CTC Supplier Relations & Negotiations Flashcards

What is a 'preferred supplier' arrangement in a travel agency context?

Answer: A supplier with whom an agency has a formal agreement to direct business in exchange for enhanced commissions or benefits

A preferred supplier arrangement is a formal agreement where an agency directs bookings to a specific supplier in exchange for enhanced commissions, client amenities, or other negotiated benefits.

What does 'override commission' mean in travel industry supplier contracts?

Answer: Additional commission earned above the base rate when an agency meets or exceeds a specified sales volume target

Override commissions are bonus commissions paid to agencies when they reach agreed-upon sales volume thresholds, incentivizing higher production with a preferred supplier.

What is a 'FAM trip' (familiarization trip) primarily designed to accomplish?

Answer: Familiarize travel agents with destinations, products, and services so they can better sell them to clients

FAM trips give travel professionals firsthand experience with destinations, hotels, and services so they can speak confidently and enthusiastically when recommending them to clients.

What is a 'net rate' in the context of hotel supplier negotiations?

Answer: A wholesale rate provided to agents from which they mark up to create their own retail price

Net rates are wholesale prices provided by suppliers to travel agents, who then apply their own markup to create the retail price charged to clients, allowing the agent to control their profit margin.

What is the primary advantage of a travel agency joining a consortium such as Virtuoso or Ensemble?

Answer: Enhanced preferred supplier agreements, higher commissions, and marketing support through collective negotiating power

Consortia leverage the combined booking volume of all member agencies to negotiate better commission rates, preferred supplier status, and marketing resources that no single small agency could achieve alone.

What does 'co-op advertising' mean in the context of travel supplier relations?

Answer: A supplier subsidizing an agency's marketing costs in exchange for featuring the supplier's products prominently

Co-op advertising involves suppliers contributing funds to subsidize an agency's marketing efforts when those materials feature the supplier's products, benefiting both parties by increasing exposure.

What does 'last room availability' (LRA) typically guarantee in a hotel preferred supplier agreement?

Answer: The hotel guarantees preferred rate availability even when the property is nearly fully booked

LRA guarantees that a negotiated preferred rate remains bookable even during high-demand periods, ensuring agents can always access the contracted rate right up until the hotel sells out.