Travel Agency Prelim Topics

Introduction to
Travel agency
Topic Objectives:
After studying this topic, the student should be able to:
• To learn about the brief history of travel business
• To provide in-depth knowledge in the travel agency
business management
• To be familiar with the different terminologies in the travel
industry
.
•.
Travel Agency
• A commercial establishment where a prospective traveller can secure
information, expert advise and make arrangement to travel by air, sea or
land to any part of the world.
Reference
https://www.slideshare.net/tofujay/tsm-101-tourism-sectors-pt-5-distribution#:~:text=17.,world%20for%20a%20professional%20fee.&text=Travel%20Agencies%20now%20earn%20through,called%20the%20%E2%80%9CCost%20plus%E2%80%9D .
Reference:
https://pediaa.com/difference-between-tour-operator-and-travel-agent/
How do Travel Agency Makes Money?
• service fees
• net/private fares/commissions from the airlines, and
• Contracted rates/commissions from the hotels.
Reference:
https://hostagencyreviews.com/blog/how-do-travel-agents-make-money
Reference:
Worklite.sabretnapac.com JEH TRAVEL SERVICES
.
•.
History Of Travel In 1822, Robert Smart of Bristol
Business England
First steamship agent
Lynmouth harbor port village coast sea

boats Bristol channel North Devon
England Europe Great Britain
Reference:
https://www.alamy.com/stock-photo-lynmouth-harbor-port-village-coast-sea-boats-bristol-channel-north-33215902.html
https://www.wikiwand.com/en/Steamboat
https://www.tugberkugurlu.com/archive/tourism-business---chapter-1-history-of-tourism-and-the-travel-business-in-the-world
Reference:
https://www.google.com/maps/dir/Dublin,+Ireland/The+Bristol+Port+Company,+St+Andrews+House,+St+Andrew's+Rd,+Bristol+BS11+9DQ,+United+Kingdom/@52.411412,-6.3586618,7z/data=!3m1!4b1!4m14!4m13!1m5!1m1!
1s0x48670e80ea27ac2f:0xa00c7a9973171a0!2m2!1d-6.2603097!2d53.3498053!1m5!1m1!1s0x487192b52dfc6421:0x2f261918f32dbcb5!2m2!1d-2.699042!2d51.5032195!3e0
In 1841, Thomas Cook
First Rail Excursion Agent
He began running excursion train

from Leicester to loughborough
12miles trip
He carried 570pax
Reference:
https://en.wikipedia.org/wiki/Thomas_Cook
https://www.ft.com/content/384099f0-d6b5-11e7-8c9a-d9c0a5c8d5c9
https://en.wikipedia.org/wiki/Excursion_train
https://edition.cnn.com/travel/article/thomas-cook-history-timeline/index.html#:~:text=Launched%20by%20cabinet%2Dmaker%20Thomas,to%20the%20Thomas%20Cook%20website .
https://commons.wikimedia.org/wiki/File:GREAT_BRITAIN_WILLIAM_IV-ONE_SHILLING_1834_a_-_Flickr_-_woody1778a.jpg
In 1850, Thomas
Bennett
First specialist in individual inclusive travel

set up a business as a trip organizer and
provided
tourist with itineraries, carriages, provisions
and a travel kit
He frequently arranges individual scenic tour

in Norway.
Reference:
https://www.tugberkugurlu.com/archive/tourism-business---chapter-1-history-of-tourism-and-the-travel-business-in-the-world#:~:text=But%20the%20first%20specialist%20in,%2Dgeneral%20in%20Oslo%2C%20Norway .
Types of Travel Agency
• Consortium
• General Sales Agent (GSA)
• Retailer
• Consolidator
• Online Travel Agents
Reference:
Travel Agency and Tour Operations Business Student Handbook Class XII , CENTRAL BOARD OF SECONDARY EDUCATION Shiksha Kendra, 2, Community Centre, Preet Vihar, Delhi-110301, 2016
CONSORTIUM
• A group of travel companies that enter into a voluntary association to share resources
in order to gain market advantage. In travel, usually used to refer as groups of supplier
that offer higher commissions and other incentives to travel agencies.
Image source:
https://resources.hwb.wales.gov.uk/VTC/2010-11/vocational/atebol/h-and-s/en/travelstop/introduction-associations.html
https://www.elitetravelgroup.co.uk
http://www.advantageasia.in/about.php
Reference:
GENERAL SALES AGENT
• Travel Agencies that act as a Sales and Marketing representative for

foreign travel companies, allowing them to have offices in countries
other than where their headquarters are located.
• The GSA receives commission of around 3-5% commission on all the
tours/land arrangements sold in the region/country that they represents.
Reference:
http://t3.gstatic.com/images?q=tbn:ANd9GcQ-yo3vFtNwrNVYGAHvJ0WE3cdSJ9jswdLKGSwDM7TSlOvHrYq0
RETAILER
• Sell tourist products directly to the

public on behalf of the product
suppliers and in return gets
commissions.
Image Logo: Schalie Travel and Tours

