Tour and Travel Management PDF

Tour and Travel Management Maricel D. Herrera, Ph.D., Ferdinand Dondi C. Ocampo, and Luzviminda O. Tugade, CGSP, Copyright 2021 COPYRIGHT This is an exclusive and copyrighted property of REX Book Store, Inc. All rights reserved. No part of this material shall be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written consent of REX Book Store, Inc. CHAPTER 1 FUNDAMENTALS OF TRAVELS AND TOURS Maricel D. Herrera, Ph.D., Copyright 2021 Introduction Traveling is a great source of revitalization and, for some people, a stress reliever. It also offers various indoor and outdoor activities that give enjoyment and relax the minds of human beings. Introduction The travel industry is now developing because of the contributions of various sectors under it such as transportation, accommodations, food and beverage, entertainment, and other related sectors. Introduction This chapter will discuss the nature of travels and tours, their relationship within the context of the tourism industry, and the different types of travels and tours. Learning Objectives 1. Cite the differences between a travel and a tour. 2. Discuss the nature and scope of travels and tours. 3. Discuss the relationship between travels and tours within the context of the tourism industry. 4. Explain the key travel and tour operation terminologies. 5. Compare and contrast the different types of Terminologies of Travels and Tours Domestic Tourism refers to travel taken exclusively within the national boundaries of the traveler’s country. FAM Tour is an abbreviation for familiarization tours, usually offered to travel agents and tour operators as complimentary or at a reduced rate to familiarize them with a specific destination or attraction to stimulate sales. Terminologies of Travels and Tours Group Inclusive Tour (GIT) is a tour in which the tourist travels with the company of other tourists. Independent Inclusive Tour (IIT) is a tour in which the tourist travels to his or her destination individually. Terminologies of Travels and Tours Independent Tour is a tour in which the tourist buys tourism components (transportation, accommodation, food and beverage, entertainment, etc.) separately. This can be done in advance through a travel agent. International Tourism refers to travel across international boundaries. Terminologies of Travels and Tours Package Tour, sometimes called “inclusive tour,” is an arrangement in which tourism components such as transportation, accommodation, food and beverage, entertainment, etc. are bought by the tourist at an all-inclusive price. Terminologies of Travels and Tours Tour Operator organizes package tours and purchases other tourism services such as transport and accommodation in advance, usually at a lower price because he or she is buying them in bulk. Terminologies of Travels and Tours Travel Insurance is an insurance product designed for use by different types of travelers such as those who travel for business, are visiting relatives, and are students during their domestic and overseas travel. Sectors of the Travel Industry Transportation Accommodation Food and Beverage Entertainment Connected Industries Transportation Airline Industry The development in air transportation in the tourism industry introduced many undiscovered areas to the travel community. A scheduled air transportation system offers a safe, convenient, reliable, frequent, and consumer-centered service (Basnet, 2015). Transportation Car Rental Car rental has been in close connection with airline and railway transportations since its early years and is considered a similar part of the travel service industry (Eronen, 2015). Transportation Coach Services Buses and coaches are the modes of transportation preferred by those in any social class to reach their destinations. They cater not only for intercity lines or long-distance travel but also as charter vehicles for excursions, corporative trips, or just carrying from airport or railway station to hotel and back (Soloviev, 2015). Transportation Water Transport Water transport is a major factor in tourism and hospitality. An example of this is the cruise ships which became known in recent years because of the idea of developing “floating resorts” or “flotels.” Transportation Railway The majority of seasoned travelers prefer to travel by train because of its safety record and the convenience and satisfaction of viewing the scenery from a comfortable air-conditioned car. The appeal of rail travel has been further enhanced by the recent introduction of high-speed trains. Transportation Spacecraft Spacecraft is now becoming known as a form of transportation, which is going to become increasingly influential in the years ahead. The year 2001 marked the beginning of space tourism as a wealthy California businessman, Dennis Tito, became the first paying passenger for space flight (Britannica Online Encyclopedia, 2013). Currently, Virgin Galactic remains the only private space tourism company that has successfully air-launched its SpaceShipTwo vehicle (S. Fox, 2010). Accommodation Hotels The most popular form of accommodation for tourists, hotels provide meals and refreshments for those who may reserve their accommodations in advance but need not do so. These also provide facilities that meet the needs of modern travelers. Accommodation Shared Accommodation It is said that Airbnb favors the growth of shared accommodation. This type of accommodation usually includes all the facilities and amenities of the entire home such as an apartment or a house or just a room space where the owner/host usually stays. Accommodation Hostels Hostels provide minimal amenities such as a bunk bed and commonly shared toilets and bathrooms. They are typically categorized as a budget choice and are usually provided on a self- catering basis. They appeal mostly to young travelers. Accommodation Camping This is a type of outdoor accommodation that makes use of temporary shelter, usually in the form of a tent. It appeals mostly to families who travel in recreational vehicles. Bed and Breakfast Bed and breakfast accommodations provide a room, bath, and a hearty breakfast to tourists. They are known as BnBs. Accommodation Timeshare Accommodation Timeshare offers the public the right to enjoy, for a set period or interval each year, and vacation time in an apartment or other type of lodging that is part of a tourist complex, equipped with a variety of services and facilities. Food and Beverage Restaurants A restaurant is a business where people sell food and drinks to customers in a public place in exchange for money (Han Dian, 2014). Catering Like restaurants and takeaway outlets, caterers provide products and services to hotels and airlines. Catering services promote local food and culture of destination Food and Beverage Bars and Coffee Shops Bars and coffee shops provide a relaxing atmosphere for travelers to eat and drink. Bars tend to focus on serving alcoholic and nonalcoholic beverages. On the other hand, coffee shops tend to focus on serving hot drinks, frappes, and light snacks. Both environments also provide a place for people to socialize. Entertainment Shopping Shopping plays an important role in travel and tourism. The majority of tourists travel to specific parts of the world to experience shopping. Entertainment Casino A casino is an entertainment establishment that provides people with opportunities to gamble. It is often connected with hotels, restaurants, resorts, cruise ships, and other related tourism establishments that are also known for hosting entertainment, such as musicals, concerts, and comedy performances. Entertainment Tourist Information A tourist information center provides reliable information and resources about the destination. It provides a welcoming environment for tourists to learn about the destination’s products and services. Leaflets, brochures, and other promotional materials can also be displayed in the tourist information center. Entertainment Tourist Guides and Tours A tourist guide is an individual who, either as an employee or an affiliate of a licensed tour operator, accompanies tourists, both foreign and domestic, for a fee or any other form of lawful remuneration on local sightseeing excursions to provide pertinent commentary and look after their general well-being. Connected Industries Foreign Exchange The foreign exchange market is an institutional arrangement for buying and selling foreign currencies. It is especially important when we travel because it is the only way to transact in a foreign land, be it paying for a cab fare or just buying a meal. Connected Industries Travel Agents Travel agents are middlemen who act as intermediaries between the suppliers and the tourists. They sell tourist products and receive a commission from the supplier as their income. Connected Industries Tour Operators Tour operators are wholesalers of tourist products. They produce tour packages which usually compose of complete itineraries from transportation, accommodations, food and beverage, as well as entertainment and the service of a tour escort or a tour guide. Connected Industries Online Travel Agencies An online travel agency (OTA) is very much like the traditional travel agency when it comes to its role, only that it uses the internet as its main source of operation. They both connect with the tourists to sell travel products and services on behalf of the suppliers. Connected Industries Tourism Organizations Tourism organizations could be government and nongovernment units as well as tourism councils which are usually composed of the different tourism sectors. Their main purpose is to support the interests of the tourism industry. Connected Industries Educational The educational subcategory includes academic institutions and tourism organizations that organize or sponsor activities like seminars, conferences, exhibitions, training, and tourism skills competitions. Types of Tours Independent Tour is a tour in which the tourist buys tourism components (transportation, accommodation, food and beverage, entertainment, etc.) separately. This can be done in advance through a travel agent. Types of Tours Escorted Tour is a tour in which tourists are accompanied by a tour director or tour manager who arranges everything and takes charge of the entire tour from the beginning until its completion. Tourists who avail of this kind of tour are not familiar with the destination they are visiting. Types of Tours Hosted Tour is a tour where tourists are accompanied by a tour guide once the tourists arrive at the destination region. It is called a “hosted tour” because the tour operator usually acts as the host to the tourists during their stay. Types of Tours Incentive Tour is given to employees as a reward for their excellent performance in achieving the company’s organization’s goals. The expenses of this tour are paid or sponsored by the company or organization. Discussion Questions 1. Define travels and tours. 2. Explain the relationship between travels and tours within the context of the tourism industry. 3. Name the five sectors of the travel industry. Explain each and give examples. 