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PONDICHERRY UNIVERSITY(A Central University)

DIRECTORATE OF DISTANCE EDUCATION

Travel Agency and Tour Operations

ManagementPaper Code: MBTM 4002

MBA - TOURISM

IV - Semester



Author

Dr. Sampad Kumar Swain,

Proessor,Dept.o ourism & Hospitality,

Indira Gandhi National ribal University,

Amarkantak

All Rights Reserved

For Private Circulation Only

ISBN 978-93-81932-24-7



TABLE OF CONTENTS

UNIT LESSON TITLE PAGE NO.

I

1.1 ravel rade - Historical Perspectives 31.2 American Express Company and History o India’s ravel rade 13

1.3 Wholesale and Retail ravel Agency Business 23

1.4 Linkages and Integration in ravel rade 37

1.5 Changing Scenario o ravel rade 48

II

2.1 Functions o ravel Agency and our Operation 63

2.2 Setting Up A ravel Agency and our Operation 75

2.3 Sources o Income in ravel Agency and our Operation Business 87

2.4 Diversi ication o ravel Agency and our Operation Business 97

2.5 ravel Documentation 109

III

3.1 Concepts o Itinerary Planning 135

3.2 Resources or Itinerary Planning 147

3.3 our Formulation and Designing Process 156

3.4 Planning and Components o Package our or FI & GI 159

IV

4.1 Classiications o our Packages 171

4.2 Components o Package our 182

4.3 Package our Costing 194

4.4 Components o our Costing and Preparation o Cost Sheet 200

4.5 our Pricing and Pricing Strategies 208

4.6 Package ours o homas Cook, SOC, Cox & Kings and CI 219

V

5.1 Roles and Responsibilities o ravel rade Associations 239

5.2 Roles and Functions UFAA 250

5.3 Roles and Functions o PAA 259

5.4 Roles and Functions o ASA 269

5.5 Roles and Functions o AAI AND IAO 279

5.6 Roles and Functions o AAOI, ADOI, IAAI, FIYO and AFI 288



1

MBA (Tourism) – IV Semester Paper Code: MBTM 4002

Paper - XVII

Travel Agency and Tour Operations Management

Objectives

Students will be able to:

➢ understand the signiicance o travel agency and tour operation business;

➢ know the current trends and practices in the tourism and travel trade sector; and

➢ develop adequate knowledge and skills applicable to travel industry.

Unit - I

ravel rade - Historical Perspectives - Emergence o homas Cook and AmericanExpress Company - ypes o our Operators - Wholesale and Retail ravel Agency business

- Linkages and Integration with the Principal Service Providers - the Changing Scenario o

ravel rade.

Unit - II

ravel Agency and our Operation Business - Functions o ravel Agency - Setting

up a ull-ledged ravel Agency - Sources o Income o a travel agency - Diversiication oBusiness - ravel Insurance, Forex, Cargo & MICE – Documentation - IAA Accreditation

- Recognition rom Government.

Unit - III

Itinerary Planning & Development - Meaning, Importance and ypes o Itinerary

- Resources and Steps or Itinerary Planning - Do’s and Dont’s o Itinerary Preparation -

our Formulation and Designing Process - FIs & Group our Planning and Components

- Special Interest ours (SIs).



2

Unit - IV

our Packaging & Costing - Importance o our Packaging – Classiications o our

Packages - Components o Package ours - Concept o costing - ypes o costs - Components

o tour cost - Preparation o cost sheet - our pricing - Calculation o tour price - Pricingstrategies - our packages o homas Cook, SOC, Cox & Kings and CI.

Unit - V

Role and Responsibility o ravel rade Associations: Objectives - Roles and

unctions o UFAA, PAA, ASA, AAI, IAO, AAOI, ADOI, IAAI, FIYO, AFI.

References

1. Holloway, J.C. (2002), HE BUSINESS OF OURISM, Prentice Hall , London, pp.220-

279.

2. Roday. S, Biwal. A & Joshi. V. (2009), OURISM OPERAIONS AND MANAGEMEN,

Oxford University Press, New Delhi, pp-164-296.

3. Goeldner, R & Ritchie. B (2010), OURISM, PRINCIPLES, PRACICES AND

PHILOSOPHIES, John Wiley & Sons, London.



3

UNIT - I

Unit Structure

Lesson 1.1 - ravel rade - Historical Perspectives

Lesson 1.2 - American Express Company and History o India’s ravel rade

Lesson 1.3 - Wholesale and Retail ravel Agency Business

Lesson 1.4 - Linkages and Integration in ravel rade

Lesson 1.5 - Changing Scenario o ravel rade

Lesson 1.1 - Travel Trade - Historical Perspectives

Learning Objectives

After reading this lesson, you should be able to understand

➢ he evolution o travel agency business in the world;

➢ Various innovations introduced by homas Cook; and

➢ Dierent milestones in the history o global travel agency business

Introduction

he business o travel agency has undergone signiicant changes in the last two

decades. Gone are the days when there were no ormal travel intermediaries to help travelers

visit places o interest. Several travel obstacles discouraged people to travel distance places.

Only a selected ew managed to travel due to their own curiosity, motivation and spending

ability. Many could not make it due to the lack o communication network along with

acilities and amenities. Leaving behind the job o a travel agent, a destination did not even

have minimum acilities to hold the visitors or an hour long. So many changes have taken

place over the centuries. ourism destinations are connected by modes o transport and

visitors ind a place o stay at the destinations.



4

When modern communication system came into existence in 18th and 19th centuries,

the world could witness mass travel leading to the demand o luxury transport and

advance arrangement o stay and sightseeing. hose advance bookings o train, erry, bus,

airlines, theater hall, entry ees, etc were organized by a person with sound experience

and inormation. In the beginning o travel agency business, travel agents could helptheir own community members or ellow members travel saely. Later, it became a ormal

business with all proessional practices. Gradually, the business has grown in such a scale

that competitive multinational travel companies have entered into this travel business. his

lesson will explain the origin o travel agency business in the world with reerence to the

contribution o Richard Cox and homas Cook or having set up proessional travel agency

in the 18th and 19th centuries respectively.

Origin of Travel Agency Business

he nature o travel agency business is to provide holiday-related services such as

ticket booking, transer arrangement, hotel room booking and arrangement o ground

transportation, venue selection and booking or MICE activities. he scope o business

o travel agents was narrow and conined to selected services. Moreover, the business was

managed with small investment. It was risky business as it was depending upon the natural

and socio-political along with cultural actors.

he amount o proit was too little to attract new entrants to do this business. A

number o restrictions were imposed by the government on travel agents and tour operators

or entry into tour operation business. our operators had no choice, but to deal with

other problems like conirmation o hotel rooms, saety in travel, quality o oods, travel

documents, volatile political system, language dierences, cultural dierences, cumbersome

and tedious travelling, long journey, etc. However, invention o railways and steamship as a

common mode o transport changed the perceptions o people on travelling distance places.

hus, homas Cook could emerge as the irst proessional ravel Agent in the wake

o introduction o aordable railway services in the United Kingdom. However, prior to

homas Cook, Cox & Kings introduced travel business in UK. You will read about the

contributions o these two big travel agents along with a couple o other travel agents in

Europe, USA and India in this lesson

Cox & Kings

Cox & Kings in the second hal o eighteenth century became pioneer in providingtravel logistics to British Army stationed at various locations in the world. It claims to be



5

the oldest travel agency in the world. he origin started rom the appointment or making

arrangements o auxiliary services to the First Foot Guards as Regimental Agent. Richard

Cox worked under the mentor o Colonel Lord Ligonier or providing necessary services to

the Army Oicers in the overseas. he Company became the most reliable military agents

or British Government. In the subsequent period, business got expanded to banking,shipping and tour operation business.

Being a 250-year old company serving leisure and business travelers, it maintains

business and operational networks across the world. Over the years, the company has

created a huge brand and credibility in the outbound travel market. Its international oices

and representatives are located in UK, USA, Japan, Germany, Spain, South Arica, Russia,

Italy, Sweden and Australia.

Cox & Kings was renamed as the Eastern Carrying Company Limited as per the

Indian Companies Act, VII o 1913. Fortunately, the company got back its generic name

as Cox & Kings in 1950. It was registered as Private Limited Company in 2001 and an

enlisted company o National Stock Exchange o India. It is a premium brand in oering

all travel related services in the Indian subcontinent. About 5000 trained sta members are

working at 14 oices, 25 associated oices and 44 associate oices in India. In addition to its

headquarters in Mumbai, 12 branch oices are located in New Delhi, Chennai, Bangalore,

Kolkata, Ahmadabad, Kochi, Hyderabad, Pune, Goa, Nagpur and Jaipur.

he company oers competitive tour packages to suit all segments o Indian

customers. Its areas o operation include leisure and corporate holidays, insurance and

rontier ormalities. Its outbound package tours are promoted in the brand name o Duniya

Dekho. his particular package has become so attractive due to packaging, pricing and

marketing strategies. It is a group tour comprising destinations in Australia, New Zealand,

Europe, US, Canada, Far-East, Middle East, South Arica and Mauritius.

Cox & Kings is a proessionally managed Public Limited Company working or

FI and GI travel as one-stop travel solutions point. Other services include charter

lights, cruises, oreign exchange and MICE. he Flexihols is an outbound holiday or

FI customized or independent travelers wishing to travel to Europe, Far East, America,

Australia, New Zealand, and Arica. At the same time, many trade are packages are also

promoted or traders, exporters, importers and manuacturers to organize technical visits,

actory visits, and buyer-seller meets. For example, Cox & Kings organized package tours

or 75 corporate houses in 2006.



6

It is a recognized active member o AAI, IAA, PAA, ASA, IAO, ICCA and

ICPB Charter. he Government o India, Ministry o ourism conerred on Cox & Kings

as the Best Conerence Agent or consecutive seven years. Radius is a business associate to

maintain its operations across 4,640 branches around the world. he company acquired

Holiday Break PLC or GBP 323.43 million in 2011 and the CVCI private equity investmenthas been made in Cox & Kings Ltd’s UK Subsidiary 2012. Reserve Bank o India (RBI) has

granted the Company as Category II Foreign Exchange License. It works with authorized

dealer’s oreign exchange nominated banks.

Thomas Cook and Its Origin

homas Cook is known to have aroused interests to help people in England

undertake travel within the country or neighbouring country. he 9th

June, 1841 is a redletter day in the history o travel trade in the world. On this day, homas Cook walked rom

Harborough to Leicester to attend a temperance meeting and he stumbled upon with an

idea o arranging train tickets or the members o emperance Society where he was serving

as an evangelist and Baptist book seller. He started his carrier as a Cabinet Maker. A 32-year

old cabinet-maker could become world’s ounder proessional travel agent. He achieved

many milestones during his lietime and many were achieved by his son John Mason Cook.

homas Cook was much worried about the Victorian social problems due to the

consumption o heavy alcohol. He thought o bringing some changes with the travel that

could be possible due to invention o railway system. homas Cook was the irst travel

agent who introduced hotel coupons, circular notes, credit cards and advance reservation

as part o its travel innovations. homas Cook showed the path o travel business to other

contemporary travel agents with his organized package tour or leisure tourists. His pleasure

and continental travel are now being studied by many new-age entrepreneurs in travel trade.

