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02 travel agencies and tour operators (an introduction)

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02 travel agencies and tour operators (an introduction)

  1. 1. Whether yo u think you can, or you think you ca n't-- you're right . Henry For d
  2. 2. Travel Agencies and Tour Operators An Introduction
  3. 3. 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.
  4. 4. The Tourism Industry Business Sector Non Profit Goods and Tourism Sector Services Product Government Sector
  5. 5. Business Sector • Lodging Facilities • Transportation Services • Food and Beverage Operations • Retail Business • Activities and Events • Travel Trade
  6. 6. Travel and Tour Agency 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 our outside the Philippines whether or not for a fee, commission or any form of monetary consideration (Tourism Code of 1980).
  7. 7. Travel Agency A commercial enterprise 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.
  8. 8. Traditional Linkage
  9. 9. Traditional Linkage Independent from suppliers
  10. 10. 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.
  11. 11. A Scenario Suppose a passenger comes to you and would like to visit Paris. The following airlines fly to Paris: CX KL TG You are not an agent of CX and TG. Which airline will you then recommend to the passenger?
  12. 12. Rate Minus and Net Plus Suppose a passenger comes to you and would like to visit Paris. The cost of a MNL-PAR-MNL ticket via TG is USD 1,000.00 per ticket. Rate Minus Ticket Price: USD 1,000.00 Commission: 7% of the ticket price TA’s income: USD 70.00 Payable to TG USD930.00
  13. 13. Rate Minus and Net Plus Suppose TG gave you a special rate of USD900.00 per MNL-PAR-MNL ticket. Net Plus Ticket Net Price: USD 900.00 TA’s Mark Up: USD 100.00 TA’s income: USD 100.00 Payable to TG USD 900.00
  14. 14. With the introduction of the internet, do you think travel agents will lose their jobs?
  15. 15. 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.
  16. 16. The Emerging Linkage Consumer Travel Suppliers Management Companies
  17. 17. Suppose a passenger would like to visit Singapore. He checked the internet for the airlines, 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.
  18. 18. The Emerging Linkage Traveler Suppliers TMC
  19. 19. Client will choose from different 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.
  20. 20. Functions of Travel Management Companies Provides information and expertise.
  21. 21. The travel consultant must be knowledgeable in order to provide the The initial exchange of information 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.
  22. 22. Functions of Travel Management Companies Recommends destinations, products and services best fitted to the needs of the 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.
  23. 23. Functions of Travel Management Companies Provide assistance in securing travel documents.
  24. 24. Functions of Travel Management Companies Process travel arrangements.
  25. 25. Processing travel arrangements means:
  26. 26. Reservation and Confirmation A reservation is a A confirmation is a request made to any written reply from the supplier for a particular supplier that the service (i.e. ticket, hotel reservation for a room). All reservations particular service is are subject to accepted and will be availability. delivered to the client by the supplier.
  27. 27. Functions of Travel Management Companies Assist in cases of refunds and cancellations. If claims are legitimate.
  28. 28. 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.
  29. 29. 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
  30. 30. Tour Operators Assemble accommodation, transportation, and other travel services into a package for resale through travel agents.
  31. 31. Tour Operators Responsible for the operation of all facets of the tour.
  32. 32. Tour Operators Many tour operators own and operate tourist transportation units and provide a tour escorts and guides.
  33. 33. Tour Operators
  34. 34. Tour Operators are usually called Destination In the Philippines, Management most of the TMCs Companies (DMCs). expand their services into tour operations.
  35. 35. Functions of Tour Operators Conceptualize, plan and develop tour packages. Tailor made packages (Ad hoc) Based on specific client’s needs
  36. 36. Functions of Tour Operators Conceptualize, plan and develop tour packages. Regular Packages Based on perceived needs of market
  37. 37. Functions of Tour Operators Negotiates with suppliers of travel services. Special Rates Suppliers Special conditions
  38. 38. Functions of Tour Operators Assemble and integrate the various travel components into a single tour package. Airline Hotel Tour Package Activities & other services
  39. 39. Functions of Tour Operators Delivers the tour package. • Overseeing the operation of the tour.
  40. 40. Sources of Revenues of Tour Operators • Variable mark up • Sales of optional tours, excursions and extensions • Shopping commissions
  41. 41. Characteristics of Tour Operators • Wholesalers • Intermediary and integrator • Income is variable • Generates additional income from sales of optional tours, excursions and extensions.