Travel Agency

Article 243 of the Tourism Code of 1980 defines a travel agency as follows: a travel and tour agency is an entity engaged in the business of extending to individuals or groups, travel services and assistance to include documentation, ticketing, booking for transportation and/or accommodation; arrangements, handling and/or conduct of tours within or outside Philippines, whether or not for a fee, commission or any form of monetary consideration.

Travel Agency The Traditional Way

A travel agency, in its traditional role as agents for principals and travel services providers is defined as follows: a commercial enterprises where a traveler can secure information and expertise, get impartial counseling, and make arrangements to travel by air, sea or land, to any point in the world.

The Traditional Linkage

Supplier

Middleman Travel Agency

Traveler

Supplier

Middleman Travel Agency

Traveler

As middleman the agency collects an agents commission from the supplier. This commission is normally defined as a rate-minus. Alternately, the agency is allowed to unilaterally mark up the net cost given by the supplier. This is known as net-plus. In other words, this is done, in a hidden and subjective way that is best price driven.

Travel Agency The New Way

The travel agency acts as a partner to both the supplier and traveler. It provides the individual traveler with the most suitable suppliers based on the travelers needs, convenience and price. They examine and evaluate the travelers preferences and budgets and determines the best travel arrangement.

The Emerging Linkage

Traveler

Suppliers

Travel Agency

Traveler

Suppliers

Travel Agency

Travel agency manages all of the travelers needs and services in his/her trip and ask for a professional fee described as cost-plus. Cost-plus is the opposite of rate-minus. Cost-plus is different from net-plus. cost-plus is open while net-plus is hidden from the client. Cost-plus is the new trend, the new way.

 A Travel Agencys new role as partner of the suppliers and the traveler requires a new definition:
a commercial enterprise where a traveler may secure information, receive travel advice, and make arrangements to travel by air, sea or land, to any point in the world for a professional fee.

Function of a Travel Agency

1. Provide information and expertise

how to get there where to stay what to do

2. Recommend destinations, products and services best suited to the needs of the client.

3. Provides assistance in securing travel documents

4. Process travel arrangements

5. Assist in case of refunds and cancellation

Sources of Sales and Revenues

1. Negotiated professional or handling fee (cost-plus) 2. Fixed commissions n regular fares (rateminus) or reasonable mark up on net fares (net-plus) 3. Service Fees 4. Production incentives and rebates

Activity Time
Grab a partner. Prepare sheet of paper. Close all your notes. Form a travel agency organization structure based on the following:

UTILITY PERSONNEL
ACOUNT EXECUTIVE

SECRETARY
RESERVATION & TICKETING

ADMINISTRATION
OPERATIONS MARKETING & SALES

ADMINISTRATION DEPARTMENT Four Functions:

1. General Administration Section 2. Personnel Section 3. Accounting Section 4. Finance Section

OPERATIONS DEPARTMENT
The players:
1. 2. 3. 4. 5. 6. 7. The Manager The Travel Supervisor The Documentation Supervisor The Travel Counselor Counter Staff The Reservation and Ticketing Officers Liaison Officer

MARKETING AND SALES

The Players:
1. Marketing Manager 2. Product Development Officer (Research) 3. Sales Manager
Counter Sales Field Sales Account Executive (Sales Agent)

Setting up a Travel Agency

It requires a legal personality before it can legally transact business.

Three types of Business establishments:

1. Sole or Single Proprietorship 2. Partnership 3. Corporation

Design Your Own Travel Agency

Do the following:
Name Company Logo Organizational structure Office Lay-out Location

Assignment: (by group)

Go to the nearest travel agency and ask the following: 1. How did they start their business? 2. How did they come up with their name? 3. What are the challenges they encounter? 4. How did they face those challenges? 5. What are their strategies to survive? 6. What are their edge towards their competitors?

 Furnish a copy of the following:

Company Profile (brief history, OS, Legal Documentations and Accreditations, others)

Support your interview with pictures / videos. Create a PowerPoint and present your output to the class on July 9. Send a soft copy of the PowerPoint to rj.moreno85@gmail.com prior to the presentation day.