First Excursion

he history o proessional travel agency business started with a day-long excursion

tour or his 570 riends in the emperance Society rom Leicester to Loughborough in 1841.

He took the services o the British Railway. All his riends were charged one shilling or this

excursion. hat excursion tour was accompanied with a band to play typical hams and a

picnic lunch o hams along with the aternoon tea or rereshment.

hus, the successul conduct o the irst excursion tour by homas Cook led to

introducing all-inclusive package tour. Subsequently, a series o trips were conductedbetween Leicester, Nottingham, Derby and Birmingham on behal o Local emperance



7

Societies and Sunday Schools to provide experience o train travel. homas Cook described

the irst excursion as Enthusiastic Philanthropy as he did not have any intention o making

money. He was printing posters and hand bills to acilitate people to travel comortably.

Establishment of Modern Travel Agency

he beginning o the establishment o modern travel agency in the world started

with the railway journey rom Leicester, Nottingham and Derby to Liverpool. He made

some proits rom this trip. he irst mass tour across England with entertainment activities

began in 1845 to provide value-or-money package.

Sir Joseph Paxton, architect o the Crystal Palace, persuaded homas Cook to devote

himsel to bringing workers rom Yorkshire and the Midlands to London or the GreatExhibition o 1851. he untapped opportunity was grabbed by homas Cook with a lot o

determination and enthusiasm.

homas Cook conducted tours or 150,000 people to visit the Great Exhibition in

Hyde Park rom Yorkshire and the Midlands in 1851 ollowed by the irst continental tour

in 1855. He accompanied two landmark tours to the International Exhibition rom Harwich

to Antwerp, Brussels, Cologne, Frankurt, Heidelberg, Strasbourg and to Paris.

Travel Innovations

homas Cook introduced Hotel Coupons in 1868 to help customers check in hotels

without any hassle. Hotels also honoured the hotel coupons issued by homas Cook. It

reduced the cumbersome procedures o payments through cash. Hotels accepted the coupons

or providing rooms and other allied services such as ood, entertainment, transport etc.

Hotels were beneited rom the coupons as bulk numbers o rooms were booked in advance

and it was only transaction. homas Cook in turn received commission rom hotels as both

maintained the accounts o their periodic transactions.

homas Cook introduced Circular Note in 1874 to help customers travel saely.

Circular Notes were accepted across the hotels, restaurants and transport operators at

several tourism destinations and cities in the Europe and the USA. he Cook’s Circular

Note got circulated in New York and it was treated as an early invention o traveler’s cheque

in the world. More particularly, the circular notes were easily exchanged against the local

currency that provided much relie to the travelers in meeting the contingency expenditures

like shopping, tips, transer, extra services, etc.



8

Package Tour for Middle Class

he massive industrialization in the mid 19th

century made massive impact on the

increase in income and consumption. It created sizable middle-class people with much

disposable income. aking the advantage o the trends, homas Cook took the beneitso rising middle-class customers when customized package tours were designed to suit

their travel needs. hose middle-class customers demanded or visiting destinations in

Switzerland and Italy. He negotiated with innkeepers and hoteliers to provide rooms and

meals at good prices.

Tour Across Intra-Continental

homas Cook continued to expand his business in Europe too. He conducted GrandCircular ours to Brussels, Cologne, the Rhine, Heidelberg, Baden-Baden, Strasbourg and

Paris, with return trip to London via Le Havre or Dieppe. He undertook the amiliarization

tours to Switzerland in June 1863 to visit the places o interest, contact hotels and innkeepers.

He accompanied sixty aluent class clients and conducted the tour to Geneva. homas

Cook organized trips in the Northern and Western Europe in 1863.

With the co-operation o the Paris, Lyons and Mediterranean Railways, homas

Cook began to issue Circular rain ickets (in both English and French) between Paris

and the Alps. He then conducted the irst circular tours to Switzerland, ater having made

an immediate success. He also arranged the package tour across the Alps. he irst Italian

tours organized in the summer o 1864 during which homas Cook escorted two large

groups. One group was taken to Florence and parts o central Italy and the other one was

accompanied to Rome and Naples.

Intercontinental Tour

homas Cook conducted the tour to the USA in the North American continent.

He introduced the ready-made package tour to London, Paris, Rome and Geneva. In the

subsequent time, the Atlantic Ocean was crossed or conducting outbound tours to North

America. It was Mr. John Mason Cook (son o homas Cook) who conceived the operation

and management o the irst-ever American tour.

homas Cook undertook an exploratory trip to the North America in 1865 or the

sake o gathering inormation about the transport, accommodation, ood, sightseeing,

saety and security, etc. he Company extended its operation to Egypt and Palestine inthe year 1869 in order to cater the demand or visiting Pyramids in Egypt and religious



9

visit to Jerusalem. He managed to develop a system o tours that covered 4,000 miles o

railways journey. he objective o aligning with the AMRK helped in conducting sae and

aordable package tour in the USA.

Great Journey

hat trip was practically possible to travel to Egypt via China in 1869 ollowing the

opening o the Suez Canal and the completion o a rail network linking the East and West

coasts o America. Finally, homas Cook and his small party managed to travel across the

Atlantic Ocean by steamship to discover a new route o world. In 1869, he conducted his

irst party up the river Nile with the help o two steamers. He set out or the Round-the-

World-our rom Leicester in 1872 when he reached at the age o 63.

hey travelled rom New York to San Francisco by rail. hey cruised to Japan

ollowed by to China across the Inland Sea. He visited Singapore, Ceylon and India. While

leaving Mumbai (then Bombay), they crossed the Indian Ocean and the Red Sea to Cairo.

He travelled back to London rom Cairo, Egypt.

homas Cook alone set o on an extended tour o Egypt and Palestine. Finally, he

reached back home ater traveling through urkey, Greece, Italy and France. It was a 222 -

day World our. He was speechless ater seeing the Great Wall o China, the aj Mahal and

the Pyramid. he world tour was a great achievement or expansion o business to dierent

parts o the world. He gathered inormation about the people, culture, political systems,

economic systems, acilities, amenities, transport connectivity, etc.

Free Independent ravelers (FI) started buying packages rom homas Cook.

here were more demands o FIs to buy the Round-the-World Package our. Independent

travelers visited those places explored by homas Cook and his party. Some o them traveled

to Asia via Australia and New Zealand rather than China and Japan.

Second Generation Thomas Cook Business

homas Cook was very ortunate to have his son John Mason Cook as an able

successor to manage promotion, marketing and administration o company aairs. Mr.

Cook could manage the homas Cook’s business empire during the World our. His son

took the control o homas Cook business ater the head oice got shited to Ludgate Circus.

Mr. Cook went or expansion o business to dierent countries and he took thedecisions at a time when telegraphy was in the beginning and telephone was not invented.



10

Mr. Cook set up overseas editions o “he Excursionist”. It was the newspaper launched by

homas Cook in 1851 to educate customers about the places interest in France, Germany,

India, Australasia, America and the Far East in the package tour. he newspaper was

renamed as “he raveller’s Gazette” in May 1902. It continued to be published until 1939.

John Mason Cook’s Remarkable Contribution

he British Government appointed John Mason Cook in 1884 to organize a relie

expedition up the Nile to rescue General Gordon rom Khartoum. Arrangements were

made or the movement o 18,000 troops, nearly 40,000 tons o supplies, 40,000 tons o coal

and 800 whale boats. Mr. Cook undertook he Gordon Relie Expedition or the British

Government as a part o social service to the nation. Mr. Cook and his Egyptian managers

supervised the entire operation. Despite all the eorts, Khartoum ell in January 1885 andGordon was killed.

Merger and Acquisition

homas Cook and John Mason Cook died successively during the 1890s when the

company got consolidated its operations worldwide. Mr. Cook’s three sons Frank Henry,

Ernest Edward and homas Albert could manage the operation.

hey introduced winter sports holidays, tours by motor car and commercial air travel.

he company was registered as homas Cook & Son Ltd in 1924. he oice headquarters

was shited rom Ludgate Circus to the aristocratic residential area at Berkeley Street in

Mayair in 1926 Later, the headquarters o homas Cook and Son Ltd was used as the

Centre o London Society.

homas Cook & Son Ltd was sold to the Belgian Compagnie International edes Wagons-

Lits et des Grands Express Européens in 1928. he Wagons Lits was a leading operator o

most o Europe’s luxury sleeping cars, including the Orient Express.

he Wagons-Lits headquarters in Paris was seized by British orces and Mr. Cook’s

British assets were requisitioned by the British Government immediately ater the outbreak

o World War II. A deal was struck to sell the company to Britain’s Four Mainline Railway

Companies.

homas Cook & Son Ltd struck a deal with Wagons-Lits to hold 25% stake in overseas

business. he Nationalized British Railways has taken over the company in 1948. In 1972,homas Cook & Son Ltd was taken over by a consortium o Midland Bank, rust House



11

Forte and the Automobile Association. A new standardized corporate logo was conceived

and introduced. Fortunately, homas Cook managed to overcome that period and survived

the recession in 1970. As a result o which, homas Cook enhanced its reputation or

providing excellent service by launching a Money Back Guarantee scheme in 1974.

homas Cook began to concentrate on its long-haul tours program by acquiring

Rankin Kuhn ravel in 1982. It closed the operation o short-haul travel market in 1988.

he company made a comeback to the core short hauls package tour market in 1996 ater

it acquired Sun world.

homas Cook amily members celebrated 150 years o its long journey in 1991. he

company was acquired by Westdeutsche Landes bank (West LB). It is the Germany’s third

largest bank and the LU Group became the Germany’s leading charter airline in 1992.homas Cook Ltd. became a wholly-owned subsidiary o West LB in 1995.

homas Cook & Son Ltd. got beneited rom the Post-World War holiday boom,

which witnessed one million British nationals travelling abroad by 1950. he Company set

up a Business ravel Service (BA) and renovated the holiday camp at Prestatyn (which had

opened shortly beore the outbreak o war). Although Cook’s remained the largest and most

successul company in the industry, but its dominance in the ravel market was subsequently

being contested by the emergence o new travel irms.

The First German Travel Agencies

he irst German ravel agencies in the line o modern travel agencies were known

as Immigration Agencies. hese agencies were engaged in booking ship’s passages and

sometimes group journeys rom a collection point to the point o embarkation. he oldest

o such agencies was Reiseburo Rominger in Stuttgart in 1842. his agency subsequently

extended its activities to the whole range o travel services in Europe. o make traveling

simple or the individual, the concept o tickets or means o transport were introduced and

issued by these larger agencies in Europe.

The First Indian Owned Travel Company

Pallonji Katgara & Jamshedji Dastoor created the Jeena and Company (a shipping

and export company) with a seed capital o US$ 75 in 1900. he Jeena ours and ravels was

established in 1920 with the privilege o being the irst Indian - owned travel company. In

1961 the Company was merged into ravel Corporation (India) Pvt Ltd to become India’slargest travel company under the leadership o the Katgaras.



