TH1804

Role and Importance of a Travel Agency

A travel agency plays a vital role in the travel business. It assists individuals or groups who wish to do any of
the following:
o Take trips
o Plan different itineraries
o Make a reservation for tours, transportations, and hotels
o Obtain or prepare airline tickets
o Perform other related services such as designing a different tour and keeping the suppliers' product
and brand knowledge.
The aforementioned role and importance of a travel agency are elaborated below:

 Provide information and expertise – A travel agency can serve as the source of information,
especially for first-time travelers. It can provide a brief history, culture of the people, and specialties
of a traveler's target destination. It can also easily determine whether the prospective travelers are in
need of travel documents like a passport.

 Recommend a particular destination, suppliers, products, and services that tailor fit the needs of
the client – A travel agency can recommend a specific mode of transportation or an airline schedule
that best suits the client's location preference, budget, and the purpose of the travel itself. It can
also recommend activities that would live up to the client's expectations of the forthcoming trip.

 Assist in securing tourist or business travel documents – A travel agency can assist in securing the
necessary travel documents, such as a passport, a visa, and immigration clearances. A passport is an
official travel document provided by the government of a country which proves that the owner is a
citizen of that particular country. It also allows people to travel overseas. Here in the Philippines, one
can simply get a passport by securing a passport application schedule online care of the Department
of Foreign Affairs (DFA).
Whereas, a visa is also an official document or mark made on a passport that will enable one to
enter or leave a particular country. Internet nowadays has automated processing of most travel
documents, which some clients find more convenient and cost-effective. However, clients can simply
ask for the services of a travel agency to monitor the progress and the outcome of the travel
arrangements along with most of their travel documents.
Some destinations require registered travel agencies to secure visa for travelers. An example of this
is the Japanese visa. One cannot directly pass the requirements for a visa to the embassy if not
handled by registered travel agencies in Japan. Another example might be South Korea joining the
likes of the trend above.

 Take care of travel arrangements by placing a reservation, obtaining confirmation, and issuing
corresponding tickets or tour vouchers – A travel agency can determine the total cost of the travel
arrangements and the issuance of the transportation documents and tour vouchers.

 Assist in cases of refunds and cancellations – If the travel arrangements made for a client's trip
didn’t go as planned due to unavoidable circumstances, and legitimate claims for a refund is in
order, a travel agency may assist a client to secure the refund from the supplier of services.

 Ensure the clients' safety – Booking with a travel agency includes the clients' safety. If an accident
took place during the tour or trip, the clients should be aware of what liabilities the agency can cover

02 Handout 1 *Property of
 STI
 TH1804

and which ones cannot. The safety of the clients should be of utmost priority. However, some travel
agencies found a way to avoid being liable and any form of misuse or misconception by asking their
clients to sign a waiver.

 Make time-saving itineraries – As travel specialists, travel agencies can help clients maximize their
tour/trip, most especially for those who have limited time. An itinerary is a travel document that
serves as a record of the schedule, timetable, agenda, program, tour, destination, accommodation,
and mode of transportation for a trip or tour.
Skills Required in Travel Agency Management
People working in the tourism and hospitality industry may either work indoors or outdoors; on land, air or
sea, based on standard hours or a flexible schedule, and may also on a contract-based or full time.
Therefore, graduates or people who have this degree are expected to manifest the following:
 Verbal and written communication – the ability to speak clearly and directly, to establish and use
networks (people-connection) and fluency in other languages aside from English.
 Ability to work independently and with a team – the ability to know how to define one’s role as a
member of a team and identify the strengths and weaknesses of team members.
 Problem-solving – the ability to develop creative, innovative, and practical solutions, to show
independence and initiative to identify and solve problems, and to resolve customer concerns about
complex project issues.
 Initiative – can translate ideas into action, generate a range of options, and identify opportunities
not obvious to others.
 Planning and organizing – can manage time wisely and set priorities, can allocate people and other
resources to tasks, and is resourceful.
 Interest and willingness to learn – has the enthusiasm for continuous learning, open to new ideas,
and has the ability to acknowledge the need to learn to accommodate change.
 Technology-savvy – has a foundation of basic information technology (IT) or computer skills, which
includes documentation, research and support, and able to use IT to organize data and use
technology as a means of communication.
 Ability to think on one’s own feet – the ability to think and react quickly.
 Maturity – has a sense of responsibility.
 Ability to create rapport with different kinds of people – has no issue to work across different ages
irrespective of gender, race, religion, or political persuasion.
 Confidence – the ability to express oneself confidently and has self-recognition.
 Leadership – has adaptability or the ability to adjust to change; team-oriented; being positive at all
times to motivate others; and passionate in one’s craft.

02 Handout 1 *Property of
 STI
 TH1804

Travel Agency Revenues

A travel agency focuses on areas like ticketing (air, train, and cruise), domestic hotel bookings, coach
reservations, car rentals, package tours, conferences, meeting arrangements, and trade fairs for earning
revenue. It has different sources of revenue which are as follows:
 Package tour commission. Selling package tours has become an appealing business option for travel
agencies. There is a growing demand for organized domestic package tours, as well as inbound and
outbound package tours, from travel companies. Travel agencies sell package tours directly to
customers on the price printed on tour brochures, making them as intermediaries between the
suppliers and the customers. They earn commissions or incentives after selling the suppliers'
products and services which are inclusive in package tours. The percentage of how much travel
agencies get depends on their agreement with the suppliers.

