ETHICAL LEGAL AND RAGULATARY ASPECT OF TOURIM AND

HOSPITALITY BISINESS

HMT-564

ASSIGNMENT ON: - LEGAL BUSINESS ETHICS FOR TRAVEL AGENCY BY

IATA

SUBMITTED BY: SUBMITTED TO:

SUKHVINDER SINGH MR. ROHIT

RV8901A07

SESSION-(2009-10)
 Travel Agency

A travel agency is a retail business that sells travel related products and services to
customers on behalf of suppliers such as airlines, car rentals, cruise lines, hotels,
railways, sightseeing tours and package holidays that combine several products. In
addition to dealing with ordinary tourists most travel agencies have a separate
department devoted to making travel arrangements for business travelers and some
travel agencies specialize in commercial and business travel only. There are also
travel agencies that serve as general sales agents for foreign travel companies,
allowing them to have offices in countries other than where their headquarters are
located.

ORIGINS:-

The British company Cox & Kings is sometimes said to be the oldest travel agency
in the world, but this rests upon the services that the original bank, established in
1758, supplied to its wealthy clients. The modern travel agency first appeared in
the second half of the 19th century. Thomas Cook, in addition to developing the
package tour, established a chain of agencies in the last quarter of the 19th century,
in association with the Midland Railway.

They not only sold their own tours to the public, but in addition, represented other
tour companies. Other British pioneer travel agencies were Dean and Dawson, the
Polytechnic Touring Association and the Co-operative Wholesale Society. The
oldest travel agency in North America is Brownell Travel; on July 4, 1887, Walter
T. Brownell led ten travelers on a European tour, setting sail from New York on
the SS Devonia.

Travel agencies became more commonplace with the development of commercial

aviation, starting in the 1920s. Originally, travel agencies largely catered to middle
and upper class customers, but the post-war boom in mass-market package
holidays resulted in travel agencies on the main streets of most British towns,
catering to a working class clientele, looking for a convenient way to book
overseas beach holidays.
OPERATIONS:-

As the name implies, a travel agency's main function is to act as an agent, that is to
say, selling travel products and services on behalf of a supplier. Consequently,
unlike other retail businesses, they do not keep a stock in hand. A package holiday
or a ticket is not purchased from a supplier unless a customer requests that
purchase. The holiday or ticket is supplied to them at a discount. The profit is
therefore the difference between the advertised price which the customer pays and
the discounted price at which it is supplied to the agent. This is known as the
commission. A British travel agent would consider a 10-12% commission as a
good arrangement. In Australia, all individuals or companies that sell tickets are
required to be licensed as a travel agent.

In some countries, airlines have stopped giving commission to travel agencies.

Therefore, travel agencies are now forced to charge a percentage premium or a
standard flat fee, per sale. However, some companies still give them a set
percentage for selling their product. Major tour companies can afford to do this,
because if they were to sell a thousand trips at a cheaper rate, they still come out
better than if they sell a hundred trips at a higher rate. This process benefits both
parties.

Other commercial operations are undertaken, especially by the larger chains. These
can include the sale of in-house insurance, travel guide books and timetables, car
rentals, and the services of an on-site Bureau de change, dealing in the most
popular holiday currencies.

The majority of travel agents have felt the need to protect themselves and their
clients against the possibilities of commercial failure, either their own or a
supplier's. They will advertise the fact that they are surety bonded, meaning in the
case of a failure, the customers are guaranteed either an equivalent holiday to that
which they have lost or if they prefer, a refund. Many British and American
agencies and tour operators are bonded with the International Air Transport
Association (IATA), for those who issue air tickets, Air Travel Organisers'
Licensing (ATOL) for those who order tickets in, the Association of British Travel
Agents (ABTA) or the American Society of Travel Agents (ASTA), for those who
sell package holidays on behalf of a tour company.
A travel agent is supposed to offer impartial travel advice to the customer.
However, this function almost disappeared with the mass-market package holiday
and some agency chains seemed to develop a 'holiday supermarket' concept, in
which customers choose their holiday from brochures on racks and then book it
from a counter. Again, a variety of social and economic changes have now
contrived to bring this aspect to the fore once more, particularly with the advent of
multiple, no-frills, low-cost airlines.

