Tourism, Travel Agencies and Airfares

• These are study notes on tourism, travel agencies and airfares

Department of Tourism (DOT)

• A national government organization oversees the country's tourism industry.
• Established in 1973 by P.D. 189.
• Reorganized in 1989 by E.O. 120 under President Corazon Aquino.
• The 1st Secretary was Sec. Jose D. Aspiras.
• The Present Secretary is Sec. Christina Garcia Frasco.

Tourism Act of 2009 (R.A. 9593)

• Created the Tourism Congress of the Philippines on Nov 26, 2009
• It serves as a private consultative body for planning and policy-making.

Attached Agencies of DOT

• Tourism Promotions Board (TPB) promotes the Philippines as a global tourism destination.
• Tourism Infrastructure & Enterprise Zone Authority (TIEZA) develops tourism infrastructure and manages tourism zones.
• Duty Free Philippines (DFP) manages duty-free retail operations.
• Intramuros Administration (IA) preserves and manages Intramuros as a historical site.
• National Parks Development Committee (NPDC) manages and develops national parks.
• Philippine Retirement Authority (PRA) encourages foreign retirees to live in the Philippines.
• Philippine Commission on Sports Scuba Diving (PCSSD) regulates and promotes scuba diving.

Other National Government Units (NGUs)

• Civil Aviation Authority of the Philippines (CAAP) establishes air safety standards.
• Philippine Ports Authority (PPA) manages port planning, development, and operations.
• Department of Foreign Affairs (DFA) handles foreign relations and protects national security.
• Department of Trade and Industry (DTI) oversees trade, industry, and business sectors.
• Department of Justice (DOJ) enforces the rule of law and regulates immigration.
• Department of Transportation (DOTr) supervises and regulates transportation.
• Civil Aeronautics Board (CAB) regulates the economic aspects of air transport.
• Maritime Industry Authority (MARINA) regulates maritime safety and standards.
• Land Transportation Franchising and Regulatory Board (LTFRB) issues and regulates public transport franchises.
• Department of Environment and Natural Resources (DENR) manages natural resources and environmental protection.
• Department of Public Works and Highways (DPWH) maintains and develops infrastructure.
• Department of the Interior and Local Government (DILG) promotes peace and order and strengthens local government capabilities.
• Department of Finance (DOF) manages government revenue and taxation.

Travel Agency: Roles and Functions

• Provides travel information and expertise.
• Recommends destinations, products, and services.
• Secures travel documents.
• Processes reservations and confirmations.
• Assists in refunds and cancellations.

Travel Agency: Products and Services

• Airline Tickets through booking and issuing domestic and international flight tickets.
• Hotel and Resort Accommodations where they offer reservation services for hotels and resorts.
• Tour Packages involving selling pre-arranged and customized tour packages.
• Car Rentals, arranging car rental services for clients.
• Cruise Packages which provides cruise itineraries and packages.
• Travel Insurance that offers protection for travel-related risks.
• Travel Documentation aiding in processing passports, visas, and other travel documents.
• Sightseeing and Activities which organizes tours and activities at destinations.

Travel Agency: Organizational Set-up

• The Administrative Department handles legal, insurance, equipment maintenance, personnel, hiring, compensation, training, accounting, and finance.
• The Operations Department ensures the timely delivery of services for tour and travel operations.
• The Marketing Department creates awareness.
• The Sales achieve a desired result of marketing.

Difference Between Marketing and Sales

• Marketing involves promoting awareness about a company, destination, and services.
• Sales involves closing deals and generating revenue being the direct result of Marketing.

Establishing a Travel Agency

• Licensing through a Business Permit or Mayor's Permit.
• Registration with DTI (single/sole) or SEC (partnership/corporation).
• Accreditation with DOT.
• Capitalization needed: P500,000.

Types of Business Ownership

• Single or Sole Proprietorship is owned by one individual.
• Partnership is owned by two individuals.
• Corporation is owned by a minimum of 5 investors.

Major Sources of Income

• Service Fees which charges for handling reservations, cancellations, and rebooking.
• Commissions earned from airlines, hotels, and tour operators.
• Markups on Tour Packages that agencies create and sell at higher rates to generate profit.
• Profit from Foreign Exchange when clients pay in foreign currency, agencies may gain from currency exchange differences.

Tour Operations Cycle

• Step 1: Tour planning involves determining objectives and creating a suitable tour package.
• Step 2: Itinerary Development builds the itinerary by arranging destinations and activities in a logical sequence.
• Step 3: Contracting Rates and Services involves negotiating competitive rates and terms with suppliers.
• Step 4: Costing and Pricing involves determining the actual cost and setting the selling price with markup.
  • P1,000++ equals P1,220 (12% VAT + 10% service charge).
  • P1,000+++ equals P1,227.50 (extra government tax of 0.75%).
• Step 5: Quotations and Proposals summarizes the total package price and terms.
• Step 6: Reservations and Confirmations place requests and secure confirmations from suppliers.
• Step 7: Field Operations executes the tour package, including airport transfers, sightseeing tours, optional tours, and coordination.
• Step 8: Billings and Accounting prepares and collecting payments from clients and settling with suppliers.
• Step 9: Evaluation measures success through customer satisfaction feedback, financial performance, and visitor arrivals.

Factors That Influence Travel

• Age young individuals have a high tolerance for varied and new experiences.
• Middle-aged individuals finds comfort as more important.
• Elderly prefers low-impact and relaxing holidays.
• Gender men have to balance time between family and business.
• Education higher education is linked with higher socioeconomic status and income, allowing for more frequent travel opportunities.

Leisure Travel Motivators

• Physical Motivators are physical enjoyment such as rest, recreation, relaxation, and participation in light sports.
• Cultural Motivators learning about history, food, music, and natural and man-made places.
• Interpersonal Motivators meeting new friends, visiting friends and relatives.
• Status and Prestige Motivators such as education, and enrichment.

Leisure Travel De-Motivators

• Health Issues like poor health may discourage travel.
• Financial Constraints with a limited budget affects travel decisions.
• Political Instability where safety concerns can deter travel.

Travel Documentation and Formalities: Passport

• An official travel document issued by a government to identify a person.
• It includes full name, photograph, place and date of birth, signature, and expiration date.

Travel Documentation and Formalities: Visa

• Permission granted by a country to enter and stay for a certain period.
• ASEAN countries - Visa-free travel for Filipino citizens.
• Some countries issue a visa upon arrival.

Terminal Fee

• International terminal fee is P550 (included in the ticket price).
• Domestic terminal fee is P200 (included in the ticket price).

Philippine Travel Tax

• P1,620 for adults.
• P810 for children under 12.
• Exempted include foreign passport holders, foreigners with ACR (Alien Certificate of Registration).

Travel Formalities

• Check-in domestically is 2 to 3 hours before departure.
• Check-in internationally is 4 hours before departure.
• Baggage Allowance for Hand-Carried is 7 kg.
  • Checked baggage domestically is 10 to 20 kg.
  • Internationally, to the US/Canada is 23 kg (2 pieces); to Europe is 30 kg (1 piece).

Ways to Calculate Airfare

• Published Fare is a fixed fare publicly available.
• Negotiated Fare offers special rates through contracts with airlines.
• Bulk Fare is a discounted fare for group travel.
• Inclusive Tour Fare is a special fare when combined with a tour package.