Travel Agency - NOTES/REVIEWER PDF

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TRAVEL AGENCY OPERATION AND MANAGEMENT Travel Management Companies/Travel Agency Tourism Code of 1980 A Travel and Tour Agency is an entity engaged in the business of extending to individuals or group travel services and assistance to include documentations, ticketing, booking for transportation and/or accommodation arrangements, handling and/or conduct tours within or outside the Philippines whether or not for a fee, commission or any form of monetary consideration. Travel Agency – a commercial establishment where a prospective traveler can secure information, expert advice and make arrangements to travel by air, sea or land to any part of the world. Travel Agent – sells and administrates tour packages. – helps you to choose a suitable package. – job ends when you start your vacation. – less responsibility than tour operators. How do Travel Agency makes money? • • •

Service fee Net/private fares/commissions from the airlines, and; Contracted rates/commissions from hotels.

History of Travel Business 1822 – Robert Smart of Bristol England – –

First steamship agent Lynmouth harbor port village coast sea boats Bristol channel North Devon England Europe Great Britain.

1841 – Thomas Cook – – –

First rail excursion agent He began running excursion train from Leicester to Loughborough 12 miles trip He carried 570 pax

1850 – Thomas Bennett – –

First specialist in individual inclusive travel Set up a business as a trip organizer and provider

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Tourist with itineraries, carriages, provisions and a travel kit He frequently arranges individual scenic tour in Norway.

Types of Travel Agency Consortium - A group of travel agencies that enter into a voluntary association to share resources in order to gain market advantage. In travel, usually used to refer as groups of supplier that offer higher commissions and other incentives to travel agencies. General Sales Agent (GSA) - Travel agencies that act as a sales and marketing representatives for foreign travel companies, allowing them to have offices in countries other than where their headquarters are located. - The GSA receives commission of around 3-5% on all the tours/land arrangements sold in the region/country that they represents. Retailers - Sell tourist products directly to the public on behalf of the product suppliers and in return gets commissions. Consolidators - High volume sales companies that specialize in niche market. They may or may not various types of services at single point of access. These can be hotel reservations, flights or car rentals and at times the services are combined into vacation packages. - They do not sell their product directly to the public, but act as wholesalers to retail travel agencies. The sole purpose of the consolidators is to sell to ethnic niches in the travel industry. - No consolidators offers everything; they may only have contracted rates to specific destinations. Online Travel Agency (OTA) - Online companies whose websites allow consumers to book various travel related services directly via internet. They are third party agents reselling trips, hotels, cars, flights, vacation packages, etc. provided/organized by others.

Comparison between Full T.A. and Online T.A.

FULL SERVICE TRAVEL AGENCY Expertise. Can suggest and arrange travel plans. Service. During cancellation, rebooking, assistance is on the way. The hassle will be pass on to agents. Can block the same rates within 24 hours or more. No hidden charges/fee.

Makes travel less stressful. Provide attention.

personalized

ONLINE TRAVEL AGENCY Convenient. Booking anytime day or night. Easy access. You can check the customer reviews of the things/places you want to go. Less phone time. Price. You can shop around and choose the best price. Get instant answer to availability inquiries. With hidden charges/fee.

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Travel Management Company Cycle -

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Providing travel information and advice First step is to obtain all necessary information from the prospective client and providing suitable recommendations that meets the client’s needs, preferences or fancies; this will enable the preparation of a travel arrangement proposal and the checking of availability of proposed suppliers. Determining fares, rates and professionals fee Putting together the costs of transportation, accommodations, sightseeing tours and tour packages, cruises or other service included in the itinerary is the next step. Part of this step is to determine the appropriate mark-up, service charge or professional fee and seek the client’s acceptance of the proposed travel arrangement. Preparing quotations and travel proposals This step aims to get the client’s consent on the travel quotation or proposal and agreement to reserve and purchase the travel services based on the price proposed or amount indicated. Requesting reservations and obtaining confirmation This step entails requesting for space or services with the suppliers in advance by preparing all necessary forms and correspondence. Obtaining the corresponding confirmations and seeking alternative suppliers in case of need – when space is fully booked is also included in this step.