COMMISSIONS:-

Most travel agencies operate on a commission-basis, meaning that the

compensation from the airlines, car rentals, cruise lines, hotels, railways,
sightseeing tours and tour operators, etc., is expected in form of a commission
from their bookings. Most often, the commission consists of a set percentage of the
sale.

In the United States, most airlines pay no commission at all to travel agencies. In
this case, an agency usually adds a service fee to the net price.

TYPES OF AGENCIES:-

There are three different types of agencies in the UK: Multiples, Miniples and
Independent Agencies. The former comprises a number of national chains, often
owned by international conglomerates, like Thomson Holidays, now a subsidiary
of TUI AG, the German multinational.[3] It is now quite common for the large
mass-market tour companies to purchase a controlling interest in a chain of travel
agencies, in order to control the distribution of their product. (This is an example
of vertical integration.) The smaller chains are often based in particular regions or
districts.

In the United States, there are four different types of agencies: Mega, Regional,
Consortium and Independent Agencies. American Express and the American
Automobile Association (AAA) are examples of mega travel agencies.
Independent Agencies usually cater to a special or niche market, such as the needs
of residents in an upmarket commuter town or suburb or a particular group
interested in a similar activity, such as sporting events, like football, golf or tennis.

There are two approaches of travel agencies. One is the traditional, multi-
destination, out-bound travel agency, based in the originating location of the
traveler and the other is the destination focused, in-bound travel agency, that is
based in the destination and delivers an expertise on that location. At present, the
former is usually a larger operator like Thomas Cook, while the latter is often a
smaller, independent operator.

CONSOLIDATORS:-

Airline consolidators and other types of travel consolidators and wholesalers are
high volume sales companies that specialize in selling to niche markets. They may
or may not offer various types of services, at a single point of access. These can be
hotel reservations, flights or car-rentals, for example. Sometimes the services are
combined into vacation packages, that include transfers to the location and lodging.
These companies do not usually sell directly to the public, but act as wholesalers to
retail travel agencies. Commonly, the sole purpose of consolidators is to sell to
ethnic niches in the travel industry. Usually, no consolidator offers everything,
they may only have contracted rates to specific destinations. Today, there are no
domestic consolidators, with some exceptions for business class contracts.

CAREERS:-

With the many people switching to self-service internet websites, the number of
available jobs as travel agents is decreasing. Most jobs that become available are
from older travel agents retiring. Counteracting the decrease in jobs due to internet
services is the increase in the number of people travelling. Since 1995, many travel
agents have exited the industry, and relatively few young people have entered the
field due to less competitive salaries.[7] However, others have abandoned the 'brick
and mortar' agency for a home-based business to reduce overheads and those who
remain have managed to survive by promoting other travel products such as cruise
lines and train excursions or by promoting their ability to aggressively research and
assemble complex travel packages on a moment's notice, essentially acting as a
very advanced concierge. In this regard, travel agents can maintain competitive, if
they become "travel consultants" with flawless knowledge of destination regions
and specialize in topics like nautical tourism or cultural tourism.
 RESPOSIBILITIES AND ETHICS FOR TRAVEL AGENCY

We live in a world in which travel has become both increasingly important and
complex in its variety of modes and choices. Travelers are faced with a myriad of
alternatives as to transportation, accommodations and other travel services.
Travelers must depend on travel agencies and others in the industry to guide them
honestly and competently. All ASTA members pledge themselves to conduct their
business activities in a manner that promotes the ideal of integrity in travel and
agree to act in accordance with the applicable sections of the following Principles
of the ASTA Code of Ethics. Complaints arising under this Code should be filed in
writing with the ASTA Consumer Affairs Department.