12

Later in 1951 ravel Agents Association o India (AAI) was established to represent

the issues o travel agency business to the government and protect the interest o its

members. Prior to AAI, travel business in India was in the hands o Jeena &Company, Lee

and Muirhead India Pvt. Ltd. and N. Jamnadas and Co. Ltd. he Jeena and Company had

entered into outbound tours as well. Along with the Indian travel companies, homas Cookand Sons and Cox & Kings and American Express came to India or inbound and outbound

tour operation.

Summary

In this lesson, the evolution o travel agency in various stages in the world was

presented. homas Cook ravel Company and other its contemporary travel companies

were successul in designing and operating package tours in the Europe during the ormativeyears o their establishments. Innovative measures were undertaken to improve the service

eiciency and saety o travel to distance places in the organized tours. he growth o travel

agency and tour operation business o homas Cook was presented with the examples o

variou breakthrough in dierent periods.

****



13

Lesson 1.2 - American Express Company and History of India’s Travel Trade

Learning Objectives


➢ he origin o establishment o Cox & Kings and American Express company

➢ Several innovative practices to run travel agency business

➢ he area o operation o travel business initiated by these two companies➢ Dierent business concepts introduced during the early stage

Introduction

People were not aware o services o travel agency and they used to ace several types

o diiculties to arrange tour on their own. ravel agents were appointed or the purpose o

arranging logistics or the army personnel or relies or war victims. hey used to work or

providing postal and courier services to the government. In the due course o time, some othe travel agents provided travel inormation like the time table o arrival and departure o

trains and buses to the local people and visitors. As such, there were not organized contacts

o travel agents with the accommodation service providers and transport operators prior

to the establishment o the irst proessional travel agency by homas Cook in 1841. Even

though, Cox and Kings became the irst travel agent established way back in 1757 in UK to

work as agent or British Army stationed at various colonies o British Government, homas

Cook revolutionized the business o travel agency or their innovative travel solutions like

Hotel Coupons, Circular Notes, Guide Books, the travel magazine, etc. On the other hand,

the American Express Company also introduced the ravelers’ Cheque and Credit Cards

to the travelers. he contribution o these three travel agencies is remembered or several

business experimentations and innovations. his lesson has highlighted the achievements

o American Express Company along with the history o travel trade in India.

he American Express Company celebrated its 150th anniversary in 2000 as a branded

Credit Card and raveler’s Cheque Company. It has created its own niche in the credit card

segment. oday, the company is the world’s largest wholesale travel agents and consolidators

with provisions o travel solutions or lights, hotels, car rentals, holiday packages, cruises

and money exchanges to individuals, groups and corporate travelers.



14

Beginning of Traveller’s Cheque

American Express is a global company serving public as well as government agencies

with its unique supply chain management system to deliver travel products lawlessly at

distance places or the last one and a hal decade. ravelers are amiliar and comortablewith traveler’s cheque issued by American Express rom several locations around the

world. It was a travel solution or long-haul travelers carrying money or spending on

transport, accommodation, ood, tips and shopping. raveling to distance places was not

sae and travelers were attacked on the way to snatch valuables including money. People

ound travelling ar-o places risky and unsae. Cox & Kings and homas Cook in UK

and American Express in USA started travel business or helping general public travel and

sojourn saely.

Among them, American Express has become popular worldwide or its Money Order

Business. It is a generic name when someone thinks o sending money to distance places.

Being an oldest and largest travel company in introducing innovative travel solutions, it had

a humble beginning with reight business in 1850 in USA. he Company was an authorized

reight agency o banks in USA to transport small parcels containing currency notes, bills,

certiicates and other negotiable instruments.

American Express started the Money Order business in 1882 as an agent to deliver

money to the receivers at several locations. It collected some charge rom the senders.

his was the history o success o American Express Company. In the subsequent time,

it introduced the world’s irst raveller’s Cheque in 1891. ravelers deposited money at

American Express counter and they were issued cheque in dierent denominations. hose

cheques were surrendered or exchange o money at American Express branches/ranchises

or any authorized commercial banks across the USA.

here were two beneits or American Express Company.

➢ It collected service charge or issuing cheques

➢ Money, which was deposited or issue o cheque, was invested or earning interest.

raveler’s cheque business became very lucrative or the company and it expanded

its network across the USA and other European countries including UK. American Express

Company became a popular and reliable agency or the general public and government or

its Money Order as well as raveler’s Cheque.



15

Philanthropic Work

he historic assistance o the American Express Company with its cheque earned

names and ames or the company to receive wider acceptability. he stranded passengers

in European cities during the First World War were given cash against its traveller’s chequesand money orders instantly. It was a timely help or passengers that helped passengers

spend or routine things. hus, it is a notable contribution o American Express during

World War I. hat needed service enhanced the brand loyalty and attachment o people

or American Express services. he general public or travelers in USA and Europe trusted

the service. he Commercial Banks highly recognized the credibility o American Express

Company. In the due course time, the British government engaged the Company to take the

responsibility o supplying relie materials to the British prisoners o war in the countries

like Germany, Bulgaria, Holland, Norway, Switzerland and urkey. he company slowlyexpanded its business to commercial banking services in Europe.

Diversification of Business

Cargo and baggage handling and money exchange were the core business until 1915.

A 30,000-mile world cruise tour connecting and stopping at dierent countries such as

Cuba, Panama, Japan, China, Singapore, India and Egypt along with the Mediterranean

countries was conducted or passengers in 1922. he duration o the cruise tour was our-

month long. he company also entered into the direct sale o bus, train and cruise tickets.

he diversiication o business did not bring about visible changes in the business

due to the political turmoil ollowed by two World Wars in a gap o two decades. Ater

the end o World War II, there were political unions across the world and many countries

deeply realized the impact o wars on the trade and commerce. Neighbouring countries were

engaged in dialogue or promoting trade and commerce. hat resulted in the movement o

people rom one country to another.

American Express took the advantage o the mass movement o people in early

1950s and the business got revived. he irst Credit Card was introduced in 1958. As a

result, credit cards were issued with easy ormalities or the general public in America to use

it extensively. People took it a status symbol and hassle-ree way o purchasing and paying.

Acquisitions for Expansions

he American Express went on acquiring companies which were directly andindirectly associated with the travel business. he names o the companies include Shearson



16

Loeb Rhodes, First Data Resources, rade Development Bank, Lehman Brothers, Kuhn

Loeb and Investors Diversiied Services. All the diversiications and acquisitions took place

between the 1970s and 1980s. his had a signiicant impact on the revenue generation. he

proit reached to the tune o $1 billion in 1986.

here was a setback to the company’s turnover when restaurant operators did not

use the cards due to high rates or accepting the payments through the Amex cards. he

Company maintained strategic links with airlines, banks, retailers, and other tourism

business establishments to increase the circulation o Amex Card.

History of Travel Agency Business in India

ravel agents were not merely meant or selling travel-related services, but alsoused to take part individually or with group or promotion o tourism destinations. he

international travel organizations like homas Cook, American Express and Cox and King

have made remarkable contributions to the growth o travel agency and tour operation

business.

hose travel agencies brought several new ideas to the limelight. Similarly, travel

agencies in various countries ollowed and practiced the innovative business strategies.

ravel trade in India was not considered as a business to grow given the scanty demand o

people or traveling in domestic and oreign countries during the pre-independence period.

Apart rom homas Cook’s organized package tour, there was hardly any entrepreneur rom

India who ventured into the business. he Government o India took a slew o measures

during the post independence period to increase tourist traic to India. It increased the

inbound tourist traic to India ater 1950.

he growth o travel agency business was not so signiicant in the irst phase o

the Post-Independence Period. Nevertheless, several initiatives were taken to increase the

share o India’s in international tourist arrivals and revenue receipts. he evolution o travel

agency business in India is presented below.

Pre-Independence Period

he evolution o modern travel agency and tour operation business in India does

not have a long history unlike the history o travel agency business in Western Europe

and North America. he overseas travel agents like Cox & Kings and homas Cook used

to operate the inbound tour in India. here was no ormal and organized travel agency insmall cities to handle the oreign visitors. homas Cook& Cox and Kings used to conduct



17

the world tour and special interest tours or royal amily members. Package tours were

regularly conducted to India or British oicials and their amily members and relatives.

hey used to visit Kashmir and Agra.

he royal visit o Queen Victoria to Kolkata ater the Sepoy Mutiny in 1858 wasorganized by homas Cook. Queen Victoria’s visit to India removed the threat o saety and

security rom the minds o British nationals. he connectivity through sea route between

India and the countries in Europe made travel easy, sae, comortable and aordable.

Peninsular and Oriental Steamship Company in 1878 was used to bring a group

o British tourists to India. he group landed in Mumbai ollowed by a visit to Agra by

train to see the aj Mahal. he group inally visited the Kashmir valley. When homas

Cook conducted this particular tour in India, he established the homas Cook and SonsInternational (Ltd.) at Mumbai and Kolkata or the inbound operation in 1880. he Eastern

Princess Department was also established in 1887 to cater the travel needs o Indian royal

amily members. As reported, the British, the French and other nations in Europe visited

aj Mahal, Jammu & Kashmir, Shimla, Goa, Ajanta & Ellora, other hill stations and beach

resorts.

A sizable number o young Indians travelled to England or higher study and

preparation or civil service examinations. At the same time, Indian political leaders traveled

to England to participate several round-table discussions. homas cook started booking

train tickets, reservation o guest houses and arrangement o small car, mini coach, horse

carts and animal-driven carts to transer tourists rom the railway stations to guest house

ollowed by conducting sightseeing tour.

Being a pioneer in operating tours in India, homas cook conronted many

hindrances while conducting the tours.

➢ Lack o proper road, bridges, railway stations, accommodation, money exchanger

and public toilets

➢ Lack o trained tour conductors, guides, escorts and interpreters

➢ Untrained sta in the guest houses and other eating places

➢ Cab drivers without having basic etiquette

Unlike in the Europe, the Indian railways system was much underdeveloped in the

context o integration with the travel agents and tour operators in the promotion o inbound

and domestic package tour. he issue has not been addressed ully as yet. In the similar



18

instance, the airlines had limited role to work with travel agents and at the same time, there

were not much airlines connectivity with India. Because airlines were generally operated

within the domestic sky and countries did not venture or linking airline services beyond

the boundary o country or two important reasons like political turmoil and low-engine

capacity or long-haul journey.

hese are the ollowing observations o homas Cook while conducting tours in India

➢ ravel agents did not have qualiied and trained sta to manage

➢ ravel agents did not have access to technology

➢ ravel agents were not given credit acility or the reservation o hotel rooms and

airlines tickets.

➢ ravel Agents hadlimited scope or diversiication o business.

➢ ravel agents did not consider advertisement or sales promotion or publicity as the

ways o increasing volume o business.

The First Indian Travel Agents

Jeena & Co., Lee & Muirhead India Pvt. Ltd and Jamnadas & Co. Ltd were the irst

travel agents and they were doing inbound and outbound tour business in Mumbai. homas

Cook and American Express used to operate the inbound tour with the help o Jeena and

Co. hus, Mr. J. N Katgara became the pioneer travel agent in India with the establishment

o Jeena & Company in 1920 to cater the domestic travel needs.