Reference:
CONSOLIDATOR
• High volume sales companies that specialize in niche markets. They may or
may not various types of services at single point of access. These can be hotel
reservations, flights or car rentals and at times the services are combined into
vacation packages.
• They do not sell their product directly to the public, but act as wholesalers to
retail travel agencies. The sole purpose of the consolidators is to sell to ethnic
niches in the travel industry.
• No consolidators offers everything; they may only have contracted rates to
specific destinations.
Reference:
ONLINE TRAVEL AGENCY
• OTA stands for: Online Travel Agency. OTAs
are online companies whose websites allow consumers to book
various travel related services directly via Internet. They are 3rd
party agents reselling trips, hotels, cars, flights, vacation packages
etc. provided / organized by others.
Reference:
https://welcome.expediagroup.com/en/resources/hotel-distribution-strategy-resources-tips/otas-work-use-one
https://www.klook.com/en-PH/
https://www.agoda.com
https://www.trip.com
Comparison between FULL T.A and OTA
FULL SERVICE TRAVEL AGENCY

ONLINE TRAVEL AGENCY
• Expertise. Can suggest and arrange • Convenient. Booking anytime day
travel plans or night.
• Service. During cancellation, • Easy Access. You can check the
rebooking, assistance is on the way. customer reviews of the
The hassle will be pass on to the agents things/places you want to go.
• Can block the same rate within 24hrs
or more
• Less phone time.
• No hidden charges/fees • Price. You can shop around and
choose the best price.
• Makes travel less stressful
• Provide personalized attention • Get instant answer to availability
inquiries
Reference:
https://protrav.com/travel-411/travel-agency-vs-onlinebooking/#:~:text=Online%20travel%20agencies%20show%20you,fluctuate%20daily%20and%20even%20hourly.&text=In%20addition%2C%20traditional%20travel%20agents,that%20are%20not%20available
%20online.
Functions & Components of
Travel Agency
(TMC)
Travel Management Company
Providing travel
information and advice
First step is to obtain all necessary information
from the prospective client and providing suitable
recommendations that meets the client’s needs,
preferences or fancies; this will enable the
preparation of a travel arrangement proposal and
the checking of availability of the proposed
suppliers.
Source:
Alicabo,J (2016) THE TRAVEL MANAGEMENT CYCLE.
Retrieve from : https://prezi.com/sp29s1lsqtkx/the-travel-
management-cycle/
Image : https://www.freevector.com/vector/travel-agency
This Photo by Unknown Author is licensed under CC BY-SA-NC
Determining fares, rates
and professionals fees
Putting together the costs of transportation,
accommodations, sightseeing tours and tour
packages, cruises or other service included in the
itinerary is the next step. Part of this step is to
determine the appropriate mark-up, service
charge or professional fee and seeking the client’s
acceptance of the proposed travel arrangements.
Source:
management-cycle/
Preparing quotations and
travel proposals
This step aims to get the client’s consent on the
travel quotation or proposal and agreement to
reserve and purchase the travel services based on
the price proposed or amount indicated.
Source:
management-cycle/
Requesting reservations
and obtaining
confirmations
This step entails requesting for space or services
with the suppliers in advance by preparing all
necessary forms and correspondence. Obtaining
the corresponding confirmations and seeking
alternative suppliers in case of need – when space
is fully booked – is also included in this step.
Source:
management-cycle/
Issuing tickets, tour
vouchers and exchange
orders
Once all arrangements are confirmed, preparing
and issuing transportation tickets, exchange
orders and tour vouchers for the suppliers is the
next step.
Source:
management-cycle/
Providing travel
documentation assistance
On a case-to-case basis, provide assistance in the
preparation, filing and acquisition of all necessary
documents for travel and the necessary
supporting documents thereof.
Source:
management-cycle/
Processing travel accounts
This step involves the collection of final
payments due from clients and payment due to
suppliers.
Source:
management-cycle/
Evaluating delivery
The last step is the assessment of the clients’
satisfaction in the travel arrangements. This is
usually a post-trip activity.
Source:
management-cycle/
Structure of Travel
Management Company
Small-sized TMC
• http://slideplayer.com/slide/17957576/
• Published by Norman Tucker
Claravall, Bienvenido G. (2013) Travel and Tour Operations in the Philippines Third Edition – Paul So and Partner
Organizational Chart
Medium Sized TMC
Organizational Chart
Large Sized TMC
Administrative Department
GENERAL ADMINISTRATION
 General Manager / Managing Director
 Supervises the functions of the whole office branch
or the total business itself.
 Secretary / Executive Assistant
 Perform required tasks by the manager
 Monitor office correspondence
 Answer calls
 Maintain effective filing system
 Prepares minutes of the meeting in the company
 Administrative Officer / Administrative Staff
 Assists the Executive Assistant or the Manager in their tasks.
33
PERSONNEL SECTION / HUMAN RESOURCE
DEPARTMENT
 HR Manager
 HR Officer / HR Staff / HR Specialist
 Involved in the hiring of employees
 Formulates hiring policies and compensation scheme
 Education and training esp. in GDS trainings
 Keeps all the 201 Files or the Employee’s Data
 Evaluation of staff performance
 Implement disciplinary actions
34
ACCOUNTING SECTION/DEPARTMENT
 Accountant
 Does all tasks pertinent to billings, credit, collection
 Billings/Invoices
 Prepare the payroll and pay slips
 Vacation Leave and Sick Leave Ledgers of employees
 Prepare financial statements
 Prepares annual reports to BIR, SSS, PhilHealth, Pag-Ibig
 Bookkeeper / Billing Officer
 Assist the accountant in his tasks
35
FINANCE SECTION
 Cashier
 Handles all cash records
 Oversees the cash flow of the organization
 Receives all payments
 Monitor (payment) collections
 Process petty cash/cash advances disbursements
 Prepares deposits and checks
 Ensure that payments to suppliers are duly deposited
36
GENERAL SERVICE SECTION
 Security
 Sanitation Officer (Janitor)
 Maintenance
 Communications (IT Technicians)
37
Sales and Marketing
Department
SALES
 Counter Sales (in-house): Sales Manager, Travel
Counselors, Travel Specialist, Ticketing Officer,
Reservation Agent/Officer, Counter Sales Officer, Sales
Account Executive, Account Executive
 Accommodate walk-in clients’ inquiries, reservations
 Book and issue airline tickets
 Negotiate rates with suppliers
 Prepare tour proposals / quotations
 Prepares sales report
 Follow-up with accounts/clients through Telemarketing
 Represent the company in business-related social activities
 Any sales activity
38
Sales and Marketing
Department
SALES
 Field Sales (corporate): Corporate Sales
Manager, Corporate Sales Executive, Account
Executive, Sales Account Executive
 Same tasks with in-house sales staff
 Corporate Sales – visits different companies in and
out of the country.
 Accompany clients in their tour (as necessary)
 Any sales activity
39
Sales and Marketing
Department
MARKETING
 Product Development Officer / Product
Development and Research Officer / Business
Development Officer
 Reviews existing customer database, product, and
market profiles
 Analyzes product characteristics, strengths,
weaknesses
 Upgrade product offerings based on market
needs/wants and current trends
 Negotiate special rates
 Prepares travel tariff (price list)
 Makes tour packages
40
Operations Department
 Operations Manager
 Monitors and oversees all tour operation activities
 Airport Representative
 Tasked to welcome and pick-up guests at the airport
and bring them to their accommodation
 Operations Staff / Tour Coordinator
 Monitor the whole tour operation
 Accompany the group during their tour
 In-house Tour Guide
 Accompany the group during the tour and give substantial information about
the destination/attraction; includes hotel check-in and check-out procedures
 Drivers / Driver Guides
 Bigger TMCs have their own tourist vehicles and drivers for their tours.
41
Components of Travel
Agency
Travel Linkages
What is travel?
Travel is moving location using different types of transport.
Whereas people can travel by:
• Road • Air • Sea • Rail
Though we know that travel is changing location, A travel agency