4. Enumerate the different types of tours. Explain each. Experiential Exercise Visit a travel agency or a website of any travel agency and list the products and services it offers in relation to the nature of travels and tours, such as types of packages it offers, types of tours, and other services. Chapter Highlights Travel Industry refers to businesses which provide services needed by the travelers or tourists once they travel from one place to another. This industry includes transportation, accommodations, food and beverages, services of a travel agency and tour operator, foreign exchange, entertainment, etc. Chapter Highlights Travel Services are services provided by tour operators and travel agents which are related to the tourists’ travel such as ticket reservation or booking both for local and international for air, sea, railroad and land travel. These also include reservation for accommodation and other tourism components, such as food and beverage, entertainment, etc. Chapter Highlights Tour Operation Business is a type of travel business that assembles the tourism products from different suppliers to create a complete tour package and sell it to the tourists directly or through travel intermediaries. CHAPTER 2 HISTORICAL PERSPECTIVE OF TRAVELS AND TOURS Maricel D. Herrera, Ph.D., Copyright 2021 Introduction The travel industry already existed way back in the early years of the 19th century, but it was not the same as what we have to date as we now have a system through travel agencies and tour operations businesses. Introduction Throughout history, people traveled from one place to another for different purposes, such as trade and religious travel. Cox and Kings and Thomas Cook played a vital role in the evolution of the travel agency and tour operations business. Learning Objectives 1. Discuss the development of the travel agency business in the world. 2. Discuss the involvement of Thomas Cook in the growth of the travel agency business. 3. Explain the various stages and turning points in the history of the global travel agency business. 4. Cite different milestones in the history of the global travel agency business. Historical Background of Travel Agency and Tour Operation Modern tour operators are organizations, companies, or private entities that cater to travelers by organizing group tours and independent travel packages. They started way back in the mid-19th century, and most likely in the past, they were the ticket agents for steamship lines and railroads. Historical Background of Travel Agency and Tour Operation With the developments in the travel agency industry, a more organized business of selling package tours to groups of travelers started to grow. It was in the 1930s that tour wholesaling continued to grow. However, the growth in the industry did not last long. Due to lack of transportation, travel became costly, hindering development in the industry. Historical Background of Travel Agency and Tour Operation It was not until the post-World War II period, beginning with the late 1940s and early 1950s, did the turning point for the tour operator industry come. Most people in the middle class were encouraged to travel with the introduction of modern long-range commercial aircraft and the development of the interstate highway system, which made traveling more comfortable and convenient. Historical Background of Travel Agency and Tour Operation There was also a growth in the number of low- cost airlines, easy access to airport terminals, and the ability to travel more cheaply. Thus, more people were encouraged to travel from one country to another country. With the help of the media, more people were encouraged and developed a high interest in travel, which helped tour operation businesses gain success. Cox and Kings, to Be Known as the First Travel Agency in the World Cox and Kings is the oldest established travel company in the world. It started in the 18th century on May 25, 1758. Because of Cox’s interest and dedication to his work, Cox and Co. became a reputable business and grew to be a major agent of British regiments. Cox and Kings, to Be Known as the First Travel Agency in the World 1923 – Cox and Co. was sold to Lloyds Bank and became Cox and Kings, a shipping company that operates and organizes travels and tours for their passengers. 1970 – Cox and Kings Agency became popular and contributed to the growth of the tourism industry in India. It specialized in cultural and wildlife tours throughout the country. Cox and Kings, to Be Known as the First Travel Agency in the World 1980s – the company developed the same concept of travels and tours that catered to Latin America, the Middle East, Africa, and far eastern Europe. During this modern age of travels and tours, Cox and Kings is continuously becoming more and more popular and developing more modernized travel and tour packages that cater to the different parts of the world. Thomas Cook and His Contribution to Tour and Travel Management Thomas Cook established the first travel agency in the world in England in the year 1845. Thomas Cook and His Contribution to Tour and Travel Management In 1841, the history of travel trade began when Cook organized a trip by train for 570 members of his association to the distance of 22 miles. The trip was successful, and everybody was delighted. It was a no-profit trip for Cook until he realized the impact of the trip. This gave him the idea of turning the success of the journey into a tour business. Thomas Cook and His Contribution to Tour and Travel Management In 1845, he made up his mind to set up a travel business that was known as the “World’s First Travel Agency” to organize excursions. Due to this pioneering approach, Cook became known as the father of the travel agency business. He also started to organize railway and steamship excursions throughout England, Scotland, and Europe. Thomas Cook and His Contribution to Tour and Travel Management In 1855, Cook started to create package tours and offered them to the public. He conducted the world’s first international tour from England to Paris. Establishment of the Modern Travel Agency In 1845, Cook organized the first mass tour across England. The trip is not just traditional travel —he incorporated special activities and entertainment during the tour. The railway journey was from Leicester to Nottingham, Derby, and Liverpool, and he made some profits from this trip. It was this year also that marked the beginning of the establishment of the first modern travel agency in the world. Establishment of the Modern Travel Agency In 1851, Cook’s travel business further progressed when Sir Joseph Paxton, architect of the Crystal Palace, convinced him to organize package tours, bringing workers from Yorkshire and the Midlands to London for the Great Exhibition. Cook did not hesitate and took the opportunity, leading to another success in his travel business. Travel Innovations As Cook’s travel business became more and more successful, more developments in the services were being introduced to the travelers, one of which was hotel coupons, first introduced in 1868 to help customers enjoy hassle-free check-in procedures in hotels. Travel Innovations In 1874, Cook introduced the Circular Note. This was used during that time by the travelers for their safety during the travel. Circular Note is the counterpart of today’s traveler’s cheque. It was not only accepted in the hotels but could also be used for restaurants and transport services in major cities in the Europe and in the USA. Package Tours for the Middle Class During the mid-19th century, middle-class people started to experience increased income and consumption. Cook took the advantage of this impact to further develop the travel industry. He thought of developing a customized packaged tour designed to suit the needs of this market. Great Journey In 1869, Cook and his company succeeded in traveling across the Atlantic Ocean by steamship to discover new points of interest for his travel business. The trip was made possible by traveling to Egypt via China, following the opening of the Suez Canal and the completion of a rail network linking the east and west coasts of America. Great Journey In the same year, Cook conducted his first party trip up the river Nile with the help of two steamers. At the age of 63, he planned for a Round-the-World Tour from Leicester in 1872. Discussion Questions 1. Correlate the most significant contributions of Thomas Cook in tour and travel management. 2. Discuss the contributions of Cox and Kings in the development of travel agency operations in the world. 3. Explain the different milestones in the history of the global travel agency business. Experiential Exercise Engage yourself in the lives of the famous tour operators and travel agents mentioned in this chapter by reading more articles about their contributions to the travel and tour operation business. Among them, who attracts you the most? What attributes do you think you share with them? Chapter Highlights Cox and Kings is the oldest established travel company in the world. It started in the 18th century. Thomas Cook set up the travel agency business and was known as the “World’s First Travel Agency.” Thomas Cook became known as the father of the travel agency business. CHAPTER 3 ROLES OF TRAVEL AGENCIES AND TOUR OPERATORS Maricel D. Herrera, Ph.D., Copyright 2021 Introduction In the travel industry, travel agencies and tour operators play an essential role. They are the ones who are responsible not only for selling and promoting tourism products and services but also for producing them. It is the role of the travel agents to develop and create tour packages of all types and offer them to the tourists. Learning Objectives 1. Explain the nature of a travel agency and a tour operation. 2. Differentiate between a travel agency operation and a tour operator. 3. Identify the different types of travel agencies and tour operators. 4. Discuss the role of travel agencies and tour operators in the tourism industry. 