Mr. Katgara took the advantage o business o Mumbai city and ventured into cargo

and courier business. He subsequently concentrated on ticket booking, hotel reservation,

package tour, transport arrangements, etc. here were many developments in the travel

trade in the Post- Independence period.

Post Independence Period

Some o the events during Post Independence Period opened windows o

opportunities or the travel agents to expand more unctions. One such event is the reported

prepared by Sir John Sargent in 1945 about the development o means o travel rom nearest

railway station, residential accommodation, travel brochures and guide books, provision

o authorized guides, etc. he ormation o ourist raic Branch coordinated with the

travel agencies and tour operators in India and overseas to promote domestic and inboundtourism in 1949. he branch also established coordination or conduct o conerences on



19

tourism and coordination with railways. Establishment o ourist Bureau in States and

development o tourist centers and the training o guides were some o the initiatives o the

Central Government or promotion o tourism.

Overseas and Regional Tourism Offices

wo overseas tourism oices were opened at London and New York and Regional

ourism Oices were also opened in Delhi, Mumbai, Kolkata and Chennai. hese oices

coordinated and controlled various segments o travel trade. In the later period, 18 overseas

tourism promotion oices were aggressive in exhibiting tourism attractions o India.

Foreign tour operators also included India’s selected tourism places like Agra, Kashmir,

Ajanta and Ellora, Varanasi, etc in the promotional brochures. At the same time, India’s

overseas tourism promotional oices maintained continuous dialogue with the oreign touroperators to participate in the amiliarization tour program in India. Air India hosted the

amiliarization tour to several places o tourism interests. It was major step o the Union

Ministry o ourism to print brochures with colourul photographs to create better image

in order to remove perceptions o oreign visitors about India.

Creation of TAAI In 1951

A group o twelve leading ravel agents ormed the ravel Agents Association o India

(AAI) in 1951. he primary purpose was

➢ o protect the interests o those engaged in the industry;

➢ o promote its orderly growth and development; and

➢ o saeguard the rights o the travelling public.

AAI is the largest ravel Association o India and it is recognized as the voice o

the ravel and ourism industry in India. here are over 1800 Active; Allied and Associate

members. hese members are IAA accredited ravel Agencies, tour operators, transports,

Airlines & General Sales Agencies, Hotels and our operators and educational and training

institutions.

Merger in Indian Travel Agency Business

he Jeena and Company organized group tours in overseas and in India or Indian

travelers. It handled the irst group o oreign tourists in 1950. However, the Company and

other two Indian ravel Agencies were merged with the name they have been recognized as

ravel Corporation o India Ltd. (CI) since it was ormed in 1961.



20

At the same period, the bulk o International tourists were handled by the homas

Cook and Sons and he American Express Company. At the same time, Student International

ravel Agents (SIA), homas Cook India Ltd. American Express, Cox and King, Ind ravel,

ravel House and Stic ravels entered into the travel agency and tour operation business

in India. With the change o oreign exchange rules, homas Cook India (Ltd.) was set upunder the Companies Act 1956 in 1978 as per the Foreign Exchange Regulation Act (FERA)

1973.

he Asian Games were hosted in 1952 in India and itattracted a good number

o inbound traic to India. Majority o travel agencies dealt with airlines tickets and

inbound operations between 1951 and 1961. Some travel agents opened branch oices

and headquarter at Delhi, Agra and Jaipur as these are the iconic places and named as the

Golden riangle o India. More particularly, travel agencies were resorting to the ticketingbusiness and inbound tours in the circuit.

ravel Agencies used to ace the shortage o vehicles to conduct sightseeing tours.

ravel agents had no choice, but to take longer time to conirm the booking o hotels,

transports, train tickets, guide services and other ground arrangements. oday, there are

more than thousand travel agencies and tour operation companies in India.

he report o Ad-hoc Committee on ourism submitted by the Jha Committee in

1963, recommended the role o public sector in the promotion tourism. India ourism

ransport Undertaking was set up in 1965.

It later merged with other two tourism public sector undertaking subsidiaries o

Government and gave birth to India ourism Development Corporation (IDC) in 1966.

IDC took several steps to provide luxuory transport acilities at the key destinations. he

IDC hotel properties came up and met the demand o oreign tourists in the creation

o international standardrooms, acilities and amenities at par with the international star

hotels.

Moreover, the Overseas ourist Promotion Oices showcased India to the tour

operators and travel agents in Europe in 1968 and in the USA in 1971 in a massive scale.

However, the overseas tourism promotion was jointly sponsored and organized by the

Department o ourism with Air India’s active participation and support. he tourist

arrivals registered a growth rom 17, 000 in 1950 to 188,820 in 1968. From the year 1965,

there has been a constant increase in the number o tourists visiting India and International

tourists arrivals also increased to 13.29,950 in 1990.



21

Post Liberalized Period

he strategy o the Ministry o ourism was to position tourism as a national

priority and enhances India’s competitiveness as a tourism destination. It also took steps

or improving and expanding product development, creating world-class inrastructureand drawing up eective marketing plans and programmes. hus, all those developments

directly contributed to the growth o travel agents and tour operators.

Changing Roles of Travel Agency Business

raditionally, travel agents were the travel intermediaries to make arrangements o

travel, stay and movement or which they used to get base and override commission. Pay-

or-perormance and override commissions are widely prevalent method o making theproit that is sustainable or large travel agents. Apart rom ticketing, travel agents have

ocused on travel insurance, hotel bookings and oreign exchange. Package tours have

remained to be the core source o business and tour operators concentrate more on selling

holiday packages. he travel business in India is largely divided into leisure and business or

inbound and domestic and employment/migrant travel. For example, homas Cook India

and KUONI as an outit o SOC outit in India ocus on adventure tourism, incentive

tourism and convention tourism.

India’s Outbound and Inbound Growth

he outbound market is surging due to the competitive international airares,

increasing disposable incomes o consumers and aspiration to travel abroad increasing.

he GI and incentive travel market is growing in India. India expects about 10 million

overseas visitors and as outsourcing cities like Bangalore and Hyderabad draw more

business travelers. he busiest airports in New Delhi and Mumbai have been modernized

to accommodate more lights and passengers.

These are the issues that travel agents should be ready to face.

➢ Shrinking revenues rom ticket sales

➢ Harder to maintain proitability

➢ Bargaining power o middle and upper-class customers

he Ministry o ourism, Government o India gives away the National ourism

Awards to inbound operators, adventure tour operators, domestic tour operators, MICE

operators, Most Innovative our Operator and ourist ransport Operators on the basis



23

Lesson 1.3 - Wholesale and Retail Travel Agency Business

Learning Objectives


➢ he meaning and dierence between tour operator and travel agents

➢ he dierence between wholesaling and retailing in travel business

➢ Dierent types o travel agents and tour operators

➢ he roles and characteristics o travel agents and tour operators

Introduction

Unlike any other business, travel business is operated through wholesalers and

retailers. It would be strange to hear the concept o wholesaling and retailing the travel

products or the beneits o customers and producers in the tourism business. he primary

service providers like hotels, resorts, erry, cruise line train, airlines, coach, car rental, even

companies, etc rely largely on the wholesalers and retailers to sell the products. It would be

unviable on the part o cruise line operators to reach out the customers at all the localities.

For instance, an airline cannot sell the products directly to all customers and it has to sell

tickets through Passenger Sales Agent (PSA) or retail travel agents.

he need or a wholesaler is essentially important in increasing the sale o tickets o

airlines and hotel rooms. Hotel appoints a wholesaler to sell the rooms directly or through

the retail travel agents. Here tour operators are largely called as wholesalers and travel agentsare basically called as retailers. Apart rom this, airlines and cruise lines appoint the General

Sales Agents (GSA) to achieve the bumper sale in a particular season. he wholesaler is

one which sells tour packages or hotel rooms to the retailers directly. It ixes standard and

special commission or retailers or the sale o these services. For example, British Airways

has appointed the GSA at dierent regions in India to monitor the sale o air tickets. he

business o travel agency is no way dierent rom any other conventional business as ar as

the sale o travel products is concerned. his lesson will explain the meaning, characteristics

and activities o retail and wholesale travel agents.



24

Travel Agency- A Retailing Point of Tourism Services

ravel agency is a irm qualiied to sell services pertaining to tours, cruises,

transportation, hotel accommodation, meals, transer, sightseeing and other elements to the

general public. his business irm is set up or providing services and earning proits. hebusiness o travel agency uses some o the important management practices like division

o labour, hierarchical authority and responsibility. ravel agency plans, organizes, directs,

controls, coordinates and sets all resources together in such a manner that it can achieve

objectives. When the unctional areas o management are linked with organizational

objectives, travel agency makes proits ater satisying customers. For example, homas

Cook or Cox and Kings have become leaders in travel agency business worldwide or their

continuous eorts in ensuring quality or customer satisaction and delight.

A travel agency is a business entity or irm that retails package tours or any

other individual travel solutions to customers as a representative o airlines, hotels, tour

companies, and cruise lines. In these days, travel agents have created separate department

to meet the travel needs o leisure and business tourists. Generally, a travel agent gives

advice to tourists about the climate, distance, culture and do’s and do not’s to ollow at the

destinations or cities. Presently, most package holidays are sold through travel agents. he

modern travel agents always remember the contribution o the legendary homas Cook or

many innovative practices and Sir Henry Lunn (Lunn Poly) or inventing skiing as a leisure

activity.

ravel agencies should have dynamic and structured organization with operational

experience to manage business eiciently. It is essentially important to examine the ixed

and variable investment to run the business. Apart rom being severally aected by the

seasonal nature o business, other external actors like natural calamities, outbreak o

diseases, ethnic wars, etc do aect the prospect o business negatively.

ravel agents make the booking tickets or air, rail, sea or road travel and arrange

hotel reservations or guest houses, hire taxis etc. Besides domestic air ticketing, travel

agents make international light bookings and other bookings or special business tours or

conerences.

On the contrary, tour operators deal with the bulk travel arrangements and

management o FI and GI travel. It is recognized as principal agent or wholesaler. It

oloads the responsibility to the ground handling agents to take care o receiving and

dropping the guests at the airports/railway stations along with sightseeing arrangements.Importantly, tour packages are mostly promoted by tour operators through travel agents.



25

our operators also oer special packages like deep-sea diving, snorkeling, Himalayan

trekking and camel saaris.

Types of Travel Agencies

ravel agencies are broadly divided into wholesale and retail travel agency or the

distribution o sale o tourism services. In addition to this classiication, travel agency can

also be classiied as implant agency, conerence organizer, meeting planners, trade air

organizer, etc.

Wholesale Travel Agency

he business o wholesaling in tourism industry is no way dierent rom thewholesaling in the commodity market. A wholesale travel agency assembles dierent

components o services to design tour packages or catering FI and GI customers. A

wholesaler is one who initiates the process o orming organized tours or sells the individual

components directly or indirectly through ranchise or retail agents. For example, a

wholesaler o Singapore airline or aj Hotel or Sterling ime Share Group is authorized

to sell the airline tickets or hotel rooms on behal o the principal service providers. A

wholesaler may be a consolidator or a manuacturer o tours or General Sales Agent (GSA).