ASTA has the following categories of membership: Travel Agent, Premium,

International Travel Agency Company, International Travel Agent Associate,
Allied Company, Allied Associate, Travel School, Senior and Honorary.

Responsibilities of  Travel Agent, Premium, International Travel Agency

Company and International Travel Agent Associate Members:

1. Accuracy. ASTA members will be factual and accurate when providing

information about their services and the services of any firm they represent. They
will not use deceptive practices.

2. Disclosure. ASTA members will provide in writing, upon written request,

complete details about the cost, restrictions, and other terms and conditions, of any
travel service sold, including cancellation and service fee policies. Full details of
the time, place, duration, and nature of any sales or promotional presentation the
consumer will be required to attend in connection with his/her travel arrangements
shall be disclosed in writing before any payment is accepted.

3. Responsiveness. ASTA members will promptly respond substantively to their

clients' complaints. 

4. Refunds. ASTA members will remit any undisputed funds under their control
within the specified time limit. Reasons for delay in providing funds will be given
to the claimant promptly.

5. Cooperation. ASTA members will cooperate with any inquiry conducted by

ASTA to resolve any dispute involving consumers.
6. Confidentiality. ASTA members will treat every client transaction
confidentially and not disclose any information without permission of the client,
unless required by law.

7. Affiliation. ASTA members will not falsely represent a person's affiliation with

their firm.

8. Conflict of Interest. ASTA members will not allow any preferred relationship

with a supplier to interfere with the interests of their clients.

9. Compliance. ASTA members shall not have been convicted of a violation

of any federal, state and local laws and regulations affecting consumers.  Pleas of
nolo contendere, consent judgments, judicial or administrative decrees, or orders,
and assurances of voluntary compliance and similar agreements with federal or
state authorities shall be deemed convictions for purposes of these provisions.

Responsibilities of All Members:

1. Notice. ASTA members operating tours will promptly advise the agent or client
who reserved the space of any change in itinerary, services, features or price. 

2. Delivery. ASTA members operating tours will provide all components as stated

in their brochure or written confirmation, or provide alternate services of equal or
greater value, or provide appropriate compensation.

3. Credentials. An ASTA member shall not, in exchange for money or otherwise,

provide travel agent credentials to any person as to whom there is no reasonable
expectation that the person will engage in a bona fide effort to sell or manage the
sale of travel services to the general public on behalf of the member through the
period of validity of such credentials. This principle applies to the ASTA member
and all affiliated or commonly controlled enterprises.

THE PASSENGER AGENCY PROGRAMME:-

The IATA Passenger Agency Programme is a global programme designed to

facilitate the secure distribution and sale of airline tickets through a network of
financially vetted and reliable accredited sales locations. The Programme is
administered by IATA on behalf of its Members. Policy development and changes
to the operating Passenger Sales Agency Rules and the rules governing reporting
and settlement of sales are controlled by the Passenger Agency Conference The
Programme incorporates two main features namely:
 − Accreditation whereby any person may seek approval to promote and sell
international air transport on behalf of IATA Members, by satisfying
specific basic criteria and entering into contractual relations with those
airlines.

− Billing and Settlement Plans (BSPs),

which provide to both airlines and Agents the benefits of standardization and
automation in the issuing, reporting and accounting of passenger air
transportation using neutral standard electronic tickets.

-The Passenger Agency Conference (also know as PAConf) takes action

on matters (excluding remuneration levels) relating to the relationships
between airlines and recognised passenger sales agents and other
intermediaries. PAConf is the body that supervises all policy development as
well as decides the rules governing the reporting and settlement of sales of
the IATA Passenger Agency Programme.

