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 Assignment no.1

On

HMT=564

LEGAL BUSINESS ETHICS FOR TRAVEL AGENCY

BY IATA

Submitted To:- Submitted By:-

Mr. Rohit Sarin Sir Arun Pathania

Roll No.-RV8901AO4

MBA(TOURISM & Hospitality)

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 clientèle, 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),[2] 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.

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.

Criticism and controversy

"Racking"

Travel agencies have been accused of employing a number of restrictive practices, the chief of
which is known as 'racking'. This is the practice of displaying only the brochures of those travel
companies whose holidays they wish to sell, the ones that pay them the most commission. Of
course, the average customer tends to think that these are the only holidays on offer and is
unaware of the possible alternatives.
Conversely, by limiting the number of companies that a travel agency represents, this can bring a
better and more profitable, working relationship between the agency and its suppliers. Travel
agencies can then obtain special benefits for their customers, from a supplier, by concentrating
their bookings with that supplier. Some examples of these special benefits would be room
upgrades or the waiver of change and cancellation fees.

The Internet threat

With general public access to the Internet, many airlines and other travel companies began to sell
directly to passengers. As a consequence, airlines no longer needed to pay the commissions to
travel agents on each ticket sold. Since 1997, travel agencies have gradually been
disintermediated, by the reduction in costs caused by removing layers from the package holiday
distribution network.[4][5] However, travel agents remain dominant in some areas such as cruise
vacations where they represent 77% of bookings and 73% of packaged travel.[6]

In response, travel agencies have developed an internet presence of their own by creating travel
websites, with detailed information and online booking capabilities. Several major online travel
agencies include: Expedia, Voyages-sncf.com, Travelocity, Orbitz, CheapTickets, Priceline,
CheapOair and Hotwire.com. Travel agencies also use the services of the major computer
reservations systems companies, also known as Global Distribution Systems (GDS), including:
SABRE, Amadeus CRS, Galileo CRS and Worldspan, which is a subsidiary of Travelport,
allowing them to book and sell airline tickets, hotels, car rentals and other travel related services.
Some online travel websites allow visitors to compare hotel and flight rates with multiple
companies for free. They often allow visitors to sort the travel packages by amenities, price, and
proximity to a city or landmark.

Travel agents have applied dynamic packaging tools to provide fully bonded (full financial
protection) travel at prices equal to or lower than a member of the public can book online. As
such, the agencies' financial assets are protected in addition to professional travel agency advice.

All travel sites that sell hotels online work together with GDS, suppliers and hotels directly to
search for room inventory. Once the travel site sells a hotel, the site will try to get a confirmation
for this hotel. Once confirmed or not, the customer is contacted with the result. This means that
booking a hotel on a travel website will not necessarily result in an instant answer. Only some
hotels on a travel website can be confirmed instantly (which is normally marked as such on each
site). As different travel websites work with different suppliers together, each site has different
hotels that it can confirm instantly. Some examples of such online travel websites that sell hotel
rooms are Expedia, Orbitz and WorldHotel-Link.

The comparison sites, such as Kayak.com, Trip Advisor and SideStep search the resellers site all
at once to save time searching. None of these sites actually sell hotel rooms.

Often tour operators have hotel contracts, allotments and free sell agreements which allow for
the immediate confirmation of hotel rooms for vacation bookings.

Mainline service providers are those that actually produce the direct service, like various hotels
chains or airlines that have a website for online bookings. Portals will serve a consolidator of
various airlines and hotels on the internet. They work on a commission from these hotels and
airlines. Often, they provide cheaper rates than the mainline service providers as these sites get
bulk deals from the service providers. A meta search engine on the other hand, simply culls data
from the internet on real time rates for various search queries and diverts traffic to the mainline
service providers for an online booking. These websites usually do not have their own booking
engine.

Ethical issues in the Tourism Industry

The tourism industry can become one of the main sources of income for several countries,
especially developing nations, which have a huge potential for tourism. Ironically, it is also one
of the prominent service sector which sees a gross violation of corporate ethical conduct. Simply
because a foreigner to a country is not aware of the system of operations, as well prevalent
cultures, the local population tends to exploit that ignorance to their benefit. They without a
conscience act upon ways to manipulate the trust which the ignorant tourist places upon them.
One of the several issues in the ethical issues of the tourism industry is the non-disclosure of
information to the tourist. The information provided to the tourist before they avail the service is
many a time misguided and fine print, well, you could call it a bit too fine! A lot of relevant
information is left out, leaving the consumer tourist confused. The exchange and return policy on
products, the fares of commercial vehicles, the added expenses of a trip, you name it, the tourist
has been exploited. Tourists on a regular basis are told about domestic travel and package deals,
which seem pretty attractive and affordable prima facie, but when the actual trip commences
they find several added expenses being incurred, leaving the tourist feeling cheated. The
authorities do not provide sufficient information as to the rates of travel, stay, and places which
are the places the tourist should be aware of, which might be a threat to them.