serves two types of clients:
• Business travelers
• Leisure travelers
Source:
Stainton, H. (2020, April 28). Components of tourism: Structure of the tourism industry. Tourism Teacher. https://tourismteacher.com/components-of-tourism/
Image : https://www.vecteezy.com/vector-art/
https://www.freevector.com/metro-vector
Authored by : C.C. | H.I.
What are these two types of clients
required?
The requirements of these tourists are different
and an agency has to assemble or purchase-related
components from the principal suppliers to cater
to their needs.
There were Travel Linkages comes in…
Source:
www.tourism.gov.ph
TRAVEL LINKAGES
1. Transportation Companies
2. Accommodation Companies
3. Insurance Companies
4. Global Distribution System (GDS
5. Government Agencies
6. Travel Trade Association
7. Organizations
Source:
N. (2020, August 9). Travel Agency - Definitions, Types, and Function or Linkages. Tourism Notes. https://tourismnotes.com/travel-agency/
www.tourism.gov.ph
Transportation Companies
Transport providers are those operating any major
form of transport.
They could be:
Airlines
Cruise Lines
Car Rentals
Rail Companies.
A tourist’s choice of transport would depend on the

travel budget, destination, time, purpose of the tour,
and convenience to the point of destination.
Source:
Image :www.tourism.gov.ph
Airline Companies
The list of Airlines enumerates local airlines in the
Philippines which have a current Air Operator's
Certificate issued by the Civil Aviation Authority.
 Passenger Airlines
 Regional Airlines
 Charter Airlines
 Cargo Airlines

 Passenger Airlines - A passenger airline is an airline dedicated to the
transport of passengers. There are several types of passenger airlines,
mainly ;
o Mainline airlines or Premium airlines, operate flights by the airline's
main operating unit. Also known as “Full service” or “Legacy”
o Low-cost carriers, giving a "basic", "no-frills" and perceived
inexpensive service
o Business class airline, an airline aimed at the business traveler,
featuring all business class seating and amenities
o Flag carriers, the historically nationally owned airlines that were
considered representative of the country overseas.
Source:
www.tourism.gov.ph
 Regional Airlines - airlines that operate over shorter non-intercontinental

distances, often as feeder services for legacy mainline networks.
 Charter Airlines - operating outside regular schedule intervals ; renting an

entire aircraft
 Cargo Airlines -Cargo airlines (or airfreight carriers, and derivatives of

these names) are mainly dedicated to the transport of cargo by air.
Source:
www.tourism.gov.ph
Cruise Line Companies
Cruise products available in the Philippines Today are
divided into DOMESTIC and INTERNATIONAL.
 Domestic Maritime Products

 International Luxury Cruises
Source:
www.tourism.gov.ph
Car Rentals Companies
may be chauffer driven or self- drives.
Most travel agencies are able to book a selection of vehicle
types anywhere in the world.
As a rule, a valid international driver’s license is
REQUIRED.
Some may be DOT ACCREDITED TOURIST
TRANSPORT OPERATORS and have offered a variety of
transportation solutions to fit each travelers’ different needs.