5. Identify the emerging technology in the operations of travel agencies and tour operators. Travel Agency and Its Nature A travel agency is a type of business that acts as an intermediary or middleman between the tourism products’ suppliers and the tourists/travelers. Some of the main functions of this business are to market and to promote all types of tourism products and services which include tour packages, accommodations, transportations, and other components of the travel industry (Goeldner & Ritchie, 2003). Travel Agency and Its Nature The travel agency is considered one of the most essential businesses in the tourism industry. It plays an important role in the entire process of developing and creating tourism products and services. It normally creates itineraries for all-inclusive tours and offers them to tourists. With this, the travel agency is also known as the “image builder of a country.” Travel Agency and Its Nature Another service offered by travel agency businesses, aside from offering package tours, is the service of arranging tourism sectors such as ticketing and booking and reservation for air, rail, land, and sea travel. They also assist and arrange travel documents such as passports, visas, and other documents required to travel. They can also secure travel insurance and foreign currency for their clients. Travel Agency and Its Nature The travel agency is an axis of tourism. Tourism activities revolve around travel agencies. In the definition of tourism as “the movement of people from one place to another,” the travel agencies generate the movement. With this, we can say that a travel agency is a generator or creator of tourism. It plays a vital role in tourism as the brain in the human body. Travel Agency and Its Nature a commission agent makes agreements with different service agencies and develops products and sales for customers to gain profit or to collect commission makes arrangements and schedules for travel helps a great deal in saving time for the tourists keeps close direct living contact with all tourist service producers Travel Agency and Its Nature provides quality services to the tourists coordinates between the enterprises and customers collects commission or service charge for the coordinating work bridge that fills the gaps between the customer and service agencies and the facilities they provide stimulates and motivates people to travel Travel Agency and Its Nature A travel agent is someone who acts as the direct contact of a traveler or tourist who is seeking assistance and planning to visit a certain destination through a travel agency. He/She arranges tours according to the needs and wants of the tourists. Some travel agents work permanently and are associated with a travel agency business while others work as freelancers. Tour Operator and Its Nature A tour operator is an organization, firm, or company that buys travel components individually and combines them into a package tour to be sold to their direct customers or through a tourism channel. It is also known as the manufacturers of tourism products and services. Tour Operator and Its Nature Tour operators are sometimes also called wholesalers because they buy goods and services in bulk to prepare a tour package and then retail it through the travel agencies or directly to their clients Generally, they offer a variety of tour packages to provide the needs and wants of different types of tourists and travelers. Functions of Tour Operators 1. Planning a Tour – Tour operators assist the travelers to plan the most memorable experience that they could have during their travel, which includes the making of an itinerary for their chosen destination. 2. Creating Tour Packages – They purchase travel components separately from transportation, accommodation, and food and beverages to tourists’ attractions and assemble them to create new travel products known as tour packages. Functions of Tour Operators 3. Organizing a Tour – Tour operators arrange or organize a tour package based on the preferences of the tourists. As their goal is to give tourists satisfaction in their travel, they can arrange a tour package that would give a unique experience to the tourists. Functions of Tour Operators 4. Providing Travel Information – Tour operators provide tourists with the necessary information concerning their travel to the chosen destination. This pertinent information includes the mode of transportation, types of accommodations, tourists' spots for sightseeing and other activities, immigration process, health and security rules and protocols, and other documents required to visit a certain country or destination. Functions of Tour Operators 5. Making a Reservation – Tour operators assist tourists in the reservation of the travel components needed for their travel and stay in the chosen destination, such as ticket for the transportation, room as accommodation, meals, etc. Functions of Tour Operators 6. Managing a Tour – Tour operators manage the entire tour availed by the tourist. Tour operators should check every detail of the tour from the time of its execution until its completion. 7. Evaluating the Available Options – Tour operators assess and evaluate the tour packages that they offer to the tourists. They make sure to consider all the possibilities and other options to make the travel of the tourists a memorable and remarkable one. Functions of Tour Operators 8. Promotion – All tour packages and other travel products offered by the tour operation and travel agency businesses are also promoted. They promote them to their target and regular clients, both domestic and international. 9. Sales and Marketing – As part of the transactions in the tour operation business, tour operators also do sales and marketing, especially to their target markets, to attract their attention and eventually have them avail their products and services. Functions of Tour Operators 10.Taking Care of Problems That May Arise during the Tour – They take charge of all the issues and problems that may arise during the tour. They are prompt to fix identified glitches and provide the best solution. Travel Agency versus Tour Operator Travel Agency Tour Operator Acts like an independent Purchases travel components reseller and receives from different suppliers, forms commissions for the sale of a single tourist product, and the tour operator’s package sells them using its own tour pricing Small to medium enterprise Usually, large companies Acts as the distributor/reseller Acts as the supplier or of the tourism products manufacturer of tourism products Deals with one component of Offers a variety of tour travel products programs Types of Travel Agencies Retail Travel Agency Retail travel agencies act as resellers of tourism products and services. They sell their products and services directly to the tourists and receive commissions from the suppliers as their income. Retail Travel Agency The functions of retail travel agencies are as follows: preparing tour quotations for the tourists booking and reservation of transportation, accommodation, food and beverages, and entertainment visa assistance and other travel documents foreign exchange arranging travel insurance Wholesale Travel Agency Wholesale travel agencies purchase travel components in bulk from suppliers, assemble tour packages, and sell them to the tourists through retail travel agencies. In terms of function, a wholesaler travel agency that typically sells package tours can also be known as a tour operator. Differences between Wholesale Travel Agencies and Tour Operators Wholesale Travel Tour Operators Agencies Do not sell their products Sell different travel and services directly to components the public. directly to tourists. Deal with one component Offer a variety of tour of products/programs. travel products and services. Medium to large business Larger business Types of Tour Operators Inbound Tour Operators Inbound tour operators are also known as incoming tour operators. Their roles are to receive tourists in the host country and handle all their land arrangements. They are based locally, and they normally offer local destinations, attractions, events, and other services to the tourists. They usually partner with local travel agencies and work hand in hand to boost the travel industry within their locality. Inbound Tour Operators Example: A group of historian tourists from China goes on a tour in the Philippines. They visit the National Museum, Intramuros, and Luneta Park. The tour operator who organized their travel is a Philippine-based company that offers local, Philippine tours. Outbound Tour Operators Outbound tour operators promote tours for foreign destinations. They normally work with international travelers and offer specialized tour packages in a particular country or region. Their roles are to develop and create tour packages that will allow the tourists to visit and enjoy their stay from one country to another country. Outbound Tour Operators Example: The Sarmiento family is a family with five members from Cebu, Philippines. They want to spend summer vacation in Dubai, UAE. They booked a trip through Delmar Travel and Tours, a well-known tour operator in Cebu which specializes in outbound travel. They are based in Cebu, but they work with foreign partners to facilitate holidays overseas. Domestic Tour Operators Domestic tour operators create and assemble travel components into all-inclusive tours and market them to domestic travelers. They provide travel services within the country of the tourist’s residence. They also operate tour packages that are composed of travel components within the boundary of the home country and offer them to domestic travelers. Domestic Tour Operators Example: Carlo and his friends from Metro Manila want to travel to Aklan for the summer break. They want to explore and discover the local attractions in the area and have some time to relax on its famous white sand beach in Boracay Island. They organize their travel through the tour company, Boracay Adventures Travel and Tours, a well-known company specializing in domestic travel within Aklan. Ground Operators Ground operators are also known as handling agencies, and their main role is to organize or arrange tours for incoming tourists on behalf of overseas operators. They see to it that the entire travel in the destination is in accordance with the package tours or agreements the tourists have with the overseas operators. Ground Operators Example: Mrs. Santos is planning to spend her Christmas holiday in Pampanga. She wants her vacation to be a remarkable one, so she decided to book her trip with a well-known tour operator in the country, Philippines Tour and Travel. The tour operator offers different types of tour packages all over the country, but it is difficult for them to have office branches in every region and province in the country. So, what they do is partner or network with the local ground operators who do the work on the ground. In this arrangement, the ground operator is ERC Travel Services, a tour operator based in Angeles, Pampanga. Emerging Technology in the Operation of Travel Agencies and Tour Operation Travel agencies must embrace and adapt to the technological changes that may affect their business. They must reinvent products and services so that they can still compete and gain profits. Emerging Technology in the Operation of Travel Agencies and Tour Operation o Internet usage – In the 21st century, the most powerful source of business is the internet. The internet helps create modern travel agencies and tour operators. Every transaction involved in the process can be done over the internet. o Use of social media – Travel agencies and tour operators need to have personalities of their own. They can use social media as part of their marketing and communications strategies. Emerging Technology in the Operation of Travel Agencies and Tour Operation o Mobile technology – Nowadays, travelers have all the pertinent information about their trip in the palm of their hand. Travel agencies and tour operators have to adapt to this swift change in reality to be able to sustain their business. o Big data – A customer’s database can help a travel agency or tour operator analyze its customers’ behavior patterns as well as guide in forecasting based on their behavioral information. Emerging Technology in the Operation of Travel Agencies and Tour Operation o Digitalization – Digitalization helps travel agencies and tour operators to be highly competitive in the business world. With this technological strategy, they can transform the experiences of the tourists in the most convenient way. o Virtual reality – Virtual reality can be used by travel agencies and tour operators as a marketing tool to entice more people to travel as virtual reality allows them to explore their dream destinations. Emerging Technology in the Operation of Travel Agencies and Tour Operation o Artificial intelligence – Artificial intelligence nowadays is incorporated into mobile devices and applications. It is a great help for travel agencies and tour operators, offering convenient and comfortable services in assisting their clients. Discussion Questions 1. How is a travel agency operation different from a tour operator? 