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HMT244
O TRAVEL AGENCY
MANAGEMENT
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Let’s explore and move
to “Explore & Understand” Travel
Agency
S Organizational Structure
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Unit 3
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T Dr. Abinash Kumar Jha
 Recaps from Last Session
In last sessions, we explored about:
 Introduction to Travel Agency Management
 Travel Business: Environment, Intermediaries and Nature of Activities
 Historical Growth and development of travel agency
S  Meaning and Concepts of Travel Agency
 Characteristics and Importance of Travel Agency
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Linkages and integrations in travel agency and tour operation
Public sector in travel business
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Global scenario of travel business
Indian scenario of travel business
 Impact of travel agencies on destination
M  Travel Business: Role and Functions of TA/ TO
 Travel business documents
T  Passport and visa types issued by major tourist receiving countries including India, procedure for applying Schengen, Indian and American visas
 Procedure and process of setting up of travel agency
 Travel business plan
 Ministry of tourism, govt. of India, TAAI, Indian mountaineering federation (imf),
RBI and IATA approval for travel agency
 Financial incentives available for travel agency business in India
 Unit-III: Organizational Structure
In this unit, we will explore following aspects:
 Organisational structure of travel agency
S  Ownership structure- MNCS, franchise, collaborative and others

O  Major operational departments and key managerial positions in travel agency

 Role and responsibilities of various managerial heads
H  HR planning, travel business job analysis and specification of major positions,
M  Case studies of Makemytrip, American express, Travelocity India, SOTC and
T yatra.com
 Organization's Structure Vs. Nature of Travel Business

 An organisational structure is recognised as a mechanism through which an

S organisation’s management plans, directs, coordinates and controls business activities.

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H  The organisational structure of a travel agency is the formal or quasi-formal network of
M reporting or controlling relationship, the powers and duties associated with each role in this
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 The network of reporting relationships is commonly depicted through an organisational
chart.
 Organisations Structure: Meaning, Concepts and
Definition
 An organisational structure of a travel agency is a collective set up to pursue
specific missions, goals and objectives.
S  A travel agency plans, organizes, directs, coordinates and controls, the travel agency
\tour operation business activities of functional departments.
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 It is a rational coordination of various activities of functional departments for the
H achievement of some well defined aims through division of labour, functions, and
M through a hierarchy of authority and responsibility.
T  Todays, organisations are not mere chart.
 It is indeed the foundation of sound management.
 Organisational structure may be defined as the established pattern of relationships
among various parts or positions of an organisation directed towards
accomplishment of aims.
 Principles of Organisational Structure
 The principles of a good organisational structure are as follows:
1. Clear line of authority
S 2. Adequate delegation of authority
O 3. Principle of ultimate responsibility
H 4. Minimum managerial levels
M 5. Unity of command
T 6. Span of control
7. Simple structure
8. Flexibility
 Organizational Structure of Travel Agency

 As nature of travel business is to provide holiday-related services such as

ticket booking, transfer arrangement, hotel room booking, food, arrangement of
S ground transportation, venue selection, site seen and booking for MICE activities.
O  Organisational structure of a travel agency is a collective set up and rational
H coordination of various activities of functional department of a travel agency.

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 The concept of organisational structure of a travel business is somewhat abstract
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and illusive – largely depends upon the size, scope and type of business
handle by it.
 Shareholders
Board of directors
MD President
General Manager
Finance Controller
Chief Executives
Heads of various Departments

S Tour Research Travel & Tour Marketing &

Destinations
Human resource Finance & Transport Conferences &
Service
& Planning Division Division Sales Division Development Accounts Department Convention Dept.
O Deputy Mgr or
Division

Deputy Tour Deputy Marketing Deputy Deputy Deputy Deputy Deputy

H Assist Mgr Mgr Manager Manager

Manager
Manager Manager Manager

Tour Executives Sales

M Executives (Inbound &
Outbound00
Manager Assistants Assistants Assistants
Assistants Assistants

T Tour Assistants
Advertising
Manager

PRO
Assistants Tour & Travel A Typical Large scale Travel Agency
Booking Assists
& Tour Company
Assistant
Tour & Travel Booking
Assists
 Factors influencing structure of travel business

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 Types of Travel Agency

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 Types of Operators

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  No scientific method exists for designing the optimal organizational chart.

