1 Matakuliah : G1184 Travel Management Tahun : 2005 Pertemuan ke-: 26 Chapter 5-8 (Power Point 26.1) Pokok Bahasan: Ch 5: The Tour Operators’ Products Ch 6: Accommodation Ch 7: Transportation Ch 8: Financial Matters

2 (Power Point 26.2) Surcharges are: sometimes levied on top of brochure prices sometimes notified at the time of booking sometimes added afterwards and clients are not allowed to cancel because this surcharge without having to pay cancellation fees not favored by clients as they haven’t budget this extra cost disliked by travel agents since they are the ones who try to explain to the clients and to collect them without getting any commission

3 (Power Point 26.3) 3 kinds of prices on the brochures/pricelists: 1. Full price guarantee The price will not be subject to any surcharges. 2. Partial price guarantee (only amounts > 2% will be charged) a. Only for those not resulting from governmental action. b. Only for those not resulting from any currency changes. 3. No price guarantee Surcharges are allowed for those resulting from currency, governmental action, aircraft fuel, overflying charges, airport charges and increases in scheduled air fares.

4 (Power Point 26.4) Ways to minimise cost of flight seats: Own the airline to have greater control over costs. Ensure the airplanes’ stay in the air as much as possible. Fly a ‘W pattern’. Assume a high break-even point when calculating costs. Fly at nights are cheaper than daytime ones. Sell holidays of odd durations as bargain-priced to avoid having empty seats. Offer a ‘seat-only’ option to offload surplus seats for at least their break-even cost. Transfer holidays to different aircraft to reduce price.

5 (Power Point 26.5) Tour operators’ sources of income: mark-up prices interest cancellation costs amendment costs car hire insurance advertisements sale of ancillary products excursion commission foreign exchange deals direct bookings miscellaneous extras

6 (Power Point 26.6) Cancellation Charges Charges are applied to the basic holiday cost inclusive of flight and room supplements only. Where booking is made through an agency, the operator will pay commission on the cancellation fee to the agent. Insurance premiums are never refundable. Agents are to ensure to collect enough money to cover whatever cancellation charges.

7 (Power Point 26.7) Amendment Charges Operators levy fixed charges for alterations made to a confirmed booking, which include: changing the booking into a different passenger name swapping the booking to a different resort moving the booking to a different hotel changing the type of room booked adding more passengers into a booking reducing the number of passengers booked (those cancel will be charged cancellation charges, while those continue will be charged amendment fees)

8 (Power Point 26.8) Operators’ Costs include 1. Travel agency commission usually 10% commissions on all sales 2. Compensation payments include major changes: - change of departure airport - change of departure date - switch from a day flight to a night flight - reduce the number of nights away - change of resort for entire holiday - change to lower graded accommodation for the whole holiday - change to higher graded accommodation for the whole holiday - change flight time more than 3 hours

9 (Power Point 26.9) All operators reserve their right to refuse to pay compensation in situations which they regard as outside their control (= force majeure), which is defined as: war, threat of war, riot, civil strife, industrial dispute, terrorism, accident, natural disaster, epidemic, nuclear disaster, health risk, fire, airline failure, closure/congestion of airport / port, prohibitive government action.