2. Describe the different types of travel agencies and tour operators. 3. Identify the important roles of travel agencies and tour operators in the tourism industry. 4. Give at least two emerging technologies in the travel agency and tour operation industry and explain how they work for the sustainability of the business. Experiential Exercise Make a list of travel agencies and tour operators in your town and nearby towns. Visit their websites and study the products and services they offer. Classify them according to their type. Chapter Highlights Travel technology – is also called tourism technology, and hospitality automation; is the application of Information Technology (IT) or Information and Communications Technology (ICT) in the travel, tourism, and hospitality industry Travel Trend – a pattern of gradual change and development on the products and services of the travel industry CHAPTER 4 THE BUSINESS OF TRAVEL MANAGEMENT Ferdinand Dondi C. Ocampo, Entrepreneur, Copyright 2021 Introduction The travel industry grew and evolved tremendously. For many years, modern approaches were implemented. Through travel systems and applications, travel data are easily gathered and are used as references to improve travel services. Introduction Travel management, therefore, plays a very vital role beyond efficiency and savings—travel management also brings the apt standards through professional and reliable arrangements. Learning Objectives 1. Introduce and appreciate the business of travel management. 2. Define what travel management is. 3. Discuss the differences between a travel management company and a travel agency. 4. Identify the organizational setup of travel management companies. 5. Recognize the functions of travel management Business Setup The business setup encompasses budget, people management, exhaustive market requirements, and supplies. The business setup comprises peoples and systems. Systems are manned by specialists. These involve technically trained crew. Business Setup Expertise is the combination of hard and soft skills and productive interrelations within the organization, especially with clients. It requires product awareness. Travel management in the Philippines has unique conditions. The introduction of multitasking may change the business setup or structure in terms of organization and workflow. Business Setup Thus, being adaptive to optimize manpower has become an approach among travel management companies. The installation of a flexible structure or an “interim” organizational flow can be adaptive yet responsive. The most recommended setup covers three important basic departments: executive, sales and operations, and administration and Travel Management Companies Focus on Eight Areas of Services The travel management company makes strategic value propositions. It must manage the travel needs of the clients, taking into account the best acceptable budget that is responsive and efficient. Travel management companies also involve travel policy- making, negotiations with travel suppliers and vendors, designing travel products, detailing the travel execution, and documenting the processes and eventual results of a travel movement. Travel Management Companies Focus on Eight Areas of Services In the Philippines, there is a very thin line defining the difference between a travel management company and a travel agency. A travel management company sets the parameters, a travel agency executes the reservations and booking on the given parameters.  Travel Management Companies Focus on Eight Areas of Services - The Travel Management Companies’ Deliverables 1. Professional Insights and Updated Advice It can be technically combined with experiential or solely technical. Other than academic learnings, professional insights can, likewise, be supported by regular and updated readings of publications and journals related to tourism. In the area of tourism economics, revenue management among travel industry supplies becomes very complicated. Different service categories (e.g., economy seats) have different fare levels, different restrictions, and different rulings. Many industry systems and terminologies may not be easily understood by regular takers.  Travel Management Companies Focus on Eight Areas of Services - The Travel Management Companies’ Deliverables 2. Travel Advisories, Warnings, or Alerts A very timely instance is this pandemic situation— information to safeguard the health protocols, financial exposure, and border rulings iså necessary. With or without the pandemic, there are advisories that need to be sorted out and are of much importance for the travelers’ awareness.  Travel Management Companies Focus on Eight Areas of Services - The Travel Management Companies’ Deliverables 3. Guide and Review of Travel Policies In the travel world, especially among corporate organizations, ethical practice, due diligence, and travel policies are very important. Legal implications can be reviewed intensively prior to embarking on travel movements. The professional handling must always be within appropriate bounds.  Travel Management Companies Focus on Eight Areas of Services - The Travel Management Companies’ Deliverables 4. Collation of Reports for Data and Reference In order to evaluate travel expenses of corporate accounts, properly recorded trips and the travel-related agenda of the company are needed. Travel expenditures need analysis. The comparative travel records of the costs and effective measures considered can lead to an even more efficient travel program design.  Travel Management Companies Focus on Eight Areas of Services - The Travel Management Companies’ Deliverables 5. Current Systems and Methodologies Mobile applications are updated and are often upgraded. To seek the services of a travel management company saves time. The companies, organizations, or any clients that avail the services of travel management companies can devote more time to more essential agendas that are not related to travels.  Travel Management Companies Focus on Eight Areas of Services - The Travel Management Companies’ Deliverables 6. Better Relationship with Suppliers Travel management companies serve as intermediaries and can bring about a better relationship between the supply and the market. The collective sales production of the travel company often results in cheaper contracted rates. All the companies they service are direct beneficiaries of these favorable contracted tariffs.  Travel Management Companies Focus on Eight Areas of Services - The Travel Management Companies’ Deliverables (cont.6) 7. Economical Rates for Airfares, Hotels, and Transportation Discounted or preferential rates for room accommodations, airfare, and transportation rentals can easily be availed through volume sales. Travel management companies enjoy such privileges. They have the upper hand to negotiate for special fares or, with some suppliers, they can easily request for an “exclusive rate” for their “exclusive” use.  Travel Management Companies Focus on Eight Areas of Services - The Travel Management Companies’ Deliverables 8. Economical Rates for Airfares, Hotels, and Transportation There are cases where big companies award their travel management company an incentive from the savings it has (marginal savings). These arrangements are rare, yet they can motivate the travel management company to engage in best practices that result in mutual benefits.  Travel Management Companies Focus on Eight Areas of Services - The Travel Management Companies’ Deliverables 9. Round the Clock Support System: 24/7 Help Desk: A Sense of Peace of Mind The biggest challenge in handling corporate accounts and incentive markets can be the sudden changes of schedules or urgent scenarios confronted by travelers during the actual trip implementation. 24/7 help desk is a premium. Attributes of a Good Travel Management Company The industry is comprised of suppliers and systems— thus, the reputation of the travel management company matters. Reputable travel companies enjoy preferential contracted rates, credit facilities, and internal support from tourism suppliers. RELIABLE Any organization with a reliable and competitive crew has the opportunity to enter and service the market. Credibility follows when reliability is evident. COMPETENT This is the capability of delivering a positive experience. It involves the use of due diligence in canvassing what supply is best to respond to the criteria of the travel requirements. KNOWLEDGEABLE This is the professional support and recommendations that are expected from a well- informed crew. The tourism industry offers an array of options that are paired with updates, travel solutions, and current trends. All these are the banked information of knowledgeable, well-trained, and properly informed travel councilors. RESOURCEFUL Travel management companies should be able to study them intensively and offer viable alternatives. Being solution-oriented is an attribute that leads to patronage. The practice of due diligence is reflective of concern and mindfulness. BONA FIDE This means to give the right recommendations. To consider all viable supplies that provide a positive experience that can only be delivered by a qualified travel management company To quantify the quality control of deliverables and conform to the agreed standards ORGANIZATIONAL STRUCTURE A. BASIC/COMMONLY USED STRUCTURE This organizational composition can be applied to the simplest structure regardless of the size of a travel management company. Figure 3. Basic/Commonly used travel management company organizational structure B. ORGANIZATIONAL VARIATIONS OR MODIFICATIONS - preferred by a client in order to adapt to a company that needs specific travel management services MARKET ADAPTABILITY, The New Strategy for Competitive Position Q : “With all the online developments, how can travel management companies even survive the competition?” A : The most manageable and controllable elements are the actual operations and manpower. B.1. Example of a SPECIALIZED STRUCTURE Figure 4 is an expanded response to a wider market