The Billing and Settlement Plan:-

The Billing and Settlement Plan (BSP) is a system designed to simplify the selling,
reporting and remitting procedures of IATA Accredited Passenger Agents on
behalf of BSP Airlines. The first BSP developed by IATA was launched in 1971 in
Japan. Today BSP is a worldwide system covering over 160 countries and
territories. In 2008, more than 58,000 Agents and 400 Airlines participated in the
BSP network, generating gross sales through the BSP of over USD 240 billion.
The BSP reduces Airline distribution costs and at the same time provides Agents
with a costeffective system for selling the products and services of those Airlines
that elect to participate in the BSP. The existence of a BSP enables Airlines and
Agents alike to save on administrative overheads, whilst streamlining their services
to the customer. It provides more time for BSP participants' selling activities since
the administrative burden on management is greatly reduced by the simplification
of the issuance, controlling and reporting of sales and settling of monies due. For
further information on the BSP, please refer to the BSP Manual for Agents.
 AGENT/IATA RELATIONSHIP

The overall decision-making authority lies with the Passenger Agency Conference
(PAConf) composed of senior managers drawn from all Member Airlines of IATA.
The PAConf adopts Resolutions by unanimous vote which, upon receipt of
approval from concerned governments, become binding upon all IATA Member
airlines and their appointed
agents. It meets regularly once a year but special meetings can be called at short
notice to deal with issues requiring immediate attention. The experience, views and
recommendations of these bodies and of individual airlines are
fed back to the PAConf which decides when adjustments in existing rules or new
rules are advisable. The PAConf also considers recommendations and proposals
from outside sources and is at liberty to act upon them within the limits of its
prescribed authority which is to take action on matters concerning relationships
between airlines and recognized passenger sales agents and other intermediaries
but excluding questions of remuneration levels.

To be meaningful and effective anybody of regulations must be seen to be

reasonable and fair to those who are subject to them. The IATA Agency
Programmed tries to meet those requirements through daily contact between some
58,000 travel agency locations around the world and more than 260 airlines. It can
do it more effectively where travel agents communicate freely and openly with the
airlines and where they support their national associations. PAConf draws on a
variety of field support on an ongoing or ad hoc basis. The day-to-day operation of
the Agency Programmed which involves dealing with matters associated with
seeking, obtaining and retaining IATA accreditation by travel agents is handled by
a local IATA Agency Services Office (ASO), generally one for a country or for a
group of countries. The activities of the ASOs are overseen and controlled by the
Agency Administrator through the respective Area offices (Beijing, Geneva,
Miami or Singapore, as appropriate).
It can be seen that most travel agents, through their representatives on the Agency
Programmed Joint Council (APJC), or through their national or international
Travel Agents' Associations, have the ability to provide input to the Passenger
Agency Conference. The Agency Programmed Joint Council is empowered by its
terms of reference to discuss items of interest and propose changes to the IATA
Agency Programmed, as described in the
Passenger Sales Agency Rules. Other IATA Passenger Conferences are:

- Passenger Services Conference – having jurisdiction over such technical

matters as ticketing, reservations and baggage handling procedures.

- Passenger Tariff Coordinating Conferences –

Having jurisdiction over passenger fares, excess baggage rates and levels of
agency commission.

DANGEROUS GOODS IN BAGGAGE

With few exceptions, passengers are forbidden from carrying dangerous goods in
or as checked or carry-on baggage or on their person. The exceptions include such
items as alcoholic beverages, perfumes, toilet articles, medicines, medical
appliances and limited amounts of ammunition. In addition, safety matches or a
cigarette lighter are permitted only when carried on one's person.

General
The following is the recommended layout of information about the articles or
substances that are not permitted to be carried by passengers or crew in their
checked or carryon baggage. It will be found in many airline tickets, ticket wallets,
timetables or on ticketing counters to warn passengers.
Dangerous goods that are forbidden in baggage

• Dangerous goods that are not allowed in passenger or crew baggage include the
following:::

• Fireworks, flares, briefcases and attaché cases with installed alarm devices
and other explosive material.
• Personal medical oxygen devices that utilize liquid oxygen as a primary or
secondary source of oxygen.
• Camping gas, cigarette lighters and refills, gas powered appliances with
cylinder and refills for the same, cylinders containing compressed or toxic
gases.
• Some adhesives, paints and thinners and other flammable liquids.
• Matches, and other articles that are easily ignited, substances liable to
spontaneous combustion and substances which on contact with water emit
flammable vapours.
• Bleaching powder, peroxides, personal chemical oxygen generators,
polyester resin kits and other oxidizers. • Arsenic, cyanide, insecticides and
weedkillers, live virus materials and other toxic
or infectious substances.
• Radioactive materials.
• Acids, alkalis, wet-cell batteries, mercury, other than that contained in a
small medical thermometer, and other corrosives.
• Asbestos, flavourings and extracts, magnetized materials and other
miscellaneous dangerous goods.

