Starting a Travel Agency Business

Starting a Travel Agency or Tour Operator

• Infrastructure and Financial Requirements:
  • Office space
  • Office systems like Amadeus, Galileo, and Sabre
  • Office furniture and furnishing
  • Communications equipment including telephone, fax machine, and computers
  • Starting capital

Location

• Travel agencies and tour operators often have offices in large cities with branches in smaller towns.
• Location should be considered, aiming for a market place or near businesses, industry centers, institutions, offices or a residential area.

Accreditation and Registration

• International Air Transport Association (IATA):
  • Not required for operation, but accreditation offers benefits.
  • Requirements include meeting local criteria outlined in the Travel Agent Handbook, selecting the country of application, submitting the application based on the Application Guide, and paying the accreditation fee.
• Department of Tourism (DOT):
  • Accreditation requires:
    • Valid mayor’s permit or municipal license
    • DTI Business Name Registration Certificate (for sole proprietorships)
    • SEC Registration Certificate (for partnerships or corporations)
    • Valid visa from the Bureau of Immigration (BI) and employment permit (for foreign nationals)
  • Benefits include endorsements to embassies and travel trade associations, eligibility for travel fairs, priority to DOT training programs, and free online/print advertising.
• Department of Trade and Industry (DTI):
  • Registers sole proprietorships.
  • Issues a 5-year certificate of registration.
• Department of Labor and Employment (DOLE):
  • Required for travel agencies employing 5 or more employees to avoid labor cases.
  • A resource for foreign nationals to obtain an employment permit.
• Bureau of Internal Revenue (BIR):
  • All businesses need to obtain a Tax Identification Number (TIN).
• Bureau of Immigration (BI):
  • Businesses owned by foreign nationals need to secure a valid visa.
• Social Security System (SSS):
  • Businesses should register and have their employees become members.
  • Provides protection against loss of income or financial burden due to sickness, disability, maternity, old age, death, or other contingencies.
• Securities and Exchange Commission (SEC):
  • Certification and registration of partnership businesses (owned by at least two individuals) and corporations (owned by at least five people).
  • Issues an SEC certificate to these businesses.
• Local Government Unit (LGU):
  • TAs and TOs must obtain a valid mayor’s permit or municipal license
• Home Development Mutual Fund (HDMF):
  • Employers are required to have employees as members.
  • Known as the PAGIBIG Housing Development Program, it provides housing and loan benefits.
• Philippine Health Insurance Corporation (PhilHealth):
  • Employers are required to have employees as members.
  • Provides employees and dependents with reduced health expenses during confinement or when availing selected health services.

Acknowledgment from Principal Suppliers

• Requires an acknowledgment of product distribution from airlines, hotels, cruise lines, and car transports.
• This assures consumers of the legitimacy and authenticity of travel products.

Challenges of Travel and Tour Operations

• Increased options and price transparency: Travelers can research and book their own tours directly.
• Greater traveler independence: DIY options mean less need for travel agents and tour operators.
• Decreasing customer loyalty: Consumers are more willing to switch brands for better offers.
• Mergers and alliances: Agencies and tour operators are joining forces, reducing independent business opportunities.
• Market domination: Larger companies have advantages in funding and publicity, making it difficult for smaller companies to compete.
• Accessibility of information: The internet has made it easy for travelers to find information and book trips without relying on travel professionals.

This quiz covers essential aspects of starting a travel agency or tour operator, including infrastructure and financial requirements, location selection, and accreditation processes. Understand the key components needed to establish a successful travel business and the regulations involved in the industry.