base that includes MICE (Meetings, Incentives, Conventions, and Events) as desired by a specific travel management company. Figure 4. Specialized travel management company organizational structure Chief Executive Officer President VP for Operations VP for Finance General Manager Director for Finance VP Sales and Marketing Sales & Marketing Team Travel Consultant Travel Consultant Travel Consultant Travel Consultant Domestic Asia and Europe US and Special Destinations Incentive B.2. An example of an ADOPTIVE STRUCTURE (Figure 5 )—modified according to the clients’ requirements—presents an organization that specifically caters to outbound and inbound, with specific market destinations as required by a client. Departmental Functions There are three basic areas that need to be manned in order to operate a travel management company. A. THE EXECUTIVE AND MANAGEMENT They are officers in charge of creating policies that concern the finance and operations of the company. Vital decisions are formulated by this group. They are considered the think-tank group. Composition: President, Chief Executive Officer, Directors, Department Managers Departmental Functions There are three basic areas that need to be manned in order to operate a travel management company. B. THE FINANCE AND ADMINISTRATION The fiscal management is in charge of operational costs. Financial obligation encompasses personnel, human resources concerns, issues, and policies. They are the pocket, the “bank” of the company. Composition: Vice President for Finance, Finance Director, Chief Accountant, Director for Human Resources Departmental Functions There are three basic areas that need to be manned in order to operate a travel management company. C. THE SALES, MARKETING, AND OPERATIONS Functions for sales acquisition, account maintenance, and servicing In charge of customer relations and competent handling of travel arrangements and service delivery They can be called the “farmers” of the company. Composition: Vice President for Operations, Sales Director or Sales Manager, Marketing Director, Reservation Manager, Travel Consultants, Web Managers, IT Managers Digitalization in Organizational Structure a) The tourism industry benefited from the introduction of digitalization. fast search engines technical innovations the introduction of automation global distribution systems Digitalization in Organizational Structure b) The tourism industry benefited from the introduction of tourism trade which is composed of expansive services and products, and their access became easier because of the digital revolution. This area is headed by an IT manager whose biggest responsibility is to make an efficient digital presence in the market. Digitalization in Organizational Structure c) Product marketing and client acquisitions can be done through computers using digital content. d) The depository of information is a fingertip away. This information can easily be accessed by the market. It can help them validate information. A tech-driven approach from the start to the end avails of all necessary information for a well-researched travel plan. A digital support system can be used during the operations, too. Revenue Sources a) Commissions System  Travel management companies are considered intermediaries.  This representation entitles them to earn through the commission system.  Travel management companies can enter into an arrangement for additional compensation on behalf of the suppliers of the product. It is not an institutional mandate or obligation of tourism suppliers to protect their retailers with commission— Revenue Sources b) Markup Mechanics Travel management companies can be part of a selected consortium or be wholesalers of tourism supplies and products. They are awarded lower contracted rates than the published rate. These are sometimes termed as “net/net” or “net of net” rates. Travel management companies can easily design an additional fee to the net of net rates as an additional source of revenue. This “margin” is called markup. Revenue Sources c) Service Fee Challenged by minimal budget that is allocated to a certain travel movement, the travel management company is constrained to apply an agreed upon service fee per delivered or accomplished transaction. The actual amount can be arranged and be put into an agreement with their clients. The amount can be dependent on the degree and nature of service. Revenue Sources d) Performance Bonus  The amount saved by the company on all travel-related expenses can be a result of well-discussed alternative supplies or from diligent sourcing of provisions. (Note that that is not standard; they can enter into an agreement if it is beneficial for both Discussion Questions 1. Why is a travel management company very essential? Give one of its important functions. 2. What characteristics of a travel management company need to be considered by the market to engage their services? 3. How does a travel management company earn income? 4. Are organizational structures important to consider with regard to the qualifications of a travel management company? Explain your answer. Experiential Exercises Using Zoom or other available virtual modes: identify at least two travel management companies in the Philippines and visit their physical setups; interview any management officer and ask their most critical role in the organization; and interview one corporate account that uses the services of a travel management company and gather information on why it chose the company it is engaged with. Chapter Highlights TRAVEL MANAGEMENT is an indispensable sector in the tour and travel industry. The business management components are combination and integration of organizational structures, skilled staff, and well-planned operational flow. The revenue is dependent on products, but more important is the commitment of quality service. Positive attributes are an essential part of the business of travel management. CHAPTER 5 THE TRAVEL MANAGEMENT CYCLE Ferdinand Dondi C. Ocampo, Entrepreneur, Copyright 2021 Introduction To deliver a complete travel experience, there are very important stages and cycle to undergo. There is a cycle that needs to be followed that is presented. This will lay down the specifics. Supplies that are to be delivered are specified by the clients. Introduction In order to comply, the travel management company identifies all the supplies and services required. The elements to consider, such as budget, convenience, reliability, and most importantly, safety, are vital. After completion, post evaluation is necessary. The travel management cycle is a mandatory process. Learning Objectives 1. Relate the “cycle” to the travel management business. 2. Interpret the process of the typical operations of a travel management company. Learning Objectives 3. Ascertain the importance of consultation and proper information handling during the process of completing a travel requirement. 4. Stress the importance of supply sourcing, monitoring, and post-service delivery evaluation as part of the complete cycle of travel management. Figure 6. Travel services management cycle Travel Management Cycle 1. Market Segment In any given situation, the cycle always starts with the market. Markets are the sources of sales. 2. Identification of Travel Requirements This is where initial contact of the travel requirements and the travel managers occur. The specific travel details are presented and considered. 3. Consultation Proper This is where the details of the travel requirement are discussed intensively, which include the specifics, such as, among others:  the type of meals,  category of accommodation,  preferred location,  the class of service for the airfare,  the coverage of commitment,  the travel policies to be observed,  the total composition, and  inclusions of the travel. 3. Consultation Proper Consider these suggested guidelines: a) Prompt booking As soon as details are advised, it is advantageous to book early. Rule: The longer the lead time, the lower/better the fare. There is a revenue management scheme that most booking engines use—cheaper fares are programmed for earlier bookings. (Airfare and accommodation have the same scheme.) 3. Consultation Proper Consider these suggested guidelines: b) Validate the travel policies of the company. A travel management company must review the rules that cover the travels of the accounts. These rules or guidelines must discuss the specifics. Example: Policy of some corporate accounts – If a trip originating from Manila to a destination is within 6 hours, the passenger must travel economy. Flights beyond 6 hours will entitle the traveler to fly business class. 3. Consultation Proper Consider these suggested guidelines: c) Organize the trip “minutely.” This is like a “run-through” of the requirements to evaluate the details. If there should be changes that need to be made, this is the best time to reconsider to check on ruling and restrictions. The clients can be guided to avoid unnecessary fees for cancellation/rebooking/reinstatement or other charges as stipulated in the contract or policy. 3. Consultation Proper Consider these suggested guidelines : (cont.3) d. Optimize the “travel investment.” In the event that there are other official agendas in the trip such as side trips, this is where an efficient trip route is best recommended. This can result in savings and optimum trip advantage. If the travel is international, this is the best stage to discuss the documentation details. These can cover the following:  Checking of passport’s validity. If a passport is not valid, the passport holder needs to renew.  Visa advise, if required. Discuss the requirements and type of visa. Lay down the timetable to get the necessary visa(s).  If the travel is international, this is the best stage to discuss the documentation details. These can cover the following:  vaccination certificate (if required)  any other immigration documentation requirements such as an exit clearance and a reentry permit  If travel is domestic, check if pertinent documentation is required, such as health regulation certificate, among others, as needed. 4. Planning/Counter Counseling The expertise of the travel counselor, updated information, and resourcefulness are often presented during this stage. All these data can be consolidated and analyzed in order to offer the best-planned travel and solutions. 5. Initial Presentation/Preliminary Acceptance * Due diligence must be properly presented. The budget can be presented and discussed. This is where travel consultants can suggest and present the pros and cons of the services. This is also the best time to confer what is possible and undoable in terms of deliverables. Consider cost efficiency, travel, restrictions/rulings. 6. Supply Acquisition Based on the agreed arrangements, the internal operations can now purchase the agreed upon supplies and services. The final acquisition reflects the restrictions, rulings, and inclusions of each and every supply and service. Any final arrangements are supported by written and official purchase vouchers and payment agreements and arrangements. 