Rail Companies
In the Philippines presently is used mostly to transport
passengers within Metro Manila and the nearby province of
Laguna, as well as a commuter service in the Bicol Region.
Major Operators Government: DoTr (PNR, LRTA)

Private: LRMC (Line 1, O&M),
MRTC
(Line 3), MRT7I San (Line 7)

Rail Companies
There are various train types throughout Europe that are
some being benchmark by Philippines.
They have Day trains that was scheduled to complete its

journey during daylight hours and Night trains that carry
passenger over long distances while were they can sleep
thru the night.
Source:
Transportation Rail Companies
Companies DAY TRAINS
Coach Car Seating-
open with center aisle
and two seats on either
side
Source:
Image : https://www.wikiwand.com/en/MRT_(Bangkok)
First Class Seating –
two seats on one either
side of the aisle and
seats on either side
Source:
Image : https:// www.travelchinaguide.com
Second Class Seating -
two seats on either side
of the aisle.
Source:
Image : https:// www.topchinatravel.com/
Compartment Car –
separated in to cabins
which open to corridor
along side of the car.
Source:
Image : https:// www.pinterest.co.uk
Companies NIGHT TRAINS
Sleepers - Are separate
compartments, with
1,2, or 3 beds.
Sometimes it has a
wash bin inside the
cabins.
Source:
Image : www.seat61.com/
Companies NIGHT TRAINS
Sleeperette - In some
night trains “Reclining
Seats” are available.
In the Philippines we
have similar to this in
our Philippine National
Railways (PNR)
Image : https:// www.thomasnet.com

Accommodation Companies
The accommodation may be marketed individually or
through the tour operators in the form of package.
This component consists of those who provide
accommodation to the people in the form of;
• Hotels
• Resorts
• Apartments / Transient Lodging
• Inns or Guest Houses etc.
Source:
Image :https://www.alumbungbohol.com/
Insurance Companies
Some large-scale travel agencies perform

additional functions to serve its clients.
Travel insurance protects the travelers
against the personal as well as baggage
losses resulting from a wide range of travel
related happenings and problems.
Source:
Image :https://www.smartparenting.com.ph
1. Travel insurance can
What does a Travel reimburse you on the
Insurance Cover? following expenses:
2. Canceled trips
3. Medical emergencies
4. Lost baggage
5. Emergency Evacuation
6. Legal costs (for
unexpected incidents you
didn’t cause)
7. Protection of property
(gear and possessions)
and more.
Global Distribution System
Is a primary reservation tool for travel agents. And

most travel business, used the GDS. These is a
network/platform that enables travel agencies and
their clients to access travel data, shop for and
compare reservations options and book travel.
• Travelport (Galileo, apollo, wordspan)
• Amadeus
• Sabre
Image :https://www.balionlinemarketing.com
Government Agencies
There are local and international agency that assisted and
promoted tourism. Some of those are;
•Department of Tourism
•Philippines Embassies and Consulate Offices
•National Tourism Offices
•Tourism Infrastructure and Enterprise Zone Authority
•Tourism Promotions Board
•Intramuros Association
•National Parks Development Committee
•Nayong Pilipino Foundation

Travel Trade Association
TRAVEL TRADE is made up of travel agents and tour
operators, also referred to as intermediaries or middle men,
and the tour guides.
Trade associations are set up to represent the interests of
their members.
AITO stands for Associations of Independent Tour
Operators and was set up for smaller travel companies.
These companies are in place so if anything goes wrong on
your holiday, all your money is protected and safe.

