Tourism Industry: Public and Private Sectors

• The tourism industry is divided into the public/government sector and the private sector

Public/Government Sector

• Comprises Local Government Units (LGUs) like cities, towns, municipalities, and barangays
• Comprises National Government Units (NGUs) which include DOT, CAB, CAAP, MARINA, PPA, LTFRB, DFA, DENR, DTI, DPWH, DOJ, DILG, and DOTr, DOF

Private Sector

• Includes Transportation Industry, Lodging Industry, Food & Beverage Industry, Travel Trade, Attraction/Activity Industry, and Other Entities such as Event Organizers and Social Media Sites

Department of Tourism (DOT)

• It is the national government organization overseeing the country's tourism industry
• DOT was established in 1973 under P.D. 189 and reorganized in 1989 during President Corazon Aquino's administration
• In 1989 the Philippine Convention Bureau was renamed to Philippine Convention and Visitors Corporation under E.O. 120
• The 1st DOT Secretary was Sec. Jose D. Aspiras
• The current DOT Secretary is Sec. Christina Garcia Frasco

Tourism Act of 2009 (R.A. 9593)

• This act created the Tourism Congress of the Philippines on November 26, 2009
• The Congress acts as the private consultative body to the government for tourism development policy and program planning and implementation

Attached Agencies of the DOT

• Tourism Promotions Board (TPB)
• Tourism Infrastructure & Enterprise Zone Authority (TIEZA)
• Duty Free Philippines (DFP)
• Intramuros Administration (IA)
• National Parks Development Committee (NPDC)
• Philippine Retirement Authority (PRA)
• Philippine Commission on Sports Scuba Diving (PCSSD)

Other National Government Units (NGUs)

• CAAP (Civil Aviation Authority of the Philippines) establishes safety standards for air carriers

• PPA (Philippine Ports Authority) coordinates port planning, development, control, and operations

• DFA (Department of Foreign Affairs) enhances national security and protects territorial integrity, maintaining friendly relations with other nations

• DTI (Department of Trade and Industry) oversees the retail industry for manufacturing, merchandising, and distributing Philippine handicrafts and products

• DOJ (Department of Justice) through the Bureau of Immigration controls entry and exit of foreign nationals

• DOTr (Department of Transportation) regulates and supervises the transportation industry

• CAB (Civil Aeronautics Board) regulates the economic aspects of air transportation

• MARINA (Maritime Industry Authority) is the policy-making agency for maritime safety

• LTFRB (Land Transportation Franchise and Regulatory Board) issues, suspends, and cancels Certificates of Public Convenience for public land transportation

• DENR (Department of Environment and Natural Resources) focuses on protecting and conserving the environment and natural resources

• DPWH (Department of Public Works and Highways) oversees the building, upkeep, and repair of national infrastructure which includes roads, bridges, and irrigation systems

• DILG (Department of Interior and Local Government) promotes peace, order, and strengthens local government capabilities

• DOF (Department of Finance) generates revenue collections via the Bureau of Internal Revenue and the Bureau of Customs

Travel Agencies

• A travel agency is a commercial enterprise where travelers obtain information, expertise, impartial advice, and arrangements for travel worldwide
• A travel agency acts as a middleman between vendors (tour suppliers) and vendees (clients/buyers)

Roles/Functions of a Travel Agency

• Provide information and expertise
• Recommend destinations, products, and services that best suit the client
• Provide assistance in securing travel documents such as passports, visas, and immigration clearances
• Process travel arrangements by placing reservations, obtaining confirmations, and issuing airline tickets and tour vouchers
• Assist clients in cases of refunds and cancellations

Organizational Set-Up of a Travel Agency

• Administrative Department
• Operations Department
• Sales & Marketing Department

Administrative Department Sections

• General Administration Section, which handles legal matters, insurance, and office equipment
• Personnel Section, which focuses on hiring policies, compensation, and staff training
• Accounting Section, in charge of licenses, permits, accountable forms, invoices, billing statements, and budget formulation
• Finance Section, which manages records of money collected and disbursements

Operations and Sales Departments

• Operations Department delivers travel products, tour packages, itineraries and related components
• Sales & Marketing Department generates maximum sales to meet profit targets
• Marketing creates awareness about a company destination or product
• Sales is the desired result of marketing

How to Establish a Travel Agency

• Licensing requires securing a Business Permit at the City Hall where the business will be located
• Registration requires securing the Business Name from the Department of Trade and Industry, while Partnership and Corporation registrations are secured from the Securities and Exchange Commission
• Accreditation is secured from the Department of Tourism for Travel Agency, Tour Operator, and Transport Operator
• Other requirements include additional legal needs and membership affiliations with organizations like TPB, PHILTOA, and PTAA

Types of Business Ownership

• Single or Sole Proprietorship is when a single individual owns the business
• Partnership is when the business is owned by 2 individuals
• Corporation requires a minimum of 5 investors and is the most common setup for travel agencies
• The capital needed to set up a travel agency is 500K

Major Sources of Income for Travel Agencies

• Variable mark-up based on the contracted rates from suppliers
• Favorable terms and conditions
• Sale of optional tours and services
• Shopping commissions

Travel Agency Products and Services

• Airport transfers with meet-and-assist
• Sightseeing Tours & Tour Packages (FIT, GIT, SIC)
• Hotel Reservation
• Airline Tickets (Domestic and International)
• Travel Documentation (Passporting, Visa Assistance, Immigration Assistance for Fil-US Dual Citizenship)
• International Cruise
• Car Rental and Vehicle Charter
• Travel Insurance