The document discusses the functions of travel management companies (TMCs). TMCs assist travelers by providing expertise, recommending destinations and services that suit clients' needs, assisting with travel documents, making travel arrangements, and helping with refunds and cancellations. TMCs earn revenue through negotiated professional fees, commissions from suppliers in the form of rate-minus or net-plus agreements, service fees for assisting with documents, and rebates or incentives for booking large groups. The document provides examples of how TMCs earn fees and commissions on bookings.

1. FUNCTIONS OF
TRAVEL
MANAGEMENT
COMPANY

2. TRAVEL TRADE is big part of tourism
TRAVEL AGENCY(TA)help tourists in varied
ways.travel agent can assist traveller with their
requirements before , during and even after the
trip.
TOUR OPERATOR are companies that contract and
purchase separate travel components and
assemble them into one package. if and when
tourists would like to have a tour in a specific
place, tour operator can create itinerary for
them.

3. ITINERARY is the schedule of activities of tourists
that state where to go, what time and other
inclusion in the tour.
TRAVEL MANAGEMENT COMPANIES (TMC)They
earn through negotiated professional and
handling fee, commissions or markup, service
fees. And production incentives and rebates
from suppliers

4. Different kinds of travel
agencies
A. Traditional Way
B. New Way

5. TRADITIONAL WAY
 TRAVEL AGENCIES act as middleperson
between the vendors and vendees.
Vendors pertain to commercial entities
such as hotels, resorts, airlines, cruise
and tour bus companies, amusement
parks, and others; Travel Agencies
serve as the agents to market their
product or services offered. On the
other hand, vendees pertain to you or
any person who buy the products
offered by the vendors; in this case, travel
agencies provide guidance on customers.

6. TRADITIONAL WAY
Vendee/Customers
Middleperson/Travel
Agency/TMC
Vendors/Commercial Entities
Can the vendee go directly to the
vendors to avail of their products or
services?

7. NEW WAY
This system opens the line of
communication between the
vendor, middleperson and
vendee.

8. NEW WAY
Customers
Middleperson
Commercial Entities
TMC or TA

9. Which of these ways do
you think would be the
best thing to do to find the
best travel deal that suits
your budget?
A. browsing the magazine
B. searching the internet
C.consulting a TMC/travel agency

10. 5 FUNCTIONS
OF TRAVEL
MANAGEMENT
COMPANIES
-Claraval(2013)

11. 1. Provide information and
expertise
TMC professionals are well-
equipped with available
information on airlines, airfares,
arrivals departures, the best
place to go depending on their
budget, and even the places
they can visit. Documentation
sassistance.

12. 2. Recommend destinations,
products and services best
suited to the needs of the
clients.
Personalized service is what the
TMC personnel do best. They
suggest, advise and recommend
destinations that best fit the
preference of the tourist.

13. 3. Provide assistance in securing
travel documents.
 PASSPORT-is an important
identification needed when
traveling international
DFA issues passport with a
validity

14. Cont.3. Provide assistance in
securing travel documents.
 VISA-is a certificate issued or
a stamp marked on the
applicant’s passport by the
immigration authorities of a
country to indicate that the
applicant’s credentials have
been verified.

15.  Australia has started issuing an electronic travel
authority(E-VISA)
 Some countries require a visa when you enter their
territory.

16. Cont .3. Provide assistance in
securing travel documents.
Flight Ticket and cruise ticket-
when passenger choose to
travel via air, they need to
secure an airline ticket that may
be issued by TMC or the
respective airline
E-TICKETS

17. 4.Process travel arrangement.
Tourist needs to have
Confirmed TICKET FOR FLIGHT,
BOOKING IN HOTELS and
SCHEDULE OF TOUR. TMC
personnel can make
reservations for tourist and have
all booking confirmed.

18. 5. Assist in cases of refund and
cancellations.
TMC personnel must be able
to assist their clients in securing
for refund. Changes in
scheduling of flights may even
be advised by the TMC staff,

19. SALES AND REVENUES OF
TRAVEL MANAGEMENT
COMPANIES
Their sources of revenues comes from the following:
A.Cost-plus
More often than not , airline rates, hotels,
attractions, and resorts have fixed rates
for their services. At times, when
bookings are done through TMCs,
travelers need to pay extra amount for
booking. this negotiated professional or
handling gee is referred to as cost-plus

20. Friends Gemma and Rina approached Mario of
Explorers Travel and Tours. They told him that they
want to visit another friend in AUCKLAND , NEW
ZEALAND. They asked about visa requirements and
the cost of airfare and tours. Mario gave them an
estimate of the airfares, hotel rates. And tour
packages. Furthermore, they were advised to visit
SYDNEY, AUSTRALIA since it is just 1 ½ hours away
from AUCKLAND. They were very glad about the
suggestions, advice, and recommendations of Mario
and so they requested him immediately lodge their
visa application and book their flights.

21. PAL OCT 2 MANILA TO SYDNEY DEP:10:15 ARR: OCT3 8:45
VIRGIN AUSTRALIA OCT3 SYDNEY TO AUCKLAND DEP 3:00PM ARR: 4:30PM
AIRFARE : PHP 34,592.00
THE AIRFARE QUOTATION IS ________
MARIO ADD 25% FOR PROFESSIONAL FEES
FOR ALL THE EXPERT ADVICE AND BOOKING
THAT HE DID FOR THEM.
PHP 34,592.00 X .25
=
PHP 8,648.00
PHP 34,592.00 + PHP
8,648.00 =
PHP 43,240.00

22. B. Rate-Minus
TMC are able to sell seats for an airline , for
instance, they are given fixed commission on
regular fares. The same is true with hotel
booking. if the hotel rooms published
rate(Public rate) is PHP4,000 per night and the
fixed commission is 10%, the commission of
TMC is PHP 400 per night. They refer to this as
rate-minus. Some travel professional also refer
to this as net-plus.

23. Example:
Mario of Explorers Travel and Tours is able to
get a rate-minus of 10% from the North Sydney
Harborview Hotel where he booked Gemma and Rina.
The total bill is AU$ 330 for three nights. 10% of that is
$33 the amount that mario earn from the supplier.

24. C. Service Fees
When Travel professionals help tourist
facilitate acquisition of travel documents such
as facilitation of passport or passport renewal,
visa applications and other tour related
documents. They charge additional fees to the
the tourist. This is called assistance fees,
handling fee or processing fee for some travel
professionals

25. Example:
Gemma and Rina asked Mario to assist them for
Australia and New Zealand visa Application. Mario
charge PHP 2,000 for each passenger and visa
assistance.
Therefore, the two ladies will have to pay Explorers
Travel and Tours PHP 2,000.00 each for Australia
visa and Another PHP 2,000.00 For New zealand visa.
TMC earn a total of
php 8,000.00

26. D. Rebates and Production
Incentives.
Apart from rate-minus that some suppliers
give the TMC personnel , there are also times
that they are give rebates and production in
incentives especially if they are able to book
big group.