Dangerous goods permitted in passenger baggage:-

Dangerous goods which are permitted in passenger and crew baggage are limited
to the
following:
• Non-radioactive medicinal or toilet articles (including aerosols) which are
necessary or appropriate for the journey, carried in checked or carry-on
baggage. In addition, non-flammable, non-toxic aerosols for home or
sporting use may be carried in checked baggage only. The total net quantity
of all such articles carried by each passenger must not exceed 2 kg or 2
litres, and the net quantity of each single article must not exceed 0.5 kg or
0.5 litres.
 • The term “medicinal or toilet articles” is intended to include such items as
hair sprays, perfumes, colognes and medicines containing alcohols.
• Alcoholic beverages, carried as checked or carry-on baggage, when in
retail packaging, containing more than 24% but not more than 70% alcohol
by volume, in receptacles not exceeding 5 L. with a total net quantity per
person of 5 L. for such beverages. Alcoholic beverages containing 24% or
less alcohol by volume are not subject to any restrictions.
• Small medical or clinical thermometer which contains mercury, for
personal use, when in its protective case, in checked or carry-on baggage.
• Hair curlers containing hydrocarbon gas, no more than one per passenger
or crew member, in checked or carry-on baggage, provided that the safety
cover is securely fitted over the heating element. These hair curlers must not
be used on board the aircraft at any time. Gas refills for such curlers are not
permitted in checked or carry-on baggage. Note: These are not permitted to,
from or through Switzerland.
• One small packet of safety matches or a cigarette lighter that does not
contain unabsorbed liquid fuel, other than liquefied gas, intended for use by
an individual when carried on the person. Matches and lighters are not
permitted in checked or carry on baggage. Lighter fuel and lighter refills are
not permitted on one's person nor in checked or carry-on baggage. (Note:
“Strike anywhere” matches are forbidden on one's person, in checked or
carry-on baggage.)

CARD FRAUD

Card fraud is rapidly increasing. In addition to the recommended practices above,

Agents should be especially cautious if, amongst other things:

a)The order is made from a mobile phone and a business or contact number
(day and evening number) is not provided, or is refused;
b) the customer is not able to provide the security code which appears on
most Cards in issue, the location of it being dependent on the card type;
(c) the booking is made for a long haul destination with immediate departure
dates;
 (d) the booking is made by a new customer not known to the Agent,
especially if they are requesting tickets for a third party traveller;
(e) the booking is for immediate departure;
(f) the order is made by fax, or the customer offers to send a copy of the
Card by fax. Do not accept a copy of the Card as additional security as the
details may have been changed;

g) the customer calls in to collect the ticket but cannot present the Card. If
the Cardholder is present you must follow face-to-face Authorisation
procedures;
(h) The passenger name is changed after the original booking is made;
(i) The customer requests one ticket, then calls back to ask for additional
tickets. The total cost of the tickets issued and printed should be treated as
one transaction.