Organizations
World Tourism Organization: Tourism Organization In The Philippines:
 International Civil Aviation  Philippine travel Agencies Association
Organization (ICAO) (PTAA)
 International Air Transport Association The Hotel and Restaurant Association of
(IATA) the Philippines (HRAP)
 Tourism Educators of Schools, College,
and Universities (TESCU)
Regional Tourism Organization:  Council of Hotel and Restaurant
 Organization for Economic Cooperation Educators of the Philippines (COHREP)
and Development (OECD)  The Association of Administrator in
 Pacific Asia Travel Association (PATA) Hospitality, Hotel and Restaurant
 Asia-Pacific Economic Cooperation Management Educational Institutions
(APEC) (AARMEI)
Source : Claravall, Bienvenido G. (2013) Travel and Tour Operations in the Philippines Third Edition – Paul So and Partner
Organizations
SECTORAL ORGANIZATION are associated with a particular sector
of the tourism industry such as transport, accommodation, attractions,
courier services or recreational pursuits of Tour Operators.
 Hotel  Transportation
International Hotel and Restaurant Hotel Association of New York
Association International Air Transport Association
American Hotel and Lodging Association European Region Airlines Association
Cambodia Hotel Association Cruise Lines International Association
 Travel Agencies  Tour Operators
World Association of Travel Agencies European Tour Operators Association
Philippine Travel Agencies Association International Association Of Antarctica
International Airline Travel Agent Tour Operators
Network Cebu Association of Tour Operators
Organizations
The National Professional tourism organizations in the Philippines are
the following:
 Philippine Travel Agencies Association (PTAA)
 Hotel and Restaurant Association of the Philippines (HRAP)
 Tourism Educators of Schools, Colleges, and Universities (TESCU)
 Women in Travel Philippines (WTP)
 Network of Independent Travel Agencies (NITAS)
 Guides Incorporated Philippines (GIP)
 Movement of Incentive Travel Executives (MITE).
Difference between
Travel Agency and Tour
Operators
Basic difference
between Travel Agents
and Tour Operators.
TRAVEL AGENTS TOUR OPERATORS
Retailer. Transact business directly with Wholesalers. Deals primarily with the
the travelers retailers (travel agencies)
Act as counselors/advisers to the traveler
Act as middlemen to supplier/vendors
and are agents or the supplier
Revenues are fixed and pre-determined Have variable but limited revenues
by the suppliers/ vendors. income and profit margins
Charge fee for documentation an Sell optional products and services and
ancillary service make us of deposits
Travel and Tour Business
Management
Travel and Tourism Industry
Characteristics of a service products
Intangibility - services cannot be seen, touched, smell, taste or stored on a shelf prior to
purchased.
Inseparability - The production and consumption of services are inseparable. The
consumer has a direct experience of the production of service.
Perish ability- Services are instantly perishable
Characteristics of a service products

Heterogeneity – Services are not identical it varies based on the personality and
demand of a customer.
Ownership - When a customer buys a service product, he or she does not receive the
ownership of anything tangible. Service buyers are buying for the use of the facility
only.
Source : Bhatia, A. K. (2013). The Bussiness of Travel Agency and Tour Operations Management. Sterling Publishers (P) Ltd.
Travel and Tourism Industry
Important factors in Travel & Tours strategic planning:
High Cost - Travel and tourism products represent high-cost purchase for
consumers. Taking a holiday, buying airline tickets and staying at a hotel are
expensive and it represents as a highest single item expenditure for a consumer
in a given year.
Seasonality - has for the price and quantity of tourism products supplied
between seasons. A management can respond to these seasonality problems by
developing or acquiring counter seasonal business
Situational Analysis
It is a method manager use to analyze both the internal and
external environments of an organization in order to
understand the firm’s own capabilities, customers and
business environment.
“The systematic collection and study of past and present

data to identify the performance of the business and the
choice of appropriate strategies.
Source : Svend Hollensen & Marc Oliver Opresnik, 2019. "Situational Analysis in the Marketing Planning Process," World Scientific Book Chapters, in: MARKETING A Relationship Perspective, chapter 2, pages 43-138, World Scientific Publishing Co. Pte. Ltd..
Two main stages in Situational Analysis:
1) The Examination of an organization’s
internal environment
2) The Examination of the organization’s
external environment
Macro-environment -It contains range of influences that affect not only an
organization in an industry, but the whole industry.
Factors that affect the Macro-environment
a) Political
b) Economic
c) Socio-Cultural
d) Technological
e) Environmental
f) Legal
Micro-environment - It comprises the industry in which the organization competes
Ex. competitors, suppliers, agencies, etc.
REPUBLIC ACT 9593 The Republic of the Philippine as
well as the Congress of the Philippine implement the
republic act no. 9593, also known as the “ the tourism
act of 2009” declaring a national policy for tourism as an
engine of investment, employment, growth and national
development, and strengthening the department of
tourism as a whole. The act encourage activities and
programs which promote tourism awareness and also
improve our infrastructure to attract more tourist
Source: www.officialgazette.gov.ph
The situation analysis consists of several methods:
1) PESTEL Analysis (more recently named PESTELE) is a framework or tool used by
marketers to analyze and monitor the macro-environmental.
2) 3Cs Analysis a tool used for internal and external analysis to identify opportunities and
risk.
a. Company Analysis – Assessment of capabilities of organization and its current
marketing position. ( What is your uniqueness? What is your weakness, why are you
losing existing customers, what are the common complaints from customers)
b. Customers Analysis – analysis of customers trends, needs/wants and behavior. ( What
are the 3 important trends, how the industry is changing, how many market segments
do you serve and where is the greatest growth potential?)
c. Competitor Analysis – Analysis of competitors current position, capabilities, strategy
and actions. ( Top 3 competitors, what are their strengths and weakness, how do you
compare the price, service and quality)
3) SWOT Analysis is a strategic planning method 4) Porters Five Forces Analysis - A good tool for
used to evaluate the Strengths, Weaknesses, reviewing the 5 forces around the organization
Opportunities, and Threats in a business. which determine the competitive strength and
attractiveness of the market .
Source : Svend Hollensen & Marc Oliver Opresnik, 2019. "Situational Analysis in the Marketing Planning Process," World Scientific Book Chapters, in: MARKETING A Relationship Perspective, chapter 2, pages 43-138, World Scientific Publishing Co. Pte. Ltd.
Revenue and cost
consideration
Sample Travel Agency’s Budget
Revenues***
1. Commissions 1.a International Air PHP0,000,000.00
1.b Domestic Air 000,000.00
2. Commissions 2.a Other Transportation Companies 000,000.00
2.b Accommodation Establishments 000,000.00
2.c Packaged Tours 000,000.00
2.d Sale of Insurance & TC’s 00,000.00
3. Service Fees 3.a Travel Documentation 00,000.00
3.b Others 00,000.00
TOTAL REVENUES 0,000,000.00
Fixed Cost ***

