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The Travel Agency

Definition
 Is

a commercial enterprise where a traveler can secure information and expertise, get impartial counseling, and make arrangements to travel by air, sea or land, to any point in the world.
as an agent of the different suppliers in the tourism industry

 Acts

Channels of Distribution
Unilateral Distribution System
Supplier Consumer

Bilevel Distribution System
Supplier Retailer Consumer

Travel Management Company
“A commercial enterprise where a traveler may secure information, receive travel advice, and make arrangements to travel by air, sea or land, to any point in the world for a professional fee.”
Consumer

Supplier

TMC

Functions of a TMC
 Provides

information and expertise.

 Recommends

destinations, products and services best suited to the needs of the client.

Functions of a TMC
 Provides

assistance in securing travel documents.

Functions of a TMC
 Processes

travel arrangements.

Functions of a TMC
 Assists

in cases of refunds and cancellations.

Setting up a Travel Agency

Setting up a Travel Agency

Single Proprietorship
 Bureau

of Domestic Trade Registration
Trade Name Registration  Bank Certificate for company’s capitalization  TIN of the owner

Setting up a Travel Agency

Single Proprietorship
 LGU

DTI’s Certificate of Business Name Registration  Copy of Lease Contract Agreement of the premises  Bank Certificate of the company’s paid up capital  Financial projections for the next three years

Setting up a Travel Agency

LGU
Bio-data of the General Manager  List of the company’s employees with respective bio-data  Duly accomplished application form  Proof of payment of application fee  General Liability insurance policy  Surety Bond from an accredited insurance company  Barangay Clearance

Setting up a Travel Agency

Partnership

Securities and Exchange Commissions & DTI Registration
 

Articles of Partnership Bank Certificate of capital fund paid-up

 LGU

SEC-approved Partnership document *** same with Proprietorship requirements

Setting up a Travel Agency

Corporation

Securities and Exchange Commissions and DTI Registration
   

Articles of Incorporation By-laws Bank Certificate of capital fund paid-up Incorporators’ Bio-data

Setting up a Travel Agency

License to Operate
Barangay clearance  Fire safety clearance  Certificate of electrical inspection  Certificate of occupancy  Certified copy of Articles of Incorporation/Partnership and By-laws or Certificate of Business Name Registration for Single Proprietorship  Contract of Lease of office space

Setting up a Travel Agency

License to Operate
Surety Bond valid for one year from the date of issue  List of all officials and employees and their respective positions, citizenship, and home address  List of all travel representatives, consultants, sales agents or persons who are regularly engaged in soliciting and booking passengers

Setting up a Travel Agency

License to Operate
For new general manager, application for permit to work and documents to prove a minimum of three (3) year’s experience in travel and tour agency operations.  For new agencies, a two or three-year projected financial statement reflecting a minimum working capital of Php 1,000,000.00.

Setting up a Travel Agency

Registration with the following government agencies:
   

SSS BIR Pag-ibig Philippine Health Insurance Group

 DOT Accreditation: is a certificate issued by
the DOT that the holder has complied with the DOT’s minimum standards in the operation of the establishment concerned.

Organizational Structure

Small-sized TMC/TA
MANAGER
Secretary

Administration

Operations

Sales

Organizational Set-Up

Medium-sized TMC/TA
General Manager
EDP/MIS Secretary Asst. General Manager

Administration

Operations

Sales

Organizational Set-Up

Large-sized TMC/TA
General Manager
Comptroller EDP/MIS Secretary Asst. General Manager

Administration

Operations (Tours)

Operations (Travel)

Sales & Marketing

Departmental Functions

Administration Department
   

General Administration Section Personnel Section Accounting Section Finance Section

Departmental Functions
 Marketing and Sales Department
 Marketing -Creating awareness of both the company and its products and services.      Advertising Publications Publicity Public Relations Promotions

Departmental Functions
 Marketing and Sales Department
 Counter Sales -Transactions captured by the travel counselors or counter staff.  Field Sales - Transactions captured by the account executives or sales agents or representatives outside the office premises.

Travel Agency’s Manpower
 Bookkeeper  Cashier  Utility Personnel  Administrative Manager  Accountant  Collectors

Travel Agency’s Manpower
 Travel Counselor  Reservation & Ticketing Agent  Liaison Officer  Travel Manager/Tour Manager  Travel/Counter Supervisor  Documentation Supervisor

Travel Agency’s Manpower
 Account Executive  Sales Manager     Sales & Marketing Manager Business and Product Development Supervisor Researchers Utility Personnel

Departmental Functions
 Operations Counter Counseling Documentation Reservations Fare Calculations Ticketing

Sales and Revenues of TMC
 Cost-plus: a negotiated professional or handling fee  Commissions: a percentage of the total price paid to an agency. (rate – minus) Transportation = 5-9%  Tour packages = 11% - 22%

Sales and Revenues of TMC
 Reasonable Mark-up on Net Fares: a fee added to the net price (considers expenses or profit margin) (net – plus)  Service Fees: a collected amount for certain ancillary service  Production Incentives and Rebates

Commission
Airline Seat Commission 450.00 6% 27.00

Mark-up
Airfare Ground transfer Accommodation Sightseeing Meals 250.00 20.00 300.00 50.00 70.00 _______ $690.00 69.00 $759.00

Total Cost Mark-up 10% Total Selling Price