It buys service components in bulk rom dierent suppliers and it designs package and sells

or resells these components together.

I it is tour wholesaler, the process starts rom the research development ollowed by

itinerary preparation. he most critical role o a tour wholesaler is the pricing o package

that positions the product in the market. hus, tour wholesaler buys the service in bulk

rom the primary or direct service providers. It means that bulk o hotel rooms and airline

seats is sold in a target time period or which wholesalers receive special commission. he

GSA o British Airways also appoints the retail travel agents to sell the tickets.

On the other hand, a wholesale travel agent is appointed to promote the sales o

outbound package tour in a particular region. Many retail travel agents are also authorized

to retail the outbound package tour in smaller cities and towns. he commission is paid to

retail agents periodically.

It however depends on retailer agencies to promote the products. Wholesaler

travel agents may also directly sell to the customers through their own retail divisions. For

example, homas Cook has its own network o branch oices in big cities to directly selltour packages to customers. In many cases, homas Cook appoints retail travel agents. It



26

generates revenues through volume discounts rom principal services providers such as

hotels, airlines, railways, car rentals, coach operators, ground handlers etc.

A wholesaler doesn’t earn on commissions directly and it earns revenue through

discounts on bulk reservations rom principal suppliers. here is always an element omarket risk or tour operators to block airline seats or hotel rooms in bulk. It takes the risk

o selling them in advance or which advance payments are made to the primary service

providers. Apart rom the usual services, it also renders services like consultancy, travel

counseling, travel document processing, currency exchanges, insurance, shipping items etc.

he wholesale travel agencies in India are Raj ours and ravels and Mercury ravels which

are also the ull-service travel agents.

Retail Travel Agency

According to Airlines Reporting Corporation (ARC), a retail travel agency is deined

as “a business that perorms the ollowing unctions: quotes ares, rates, makes reservations,

arranges travel tickets and accommodation, arranges travel insurance, oreign currency,

documents and accepts payments”.

A retail travel agency is one that sells directly to customers at several small locations

in cities or towns. Retailer gets commission rom the gross sale o hotel rooms, airline,

train, bus and cruise tickets, insurance, oreign exchange, etc. Commission is the primary

source o its revenues. A two-way selling method, that a large travel agent practices, includes

commission and mark-up price. A marked-up price reers to mark up o cost o tour. It is

sold on a higher price. Further, market-up price is obtained rom the dierence between

retail price and the wholesale cost. he role o retail travel agencies is crucial when majority

o principal service providers have no choice to increase the sale without the help o retail

travel agents. hus, there is a mushrooming growth o retail travel agents dealing with the

booking o hotel rooms, airlines seats, cruise line seats, etc. hey consider in reaching the

customers through retail agents or getting the hotel or airline promoted through retailers

easy, reasonable and sustainable.

Full Service Agency

It is a type o travel agent that deals with all kinds o services. It may be called as

complete travel agents. Apart rom being an accredited agent o IAA or any other principal

service providers, this ull-service travel agent owns the transport leets and charter lightsand cruises.



27

Commercial Agency

It is a category o unconventional travel agency that deals with business travel.

It books convention centers and stalls in exhibition center. It also arranges venue or

conducting small and large meetings.

Implant Agency

It is a type o travel agent that is located in the premises o corporate oices to

make travel arrangements o employees. It is a registered travel agent appointed as per the

agreements.

Group / Incentive agency

It is an emerging orm o travel agency business that a specialized category o agent

acts as intermediary to deal with bulk bookings or employees and clients o corporate

houses.

Online Travel Agency

It resembles an oline travel agency in all its services. It operates on the internet

through a website connected to a global distribution system. he OAs apply the operational

mechanisms o e-commerce and transact online with their customers. he OAs oer

inormation, bookings o hotels, cars, reservation o seats in airlines, railways, ships and

buses. hey sell package tours; customize tours and take enquiries. ransaction o payment

is also done online using online payment modes such as credit/debit cards, internet banking,

pay-pal etc. Some o the major OAs in India are cleartrip, goibibo, travelocity, traelguru,

yatra.com. makemytrip.com etc.

Roles and Services of Travel Agency

he volume o business has increased so much and the areas o business operation

have also been expanded in the post globalization period. With the operation o more

scheduled airlines in domestic and international sector, the scope o business o travel agency

is more in terms o receiving beneits and returns. Customer satisaction and delight is given

top priority. A high degree o proessional accuracy is needed to survive in the business.

It is otherwise diicult to stay in the business. Most o the essential services are primarily

provided by travel agents include transport (road, rail, air and water), accommodation,passport, and visa procuring acilities, oreign exchange and also guidance and inormation



28

about the places o travel. Many travel agents sell packages on commission basis oered by

inbound operators.

These are the following important roles and responsibilities of a large travel agent

➢ It works as a retailer and sells package tours on behal o wholesaler. he sale o

package tours involves the rate o commission ixed on the agreement.

➢ It ensures horizontal integration or the purpose o achieving bumper sale.

➢ It is an intermediary between tour operators and tourists in terms o selling package

tours in case o outbound tours and conducting sightseeing tours in case o inbound

tours.

➢ It ollows tour itinerary and it does not have anything to do with itinerary.

➢ ravel agents also provide destinations transer services to the clients as per the tour

itinerary.

➢ It acts as a local agent to conirm and reconirm the services reserved by the tour

wholesalers.

➢ It sorts out problems as per the directions o tour wholesalers.

➢ It preers to become the member o national bodies like AAI and IAO.

➢ It negotiates the terms and conditions or commission with principal suppliers.

➢ It recruits trained manpower rom time to time.

➢ It procures advanced technology or operation o business.

➢ It subscribes publications like IM or travel documentations.

➢ It distributes the work in the oice or optimization.

➢ It arranges the vehicle in a systematic manner.

➢ It collects eedback rom suppliers and consumers

➢ It shares inormation and knowledge

Tour Operator

our operator links between customers (tourists) and primary service providers. his

acts as a major destination promoter and this is also called as wholesaler. It is a proessional

agent with the capacity o buying services in bulk and distributing through the channel in

methodical and organized manner.

It is essential to understand the meaning o tour operator. It is an organization and

irm or company with the experience and capacity to buy individual travel components



29

separately rom dierent suppliers and assembles them into attractive packages by adding

mark-up. It is sold in dierent price tag to customers directly or through the middlemen

(ravel Agent).

our operator is largely responsible or delivery o services as per the contractin tour itinerary. our operator is a proessionally managed company with expertise and

experience in planning and operation o pre-paid and pre-planned packages or vacationers

or business travelers.

our operators sign long-term contracts with air carriers, hotels, cruise liners and

other suppliers or provision o bulk travel services. Individual travel services are assembled

into dierent tour package highlighting round-trip transportation, accommodations,

ground transportation and sightseeing. our operators are accountable to consumers orthe provision o travel services o each tour package. our operators are the organizers

o package holidays and they make annual contracts with hoteliers, airlines and ground

transport companies. hey print brochures displaying each component o services.

our operators generally provide the services independently and tours

are conducted at the cities where the oices are located. However, these services can be

arranged though the other suppliers at various places. Package tours are retailed through

travel agencies or directly to customers. However, a tour operator may have readymade or

tailor-made packages as per the trends o market. he distribution o package tour business

passes through various stages.

Accommodation

Services

Carriers

Touroperators

Travel Agent

Customers

Sales of goods/ services

Arranging a sale for commission

DOMINANT ROLES OF TOUR OPERATORS

Figure - 1



30

A tour operator buys (or owns in some cases) a high volume o travel services like

carriers, accommodation and services. hese services are then assembled into packages

or purchase by consumers. Packages are sold via travel agents (independent or owned) or

through the phone and internet. Figure presents dominant roles o tour operators.

Nature of Primary Activities of Different Tour Operators

➢ Inbound – Describing places o important o the country

➢ Outbound – Highlighting holidays about other countries

➢ Domestic – Specializing on domestic holidays within country

➢ Specialist – Special interest travel to destinations

➢ Independent- Specialized in speciic holiday

➢ Integrated – Business Conglomerate

➢ Mass-market- argeting more sale

The following services are provided by the tour operates in the package tours

➢ Airport and hotel transer

➢ Arrangements or traditional reception at the arrival points

➢ Arrangements o luggage transer in the airport and railway stations

➢ Arrangements o guided sightseeing tours

➢ Options and selection or worldwide destination

➢ Comprehensive itinerary planning

➢ Appropriate hotel selection & reservation

➢ Meeting, conerence and meeting arrangements

➢ Exhibition and actory visits

➢ heme parties, events & sightseeing ➢ Air tickets & travel documents like passport, VISA, health certiicate and currency,

insurance and permits or entry into the restricted areas

➢ Foreign Exchange & ravel Insurance

➢ Experienced and proessional tour guides, escorts, interpreter and tour managers

➢ Personalized services at destination

➢ Coordination with local tourist organizations at destination

➢ Domestic and international air travel

➢ Rail bookings in India, Europe, America & Japan



31

➢ Hotel reservation

➢ Car rental

➢ ravel documentation

➢ Airport acilitation

➢ Foreign exchange

➢ Overseas travel insurance

➢ Conerence and seminar management

➢ rade Fair/Exhibition visits

➢ Implant Operations- in-house travel consultant equipped with CRS system and

satellite ticket printer

➢ Business/trade delegations

➢ Incentive travel in India and Worldwide

Types of Tour Operator

our operators are classiied as they do tour business and area o operation o

package tours. Each category o tour operator is unique in their own ways o providing

services. his classiication is suggested to distinguish dierence o meanings and

unctions. hey are called as inbound tour operators, outbound tour operators, domestic

tour operators, specialist tour operators and ground tour operators. Figure presents traveltrade intermediaries that include types o travel agency and tour operators.

Travel Trade Intermediaries

Travel AgencyTour Operators

Retail WholesaleInbound

Tour

Operators

Outbound

Tour

Operators

Domestic

OperatorsGround

Operators

Figure-2 Types organization in Modern Travel Trade business



32

Inbound Tour Operator

hey handle inbound oreign tourists in the host country. hey provide them various

services on their arrival and departure such as transer, accommodation, transportation,

sightseeing, entertainment, currency, insurance services etc. hey are known as inboundtour operators or incoming tour operators as they speciically operate or handling incoming

oreign tourists or guests. Inbound tour operators make tour packages individually or in

collaboration with oreign tour operators.

Packages are promoted and sold directly or through intermediaries. In act, inbound

tour operators attach much added appeal into tourism products. hey earn oreign exchange

that increases oreign exchange reserve ratio o the host countries. Some o the major

inbound tour operators in India are CI, Indo-Asia ours and ravels and SIC ravels.

An inbound tour operator prepares package tours on their own and conducts tours

through ground operators at host destinations. Reception upon arrivals and departures o

guests and arrangements o stay and sightseeing are some o the unctions o inbound tour

operators.

hey get ground arrangements managed inside a country or inbound tourists. For

example, a group o 16 Germany nationals including group leader purchased package tour

rom travel agent at Berlin and arrived at IGI airport, New Delhi. It is the representative o

SIC travel to receive the guests upon arrival and handles tour in Delhi. Ground operators

are appointed at other places to provider services as per vouchers. hus, SIC is called as

inbound tour operator as it sold and conducted package tours.