Using tickets, tour vouchers and exchange orders Once all arrangements are confirmed, preparing and issuing transportation tickets exchange orders and tour vouchers for the suppliers is the next step. Providing travel documentation assistance On a case-to-case basis, provide assistance in the preparation, filing and acquisition of all necessary documents for travel and the necessary supporting documents thereof. Processing travel accounts This step involves the collection of final payments due from clients and payment due to suppliers. Evaluating delivery The last step is the assessment of the clients’ satisfaction in the travel arrangements. This is usually a post-trip activity.

What is travel? Travel is moving location using different types of transport. • • • •

Road Air Sea Rail

Though we know that travel is changing locations, a travel agency serves two types of clients: • •

Business travelers Leisure travelers

What are these two types of clients required? The requirements of these tourists are different and an agency has to assemble or purchase-related components from the principal suppliers to cater to their needs. There were travel linkages comes in…..

Travel Linkages Transportation Companies

Transport providers are those operating any major form of transport. They could be: Airlines Cruise lines Car rentals Rail companies A tourist’s choice of transport would depend on the travel budget, destination, time, purpose of the tour, and convenience to the point of destination. Airline Companies The list of Airlines enumerates local airlines in the Philippines which have a current Air Operator’s Certificate issued by the Civil Aviation Authority. o

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Passenger Airlines – an airline dedicated to the transport of passenger. Mainline airlines or Premium airline, operates flights by the airline’s main operating units. Also known as “full service” or “legacy” Low-cost carriers, giving a “basic”, “no-frills” and perceived inexpensive service. Business class airline, an airline aimed at the business traveler, featuring all business class seating and amenities. Flag carrier, the historically nationally owned airlines that were considered representative of the country overseas. Regional Airlines – airlines that operate over shorter non-intercontinental distances, often as feeder services for legacy mainline networks. Charter Airlines – operating outside regular schedule intervals; renting an entire aircraft. Cargo Airlines – or airfreight carriers are mainly dedicated to the transport of cargo by air.

Cruise Line Companies Cruise products available in the Philippines today are divided into:

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Domestic Maritime Products International Luxury Cruises

Car Rental Companies May be chauffer driver or self-drives. Most travel agencies are able to book a selection of vehicle types anywhere in the world. As a rule, a valid international driver’s license is REQUIRED. Some may be DOT ACCREDITED TOURIST TRANSPORT OPERATORS and have offered a variety of transportation solutions to fit each travelers’ different needs. Rail Companies In the Philippines presently, rail is used mostly to transport passengers within Metro Manila and nearby province of Laguna as well as a commuter service in the Bicol Region. Major Operators o o

Government: DoTr (PNR, LRTA) Private: LRMC (Line 1, O&M), MRTC (Line 3), MRT7I San (Line 7)

There are various train types throughout the Europe that are some being benchmark by Philipiines. They have Day Train that was scheduled to complete its journey during daylight hours and Night Train that carry passenger over long distances were they can sleep thru the night. Day Trains Coach Car Seating – open with center aisle and two seats on either side. First Class Seating – two seats on one either side of the aisle and seats on either side. Second Class Seating – two seats on either side of the aisle. Compartment Car – separated in to cabins which open to corridor along side of the car. Night Trains

Sleepers – separate compartments with 1, 2, or 3 beds. Sometimes it has a wash bin inside the cabins. Couchette Car – offer standard sleeping accommodation where they offer a place to lie down with a pillow, a blanket and a sheet. Sleeperette – in some night trains, “reclining seats” are available. In the Philippines we have similar to this in our Philippine National Railways (PNR)

Accommodation Companies The accommodation may be marketed individually or through the tour operators in the form of packages. This component consists of those who provide accommodation to the people in the form of: o o o o

Hotels Resorts Apartments/Transient Lodging Inns or Guest houses etc.