7. Product Presentation Final arrangements need to be advised with complete details to the end user. This can be the initial presentation of what is arranged. The primary objective is to make sure that all the details were well taken care of. At this point, any changes or alterations can be done as needed: rebooking, refinalization, and reconfirmation. Cost analysis can also be explained. This should be able to realize savings versus the approved budget, if any. 8. Document Turnover/Predeparture Orientation 8.1 Regardless if the traveler is an individual or a group, this part of the cycle is a must. The travel consultant can give a “run-through” of the details as if the passenger(s) is/are already in the travel proper. Actual/ Physical documents like passport/visa are turned over. 8. Document Turnover/Predeparture Orientation 8.2 In case a face-to-face predeparture orientation is not possible, it is highly recommended that a written version of the pre-orientation information be handed together with the documents. For big incentive groups, a special venue is reserved to meet all clients to discuss the flow of the tour program. 9. Market The recipient of the documents can be the actual traveler or an appointed representative. It is best to have transmittal of all the processed documents received by the clients. Transmittal can be in duplicate copies to reconfirm receipt. Travel consultants often send an email of scanned copies of all documents in case of loss. 10. Implementation/Delivery Proper Completion of the products and services rendered by the respective suppliers is finalized and reconfirmed. It is during this stage that exceptional travel management companies can provide a 24/7 facility to monitor the delivery and to make sure that the client(s) experience(s) their presence every step of the way. 11. Post-Arrangement Evaluation The main objectives are to gather and evaluate the information that transpired during the product execution. Data can be analyzed. Expenditures can be assessed. Arrangements can be critiqued for future reference. Depending on the area of specialization or travel agenda, the travel management company can design some rubrics that can be useful in future travels. Discussion Questions 1. Using the cycle as a reference, when does the initial contact of the requirements and the travel consultants happen? 2. In the complete cycle, what do you think is the most important part of the process? 3. When in the cycle will it be best to finalize and firm up the detailed arrangements? 4. Why is post-evaluation imperative in order to complete the cycle? Experiential Exercises Call a travel management company and request for a detailed simple transaction. Using the cycle presented, indicate which procedure is implemented. Identify a specific destination you want to visit. Identify the supplies you need to engage with in order to reach your desired destination. Experiential Exercises Interview a friend or a family member who had just returned from a recent trip. Ask him/her about the stages he/she undertook from the time he/she conceived the destination and how the travel consultant assisted him/her. Chapter Highlights It is a must to observe proper TRAVEL MANAGEMENT CYCLE to avoid missing important details of the process. It is the professional manner of handling any type or nature of travel requirement(s). DETAILING and EVALUATION are very necessary parts of the cycle to assure quality, and to address cost efficiency and proper implementation of a professional travel experience. CHAPTER 6 TOUR OPERATIONS CYCLE Ferdinand Dondi C. Ocampo, Entrepreneur, Copyright 2021 Introduction Travel management companies need to formulate and prepare all the necessary services discussed during consultation. The challenges caused by the COVID-19 pandemic situation have made the detailing accountable to more safety and world heath standard protocols. Tour Operations Cycle is a process done internally and with proper time frame. The organizational structure of the travel management company can determine the flow of these stages. This whole process is termed tour operations cycle. It includes the travel data, composing and detailing of the product, and the execution/conduct of the arrangements. Importantly, this cycle leads to the analysis of the cost implications of all the incorporated services. Learning Objectives 1. Differentiate between the tour operations cycle and the travel management cycle. 2. Present the “kitchen work” of product development. 3. Describe the matrix of tour products and the services involved. Stages 1 and 2 were considered from Travel Management Cycle Stage 3, commence TOUR OPERATIONS CYCLE: From CONSULTATION PROPER, the following are achieved : - Details of the travel requirement are discussed intensively. - Include the specifics such as the type of meals, category and location of accommodation, the class of service for the airfare, the coverage of commitment, the travel policies to be observed, the total composition, and inclusions of the travel. From Stage 3 of the Travel Management Cycle - CONSULTATION PROPER: TOUR OPERATIONS STARTS: PLAN/GROUNDWORK - scrutiny of the travel requirements - acquaintance of the destination - This will require research and awareness of the nature of the destination. - More importantly, the classification of services needs validation. - The developer has to evaluate how intense are the elements involved in the travel requirements: the specifics. CONTRACTING/AGREEMENT All supplies have rules, restrictions, policies, and inclusive clauses. These need to be agreed upon by the travel management company and the supplier. More often than not, these are protected by written and signed contracts. All stipulations are stated for future reference. CONTRACTING/AGREEMENT In the event that a necessity to review the contract arises, all stipulations are clearly written. This contains all the needed details. For example, minimum/maximum number of rooms, rate inclusion, cancellation policies, attrition schedules, and all other details need to be agreed upon by both parties.  This is also the best venue to perform the tour planning and itinerary development. QUOTATION/COST ANALYSIS This is the product disclosed to the takers. A quotation must include written narratives of the details of all the arrangements, fees, and value propositions. There are travel management companies that observe formalities and present the quotation face-to-face or as needed. QUOTATION/COST ANALYSIS During this presentation, the client can raise questions and verifications. This first encounter is between the client and the “products.” It can also be termed the “final consultation,” being the opportunity to “revise” any detail if needed. The policies of the agreements will determine QUOTATION/COST ANALYSIS In cases of “big” movements and very exclusive high- end travel arrangements, the travel management company is recommended to do a product ocular. It is also important that inclusions are stipulated in the contract. In cases where the standard and the price do not match, renegotiation can be made possible. It is also here that the “volume” of users can play a vital role. Suppliers can design cost “graduated”—in nature, as number increases, rate decreases. RESERVATION SUPPLY ACQUISITION To secure the involved products and services, reservation needs to be done. Acquiring the supply will depend on the availability of the fare level and the reservations and confirmations based on commitment. CONSOLIDATION/MERGING After all the reservations and services are finalized, it is very necessary to collate everything: - vouchers, - reconfirmation numbers, and - all other service references and other documentation(s) needed by passengers.  It is recommended to merge services that are delivered by one service provider for better monitoring. CONSOLIDATION/MERGING POST PANDEMIC SCENARIO (New Procedures/Protocols) Many have developed a “less contact” and others have developed “contactless” mechanisms for safety and security. QR codes are provided instead of papers. Electronic codes that may be used during check-in and check-out procedures for accommodations, transportations  Contact tracing mechanisms may vary from different suppliers. SUBMISSION/ACCEPTANCE FINAL AGREEMENT Based on deadline agreements, the final program is submitted. The finalized and valid contracts are properly reviewed. Proper acceptance of the tour program seals all the agreement stipulated in the proposal. SUBMISSION/ACCEPTANCE OF FINAL AGREEMENT  This is also the stage where clients formally manifest their acceptance. The responsibilities must be carefully reviewed.  The mandatory predeparture orientation, as discussed in the management cycle, happens here.  This serves as a preview of the program execution.  Proper specification(s) must be presented and all details must be polished. ACCOUNTING/FINANCIAL DOCUMENTATION This is the stage to bill the clients. Credit terms must be considered if any. Credit terms will be extended only under the directives of Accounting Department of Finance Director. The services and products need to be properly billed and collected.  Only when transactions are paid can we call the process “closed” or “completed.” Make sure that all agreed service handling fees, markups, and commissions are incorporated in the complete billing. POST PRODUCT EVALUATION SERVICE REVIEW  The primary objective is to identify areas that can be sustained or improved for future requirements. Feedbacking, post-evaluation, is equally necessary to complete the cycle. It is in this stage that the arrangements are assessed based on the clients’ actual experiences. All information or data gathered will be part of bank information for future reference. PROCEED TO START CYCLE AGAIN  Commence with the market to get the needed requirements.  Touchbase for groundwork Note: TOUR OPERATIONS CYCLE must not be confused with the travel management cycle. The tour operations cycle deals primarily with the details of the tour components, such as the contracts, restrictions, inclusions, and complete matrix of the tour proper. Discussion Questions 1. All the stages of the tour operations cycle are important. Which part of the cycle do you think is the most critical? 2. Why is “contract” essential in the whole context of tour operations? 3. During the product implementation, how can a travel management company assure its presence while the tour arrangements are ongoing? 