 Hotel room reservation commission. Travel agencies generally find the sale of hotel rooms for a
certain duration as very profitable and attractive than other sources of income. Even though online
bookings are made available directly for customers, all categories of accommodation also consider
the sale of rooms through retail travel agencies as a very convenient and cost-effective option.

 Transport booking commission. Earning commissions for reservation of ground transport is a

traditional source that a travel agency heavily depends on while booking different types of
transports for their own clients. There are transport operators having hundreds of vehicles that are
available as transportation service providers.
 Meetings, Incentives, Conventions and Exhibitions (MICE) commission. Travel agencies organize MICE
activities for business houses and companies. Specialized event management companies deal with
trade fair, exhibitions, conference, conventions, congress, political rally, and meetings of different
scale and size. The wholesalers of these activities promote directly and through retail travel
agencies.
 Transaction of foreign exchange commission. Travel agencies do the retailing of foreign currency
directly to customers who plan to travel abroad. They also earn commission from the wholesale
foreign exchange dealer for the transactions of foreign currencies. Most of the foreign exchange
dealers deal with US dollar, Great Britain pound, Singapore dollar, Australian dollar, euro, Japanese
yen, and franc.

 Insurance commission. Travel agencies take the insurance services from insurance companies for
package tours and suggest the clients to apply for an insurance policy covering medical aid in case of
emergency. There are merits of taking insurance policy while traveling. Insurance companies offer
commission on the insurance policy.
 Revenue from bank interests. Travel agencies receive advance payments for booking hotel rooms,
airline seats and a berth in cruise lines, airline and train tickets, and hiring a coach or light vehicles.
Travel agencies get time to rotate the money or go for term deposits for which they can get interest
or make down payments for borrowing loans from banks.
 Revenue from card payments. Travel agencies can also take payments through credit or debit cards
to get commissions from banks. Many customers find it more convenient to make card payments.
The concept of “travel now and pay later” has gained more leverage. With this, travel agencies get a
percentage (depends on the agreement with the bank or credit/debit card company) if their clients
opt for card payment.

02 Handout 1 *Property of
 STI
 TH1804

Organizational Structure of a Travel Agency

A travel agency’s structure depends on its size and type of business it handles. However, all of them have the
same foundation that can be classified into the following:

 Small-sized travel agency has no more than 10 employees, with the manager supervising all the three
(3) departments as shown in Figure 1. On the administrative side, the backup staff is made up of a
secretary, a bookkeeper, a cashier, and a utility staff for janitorial and messenger services.
Operations has a travel counselor or counter staff, backed up by a ticketing and reservations staff,
and a liaison officer. The manager acts as the marketing person, backed up by an account executive
to perform the sales functions. To reduce staff costs, the accounting functions would be out-sourced
(Claravall, 2013).

 Medium-sized travel agency had about 20 or so employees, with three (3) department heads. The
upper management is made up of a general manager, an individual to oversee all electronic data and
manage the automated systems and procedures, and an assistant general manager backed up by a
secretary as shown in Figure 2. A full-time accountant, who in turn is assisted by a bookkeeper, a
cashier, and a utility person, backs up the administrative manager. The operations manager, backed
up by a travel supervisor, oversees the travel counselors or counter staff and the ticketing and
reservations staff. There would be an additional liaison staff. The upper management acts as the
agency’s marketers, while a sales manager oversees the account executives (Claravall, 2013).

 Large-sized travel agency has at least 30 employees headed by the managing director or a general
manager—the former being a stockholder and member of the board of directors, the latter an
employee. A deputy managing director or an assistant general manager backs them up. A
comptroller oversees the management of the company’s database and ensures that electronic and
automated systems and procedures would be in place. An executive assistant augments the general
manager. On the administrative side, a personnel officer is hired to handle human resources and a
number of collectors is added to collect the ever-growing amount of receivables. The operational
functions are divided into travel management and tours operation as shown in Figure 3 (Claravall,
2013).

02 Handout 1 *Property of
 STI
 TH1804

Figure 1. Small-sized Travel Agency

Source: Travel and Tour Operations in the Philippines 3rd Edition, 2013. p. 63

02 Handout 1 *Property of
 STI
 TH1804

Figure 2. Medium-sized Travel Agency

Source: Travel and Tour Operations in the Philippines 3rd Edition, 2013. p. 63

02 Handout 1 *Property of
 STI
 TH1804

Figure 3. Large-sized travel agency

Source: Travel and Tour Operations in the Philippines 3rd Edition, 2013. p. 64
References:
Claravall, B. G. (2013). Travel and tour operations in the Philippines. Sampaloc, Manila: ACCUMIRO I.T. SOLUTIONS.
Page, S. (2015). Tourism management. London; New York: Routledge.
Tuazon - Disimulacion, M. A. (2016). Principles of tourism 2. Mandaluyong: Books Atbp. Publishing Corp.
Swain, D. S. (2014, February 26). Travel and tour operations management. Retrieved from Pondicherry University’s website:
http://www.pondiuni.edu.in/sites/default/files/travel-agency-op-mgt-260214.pdf on March 5, 2018

02 Handout 1 *Property of
 STI