Insurance Companies Some large-scale travel agencies perform additional functions to serve its client. Travel insurance protects the travelers against the personal as well as baggage losses resulting from a wide range of travel related happenings and problems. 1. Travel insurance can reimburse you on the following expenses: 2. Cancelled trips 3. Medical emergencies 4. Lost baggage 5. Emergency evacuation 6. Legal costs (for unexpected incidents you didn’t cost) 7. Protection of property (gear and possessions) and more. Global Distribution System Is primary reservation tool for travel agents. And most travel business, used the GDS. This is a network/platform that enables travel agencies and

their clients to access travel data, shop for and compare reservations options and book travel. o o o

Travelport (Galileo, Apollo, Wordspan) Amadeus Sabre

Government Agencies There are local and international agency that assisted and promoted tourism. o o o o o o o o o

Department of Tourism Philippines Embassies and Consulate Offices National Tourism Offices Philippine Tourism Authority Tourism Infrastructure and Enterprise Zone Authority The Philippine Convention and Visitors Corporation Intramuros Association National Parks Development Committee Nayong Pilipino Foundation

Travel Trade Association TRAVEL TRADE is made up of travel agents and tour operators, also referred to as intermediaries or middle men, and the tour guides. Trade associations are set up to represent the interest of their member. AITO stands for Association of Independent Tour Operators and was set up for smaller travel companies. These companies are in place so if anything goes wrong on your holiday, all your money is protected and safe. o Travel Agency – one of the most important organization in the tourism private sector which plays a significant and crucial role in the entire process of developing and promoting tourism in the country or at destination. It is a travel agency which packages and processes all the attractions, accesses, amenities and ancillary services of a country and present them to tourist. Travel agency is known as “image builder” of a country. o Tour Operators – is an organization, firm or company who buys individual travel components, separately from their suppliers

International Airlines Travel Agent Network Transportation o Hotel Association of New York o International Air Transport Association o European Region Airlines Association o Cruise Lines International Association Tour Operators o European Tour Operators Association o International Association of Antarctica Tour Operators o Cebu Association of Tour Operators

and combines them into a package tours, which is sold with their own price tag to the public directly or through middleman.

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Organizations World Tourism Organization (WTO) o International Civil Aviation Organization (ICAO) o International Air Transport Association (IATA) Regional Tourism Organization o Organization for Economic Cooperation and Development (OECD) o Pacific Asia Travel Association (PATA) o Asia-Pacific Economic Cooperation (APEC) Tourism Organization in the Philippines o Philippine Travel Agencies Association (PTAA) o Tourism Educators of Schools, College, and Universities (TESCU) o Council of Hotel and Restaurant Educators of the Philippines (COHREP) o The Association of Administrator in Hospitality, Hotel and Restaurant Management Educational Institutions (AARMEI)

The National Professional Tourism Organizations in the Philippines are the following: o o o o o o o

Philippine Travel Agencies Association (PTAA) Hotel and Restaurant Association of the Philippines (CHRAP) Tourism Educators of Schools, College, and Universities (TESCU) Women in Travel Philippines (WTP) Network of Independent Travel Agencies (NITAS) Guides Incorporated Philippines (GIP) Movement of Incentives Travel Executives (MITE)

SECTORAL ORGANIZATION are associated with a particular sector of the tourism industry such as transport, accommodation, attractions, courier services or recreational pursuits of Tour Operators. Hotel o o o

International Hotel and Restaurant Association American Hotel and Lodging Association Cambodia Hotel Organization

Travel Agencies o World Association Agencies o Philippine Travel Association

Basic Difference between Travel Agents and Tour Operators of

Travel Agencies

TRAVEL AGENTS Retailer. Transact business directly with the travelers.

TOUR OPERATORS Wholesalers. Deals primarily with the retailers (travel agencies).