SIC did not take the services o handling agents and tour conducted in Delhi and

SIC has establishments to handle the group. For example, a tour operator needs to adopt

innovative marketing strategies to promote the package holidays and work continuously to

oer special interests tours to cater the special needs o oreign tourists visiting to India.

Outbound Tour Operators

hey sell package tours highlighting the destinations in oreign countries. hese

operators are specialized in designing and promoting multi-national tours. Like inbound

tour operator, outbound tour operator sells a package tour to an individual or a group o

people o a country to another country or a number o countries or a temporary period.

hey arrange travel documents, transportation and hotels and sightseeing, inbound touroperators/ground operators provide accommodation, transportation, local sightseeing



33

and other services. For example, a group o Indian visitors have bought packages to visit

Singapore, hailand and Bangkok rom Cox and Kings Oice in Chennai. he Cox and

Kings Chennai oice takes care o the ground arrangements at these countries through an

inbound tour operator.

Generally, outbound tour operators appoint inbound tour operators/ground

operators to make arrangement o services. hey receive the guests at airport, transer

group rom airport to hotel and arrange local sightseeing or business or leisure oriented

customers.

Domestic Tour Operator

Domestic tour operator is one which conducts tour within the country. Domestictour operators operate within the boundary o home country and cater the diverse needs o

individuals and group travelers like inbound and outbound operators. hey promote tour

packages both through their own outlets and other retail travel agents. For example, a group

o pilgrimage rom Odisha visited Allahabad as part o religious tour. hey bought package

tour rom the IRCC and it is the IRCC to conduct tours or the group at Allahabad. he

IRCC is a domestic tour operator that operates within the boundaries o the country or

nationals o the same country.

Ground Handlers/Operators

Ground operator is otherwise known as reception operator or destination

management operator or handling agencies. hese operators are generally expected to

provide arrangements and ground logistics at a particular destination. hus, a ground

operator provides the services required by large tour companies and they do not have a local

branch/oice. hey do not deal with the principal suppliers such as hoteliers, transport

operators, car rentals, entertainment organizations and so orth.

he operator coordinates, supervises and handles accounts/payments o all services

related to tour. For example, Swosti is a ground operator or tribal tour in Odisha. hus,

inbound as well as outbound operators must look into the ollowing aspects beore the

selection o a ground handling operators.

➢ Convenient o Location

➢ Size o business

➢ Proessional sta



34

➢ Length o business

➢ Reputation and membership with International and national travel and tourism

associations

➢ Credit acilities

he wholesale tour operators primarily depend on ground operators or the ollowing

reasons.

➢ Introduction o new product or plan to promote these exotic destinations.

➢ Lack o control over the government regulations

➢ Lack o personal contract

➢ Language o barrier ➢ Uneasible to maintain own branches at each destination

Special Interest Tour Operator

his type o tour operator oers and promotes the special interest package tours.

hey mostly do direct marketing or the packages or through the retail agents. For example,

Shikhar ours and ravels, New Delhi is organizing adventure tours in the Himalayas in

India and Nepal. hese are the wildlie and ecotourism tour operators and they design

wildlie and ecotourism packages or group in the niche market. his type o tour operator

does not plan or mass market as buyers are limited in number. When the company plans

or dealing with specialized areas, there must be potential buyers or the package tours as

the nature and cost component is relatively higher unlike the conventional package tours.

he specialist tour operators only organize tours in the pleasant climate and the business is

mostly seasonal in nature.

In the recent years, many specialist tour operators are moving towards corporate

travel, incentive travel, MICE travel, ecotourism, rural tourism and cultural tourism. hey

are also called as personalized or customized tour operators as package tours are made on

the choice and suggestions o tourists. hese are the ollowing areas that specialized tour

operators do promote package tours.

➢ Ayurveda and Health

➢ Archaeology and historical sites

➢ Adventure and ecotourism sites

➢ Buddhism and Jainism ancient religious sites.



35

➢ Special cuisines at each place.

➢ Desert and jungle saari tour

hese are the ollowing activities that specialized tour operators carry out during the tour.

➢ Arrangement o visit o airs and estivals venues

➢ Arrangement or shopping and exhibitions grounds.

➢ Provision o hiring equipments or sports and games (Gol, winter sports and water

sports.)

➢ Provision or scholarly interpretation o objects with the help o experts at the

museums

➢ Arrangements or host community interaction

➢ Organizing special cultural programmes in the palaces

➢ Special amenities or the tourists in the train or bus journey

Roles and Characteristics Tour Operator

In this package tour market, tour operators showcase destinations though their

unique package tours. homas Cook, American Express and Cox and Kings ollow the

customer-driven approach or designing package tours to cater the demands o customers.

Roles o tour operators are given below.

➢ It is a wholesaler as it assembles packages as per the trend o market and capacity o

distribution channel.

➢ It deals with customers directly as a principal agent or oreign travel agent without

o-loading tours to ground handling agents.

➢ our operator has liberty to amend the tour itinerary and program i it warrants.

➢ It invests much o time and resources to chart out delightul and value added tour

itinerary or meeting the demand and expectation o tourists.

➢ It gives much stress on selling the tour than the conducting the tour.

➢ our operators are mostly located in the mega cities or in the cities with the

international airlines services or the strategic advantage o controlling the package

tours.

➢ It mostly provides international transer rom hotel to airport and vice-versa, i

oices o tour operators are located.



36

➢ It deals with both the tourists and primary service providers as direct intermediary.

➢ our operators design the tours in such a way that handling agents may not get extra

excursion tours directly rom tourists.

➢ It accepts oreign currency or the tour package and gets accreditation rom theReserve Bank o India money exchange dealer.

➢ It gives ample importance to become the proessional member o national and

international tourism, travel, and hospitality and aviation associations.

➢ It is committed to work as a responsible partner in the tourism industry to popularize

destinations and explore new potential destinations through their package tours.

Summary

CI, homas Cook, SOC, Cox & Kings, Jet tours, etc are specialists in ground

operations or large movements o tourists and make all arrangements to handle the tour

with much care and attention. CI conducts several and regular amiliarization trips or

cruise companies and leisure trips or tourists on air charters and cruise liners. It is diicult

to identiy an individual operator with a single category o operations. hey act as retail

agents, wholesalers, tour operators, specialty channels and also as the GSA. hus the scope

o modern travel agency activities is diicult to limit and conine to one unit o classiication.

****



37

Lesson 1.4 - Linkages and Integration in Travel Trade

Learning Objectives

After reading this lesson, you should be able to

➢ Understand the dynamic roles o travel agents and tour operators;

➢ Know the business connections with the primary tourism service providers;

➢ Explain the need or establishing orward and backward linkages; and

➢ Know the continuous horizontal and vertical integration

Introduction

A ravel agent or tour operator is an intermediary in the travel trade. Linking

customers with service providers is the primary job o a proessional travel agent or tour

operator. Unlike the travel agents, the relationship o tour operators with principal service

providers is linked in the orm o selling the primary services to customers. our operator

or travel agent is a linking point or connecting place that provides travel inormation and

conirms hotel rooms, airlines, train, erry and bus tickets and other ground services.

our operator designs itinerary or organized package tours or which it requires travel

inormation rom hotels, airlines, bus and car rental companies, cruise companies, tourism

oice, etc. It establishes orward and backward linkages with the service providers to design

the packages. hese linkages can be horizontal and vertical to seek the ways o keeping

competitors behind. Linkages can be direct or indirect between travel intermediaries and

principal service providers depending on the nature o business. Integration between touroperators and principal service providers is essential or mutual beneits. his lesson will

present you linkages and integration in tour operation and travel agency business.

Meaning of Linkages and Integration

Integration is an approach o doing things together. Business integration is a means

o combining generic talents and resources to produce best products or delivery quality

services. It is very common in manuacturing sector and it has become usual businessstrategy to preer integration or marketing and sales o products or producing products in



38

minimum costs. he primary objective o integration is to maximize output with least costs.

Cost cutting measure is one o the ways o reducing production cost. his leads to lower the

inal price o products. Lowering the price can increase the market share.

Business integration is essentially important in travel and tour operation business aseach provider o service cannot provide complete services on its own. hus, linkages and

integrations are common business practices in tourism business. A tour operator maintains

integration with another tour operator in another city or use o common resources.

A tour operator wishes to establish business link with hotels, airlines, railways,

transport operators, etc or optimizing resources. Integration enables a travel agent or tour

operator to increase its market share. It simultaneously reduces the risk o loss and ear o

competitive orces. here are horizontal and vertical integration in travel trade. he ormeris meant or business linkage between airlines or among airlines and the later is known or

linkage between airline and hotel or between tour operators between cruise lines. here are

beneits o integration as well as risks o doing integration. hese are the ollowing beneits.

Economics of Scales

his concept is very common in business and it would be more appropriate in tour

operation and travel agency business. he volume o productions and sales would be more

that leads to providing more proits. he cost o production can be drastically minimized

with the help o integration. For example, a tour operator can take care o marketing, sales

and customer care o an airline or hotel operator or they can jointly do the marketing.

Avoidance of Middlemen

Integration can link the tour operator with primary service provider directly.

Consolidation of Market

Integration can increase the market share and it simultaneously helps in dominating

the market.

Control over Supply for More Bargaining Power

Merger and acquisitionscan help travel agency and tour operator to have more

control over supply o package tours in market. he acquisition o SIA World ravel IndiaLtd by Kuoni has increased the market share o outbound business o Kuoni. At the same



39

time, tour operator can secure some bargaining power or booking hotel rooms and airline

seats.

Horizontal Integration

It involves two tour operators or two travel agencies or two hotels and two airlines

or amalgamation o competitive product through merger or acquisitions. his integration

helps the players oer complementary products and minimize unair competition. For

example, homas Cook has taken over CI or inbound tours in India and LKP or oreign

exchange. Horizontal integration is established between producers o services oering

complementary rather than competitive products.

Vertical Integration

It is a type o integration that links between airline and hotel or tour operator and

airline or hotel or mutual beneits. For example, an airline gets integrated with tour operator

or sale o tickets and tour operator gets integrated with airline or more sales o tickets

leading to more commission. Big corporate airlines and hotel companies have owned travel

agencies at key destinations or increasing the volume o business and gaining competitive

edge over other competitors.

Needless to say, travel agency and tour operation business is acing cut-throat

competition due to the rising number o small players entering into the package tour

market. In the last two decades, many multinational travel companies have orayed into the

Indian market and posed serious challenge to the Indian traditional companies. his has

become possible due to change in government policies like deregulation o domestic and

international airlines under the Open Sky Policy, liberalization o guidelines or transport

operators, hotel and restaurant companies, theme parks, etc. hus, integration is the need

o the hour due to the economic volatility and socio-political risk actors. It is however

important to note here that multinational travel companies like Cox and Kings and Kuoni

have thrown open challenges to India travel companies to seek their ways to become more

aggressive in selling package tours..

