Travel Agency

• Article 243 of the Tourism Code of 1980 defines a

travel agency as follows:
“a travel and tour agency is an entity engaged in
the business of extending to individuals or groups,
travel services and assistance to include
documentation, ticketing, booking for
transportation and/or accommodation;
arrangements, handling and/or conduct of tours
within or outside Philippines, whether or not for a
fee, commission or any form of monetary
consideration.”
 Travel Agency – The Traditional Way
• A travel agency, in its traditional role as agents
for principals and travel services providers is
defined as follows:
“a commercial enterprises 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.”
The Traditional Linkage

Supplier

Middleman
Travel Agency

Traveler
 Supplier As middleman the agency
collects an agent’s commission
from the supplier. This
commission is normally defined
as a rate-minus.
Middleman Alternately, the agency is allowed
Travel Agency to unilaterally mark up the net
cost given by the supplier. This is
known as net-plus.
In other words, this is done, in a
hidden and subjective way that is
Traveler “best price driven.”
 Travel Agency – The New Way
• The travel agency acts as a partner to both the
supplier and traveler.
• It provides the individual traveler with the
most suitable suppliers based on the traveler’s
needs, convenience and price.
• They examine and evaluate the traveler’s
preferences and budgets and determines “the
best travel arrangement”.
The Emerging Linkage

Traveler

Suppliers Travel
Agency
 Traveler

Suppliers Travel
Agency

Travel agency manages all of the traveler’s needs and services in

his/her trip and ask for a professional fee described as cost-plus.
Cost-plus is the opposite of rate-minus.
Cost-plus is different from net-plus.
cost-plus is open while net-plus is hidden from the client.
Cost-plus is the new trend, the new way.
• A Travel Agency’s new role as partner of the
suppliers and the traveler requires a new
definition:

“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.”
Function of a Travel
Agency
1. Provide information and expertise

“how to get there”

“where to stay”

“what to do”
 2. Recommend destinations,
products and services best suited
to the needs of the client.
 3. Provides assistance in
securing travel documents
4. Process travel
arrangements
5. Assist in case of refunds
and cancellation
 Sources of Sales and Revenues
1. Negotiated professional or handling fee
(cost-plus)
2. Fixed commissions n regular fares (rate-
minus) or reasonable mark up on net
fares (net-plus)
3. Service Fees
4. Production incentives and rebates
Activity Time
Grab a partner.
Prepare ¼ sheet of paper.
Close all your notes.
Form a travel agency organization
structure based on the following:
 UTILITY
PERSONNEL
ACOUNT
EXECUTIVE
SECRETARY

RESERVATION &
TICKETING
 ADMINISTRATION

OPERATIONS

MARKETING & SALES

 ADMINISTRATION DEPARTMENT

• Four Functions:
1. General Administration Section
2. Personnel Section
3. Accounting Section
4. Finance Section
OPERATIONS DEPARTMENT
• The players:
1. The Manager
2. The Travel Supervisor
3. The Documentation Supervisor
4. The Travel Counselor
5. Counter Staff
6. The Reservation and Ticketing Officers
7. Liaison Officer
 MARKETING AND SALES
• The Players:
1. Marketing Manager
2. Product Development Officer
(Research)
3. Sales Manager
• Counter Sales
• Field Sales
• Account Executive (Sales Agent)
 Setting up a Travel Agency
• It requires a legal personality before it
can legally transact business.

• Three types of Business establishments:

1. Sole or Single Proprietorship
2. Partnership
3. Corporation
 Design Your Own Travel Agency
• Do the following:
– Name
– Company Logo
– Organizational structure
– Office Lay-out
– Location
 Assignment: (by group)
• Go to the nearest travel agency and ask the
following:
1. How did they start their business?
2. How did they come up with their name?
3. What are the challenges they encounter?
4. How did they face those challenges?
5. What are their strategies to survive?
6. What are their edge towards their
competitors?
• Furnish a copy of the following:
– Company Profile (brief history, OS, Legal Documentations
and Accreditations, others)
• Support your interview with pictures / videos.
• Create a PowerPoint and present your output to the
class on July 9.
• Send a soft copy of the PowerPoint to
rj.moreno85@gmail.com prior to the presentation
day.