02 travel agencies and tour operators (an introduction)
Whether yo u think you can, or youthink you ca nt--youre right . Henry For d
Travel Agencies and Tour Operators An Introduction
Objectives• Define the role of the travel agency and tour operators in the tourism industry.• Identify the difference between travel agencies and tour operators.• Outline their major functions.
The Tourism Industry Business SectorNon Profit Goods and Tourism Sector Services ProductGovernment Sector
Business Sector• Lodging Facilities• Transportation Services• Food and Beverage Operations• Retail Business• Activities and Events• Travel Trade
Travel and Tour AgencyAn entity engaged in the business of extendingto individuals or groups:• travel services and assistance to includedocumentation, ticketing, booking fortransportation and/or accommodation;arrangements•handling and/or conduct of tours within ouroutside the Philippineswhether or not for a fee, commission or anyform of monetary consideration (Tourism Codeof 1980).
Travel AgencyA commercial enterprise where a travelercan secure information and expertise, getimpartial counseling and makearrangements to travel by air, sea or land toany point in the world.
Traditionally…• Travel agency acts as an agent for different suppliers that cater to the need of the travelers.• Travel agency reacts to the needs of the traveler while acting as an agent for the supplier.• The agency earns income in the form of rate-minus or net-plus.
A ScenarioSuppose a passenger comes to you andwould like to visit Paris.The following airlines fly to Paris: CX KL TGYou are not an agent of CX and TG. Whichairline will you then recommend to thepassenger?
Rate Minus and Net PlusSuppose a passenger comes to you andwould like to visit Paris.The cost of a MNL-PAR-MNL ticket via TGis USD 1,000.00 per ticket.Rate MinusTicket Price: USD 1,000.00Commission: 7% of the ticket priceTA’s income: USD 70.00Payable to TG USD930.00
Rate Minus and Net PlusSuppose TG gave you a special rate ofUSD900.00 per MNL-PAR-MNL ticket.Net PlusTicket Net Price: USD 900.00TA’s Mark Up: USD 100.00TA’s income: USD 100.00Payable to TG USD 900.00
With the introduction ofthe internet, do you think travel agents will lose their jobs?
Travel Management Companies• TMCs become vendors and principal selling travel services and solutions.• TMCs form a tripartite alliance where all partners (suppliers and consumers) are treated equally.• TMCs become partner to both suppliers and consumers.• TMCs evaluates the consumer’s preferences and the suppliers’ assets to determine the best travel arrangements.
The Emerging Linkage Consumer TravelSuppliers Management Companies
Suppose a passenger would like to visit Singapore. Hechecked the internet for theairlines, hotels and activities and other information. He then call the TMC to request for a proposal. The TMC will now prepare a proposal that will me the requirement of the client.
Client will choose fromdifferent proposals given. If acceptable the client and TMC will agree on professional fee. TMC manages the client’s needs while capitalizing on the available suppliers so as to have a win-win situation for all the 3 parties involved.
Functions of Travel Management CompaniesProvides information and expertise.
The travel consultantmust be knowledgeablein order to provide the The initial exchange ofinformation needed by information is important the client. because it is during this time the travel consultant can accurately assess the needs and requirements of the client.
Functions of Travel Management CompaniesRecommends destinations, productsand services best fitted to the needs ofthe client. There are two airlines flying to LA. One is a direct flight, arriving evening, same day and the other is with a stopover in Narita arriving afternoon of same day. Since you would like to arrive early, I would suggest that you take the second option.
Functions of Travel Management CompaniesProvide assistance in securing traveldocuments.
Functions of Travel Management CompaniesProcess travel arrangements.
Reservation and ConfirmationA reservation is a A confirmation is arequest made to any written reply from thesupplier for a particular supplier that theservice (i.e. ticket, hotel reservation for aroom). All reservations particular service isare subject to accepted and will beavailability. delivered to the client by the supplier.
Functions of Travel Management CompaniesAssist in cases of refunds andcancellations. If claims are legitimate.
Sources of Revenues of TMCs• Negotiated handling fee (cost plus)• Fixed commission (Rate minus) or Mark Up (Net plus)• Service fees for other service/s• Production incentives and rebates.
Characteristics of TMCs• Retailer• Counselor to the end-user, agent/intermediary for the suppliers• Derives revenues from fixed commission or professional fees• Charges fees for ancillary services
Tour OperatorsAssembleaccommodation,transportation, andother travel servicesinto a package forresale throughtravel agents.
Tour OperatorsResponsible for theoperation of allfacets of the tour.
Tour OperatorsMany tour operatorsown and operatetouristtransportation unitsand provide a tourescorts and guides.