There are several ways the tourism industry may take better care of this problem. The main
initiative is required from the tourism ministry of the country, since it is the regulatory authority.
More stringent norms for tourist satisfaction, providing easy access of relevant information to the
tourists, about rates, tariffs, certified places of accommodation and modes of travel, are required
to prevent the tourist being duped. A tourist’s satisfaction is of the utmost importance, because a
displeased tourist leaves a bad impression about a whole nation.

Code of Ethics - Guiding Principles for Members

Preamble

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 [terminating 12/31/08] 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.

Conclusion

Failure to adhere to this Code may subject a member to disciplinary actions, as set forth in
ASTA's Bylaws.

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.

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.

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.

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.

CODE OF ETHICS

INTEGRITY – We will conduct our activities with honesty, dignity and fiscal responsibility,
always protecting and promoting our clients’ best interests.

DISCLOSURE – We will communicate material facts to our clients by supplying accurate and
complete information in a clear and understandable manner.

MARKETING – We will refrain from using any form of misleading advertising or innuendo in
marketing products and services.

COOPERATION - We will respond to legitimate complaints immediately. We will cooperate

with any investigation/inquiry in order to resolve any problems or disputes as quickly as
possible.

CONFLICT OF INTEREST – We will be responsible first to clients and our clients' best
interests. We will not allow any preferred relationships with suppliers to interfere with the
interests of our clients.

RESPECT – We will treat all people with equality and respect.

ACCOUNTABILITY – We will fulfill all contractual obligations promptly and completely. We

will maintain accurate and complete records of all client transactions and safeguard client
monies.
COMPLIANCE – We will abide by all applicable laws and regulations and never knowingly do
business with those who operate outside.

COMPETENCY – We will work to constantly improve the products and services we offer to
clients, through a planned training and familiarization schedule.

CONFIDENTIALITY – We will treat every client transaction confidentially. We will not

disclose any information without a client’s permission, unless required to do so by law. We will
not use improperly obtained client lists or other confidential information obtained from an
employee’s former employer.

Why Use A Travel Agent?

Travel is becoming more difficult and unpredictable. Travelers who left travel agents in favor of
self-service internet booking are rediscovering the true value of a good travel agent.

The following are some of the many benefits of using a travel agent.
     Help when things go wrong. Many internet customers complain that when problems arise
there is no one to help. Best Connection Travel's agents ARE available and have the expertise
and contacts to quickly resolve travel problems as they arise. It may take hours for you to find
the best deals on the Internet. One quick call to Best Connection Travel and the work is done for
you. 
   Trustworthy information. Travelers often find that on-line deals that look fantastic turn out to
be disappointing. Best Connection Travel will be able to give you good travel recommendations
that fit your needs and your preferences. 

   Knowledge and experience. The more complicated your travel plans, the more likely you will
have serious difficulties if you are on your own. We can help you avoid such difficulties. For
example, we can make arrangements for you to travel to remote locations, brief you on local
laws and customs, and recommend prudent safety and health practices.

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;

Benefits of Using a Travel Agent

Save Money! - Strong working relationships with travel suppliers and the latest in computer
reservations technology enable travel agents to access the most up-to-date information on how to
get you the best value.
Traveler Advocates - Your best interests are the priority. ASTA (The American Society of
Travel Agents) has a long-standing record of fighting for consumer rights and ASTA member
travel agents are required to adhere to a strict Code of Ethics.

Convenience - The ASTA membership includes travel agents across the country and throughout
the world, most of which offer one-stop shopping for all travel arrangements.

Service - ASTA member travel agents are knowledgeable and active in the industry. The Society
provides education, training and resource materials to its members to equip them with the tools
to offer the highest quality of service.

Agents Will Go the Extra Mile - Agents work for you and will do everything they can to meet
your travel needs. Some agents literally go that extra mile to help their clients. One ASTA-
member agent even went to Ethiopia to escort two adopted orphans to the US.

Bibliography

 http://www.travelsense.org/tips/whyuseanagent.cfm
 http://www.asta.org/about/content.cfm?
ItemNumber=753&navItemNumber=511
 http://www.bestconnectiontravel.com/home/codeofethics.html
 http://www.complaints.com/2011/january/19/Travel_Agency_Ethic
s_250223.htm
 http://www.gdrc.org/uem/eco-tour/principles.html

 http://www.indiainvites.com/global_ethics.html

 www.iata.org/agenthome

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

 https://www.pcisecuritystandards.org/