USE OF IATA LOGO:-

An IATA Accredited Agent may use the logo on its letterhead and publicity
materials exactly as illustrated here. No other forms of the IATA logo are
authorized for the Agent's use. The use of the logo is permitted only in connection
with activities of an IATA Accredited Agent's Approved Locations.
 CODE OF RESERVATIONS ETHICS

To provide customers with a worry-free experience and to guarantee smooth

handling of reservations, travel agents, airlines, CRSs and other providers, must
keep accurate and complete records covering all reservations transactions. All
dealings should be conducted in a business like manner, keeping in mind at all
times the need for correct and efficient handling of each transaction.
The IATA Reservations Services Manual is designed to provide a central source of
reservations procedures and practices for use by all reservations staff. It should be
used for reference purposes by reservations operational staff and, equally
important, as a source of training instruction. The Manual promotes a much
broader understanding, usage and acceptance of standard reservations procedures,
and enables travel agents, airlines, CRSs and other travel industry organisations to
conduct their everyday business in the most efficient and economical manner with
a more effective response to customers.

RESPONSIBILITY OF AIRLINES, CRSs and OTHER PROVIDERS

Subscribers, e.g. Travel agents, connected to an airline, CRS or other provider's

reservation system, shall adhere to the appropriate reservations procedures
contained in IATA Resolutions. These procedures shall be provided by the Airline,
CRS or other provider to the Subscriber. Whether working in an automated or
manual mode, always adhere to standard reservation message procedures, as
defined in ATA/IATA Reservations Interline Message Procedures —
Passenger (AIRIMP). The following rules apply at all times.

Booking Space or Services

When it is necessary to contact a service supplier by telephone, in the interest of
efficiency and accuracy, always establish and pre-check the details of the required
service, such as, for airlines: the complete itinerary, minimum connecting time
intervals, flight number(s) and any special service information and requirements
before calling the service supplier. Never deliberately make duplicate reservations
for the same customer(s). When reservations
for a party or group are not confirmed, never attempt to secure the required service
by requesting this in smaller numbers in individual
transactions.
Always try to obtain a telephone contact and/or address for the customer(s). Where
there is an indication that a customer already holds an airline ticket or has an
equivalent payment voucher for other services that are being booked, obtain from
the customer the name precisely as it appears on the ticket or voucher. When
arranging flight bookings ensure that the actual operating carrier of the service(s)
booked is made clear to the customer. This is particularly important for code-
shared flights.

Cancelling Booked Services

Whenever a customer cancels a reservation, such cancelled services must be
immediately released back to the service supplier(s) concerned. When a customer
changes an itinerary, ensure that all space and supplementary services no longer
required are cancelled at the time the new reservations are made.

RESPONSIBILITY OF TRAVEL AGENTS

The rules defined in ‘Booking Space or Services’ and ‘Cancelling Booked

Services’ apply equally to reservations originated by travel agents.

Additionally, travel agents should:

• Where practical, always request or process all airline reservations for a specific
itinerary, and advise all subsequent changes, through one airline or CRS. Where
this is not practical, each airline or CRS with which reservations have been made
must be informed that the reservation is in connection with an itinerary;

• Always provide the service supplier with which reservations are made with a
customer contact. This enables continuity of customer service during the hours
when the office of the travel agent is closed; • request and/or sell airline space or
other services only at the specific request of a customer. Travel agents shall make
reservations transactions in accordance with the terms in the agreement with the
provider of the electronic system;
• Ensure that the airline ticket or other accountable document is issued in
accordance with the actual status of the reservation for each element of the
service(s) booked and within the applicable time limits specified or agreed for the
issuance of such accountable documents;

• Never issue a ticket or other accountable document, or create a passive segment,

indicating a definite reservation for a particular service unless confirmation of such
reservation has been received from the service supplier either directly, or via a
CRS, or via another service supplier;
• When making reservations for a group, strictly adhere to the time limits
established with the service supplier for the notification of individual customer
names and release back all unsold services at this time. Where appropriate, advise
the service supplier of the price or price level that is being offered to the
customer(s).
 REFERENCES
 http://www.asta.org/about/content.cfm?ItemNumber=745

 www.iata.org/agenthome

 http://www.travelagency-commissioner.aero

 https://www.pcisecuritystandards.org/

 http://www.visaeurope.com/aboutvisa/security/

 ais/aisprogramme.jsp

 http://www.mastercard.com/us/merchant/securi

 ty/sdp_program.html