such as resort support – against cheaper rivals.”
Hotels4U.com sales director John Harding, whose company has opted not to take principal status, argues a company’s actions should be the most important factor in an agent’s decision to book.
“Putting our money where our mouth is says much more than saying you are the principal and doing the minimum,” he said.
In his view, Hotels4U’s liability policy covering health and safetyissues, personal injury and death is both substantial and satisfactory cover for holidaymakers.
“Contractually we do not provide liability but in essence we will do whatever we have to, backed by a substantial insurance policy covering all of our 13,500 hotels,” he said.
He argued the term ‘principal’ is not enough to indicate precisely what a company would do if something went wrong during a holiday. “There are no minimum criteria to be a principal you just have toaccept liability,” he claimed.
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