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 The most effective structure will depend upon such variables as size and age of the
O agency, business concentration (commercial, vacation, incentive travel, group
H travel, and so on), span of management control, delegation of authority, and
quality of personnel presently employed.
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T  Generally in small and medium scale travel agencies, one will find a simple organization
structure be limited in terms of operations, size, division of labor.

 There are a large scale travel companies such as “Thomas cook”, India limited TCI (travel
corporation of India limited), FCM etc., there organization structure is more formal.
 Organizational Structure of Travel Agency

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 Benefits of Sound Organizational Structure of Travel Agency

• Formal structure specify the role that each member in the organization plays and how each role relates to
others through a reporting and decision-making communication network.
• Organisational structure/ structure of network will support the agency’s goals and objectives and give each
S member an understanding of his or her responsibilities toward:
O 1) Develops sound and up to date in management practice, systems and strategies.

H 2) Develop effective leadership.

M 3) Growth and diversification.
T 4) Optimum use of human asset.

5) Stimulate creativity.

6) Effective coordination between various development.

 Ownership Structure
 In addition to a geographic classification, tourism organizations can also be
classified by ownership, such as government, quasi-government, or private; by
S function or type of activity, such as regulators, suppliers, marketers,
O developers, consultants, researchers, educators, publishers, professional
associations, trade organizations, and consumer organizations; by industry, such
H as transportation (air, bus, rail, auto, cruise), travel agents, tour wholesalers,
M lodging, attractions, and recreation; and by profit or non profit.
T  or
 MNCS, franchise, collaborative and others
 Specialized activities or functions of travel
agencies as:
 Ticketing

• Documentations
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• Managing the enterprise and making business decisions and policies
O • Marketing the agency
H • Selling the products represented by the agency

M • Accounting for the profitability of the agency

T • Book-keeping daily transactions

• Providing travel counselling to retail clients

• Handling commercial clients

• Dealing with specialized products and services

• Handling automation and clerical functions

 Organizational Structure of Large Travel Agency

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 Major operational departments
 In designing the organizational structure, a travel agency is free to use any means of
departmentation that is appropriate to its volume of business, the types of clients it
S serves, or the specific functions it must carry out to conduct agency business.
O  The following methods of Departmentation have their basis in general principles of
H organizational design.
M 1. Departmentation by Time: an uncommon method but helps to create a special
niche in the market - operating twenty-four hours a day on a shift schedule.
T 2. Departmentation by Function or Occupational Specialization: an effective
way of organizing for the mid or larger-size agency is to have distinctly separate,
functional departments viz. administration and accounting, sales, and operations.
3. Departmentation by Territory:
4. Departmentation by Types of Markets and Customers Served:
 Roles and Responsibilities of Travel Agency
Departments

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 Reservation / Tour Operation Department

• Offer best deals with competitive rates

• Tailor-made group programs to include original sightseeing with best value hotels as per
S requirements and prepare Colorful, timed and detailed itineraries
O • Select Professional, knowledgeable, comprehensible and enthusiastic guides services
• Arrange Deluxe air conditioned motor coaches with professional drivers for tour as per
H client need.
M • Follow-up enquiries, quotations, after sales, relationship building with agents
• Follow-up with destination offices related to costing, quotation, invoicing & ground
T handling
• Business generation responsibility for all segments. Reporting & follow-ups and do the
relevant Hotel / Travel booking for the Client / Agent
 Human Resources Department