1. Salaries and Wages (include benefits) PHP0,000,000.00
2. Rent 000,000.00
3. Insurance Premiums 00,000.00
4. Interest Payments 00,000.00

5. Professional Fees 00,000.00
6. Municipal Fees and Licenses 00,000.00

7. Depreciation of capital equipment 000,000.00

Sample Travel Agency’s Budget
Variable Cost***
8. Advertising and Promotions PHP000,000.00
9. Education and training 000,000.00
10. Travelling Expense 00,000.00
11. Representation and Entertainment 00,000.00
12. Office Supplies and Stationary 00,000.00
13. Miscellaneous 00,000.00
Total Expenses PHP0, 000,000.00
Total Revenue 0,000,000.00
Total Expenses (PHP0,000,000.00)
Profit (loss) before Income Tax PHP00,000.00
Income Tax Due (PHP00,000.00)
Net Profit/(loss) PHP000.00
Sample computation
H1 Travel Services sold 25pax for 5d4n Beijing, China Package at Php
32,000/pax. Mark up set by the company is 10%.
Compute for the total sales of the company? PHP800,000.00
PHP32,000.00 X 25PAX= PHP800,000.00
Compute for the total revenue of the company? PHP80,000.00
PHP800,000.00 X .10 = PHP80,000.00

Sample computation
The following are the cost/s H1 Travel Services:
 ELECTRICITY PHP3,500.00
 POSTPAID CELLPHONE PHP1,000.00
 RENTAL PHP25,000.00
 TRAVELLING EXPENSE PHP1,200.00
 WATER BILL PHP500.00

Sample computation – list the
expenses alphabetically
Variable cost
ELECTRICITY PHP3,500.00
TRAVELLING EXPENSE PHP1,200.00
WATER BILL PHP500.00
Total variable cost : PHP5,200.00
Fixed cost
POSTPAID CELLPHONE PHP1,000.00
RENTAL PHP25,000.00
Total fixed cost : PHP26,000.00
Authored by : C.C. | H.I. PHP80,000.00-PHP31,200.00 = PHP48,800.00 Net profit (NP)

Financial Management & Cost Control
Objective of Financial Management
• To ensure regular and adequate supply

of funds to the concern. “Refers to planning, organizing,
directing and controlling the
financial activities such as
• To ensure adequate returns to the procurement and utilization of funds
shareholders which will depend upon of the enterprise.”
the earning capacity, market price of
the share, expectations of the
shareholders.
• To ensure optimum funds utilization.

Once the funds are procured, they
should be utilized in maximum
possible way at least cost.
Legal and commercial
aspects for travel agency
Set-up of a travel agency
SET-UP OF A TRAVEL AGENCY
2. Secure the
1. Identify the type of documentation needed
3. Get accreditation
business establishment according to your type
of business.
• Sole or Single • Sole or Single • Department of
Proprietorship Proprietorship Tourism (DOT)
• Partnership • Partnership • International Air
• Corporation • Corporation Transport Association
(IATA)
Source: Claravall, Bienvenido G. (2013) Travel and Tour Operations in the Philippines Third Edition – Paul So and Partner
https://bnrs.dti.gov.ph/
https://apps.iata.org/sites/fmc/Files/TAH-2019-EN-LFC.pdf
ACCREDITATION
DOT IATA
ACCREDITATI ACCREDITATI
ON ON
Who may apply for accreditation?
Partnership organized
Resident Filipino citizen
under Phil. Laws, 60% of
registered as a single or
capital owned by Filipino
sole proprietorship.
citizen.
Corporations organized
under Phil. Laws, 60% of
shares of stock owned by
Filipino citizen & 60%
Filipino citizens as Board
of Directors.
Authored by : C.C. | H.I. | M.O.
Valid Mayor’s Permit and/or Business
License from the Local Government Unit
If Single Proprietorship, valid DTI Business
Name Certificate
Documentary
If Corporation/Partnership, SEC
requirements for new Registration Certificate and Articles of
application Incorporation and its By-Laws
Proof of working capital of
P500,000.00.
- For Corporation/Partnership,
P500,000.00 Paid-up/partners capital;
- For single proprietorship, original copy of
bank certification
For General Manager, documents to prove a
minimum of three (3) years managerial experience
in travel and tour agency operations or proof of
passing the Travel and Tour Agency Management
Course or its equivalent.
Documentary
requirements for new
application Notarized List of Names of all Officials and
employees (with office designation and Nationality)
Located in a commercial area and/or
building
Easily identifiable and used exclusively for