Act as counselor to the traveler and are agents or the suppliers. Revenues are fixed and pre-determined by the suppliers/vendor. Charge fee documentation ancillary service.

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Act as middleman to supplier/vendors. Have variable but limited revenues income and profit margins. Sell optional products and services and make up of deposits.

problems by developing or acquiring counter seasonal business. Situational Analysis It is a method manager use to analyze both the internal and external environments of an organization in order to understand the firm’s own capabilities, customers and business environment. Two main stages in Situational Analysis

Travel and Tourism Industry Characteristic of a service product • Intangibility – services cannot be seen, touched, smell, taste or stored on a shelf prior to purchased. • Inseparability – the production and consumption of services are inseparable. The consumer has a direct experience of the production of service. • Perish ability – services are instantly perishable. • Heterogeneity – services are not identical it varies based on the personality and demand of a customer. • Ownership – when a customer buys a service product, he or she does not receive the ownership of anything tangible. Service buyers are buying for the use of the facility only. Important factors in Travel & Tours strategic planning • High cost – travel and tourism products represents high-cost purchase for consumers. Taking a holiday, buying airline tickets and staying at a hotel are expensive and it represents as a highest single item expenditure for a consumer in a given year. • Seasonality – has for the price and quantity of tourism products supplied between seasons. A management can respond to these seasonality

The examination of an organization’s internal environment The examination of the organization’s external environment • Macro-environmental – it contains range of influences that affect not only an organization in an industry, but the whole industry. Factors that affect the macroenvironment: Political Economical Socio-cultural Technological Environmental Legal • Micro-environmental – it compromises the industry in which the organization competes. Ex: competitors, suppliers, agencies, etc. The situation analysis consists of several methods: PESTEL Analysis (more recently named PESTELE) is a framework or tool used by marketers to analyze and monitor the macro-environmental. 3Cs Analysis is a tool used for internal and external analysis to identify opportunities and risk.

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Company Analysis – assessment of capabilities of organization and its current marketing position. (What is your uniqueness? What is your weakness? Why are you losing existing customers? What are the common complaints from customer?) Customer Analysis – analysis of customer trends, needs/wants and behavior. (What are the 3 important trends? How the industry is changing? How many market segments do you serve? Where is the greatest growth potential?) Competitor Analysis – analysis of competitors current position, capabilities, strategy and actions. (Top 3 competitors. What are their strengths and weakness? How do you compare the price, service and quality?)

SWOT Analysis is a strategic planning method used to evaluate the STRENGTHS, WEAKNESSES, OPPORTUNITIES and THEATH in a business. Porters Five Forces Analysis - a good tool for reviewing the 5 forces around the organization which determines the competitive strengths and attractiveness of the market.

Financial Management and Cost Control Objectives of Financial Management: To ensure regular and adequate supply of funds to the concern. To ensure adequate returns to the shareholders which will depend upon the earning capacity, market price of the share expectations of the shareholders. To ensure optimum funds utilization. Once the funds are procured, they should be utilize in maximum possible way at the least cost. Legal and Commercial aspect for Travel Agency

Accreditation 1. Identify the types of business establishment

Sole or single proprietorship

2. Secure the documentation needed according to your type of business Sole or single proprietorship

Partnership

Partnership

Corporation

Corporation

3. Get accreditation

Department of Tourism (DOT) International Air Transport Association (AITA)

DOT Accreditation • A certificate issued to document that an establishment has complied with the department’s minimum standards of its operations to ensure the comfort and convenience of its client. Validity: 2 years Who may apply for accreditation? • •

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Resident Filipino citizen registered as a single or sole proprietorship. Partnership organized under Philippine Laws, 60% capital owned by Filipino citizen. Corporations organized under Philippine Laws, 60% of shares of stock owned by Filipino citizen & 60% Filipino citizen as Board of Directors.

Documentary requirements for new application • • •

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Valid Mayor’s Permit and/or Business License from the Local Government Unit If single pro...