• Recruitment and selection process

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• Training and Development process
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• Use financial management skills, such as overseeing budget
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• Co-ordinate merchandising functions through retail buyers
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• Research new products
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 Sales, Marketing & Advertising Department

• Developing new business/products/services and generating new sales lead

S • Responsible for sales of Travel related services to Travel Agents

O • Maintain relationship with existing clients & generating new clients to develop business
• Coordination with operation team for pre sales & post sales requirement
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• The targets have to be set for each segment (SBU) and have to be distributed as per agency. It has
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to be evaluated every quarter
T • To follow up on the targets and support the agencies to reach the targets
• To circulate all promotions and tariffs if at all published
• To target markets where the company needs to build up market share
• To plan appointments before visiting outstation
 Accounts/Finance Department

• Maintaining and checking all books of accounts including Bank-books, General-Ledger, bank-
statement, Trial- balance.
S • Ensured and check all entries of system
O • Preparing monthly departure wise / group wise profitability and sharing with the Management.
H • Support and finish related task of accounts and monthly reconciliation of Branch, Debtor,

M Supplier, Bank and Head Office Accounts.

• Handling & Analyzing Accounts payable and Receivables entry with clients and conduct variance
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analysis.
• Maintain, scrutinize and review general ledger and prepare financial statements.
• Analyze Balance Sheet, P & L accounts and prepare Trial balance at monthly & year end.
• Control on Financial issued related to expenses, cash, and payment
 Mice and Special Events Department

• Theme party & themed event organization

S • Creation of team-building activities
O • VIP Program development & implementation

H • Custom-designed daytime activities & tours

• Award program design & organization, Stage Design, audio-visual equipment management &
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technical support
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• Selection of room gifts, decoration & production of souvenirs
• Coordination of accommodations & in-house activities
 Key managerial positions in travel agency

• Based on the business functions to be handled within the agency, the number of possible job classifications needed
to do the work would soon surpass the modest number of staff employed in the average-sized travel agency.
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• Smallest staff must be available to assume duties and responsibilities necessary to handling of specialised activities
O within various functional departments through division of labour.
H • Some of the more common job classifications and titles identified to the travel agency business include agency
M manager, marketing manager, sales representative, ticketing clerk, travel consultant, travel
counsellor.
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• However, for small agency with fewer than seven employees, it is not possible to create a title and position to fit
every specialized function.
• The reality is that employees must be flexible and willing to perform a wide variety of tasks ranging
from those that require a great deal of experience or skill to those that are routine in nature.
 Case studies of Makemytrip

 MMT was launched in the US in 2000 to cater to the niche US-to-India travel
S market.
 The company survived the dotcom bust and the 9/11 tragedy and was able to
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breakeven in 2002.
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M  COMPANY OVERVIEW An online travel service portal
T  Focused on the leisure and small-business traveller coming to India
 Deep Kalra, CEO of MakeMyTrip (India) Pvt Ltd. (MMT)
 Objective to tap the potential of the huge US$1.5 billion NRI market worldwide
 MAKEMYTRIP:
 THE COMPANY & THE PRODUCT Offer competitively priced travel products –
real time booking capability.
S  Offer travel insurance, access to business lounges and valuable shopping discount
booklets Entire facility of travel services through Internet.
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 Addition to Airline ticket, MMT offers Hotel booking, Holiday packages, car
H rentals, trains & cruises for Indian & International destinations.
M  MMT launched www.indiaahoy.com a B2B site offering Indian Hotels and tour
packages for international agents.
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 Allows online booking and confirmation, online Web chat and toll free number.
 Provide value added service like a free drop and pickup cab for its clients.
 Also offers information visas, passports, insurance, travel & finance.
 Case studies of American express

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 Case studies of Travelocity India

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 Case studies of SOTC

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 Case studies of Yatra.com

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S
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M Any Question?
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Next Class: Unit-IV Itinerary Planning and Tour Packaging