4. What is the relationship between the forecast budget and the supplies used in product development? Experiential Exercises The whole class will carefully listen to the exchange of “conversations.” This can be done in Zoom or any virtual facility. Role-play Consultation Stage – Divide the class into two groups. GROUP A: Client: Arrange an annual family vacation to Paris. Interests are museums, culinary, and shopping. - Research about restaurants to visit, Louvre Museum fees and guide costs, and the regulations at Lafayette. GROUP B: Travel management company: Act as a consultant to listen to the clients’ requirements. Experiential Exercises Interview one travel management company and ask what their most complex program is and how their preparations are done. Present a sample “agreement” or “contract” that is based on an actual program. Note the important coverages of the contract such as the tour voucher and the booking and cancellation policies. Refer to Globus, Insight, or any counter brochure. Download two different evaluation forms online and discuss the areas they cover using the attachment: CHAPTER 5: FAMILY REUNION PROGRAM. Identify areas that were covered by the evaluation criteria. Chapter Highlights TOUR OPERATIONS CYCLE involves detailing of the exact flow or the implementation of the tour/travel requirement(s). Supplies, contracts, and specific agreements need to be formulated and professionally entered into for both passenger’s and travel management company’s protection. PROPER FEEDBACK MECHANISM through post product evaluation is the best avenue to review an efficient cycle. CHAPTER 7 ONLINE TRAVEL AGENCIES (OTAS) Ferdinand Dondi C. Ocampo, Entrepreneur, Copyright 2021 Introduction Today, we have a world of “super informed travelers” brought about by various platforms used by Online Travel Agents (OTAs). We can encounter a bank of travel information posted and several types of websites to visit. Tons of virtual tours are available to appreciate the destinations. Introduction The market demand has changed in terms of accommodations, meals, and relaxation facilities. It resulted to adaptation of more efficient and convenient upgrades in tourism systems. The Industrial Revolution gave birth to the Information Age. This period is also named the Computer Age, Digital Age, and New Media Age. It became the vehicle for the nonstop upgrades of tourism systems that changed the landscape of the travel trade. Learning Objectives 1. Describe how OTAs are operated. 2. Highlight the market reach of the current platforms of OTAs. 3. Present the advantages and disadvantages of OTAs. 4. Gather best practices among OTAs. Emergence of ONLINE TRAVEL AGENCIES (OTAs) The online travel industry comprises travel e- commerce sites. Most of them have shifted their business model to web- based services including smartphone applications. Many travel agencies, but not all, have websites to signify their online presence. Some invest to have the most complex “personality” (the image they prefer, the brand they want to be recognized as) in web portals to reach the market they prefer. Emergence of ONLINE TRAVEL AGENCIES (OTAs) These OTAs can carry travel products and services ranging from airfare, cruises, car rentals, tours, flights, accommodation, and restaurants of various categories and types. There are even new sites that offer the services of guides and travel interpreters. Emergence of ONLINE TRAVEL AGENCIES (OTAs) The fast development required the speedy changing demand, the desire to reach a broader market is inevitable. Upgraded systems mean an increase in capacity and a more efficient and faster way to respond to clients. They constantly update and engage in effective digital content. GDS is still manned by human staff who are subject to continuous trainings related to their specialization. Emergence of ONLINE TRAVEL AGENCIES (OTAs) There are OTAs whose presence is dominant. They continuously develop their own computer applications and systems.  Examples of big OTAs are the price line group (Booking.com, Priceline.com, agoda.com, KAYAK, rentalcars.com) and others like Expedia, Inc. (Expedia.com, Hotels.com, Egencia, Hotwire, Trivago, Venere.com, CarRentals.com, Classic Vacations, Expedia CruiseShipCenters, Expedia Local Expert (LX), Wotif Group, Travelocity, Tripadvisor Inc., and Opodo). Emergence of ONLINE TRAVEL AGENCIES (OTAs) The booking engines they use in their operations basically run on the same principle. They only differ in specialization in terms of product. Many of these booking engines boast of capabilities in capturing the different categories of fares and accommodations, including hotel locations and other essential details and information from the market. Currently, OTAs are confronted with various forms of challenges: The most controversial and contested issues is the direct marketing efforts of the suppliers to the market. This is an issue of undercutting commission schemes and other areas of revenue for travel management companies. Currently, OTAs are confronted with various forms of challenges: The 2019 pandemic was just one of the devastating natural disasters in the industry. Those OTAs who invested massive amounts to upgrade their marketing and operational systems will have to wait a longer period of time for the return of their investments. For some, the stiff competition among fast-growing OTAs is not just because of costs or the manner the products are marketed but more on legitimate issues. (“legal/legitimate” presence) Currently, OTAs are confronted with various forms of challenges: In many digital platforms like Facebook, Instagram, world wide web (www), there are individuals who post tour and travel products and services and are mistaken as “travel agencies” or “travel management companies.” In reality, they are reposting these travel and tour products like “groceries.”  It is a big challenge for their target markets to validate if they are legitimate or duly licensed travel agencies or travel managements companies. The regulation of massive posting of such tour products and services on digital platforms is an open-ended challenge. Currently, OTAs are confronted with various forms of challenges: The most important way to sustain and expand market share is still online. Customer engagements can easily be monitored through programs that are installed to support your visibility. Customers are looking for the best deals and clear deliverables. Significant value propositions can only be superior if they can respond with a balance of efficiency, economics, and quality. Online Travel Agency Business Models There are three common OTA business models: (Note: There might be other terminologies used in other references, but they use the same principle.) 1. Merchant Model (Volume Base)  Principle: The agency enters a contract with suppliers using net/net or discounted rates. These supplies can either be hotel rooms, entrance tickets, airline tickets, etc. The purchase date and rate seasonality can be stated specifically. Supplies are sold with markup not higher than the published rate (e.g., Expedia). Online Travel Agency Business Models There are three common OTA business models: (Note: There might be other terminologies used in other references, but they use the same principle.) 2. Agency Model (Retail/Commission Model)  Principle: The agency sells supplies using publish rate. This rate already comes with “protected income.” This model uses a commission basis. The agency earns the income between the agreed upon net/net and the published price. The margin can be agreed upon prior to selling, or it can be entered into an agreement (e.g., Booking.com). Online Travel Agency Business Models There are three common OTA business models: (Note: There might be other terminologies used in other references, but they use the same principle.) 3. Advertising Model/Opaque and Others (Travel Review/Display Base)  Principle: This uses rigid information about the supplies. The hotels offer a price range and visuals alongside a written description of the property. Also, reviews are available for takers to consider. Revenue will come from the number of clicks of visitors; thus, it is also called “click-based advertising” (e.g., Tripadvisor). Digital Content and Marketing, Advantage of Niche Tourism for Online Travel Agencies The rigid competition among OTAs needs to focus on the proper approaches and strategies in order to last. The proper market niche can be an approach for the OTAs to position themselves positively on the broad reach of the online world. Contrary to mass marketing, a proper market niche can sustain revenue; it is more purposive. The following are considered by OTAs in preparing digital marketing strategies and digital content: 1. Different Motives That Drive People to Travel Many travelers like more deep experiences in culture, cuisine, and traditions. Personalized travel plans can go as far as experiencing the restaurant at the peak of Eiffel Tower rather than just taking a picture. The following are considered by OTAs in preparing digital marketing strategies and digital content: 2. Opportunities for “Word of Mouth” – Referral System Satisfaction is measurable. Their positive experiences—they are your best advertisement. They can be a superb brand endorser. If travelers are satisfied, their referral can cover the family, community, organization, and club they belong to. The bus with free and fast Wi-Fi during their tour can be a talking piece in their stories—it can be a trademark. The following are considered by OTAs in preparing digital marketing strategies and digital content: 3. Manageable Cost, Higher Impressions The economics of tourism can be identified by the requirements of the market. Focus on travel influence by demographics, such as income, purchase behavior, age range, etc. Some expect a taste of champagne in a beer; thus, making expectation transparent can lead to the right target market. The following are considered by OTAs in preparing digital marketing strategies and digital content: 4. Higher Conversions If an agency identifies a specific market niche, digital support materials and circulation become more focused. Collateral efforts are more specific; therefore, expect lesser cost but higher engagements and materialization. The following are considered by OTAs in preparing digital marketing strategies and digital content: 5. Specialization, Lesser Competition OTAs that hone and project their expertise in a specialized field, for example, pilgrimages, wedding events, student movements, etc., tend to leave more impact. When their clients are satisfied, they become loyal. This guarantees a repeat market. Value of ONLINE TRAVEL AGENCIES (OTAs) Generally,  The digital world makes traveling less complicated.  The do-it-yourself community is more in control of their travel plans.  Cost transparency, product differentiation, flexibility, and customization Value of ONLINE TRAVEL AGENCIES (OTAs) Online travel agents are increasingly important for tourism suppliers. They serve as both marketing and distribution channels. A growing number of potential guests now turn to OTAs which function as a kind of “one-stop shop,” allowing them to easily search for hotels and other services. The available reviews and comparison of price ranges Value of ONLINE TRAVEL AGENCIES (OTAs)  During the COVID-19 pandemic, complications arose because of the technicalities that were being brought about by cancellations and attrition policies, but even then, there was a guarantee of transparency and flexibility. Consumer behavior can easily be addressed through OTAs. The compatibility of expectations of the market and the supply can be widely available in the online world. Value of ONLINE TRAVEL AGENCIES (OTAs) Products propositions can easily be accessed; price advantage, efficiency, system quality, and convenience need to be offered to attract customers. The world of OTAs, likewise, stimulates the suppliers’ rightful definition of consumption value, hygiene consciousness, and quality through detailed review. Benefits of OTAs That Boost the Confidence of Buyers:  Transparency of reviews  Accessibility of information that is important to clients  Reduced marketing cost via wider visibility  Low cost of advertising properties and other tourism supplies  A wider range of supply choices—from the cheapest to the most luxurious Drawbacks  Booking engines’ cost can be very expensive.  