Travel & Tour business operation
Office requirements Adequately furnished for the conduct of its

business
Office floor area shall be a minimum of 18

square meters
Shall have a minimum of 3 employees:
- General Manager
- Reservation Officer
-Tour/Product
Development Officer
Office requirements All offices shall be ventilated maintaining a

temperature bet. 20-25 degrees year round
DOT
Accreditation
IATA Accreditation
IATA supports airline activity IATA accreditation simplifies

and helps formulate industry the business relationship
policy and standards. between travel agents and
airlines.
Benefits
Access to IATA airline Access to IATA’s Billing

members with a single and Settlement Plan (BSP),
Sales Agency Agreement an efficient interface for
which authorizes the sale of invoicing and payment
international and/or between the agent, airlines
domestic tickets. and transport providers
Benefits
Use of the "IATA Standardized

Unique identification
Accredited Agent" procedures to
throughout the global
logo providing
travel industry with
visibility and ensure fair
the “IATA Numeric dealings with the
credibility on
Code” (283)
premises and website. airlines.
Industry Terminologies
Ad HOC Tour Package A tour put together according to the specification of a
client
Adjoining rooms Two or more contiguous rooms
Airport representative An employee of a travel agency, tour operator or
accommodation establishments who assist arriving guest.
American Breakfast A morning meal consisting of fresh fruits or juice, cereals,

coffee or tea, eggs with bacon, ham or sausages toast h and
marmalade
American Plan A meal plan basis which includes three (3) meals a day;
also known as “full board” or “full pension”
Arrival transfer A trip from the destination’s gateway to a place of lodging.
Reference:
Adjoining room
American Breakfast
Image source:
https://www.pinterest.ph/pin/492933121713337966/
https://www.colourbox.com/image/full-american-breakfast-image-40475254
Availability Space or services ready for sale, reservation or commitment
to a customer, at the time of inquiry or need.
Baggage Allowance The volume and weight of luggage that may be carried on
board by a traveller without any additional charge.
Baggage Tag An identifying tag strapped to the passenger’s luggage,
issued by the carrier for identification purposes.
Blocked Off A specific number of rooms or seats sets aside at a specific
rate , for a specific date.
Booking A reservations for a seat, room, tour or service.
Booking Order A document prepared by the reservations staff of travel
agencies or tour operators , requesting space or services
from the suppliers. Also known as “Reservations Request”.
Reference:
Bump Off To off load passengers from a flight or trip.
Business Class Air travel by a class superior to economy but lower than
first class service.
Business Traveller A person who travels primarily for business purposes.
Cancellation The release of the confirmed reservation.
Cancellation Charge A fee collected by a supplier for failure of a client to use
a reserved space, without having cancelled the
reservation within the allowed cancellation period.
Check-in Formalities attendant to the arrival of a guest at the
place of lodging, including the filling out the registration
forms.
Check-in time Guest may occupy the room based on the established
check-in time. Normally at 1400H
Reference:
Checked-in Baggage Accompanied baggage turned over by the passenger to the
carrier.
Check-out Departure of a guest upon completion of stay , including
settlement of personal accounts.
Check-out time A specified time at which the hotel guest must vacate the
room , normally at 1200H.
Commercial Rate A special price for a regular guest of a hotel.
Complimentary A service or product provided free of charge.
Complimentary Room Non revenue rooms offered by the hotel in a ratio to the
total number of rooms occupied, usually one
complimentary bed for every fifteen (15) beds.
Conducted tour A pre-arranged tour accompanied by a tour escort
throughout. Also known as “Escorted Tour”
Confidential Tariff A list of wholesale rates distributed by confidence to travel
agents and wholesaler by tour operators.
Reference:
Confirmed Reservations An advise that a reservation has been accepted and will
honored.
Connecting Rooms Two or more rooms with private connecting doors, permitting
access between the rooms.
Continental Breakfast A morning meal generally consisting of coffee or tea, rolls and
croissant, butter and marmalade.
Double-Up An assignment of two unrelated persons to share one twin room.
Day rate A special rate for non-overnight use of a hotel room.

Demi-Pension A meal plan basis which includes breakfast and either lunch or
dinner. Also termed as “Half Broad” or “Modified American
Plan”.
Denied Boarding When passenger is not allowed to board a flight due to
insufficient or improper travel documents.
Departure Transfer A trip from a place of lodging to a destination’s departure point.
Reference:
Deposited Reservation A reservation for a which payment has been received and
obliges the supplier to hold the reservations.
Double Room A room with matrimonial bed for two persons
Double Room Rate Full price of a room with matrimonial bed for two persons
Early Check-in The arrival of guest before the standard 1400H check-in time.
Economy Fare The fare for economy class service.
European Plan Hotel accommodation with no meals included.
Excess Baggage The amount of luggage by weight, volume or number of pieces
that exceeds the baggage allowance set by the carrier.
Reference:
Connecting room
Double room
Image Source:
https://www.keizershof-hotel.com/en/kamer/connecting-room/
https://www.princehotels.com/shinyokohama/room/double-room/
Extra Bed An additional bed placed in a room to accommodate an
additional guest.
FIT An acronym for FREE INDEPENDENT TRAVELLER that
indicates that the traveller is not part of a tour group.
Familiarization Tour A complimentary or reduced rate tour for media people or
travel agents designed to acquaint them with specific
destination.
Flight A scheduled air service identified by a flight number.
Ground arrangements A tour package classification that comprises only transfers
and sightseeing tours at a destination.
Group rate A special, discounted hotel room rate offered to a group.
Guaranteed Reservations Reservations secured by the guest agreement to pay for the
room whether it is used or not
GIT An acronym for Group Inclusive Tour that indicates there
are more than ten or fifteen travellers in a pre paid tour
package of specific components and value.
Reference:
Full board itinerary
Guided Tour A sightseeing tour conducted by a tour guide.
Half Twin Rate The per person rate of a twin or double room to be occupied
by two persons.
Hand carried luggage Personal effect carried by the passenger inside the aircraft ‘s
cabin.
High/Low season The time of the year at any given destination, when traffic
and rates are the highest/lowest.
High/Low season rate A maximum/minimum room rate charged when demand is
heaviest/lightest.
Hotel contracted rate A negotiated net rate agreed upon by a tour operator and a
hotel , where-in the latter commits to supply rooms of a
specified category at a flat rate.
Hotel Package combination of board, lodging, transfers and use of hotel
facilities offered as a package by accommodation
establishments.
Reference:
Incidental charges Charges for personal services rendered that are not included
in the arrangement made by the tour operator or travel agent.
Inclusive Tour A tour package classification consisting of transportation