Linkages for Effective Distribution of Services

our operator is a partner o a dynamic travel distribution channel through which

buying and selling o package tours is possible in a long-term basis. he vertical integration

establishes continuous relationship with many direct and indirect providers o services totourists. our operators bring the principal suppliers to a common network. hese principal



40

suppliers are transport operators, airlines and charter lights, cruise line companies, railways

and car rental companies, hotels and event mangers. hey are selected on the basis o

location, existence, service quality, physical acility, credit acility, etc. our operators make

the inal contacts with these service providers on the conditions that tourists are served at

the destinations. It is essential to have up-linking networks or arranging services and getthe services delivered directly through the primary service providers.

When tour operators are ready with package tour to be promoted in market, they preer

to promote it through organized channels and in certain cases clients buy directly rom

them. Figure highlights the selling o package tours to the end users (ourists) through

online marketing or directing marketing or retail travel agents. What tour operators plan

or the sale o package tours is that they open new branches in big cities and appoint several

retail travel agents in the smaller cities. our operators also accredit retail agents by givingranchises. hey work together on the condition o 10 to 20 per cent commission and

perormance based rewards. he detail distribution network is given in Figure.

Distribution Networks of Tour Operation Business

Actual Tourist Potential TouristTour Operator

Approaches

Principal supplier

Transport

operators

Airlines and

Charter flight

companies

Cruise

Line

Companies

Railways &

Car Rental

Companies

HotelsEvent

Manager

Processing of package tours

Travel agentsEnd users (Cents)

D i r e

c t S e

l l i n g

I n t e r n

e t

In the manuacturing sector, supply chain management is a signiicant area in the

distribution o inished products in the market. our operators are the travel intermediarieswho negotiate and sell the services o primary producers to tourists. It is almost diicult



41

both in case o tourists and principal service providers to contact separately on selling the

products. his is a dynamic mechanism to make the products reachable at the consumer

doors rom the place o production. Neither the producers nor the consumers conront in

the inal stage o sales because there is a very active linkage system to deliver the product

in the market area. Both the producers and consumers are controlled by the distributingagencies. In similar case, you may compare the relationship o tour operators with the

producers o tourism products and services like transport companies, accommodation

providers and destinations agencies. hese are the ollowing services that tour operates

seek to strike integration with the principal service providers or deigning the conventional

package tours.

Airlines

Airline is a major segment in the tour operation business network. our operators

maintain alliance with domestic and internal airlines or the bulk reservation o seats or a

particular season. he role o airlines in the channel o distribution in tour operation business

is signiicant. Air travel is an important component and airlines preer the sale o air tickets

in bulk through tour operators. he sale o air tickets is done as per the conditions. Airline

companies oer special commissions to tour operators or sale o tickets. It is a distribution

network connecting airlines and tour operators or the sales promotion o airline tickets.

our operators work on a standard commission that is common or all tour operators.

Car Rental Companies

our operators procure ground transportation or the purpose o airport transer

and drop rom recognized car rental companies. Car rental companies provide luxury car

services on the terms and conditions with tour operators. hey sometime work on the

annual contact and ixed rate or sometime work on the ixed commission.

Railways

our operators take the help o railway companies or booking seats and other

amenities at the railway stations. Journey in train gives dierent pleasure and experience

than other modes o communication. hus, tour operators sign contract with railways

companies or the reservation o special coach or issue o special tourist pass. For example,

Indrail, Euorail and Brital Pass are issued by respective railway operators or tourists.

Railway companies give discount to tour operators or booking these passes in advance. In

the travel trade distribution network, railway companies contribute much or the growth otour operation business. Many tourist destinations not connected by air are highly preerred



42

or train travel. For example, palace-on-wheels and Royal Orient are uniquely designed

trains or high-end tourists wishing to enjoy the holiday in train. our operators promote

the palace-on-wheels or which commission is obtained rom Rajasthan ourism.

Cruise Companies

he size o market o cruise travel is growing due to the preerence o new-age

tourists or experience. Cruise package is now very aordable. Cruise companies have

designed packages suiting the needs o lower, middle and upper segment o customers.

For example, India is a target market or cruise travel. Leading Cruise Company like Star

Cruise has authorized tour operators to sell cruise packages. our operators block and book

the seats in large numbers. hey work on the commission and sometime special discount

also along with complementary cruise travel. In the travel trade distribution network,cruise operators take direct help o tour operators and travel agents or bulk sales o cruise

packages. Cruise companies appoint tour wholesalers or the sale o cruise packages and

provide commissions and other incentives. he General Sales Agent (GSA) appoints retail

travel agents to sell cruise packages in small cities.

Car Rental Companies

Car rental operator is a primary service provider. Car rental service is an important

part o travel trade linkages. It is a type o ground operator that provides light transport

service to tour operator or airport or railway station transer, sightseeing and excursion.

Car rental companies own dierent luxury cars which are customized or sightseeing and

excursion tours. Maintenance and saety measures along with trained driver can become a

good car rental company.

Car rental companies provide luxury car services as per the terms and conditions with

tour operators. Conventionally, annual contract is signed with tour operator on the basis

o ixed rate and commission too. However, method o paying principal and commission

dier rom one operator to another. For example, Easy cab is a reputed Car Rental operator

with having more than 1000 dierent luxury cars and it provides car rental services at

various localities in big cities in India.

Luxury Coach Operators

A coach operator is a primary service provider in tour operation business distribution

network. our wholesalers appoint coach operators on the basis o competitive rates andquality o transport and services. Coach operators send quotations or transer, sightseeing,



43

and excursion trips to tour operators or wholesalers during May and June every year. he

luxuory coaches are customized or sightseeing and excursion tour or GI. Each coach is

equipped with gadgets or comort and saety o visitors. Each tourist coach must have elevated

bucket seats, white window glass, micro phone, air condition system and rerigerator. he

service quality is measured in terms o punctuality, saety, lexibility, and adaptability. Forexample, KPN coach service owns luxury coaches or oreign as well as domestic tourists

plying across southern states o India. In this context, coach is an important alliance o the

distribution network o tour operation business.

Accommodation Operators

Accommodation operators maintain conventional and non-conventional type o

accommodation. ourists may have choices o selecting accommodation depending onbudget, acilities, locations and comort. It adds value in package tour. Room, restaurant

and cocktail services along with duty-ree shopping, doctors on call, beauty parlor, itness

center, etc make a guest eel at home. Cultural events in some occasions give opportunity to

guests to participate in the premises o hotel.

Christmas and New Years are two mega events that hotels organize a number o

cultural activities. Expenditure on hotel rooms and ood & beverage services o a guest

is estimated to one-third o total budget o package tour. Hotels provide dierent types

o rooms and provide complementary rooms or group leaders and company executives

during the tour. our operators align with hotels or the sale o rooms and other services

or which hotels remit the commission as per the contracts. our wholesalers work with

accommodation operators or the bulk sale o rooms. For example, the cost o hotel rooms

and ood services is usually included in package costs.

Event Management Companies

our operator may be an event management company to deal with MICE activities.

here are specialized event management operators like Creative ours and ravel in

New Delhi. Booking venues, ood, conerence kits and post & pre-conerence sightseeing

programmes are the unctions o Event Management Company. our operators negotiate

with the event management companies on the lat rate basis. Even management companies

maintain the inventory o essential items or conduct o mega events or which tour operators

establish integration with them. In most o cases, event management companies send the

quotations and tour operator assign the contract to the lowest bidder. In this context, Event

Management Company is integrated in the dynamic process o travel trade distributionnetwork.



44

Authorized Foreign Exchange Dealer

our operators also deal with oreign currencies as they receive or the sale o

inbound package tours. Payment is also made through oreign currency or booking o

hotel rooms, transports, guide services and other services in case o outbound package tour.

Authorized oreign exchange agents or authorized money exchangers deal with

oreign currency is an important part o travel trade linkage and integration. Endorsement

o oreign currency, more importantly Dollar or Euro or Great Britain Pound in passport o

clients is mandatory in oreign travel.

For example, any Indian traveling overseas on leisure purpose is eligible to transact

$10,000 or its equivalent under the basic travel quota scheme. Moreover, as much as $2000or its equivalent can be exchanged in the orm o currency notes and $8000 may be carried

in the orm o traveller’s cheques or oreign currency pre-paid cards.

At the same time, outbound tour operators preer to maintain good stock o oreign

currencies or booking and payment o hotel rooms, transportation, guide services and

other services at the overseas destinations. Foreign currency dealers in India are authorized

by RBI or buying and selling oreign currency.

Insurance Company

ravel insurance is an important area o business or tour operators. Most o the

package tours are insured and insurance companies working with tour operator. our

packages are insured or compensation to the tour operators or guests in the event o

cancellation.

Customers also preer or insuring health and luggage insurance. our operators get

commission rom the insurance companies. For example, AA AIG, Bajaj Allianz, and

Reliance have customized travel insurance or customers traveling abroad on an organized

tour.

Destination Management Operators or Ground Handling Operators

Ground handling operators work or tour operators to provide ground logistics

services. It includes the luxury car or bus services, guide and language interpreter

services, entrance ees, reception upon arrivals, etc. Ground operators are located at themajor tourist destinations and they work as per the directions o tour wholesalers or tour



45

vouchers. However, adventure tour operators or special interest tour operators arrange

most o the ground services. our operators collect transport tari and inormation about

the destinations rom the ground operators during the o season.

Government Agencies

our operators arrange the valid travel documents or clients/customers or

outbound or inbound travel. hus, tour operators take the help o Regional Passport Oices

or issuance o passport, Foreign Consulate Oices or Visa and the Ministry o Home

Aairs or permission to conduct tours in the North-Eastern region and the Andaman and

Nicobar Islands. our operators participate in amiliarization tours with the State ourism

Board or corporation or road shows, press conerences and exchange activities. hus, these

departments are integrated directly with the travel trade network system.

he specialized tour operators seek permission rom Forest Department or

conducting ecotourism or wildlie tourism in the national parks and wildlie sanctuaries.

our operators get permission to operate tours with the vehicles and eco-guides or saari

tours. he Archaeological Survey o India (ASI) is also aligned with tour operation business

when tour operators conduct special visit or documentary o any national protected

monuments or heritage sites.

National and International Travel Organizations

our operators are the members o national and international proessional

associations like PAA, ravel Agent Association o India (AAI), and IAO. It helps them

gain visibility and acceptability in the market.

Local Representative Bodies

Community-based tourism or community-driven tourism is gaining more

acceptability and tour operator ropes in with local bodies or their support and cooperation

in conducting tours in their localities. For example, tour operators take the help o local

community members during the tour to villages or witnessing airs and estivals or any

special religious or community events.

Strategic Alliances

our operators maintain regular contacts with the principal suppliers or procuring various services through its strategic alliances. Alliance is struck between the companies



46

producing homogenous products. For example, domestic airlines are making all possible

eorts to increase the sale o tickets by oering attractive incentives with additional

discounts. our operators negotiate with the airlines to get cheapest are or their customers.

hey collect inormation about promotional ares and schemes o the airlines. At the same

time, airlines organize promotional tours to amiliarize tour operators. Hotels, resortscompanies and transport operators participate in tourism exhibitions.