Limited flexibility as OTAs abide by restrictions and complicated cancellation policies/terms and conditions of the supplies they support and promote  Override/Hidden commissions for some posted supplies  Revenue source is a variable and is not too Discussion Questions 1. How can digital content influence the target market? 2. What do you think is the most effective model of OTA and why? 3. Discuss one benefit/advantage of OTAs. Discuss one drawback of OTAs. Experiential Exercises Visit one travel agency website and discuss to the class its market niche. Explain your observations: a) Divide the class into three groups. Assign each group to one of the three most popular OTAs: a.1 Tripadvisor a.2 Expedia a.3 Booking.com Report briefly your experience and discuss your major observations on their digital marketing contents. Experiential Exercises b) Check the tour packages of any tour and travel company. Example: Allpoints Travel Services, Inc. - Identify the sources of its revenue from the packages. - Review their posted tour flyers and examine the governing “Terms and conditions of the tour package.” You can can also use the hard copy of the brochure or print from the company’s website. Experiential Exercises Conduct an online interview or face-to-face interview (whichever is more appropriate) with a tour company regarding their revenue management strategies and the issues confronting their business. Prepare your interview guide and present it to the class. Experiential Exercises Conduct an online survey of travel agencies and tour operators on the impact of COVID-19 on their operations. Inquire about their effective strategies to bounce back and generate revenue. Chapter Highlights ONLINE TRAVEL AGENCIES are considered apt and responsive to the fast-growing travel needs in many platforms because of the introduction of digital world. There are advantages and drawbacks. These are highly dependent on the perspective of both the sellers and buyers. Chapter 8 Tour and Travel Agency Marketing Luzviminda O. Tugade, Copyright 2021 Introduction The concept of tourism marketing comprises the words tourism and marketing. Chang and Katrichis (2016) described tourism activity as a social experience of people to places other than where they usually live and their temporary and immediate work. Marketing can be the gainful process of identifying, complying, and pleasing customers and their needs (Sharpley & Pearce, 2014). Promotion enables marketers to endorse their tourist products and maximize demand, but on the other hand, destinations experience environmental degradation, pollution, species destruction, and climate change (Sharpley & Pearce, 2014; Nickerson et al., 2016). Given that background, tourism marketing is a crucial element of tourism to generate profit (Donohoe, 2012). Learning Objectives 1. Discuss the roles of tour operators and travel agents in the distribution channel. 2. Explain the functions of the various channels of the distribution channel in the hospitality and tourism industry. 3. Exemplify the variety and importance of the marketing mix. 4. Discuss the linkage between the tourism product characteristics and the tourism marketing mix. 5. Compare and contrast the influence of electronic marketing in the customer’s decision-making, purchase, and satisfaction. 6. Analyze the impact of electronic marketing on the profitability and sustainability of tour and travel agency establishments. 7. Explore the marketing environment and establish marketing plans for the hospitality and tourism businesses. The Roles of Tour Operators and Travel Agents in the Distribution Channel Tour operators negotiate and assemble tour Role products with tourism suppliers and sell to Tour s travel agents. Tour operators directly deal with customers Operators to offer tour products and services. Tour operators manage ground services on- site with tourism suppliers in the Tourism destination. Travel agents work with local tour operators Supplier to distribute and sell pre-arranged tour services. s Travel agents may deal directly with suppliers and customers. Travel Customers Agents Customers have the option to deal directly with suppliers or negotiate tour products and services with tour operators and travel agents. Distribution Channel in the Hospitality and Tourism Industry Structure of tourism distribution channels: GDS’s and Google web browser (2005–2009) (Kracht & Wang, 2010). Variety and Importance of the Marketing Mix Tourism LACK OF Service OWNERSHIIP Characteristic SIMULTANEOU S PRODUCTION INTANGIBLITY s AND CONSUMPTIO N TOURISM INSEPARABILI SEASONALITY SERVICE TY ATTRIBUTES FIXED VARIABILITY CAPACITY PERISHABILIT Y Influence of Electronic Marketing in the Customer’s Decision-Making, Purchase, and Satisfaction Electronic Media Marketing Generate customers’ attention and interest. Social Network Blog/Vlog Forum/Podcast Meet customers’ desire and specific demands for products/services. Email Websites Provide action leading to sales and Search Engine customer satisfaction. Optimization (SEO) Google Search Review Platforms Customer appraisal and review Impact of Electronic Marketing on the Profitability and Sustainability of Tour and Travel Agency Establishments Impact of Global reach E-Marketing Low cost to Tour and Travel 24/7 Marketing Agency Management of reviews Customer interaction Personalized marketing Updated information to customers Search for a relevant video about an effective social media marketing in tourism businesses and present it to the class. Share your insights after watching. Market segmentation Website development E- Marketing Mobile marketing Strategies for the Tour and Social media Travel Companies Online booking E-mail marketing Management of reviews Components of a Strength s Marketing plan Political Threat Weaknesse SWOT s s Environmenta Economic l PESTLE FORCES Opportunitie Monitorin s g and Legal Social Financial Evaluatio Plans n Marketin g Marketin Technological Programs g /Activities Objective Strategy s SWOT PESTLE Analysis Short- Analysis term Long-term Discussion Questions 1. What are the roles of tour operators and travel agents in the distribution channel? 2. What are the different varieties and applications of the marketing mix? 3. How does electronic marketing affect the decision- making, purchase, and satisfaction of customers? 4. How does electronic marketing jeopardize the profitability and sustainability of tour and travel agency establishments? 5. How do the current tour and travel companies design their marketing programs? 6. How do travel agencies promote customer loyalty and trust? Experiential Exercises Conduct an online interview or face-to-face interview (whichever is most applicable) with a tour and travel operator regarding its sales and marketing approaches. Prepare your interview guide and present to the class the interview responses. Search for a website of any tour and travel company. Discuss its contents in terms of the marketing Ps (product, price, place, promotion). Make an analytical judgment as to the content and presentation of their website. Create a five-minute video presentation of any local destination in the Philippines and present it to the class. It should contain relevant information regarding its attractions, amenities, and accessibility. Draft a simple marketing plan assuming that you are the Chapter Highlights Tour operators and travel agents are both recognized as prominent distribution channels and they work with suppliers. Today’s distribution channels consist of various digital media that customers and suppliers can choose from, either direct or indirect. The traditional marketing mix includes a combination of product, price, promotion, and place. The emerging Ps include positioning, packaging, programming, people, and partnership. Chapter Highlights There is a positive impact of e-marketing on consumer decision-making by providing a variety of options to the customers, product comparison, information screening, and dependability. The emergence of e-commerce is an important development that affects the profitability and sustainability of the tour and travel agency businesses. In this digital world, they cannot operate and compete without the use of e-commerce. A marketing plan outlines the company’s marketing strategy based on a time frame and is usually an integral part of a business plan. Chapter 9 Revenue Management in Tour and Travel Agency Business Luzviminda O. Tugade, Copyright 2021 Introduction Financial sustainability is one of the most vital factors for the long-term survival of any organization. It is the capability to remain committed to providing services and absorbing economic pressures without external financial assistance. For every institution, either for-profit or not-for-profit, achieving financial sustainability is a crucial vision. Accomplishing economic sustainability will be helpful in every institution, especially among travel agencies. A travel agency owner must determine how to manage the enterprise’s available resources judiciously. A manager needs to utilize different approaches to generate income and to keep the company from a financial crisis. He/She must be excellent in executing realistic internal control and client relationship. Learning Objectives 1. Illustrate the foundation of revenue management. 2. Describe the importance of revenue management. 3. Distinguish the different factors influencing revenue management. 4. Examine the implications of industry product and service attributes toward revenue management. 5. Identify strategies to maximize revenue in the tour and travel business. 6. Evaluate models, pricing, and management strategies to maximize revenue and yield. Revenue Management Process Revenue management refers to selling the right product at the right time and price while simultaneously engaging with the right customer. It considers choosing the most appropriate channel through which the product is distributed (Hospa, 2013). Sources of Travel Agency’s Revenue Market Segment as Source of Revenue Sources of Income MICE Segment/Business Travelers/ Markups Corporate Market Young Urban Professionals Commissions Family/Multi-generation market Service Charges Couples Rebates Seniors/Elderlies Concessions Educational tourists/students Special-interest tourists Factors Affecting Revenue Management Suppliers like Theme parks, Travel airlines and tourism agencies hotels work on attractions, encounter fixed capacity, restaurants, limitations

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