to/from a destination, transfers, sightseeing tours,
accommodations and specified meals.
Itinerary A schedule of sites and activities arranged in chronological

order.
Land arrangements A tour package classification that comprises transfers,
sightseeing tours , accommodation and specified meals in a
destination.
No show A reservation that is neither cancelled or fulfilled.
Net Rate A wholesale rate to be market up for eventual resale.
No show charge A fee collected by a supplier for a reservation that is neither
cancelled or fulfilled. It may be considered a last minute
cancellation.
Reference:
One-way fare The fare for one point to another with no provision for the
return trip.
Optional tour A tour that is not part of the basic package
Overbooking The practice of committing more rooms or seats than are
available ; a hedge against “no show”
Published Fare /Rack Rate A rate with built in commission, no discount in anyway,
quoted by the suppliers.
Roundtrip Fare The fare from the origin point to another and back to the
origin point by the same route.
Triple room A room that can accommodate three adult persons
regardless of its configuration (eg. Twin room plus extra
bed; double room plus extra bed)
Reference:
Twin room
Twin room A room for two persons, in two separate beds

Upgrade the full price of a room for two persons each occupying
one bed.
Waitlist A supplier list of customer who seek space on a date that is
sold out.
Walk-in A client who comes to a supplier without prior reservations
or arrangement.
Reference:
Image source:
https://www.palmhoteluk.com/budget-accommodation-london/standard-twin-room/r
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Topic 2 

Travel Agency Prelim Topics

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Travel Agency Prelim Topics

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Introduction to

Lynmouth harbor port village coast sea

He began running excursion train

First specialist in individual inclusive travel

He frequently arranges individual scenic tour

• Travel Agencies that act as a Sales and Marketing representative for

• Sell tourist products directly to the

Image Logo: Schalie Travel and Tours

FULL SERVICE TRAVEL AGENCY

Though we know that travel is changing location, A travel agency

There were Travel Linkages comes in…

A tourist’s choice of transport would depend on the

Authored by : C.C. | H.I.

 Regional Airlines - airlines that operate over shorter non-intercontinental

 Charter Airlines - operating outside regular schedule intervals ; renting an

 Cargo Airlines -Cargo airlines (or airfreight carriers, and derivatives of

 Domestic Maritime Products

Authored by : C.C. | H.I.

Major Operators Government: DoTr (PNR, LRTA)

Authored by : C.C. | H.I.

They have Day trains that was scheduled to complete its

Image : https:// www.thomasnet.com

Some large-scale travel agencies perform

Is a primary reservation tool for travel agents. And

Authored by : C.C. | H.I.

Authored by : C.C. | H.I.

Characteristics of a service products

“The systematic collection and study of past and present

Fixed Cost ***

3. Insurance Premiums 00,000.00

4. Interest Payments 00,000.00

6. Municipal Fees and Licenses 00,000.00

Authored by : C.C. | H.I.

Compute for the total sales of the company? PHP800,000.00

PHP32,000.00 X 25PAX= PHP800,000.00

Compute for the total revenue of the company? PHP80,000.00

PHP800,000.00 X .10 = PHP80,000.00

Authored by : C.C. | H.I.

Authored by : C.C. | H.I.

Total variable cost : PHP5,200.00

Total fixed cost : PHP26,000.00

Authored by : C.C. | H.I. PHP80,000.00-PHP31,200.00 = PHP48,800.00 Net profit (NP)

• To ensure regular and adequate supply

• To ensure optimum funds utilization.

Easily identifiable and used exclusively for

Office requirements Adequately furnished for the conduct of its

Office floor area shall be a minimum of 18

Office requirements All offices shall be ventilated maintaining a

IATA supports airline activity IATA accreditation simplifies

Access to IATA airline Access to IATA’s Billing

Use of the "IATA Standardized

American Breakfast A morning meal consisting of fresh fruits or juice, cereals,

Day rate A special rate for non-overnight use of a hotel room.

Group rate A special, discounted hotel room rate offered to a group.

Inclusive Tour A tour package classification consisting of transportation

Itinerary A schedule of sites and activities arranged in chronological

Twin room A room for two persons, in two separate beds

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