1. Whether you think you can, or you think you can't--you're right.
Henry Ford

2. Travel Agencies and Tour Operators
An Introduction

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. The Tourism Industry Business Sector Non Profit Sector
Tourism Product
Non Profit Sector
Goods and Services
Government
Sector

5. Business Sector Lodging Facilities Transportation Services
Food and Beverage Operations
Retail Business
Activities and Events
Travel Trade
Travel Agencies
Tour Operators

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. 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. Traditional Linkage
Supplier
Travel Agents
Consumer

9. Traditional Linkage Supplier Travel Agents Consumer Restaurants Tours
Airlines, Trains, Cruise, Coaches
Hotels, Inns, Resorts
Restaurants
Independent from suppliers
Tours

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. 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, per ticket. Rate Minus Ticket Price: USD 1, Commission: 7% of the ticket price TA’s income: USD Payable to TG USD930.00

12. Rate Minus and Net Plus
Suppose TG gave you a special rate of USD per MNL-PAR-MNL ticket. Net Plus Ticket Net Price: USD TA’s Mark Up: USD TA’s income: USD Payable to TG USD

13. With the introduction of the internet, do you think travel agents will lose their jobs?

14. 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.

15. Travel Management Companies
The Emerging Linkage
Consumer
Suppliers
Travel Management Companies

16. Suppose a passenger would like to visit Singapore
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.

17. Offers different proposals that can meet the client’s needs.
The Emerging Linkage
Traveler
Suppliers
TMC
Offers different proposals that can meet the client’s needs.

18. Client will choose from different proposals given
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.

19. Functions of Travel Management Companies
Provides information and expertise.
How to get there?
Where to stay?
What to do?

20. The travel consultant must be knowledgeable in order to provide the information needed by the client.
The initial exchange of information is important because it is during this time the travel consultant can accurately assess the needs and requirements of the client.

21. 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.

22. Functions of Travel Management Companies
Provide assistance in securing travel documents.

23. Functions of Travel Management Companies
Process travel arrangements.

24. Processing travel arrangements means:
Placing reservations.
Obtaining confirmation.
Determine package cost and inform client.
Issuing ticket, vouchers and other documents.
Monitoring the travel.

25. Reservation and Confirmation
A reservation is a request made to any supplier for a particular service (i.e. ticket, hotel room). All reservations are subject to availability.
A confirmation is a written reply from the supplier that the reservation for a particular service is accepted and will be delivered to the client by the supplier.

26. Functions of Travel Management Companies
Assist in cases of refunds and cancellations.
If claims are legitimate.

27. 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.

28. 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

29. Tour Operators
Assemble accommodation, transportation, and other travel services into a package for resale through travel agents.

30. Tour Operators
Responsible for the operation of all facets of the tour.

31. Tour Operators
Many tour operators own and operate tourist transportation units and provide a tour escorts and guides.

32. Tour Operators Supplier Tour Operators Travel Agents Restaurants
Airlines, Trains, Cruise, Coaches
Hotels, Inns, Resorts
Restaurants
Entrance fees, tour guides, tour escort, transportation

33. Tour Operators are usually called Destination Management Companies (DMCs).
In the Philippines, most of the TMCs expand their services into tour operations.

34. Functions of Tour Operators
Conceptualize, plan and develop tour packages.
Number of participants
Duration of stay
Tailor made packages (Ad hoc)
Preferred destination
Hotel category
Preferred airlines
Based on specific client’s needs
Other services

35. Functions of Tour Operators
Conceptualize, plan and develop tour packages.
Regular Packages
Based on perceived needs of market

36. Functions of Tour Operators
Negotiates with suppliers of travel services.
Special Rates
Suppliers
Special conditions

37. Functions of Tour Operators
Assemble and integrate the various travel components into a single tour package.
Airline
Tour Package
Hotel
Activities & other services

38. Functions of Tour Operators
Delivers the tour package.
Overseeing the operation of the tour.

39. Sources of Revenues of Tour Operators
Variable mark up
Sales of optional tours, excursions and extensions
Shopping commissions

40. Characteristics of Tour Operators
Wholesalers
Intermediary and integrator
Income is variable
Generates additional income from sales of optional tours, excursions and extensions.