Travel Agencies & IATA Accreditation

• Travel agencies sell travel products and services to potential clients on behalf of suppliers.
• These service providers offer transport, lodging, food and beverage, tour guiding, insurance, and other travel necessities.

Classification of Authorization to Travel

• An IATA-accredited travel agency has met requirements set by the International Air Transport Association.
• A Non-IATA travel agency has not met requirements set by the International Air Transport Association to gain accreditation.

International Air Transport Association (IATA)

• The IATA serves as a regulatory entity for airlines, passenger sales agents, and cargo agents.
• This trade group formulates industry policy and standards to ensure safety, security, and work simplification of airline operations around the world.
• It represents around 240 airlines, accounting for over 84% of total air traffic.

IATA-accredited Travel Agency

• IATA-accredited travel agencies can be trusted to issue tickets and directly oversee rebooking.
• They are able to re-issue rebooking or revalidation of tickets issued, and give endorsement to other airlines.

Non-IATA-accredited Travel Agency

• Non-IATA agencies cannot issue tickets directly for IATA-accredited airlines.
• They collect orders, send booking requests to IATA travel agencies, and then forward the booked tickets to the customer.

Kinds of Travel Agencies

• Travel agencies can be divided by Wholesalers/Consolidators, Corporate Agencies, Marine Agencies, Leisure Agencies, Independent Agencies and Online Agencies.

Wholesalers/Consolidators

• These agencies have consolidated their travel program to provide better efficiency and savings.
• They operate with outlets in different regions and have connections with the greatest number of suppliers.

Corporate Travel Agency

• These agencies manage a corporate or company's travel program, be it for business or other purposes.

Marine Travel Agency

• Marine travel agencies manage travel for clients, which includes reservations in cruise lines, cargo ships, inter island ships and ferryboats.

Leisure Travel Agency

• These agencies create travel arrangements for individual travelers, families, or small groups.
• They promote destinations with ecological/physical attractions, rich historical/cultural heritage sites, and international landmarks.

Independent Travel Agency

• Independent travel agencies can freely operate as sales agents or service providers for prospective clients.
• They aren't bound by the rules of big travel agencies or travel management firms, but adhere to the policies of industries and their suppliers in business transactions.

Online Travel Agency

• These agencies have a website or application that is dedicated to all things travel.
• They specialize in online bookings and reservations for air, land, and sea transport, hotels, tour guides, and itineraries.
• Examples include Expedia Inc., Orbitz Worldwide Inc., and Priceline.com.

Travel Management Company (TMC)

• These organizations offer specialized travel services to the corporate market or to business travelers.
• Beyond travel booking, they offer management information and a comparative cost analysis of airfares, car rentals, hotel prices, and other travel costs.
• TMCs can hold office within international or multinational companies, serving them exclusively.
• It functions as a travel department of a multinational company or an international organization.

Functions of Travel Management Company (TMC) / Travel Agency

• Provide reliable information to clients.
• Recommend travel products that suit the clients’ needs.
• Guide travelers in obtaining travel documents.
• Arrange and coordinate travel activities.
• Assist in case of refunds or cancellation of the deal.

Sources of TMC Sales and Revenues

• TMCs generate sales and revenue through professional/handling fees, sales commissions, and incentives/rebates from suppliers.

Professional/Handling Fee

• This covers the fees that are clients are charged for the professional services rendered by the travel agent.
• Gathering travel information, advising clients, and processing travel arrangements are all part of these services.
• Professional fees are a fixed amount or percentage of the travel cost, also known as cost-plus.

Sales Comissions

• These can either be a commission from set product fares charged to the supplier or known as rate-minus.
• These can also be a mark-up on net product fare that is passed on the client, also known as net-plus.

Incentives and Rebates from Suppliers

• TMCs sometimes get incentives and rebates of many types from suppliers as regular agents.
• This acts as a sign of generosity and appreciation.

Organizational Structure of TMC/Travel Agency

• Top level: President/CEO
• General Manager
• Departments: Accounting and Finance, Sales and Marketing, Travel Division, and Administration.
• The Travel Division is broken down into Inbound and Outbound, while Admin are broken down into Human Resources

Administration Section

• This division implements company policies, communicates with personnel, and keeps records of supplies and equipment.
• It handles disbursement, security, custodial work, and management relations.

Personnel Section

• This sets all administrative policies concerning human resources and development.
• This includes personnel qualifications, screening, professional development, and personality development trainings of employees.

Accounting Section

• This keeps all company records, permits, licenses, bills, ledgers, and other accounting documents.

Finance Section

• It manages the collection of revenues, transacts with banks, and prepares financial reporting.
• It disburses money to defray all financial responsibilities of the company, such as employee salaries and utility bills.

Operations Section

• This division has two parts: Inbound/Travel Operations and Outbound/Tour Operations.

Inbound/Travel Operations

• Takes care of the normal services offered by the TMC, like advising, information seeking, processing, reserving/ticketing, and securing travel documents for clients.

Outbound/Tour Operations

• Handles preparation and implementation of all activities with an itinerary, within a specific time, and within estimated costs.
• This ensures expectations of paying clients are met.
• Tour Operations responsibility covers the actual tour activities in the field.

Sales and Marketing

• Designed to boost the TMC's sales revenue, marketing involves all activities that create public awareness about the company and its services.
• Effective marketing plans grow interest in the products and increase sales.

The Traditional Trend

• Travel agencies are middlemen between vendors and vendees in the traditional way of selling travel products.

Vendors

• Vendors are commercial entities such as hotels, resorts, airlines, cruise and tour bus companies, amusement parks, and more.
• Travel agencies market their products or services.

Vendees

• Vendees are you or any person who buy the products offered by the vendors.

• Travel agencies provide guidance for clients.

• Travel agencies have the right to collect commission from the vendor.

• Commissions may range from 10% to 15% of the selling price (rate-minus).

• Travel agents can also impose a mark-up on the net cost of products forwarded by the vendor, also known as net-plus.

The New Trend

• Through the internet, airline tickets and hotel reservations can be made directly.
• This is done with a Computerized Reservation System (CRS) and a Global Distribution System (GDS).
• Travel agencies now act less as agents and more as partners to both parties, and are known as Travel Management Companies (TMC).
• TMCs evaluates the vendee to determine options based on vendor assets.
• Additionally, TMCs manage and negotiate all the vendee’s travel processes.
• In return, TMCs explain and charge a professional fee from the vendee or cost-plus, communicated openly to the vendee.

Advantages of Booking through a TMC or Travel Agency

• Experts in their field, travel agents can find the best travel solution.
• They save you time and effort by gathering information from suppliers and clients.
• They also arrange company agreements and coordinate travel plans, in addition to filing the needed documents.
• Travel management businesses have a wide range of company connections and profiles.
• They compare price rates and marketability of travel products from several companies.
• They will continue until finding the most economical deal.
• The company immediately resolves conflicts if things go wrong, since travel agents have direct attachments to customers.

Travel Agency Commitment

• Retailer: Buying travel products from suppliers and selling them to the consuming public.
• Agent: Negotiating and helping suppliers distribute travel products to the end user or client.
• Counselor: Guiding clients to the best travel products for their needs.
• Profit Earner: Generates revenue from services rendered to suppliers and clients, such as professional fees (cost-plus), rate-minus, net-plus, and service fees from auxiliary services.