Alliance enhances eiciency and penetrates proessionalism in tourism operation

business. hese are the ollowing beneits o strategic alliance in travel agency and tour

operation business.

➢ Better image building o tour companies

➢ Improvement o quality o services

➢ Enhancement o eicient o services

➢ Easy conirmation o sale and identiication o potential buyers

➢ Reduction in costs o production and distribution

➢ Change in perceptions buyers

➢ Larger market share through joint marketing eorts

For example, Cox & Kings is a partner o Radius. It is a consortium o leading travel

agents. As a result, Cox& Kings has created its presence through its own oices as well

as Radius partners in more than 80 source countries. his is obvious that customers are

beneited rom the strategic partnership between Cox & Kings and Radius.

Distribution is the means o increasing eiciency o delivery systems. he linkage

between producer and consumer becomes practical possible in a short period o time

through a strong distribution system. In the tour operation and travel agency business, the

distribution system is managed by trained and skilled personnel. he primary objective o

an eicient and eective distribution system is to send clients/ guests happy and delighted.

For instance, providing pickup and drop acility to visit aj Mahal at Agra is a part o

distribution system. Figure presents the strategic alliance o tour operators with primary

service providers.

Summary

our operators assemble components o services to make the stay o tourists more

comortable and enjoyable. our operators manage package tour business in a dynamicdistribution network system. our operators play a dominant role in tourism business in



47

Support service

Education &

India. In the zero commission regimes, travel agents and tour operators have ventured

into package tour business in India. he market or package tours is very vast and the

scope or inbound, outbound, and domestic package tours. our operators maintain strong

alliance with service providers to manage heli-sightseeing and skiing, leisure charter lights,

chartered helicopters, corporate jets, executive jets and aircrats on rent or ilm shooting,air ambulance and cargo charters.

Strategic Alliance with the Service Providers

Tour Operators and Brokers

Travel Agent

Tourist

****

Accommodation

private service

Support Services

Pubic Sector

Guiding

Services

Travel Insurance

Travel press

training, etc.

Travel Finance

Guides and

Publications,

Support

Marketing

Tine stables

Sea Transport

Rail Transport

Air Transport

Road Transport

Attractions

Guest Houses

Villas

Holiday villages

Ancient

Monuments

centre

Parks

Catering

National

Tourism

Office

Tourism

ManmadeCarriers

Hotels, Motels

Apartments Ancient

Theme

Regional

Office

Training

Visa &

Passport

service

Holiday Homes

Holiday camps

Producers/

Principal Suppliers



48

Lesson 1.5 - Changing Scenario of Travel Trade

Lesson Objectives


➢ Understand the volume o travel trade business in the world vis-à-vis in India;

➢ Find the rapid changes and development in the travel business;

➢ Be amiliar with the key actors responsible or mass travel; and

➢ Know the business opportunities beore the tour operators and travel agents

Introduction

Change is inevitable and it happens in all types o business. Change is always accepted

in any business. All businesses are growing worldwide so also the business o travel agency

and tour operation. here is a direct positive relationship between the growth o tourist

arrivals and increase in the volume o sale o organized package tours. It is noticed that

tour operators and travel agents are the promoters o tourism destinations and arrivals

o tourists to any destinations depend on how appealingly a tour operator presents the

package to the customers.

It is an ever-changing and ever-growing business. It is directly associated with the

changing socio-economic legal and technological scenario o the origin and destination

countries. For example, the liberal aviation policy may attract more airline companies to

link the country with rest o the world. More people can travel overseas when government

lits ban on oreign travel. Largely, the travel trade is witnessing the change rom technologythat has made structural changes in the travel agency business worldwide. For example,

the online travel portals have not only given threats to the traditional travel agents but also

oered multiple travel choices to the customers. his lesson will present you the changing

scenario o travel business in the world.

Factors Influencing Travel Business

ravel started rom the search or ood, shelter and clothing. In the later stage,development o transport communication provided better roadways and waterways or



49

the merchants to travel distance places or trade and commerce. In earlier period, people

were not travelling or pleasure, recreation and relaxation. For example, Merchants in India

sailed to countries located in Southeast Asia, West Asia, Middle East and Arica continents

or spice and handicrat trade.

he amous arduous Silk Route provided a way or merchants and other to do cross-

border travel across the Asia continents. For example, Romanians were the irst Pleasure

raveler and they used travel short distances in the relay o horses or the horse cart to the

hill stations or spa bath or sea side. he medieval travelers like Iban Batuta, Marco Polo,

Columbus and some other amous discovers removed the perceptions on travel to orient

countries in the East through their travel writing and ictions.

Some o world amous seven wonders like the Great Pyramid, the Great Wall oChina and the Hanging Garden o Babylonia started attracting visitors. In the mean time,

dierent continents were discovered or political and trade purposes.

he industrial revolution in the 16th and 17th centuries ueled economic growth

in the Western Europe ollowed by invention o modern transportation system that

includes railways, luxury coach and small car in Hungary and Germany. Moreover, annual

paid holidays and weekly holidays added more demand or travel. he Elite and Middle-

Class people in Europe travelled or education and culture purposes to Paris and Rome.

he invention o air transportation in the irst quarter o the 20th century added a new

dimension to travel trade. More importantly, Piston-engine aircrat was replaced with jet

aircrat in 1960 and it increased speed, reliability and comort while reducing the costs o

operation.

Demand for Air Travel

he new Middle Class and business class travelers with huge disposable income

looked or travelling by airlines. It was comortable and luxoury. For example, people in big

cities in the USA, UK, Germany, France, Spain, Brazil, Italy, Japan, China, South Arica,

Brazil, Argentina and India are the rising economies and air travel across these countries

has increased signiicantly. At the same time, the operation o low-cost airlines has brought

down air are drastically and it has increased demand or air travel more in recent years.

Loyalty Programmes of Airlines

American Airlines irst introduced Frequent Flier Programmes (FFPs) in the name‘Advantage’ in 1981. At present, almost all international and domestic air carriers have started



50

the loyalty programmes. More than 100 million passengers have become the members o

FFPs. For example, Holiday Inn became the irst partners with the loyalty programme in

1983 in association with many international hotels to attract more passengers.

At the same time, airlines have introduced excursions and discount ares or theadvance bookings. Airlines keep the several options open or the passengers to avail

maximum discounts by booking the tickets.

Airlines have started introducing Cooperative Services agreement between carriers

or mutual beneits and transer o passengers. It is explained as a light operated by an

airline is jointly promoted as a light or one or more other airlines to share the passengers

and enable the passengers to reach lesser known locations. Provision or connecting lights

has solved the problems o long waiting at airports. his has become possible due to thestrategic alliance between the airlines.

Technology

With the rapid expansion o airline networks and operations, there was a need or

integrating the airline ticket booking through technology. hus, the Global Distribution

System (GDS) has provided solutions to hundreds o airlines in the world or booking,

cancellation and payments o air are.

he concept o e-business establishes direct connection between passengers in order

to save time and place limits. For example, the airline industry in the US oers e-tickets

as a deault option and more than 60 per cent tickets in the domestic sector are e-tickets.

E-tickets have made customer ree to take print out o tickets. Mobile booking o a domestic

air ticket is an added acility to passengers to book tickets in domestic sector. For example,

World Reliance Inocomm oered India’s irst mobile air ticket booking option. At the same

time, ICICI Bank has tied up with IRCC or Railway icket Booking.

IAA accredited travel agents have made the mandatory or issuing e-ticketing to

provide additional convenience to passengers thereby reducing airline distribution and

operation costs. Duty ree shops in airports have helped passengers to buy souvenirs and

other gits through their attractive discounts and oers.

Airlines have taken maximum care or passenger saety by introducing non-stop

routings and larger size aircrat to avoid the expected accidents at the time o takeo, climb,

descent and landing phase o light. For example, lying nonstop by British Airways romNew Delhi to Heathrow has increased saety and comort o passengers.



51

Passenger Amenities

he passenger terminal acility is now equipped with a wireless Internet network

powered by ICOA Airport Networks. he wireless-enabled laptop, PDA or cell phone can

now get connected to the Internet anywhere rom the curb ront to the airplane.

Visa Upon Arrival

Many tourist-centric countries have introduced visa-upon-arrival system or

inbound visitors. For example, hailand, Malaysia and Singapore have made the provisions

or inbound visitors to get the Visa endorsed upon arrival. At the same time, online issues

o Visa and Passport have simpliied the travel procedures.

Travel Insurance

ravel Medical Insurance is one o the unctions o tour operator that reimburses

the claim or emergency medical expenses incurred by passengers and unexpected crises

(death, sickness, airline strike and travel company bankruptcy) while traveling in a oreign

country. Maximum coverage under this plan is US$5 million to take care o emergency

surgery and extended hospital stays. However, trip Protection plans typically reimburse

one’s non-reundable travel expenses.

Scenic Highways

he rans Canada Highways covering a distance o 7,820 kms across Canada passes

through Montreal, Winnipeg, Calgary, Vancouver and Victoria. he European road network

is connected with Germany, the Benelux countries, UK, France, Switzerland and Italy. Japan

has well developed road network. In the Middle East countries, modern roads link the

Mediterranean coast with Iraq and the Gul region.

Increased number o car ownerships, the development o motorail and expanded

network with speedy accessibility have made the road a preerred mode o transportation.

Some o the popular international highways are the rans Arican Highways, the rans

Europe North and South Motorway and the Pan American Highway, he Asian Highway.

he highways and expressways maintained by the National Highways Authority o

India (NHAI) are meant or long-distance journey in India and it is one o the highly used

means o transport in India. he road journey on the important highways provides moteland other scenic highway acilities.



52

Cruise line has emerged as a key part o travel agency and tour operation business.

In the recent years, people have shown interest to experience the journey in the loating

hotel. he demand or travelling in cruise line is increasing as retired and aged people in

Europe and America preer or spending time in the steamship. he popular cruise line

journey starts rom Europe to the Orient, Australasia and Arica. For example, QueenElizabeth-2 conducts cruise tour or the round the world. Visitors enjoy in celebrating

wedding anniversary, a romantic interlude, an amazing nightlie and ball room dancing. For

example, Scandinavia Royal Viking Line Cunard, South Paciic Royal Cruise Lines, Clipper

Cruise Lines, Rhine River Marriott Nile Cruise and Amazon River Society Expeditions are

some o the known cruise operators in the world.

A Rail Credit Card is card issued along with Visa card. It is issued by the Standard

Chartered Bank. his card can be used or booking travel over the phone. ickets arecollected in 48 hours prior to the commencement o journey. he State Bank o India

also issues a co-branded credit card with a loyalty eature. Passenger can earn points to

be redeemed or travel on IR when using the card and the points can later be redeemed.

For example, a Shubhyatra card has also been launched with the redeemable points eature

without the credit card acility. Other acilities include Internet booking o Indian Railways,

discounted tickets or senior citizens Season tickets, INDRAIL Pass and Special ourist

rain Services.

Indian Railways runs special trains between major tourist places. For example,

the Palace on Wheels is a specially designed train promoting tourism in Rajasthan. he

Deccan Odyssey along the Konkan route promotes Karnataka and Goa. he har Express

connecting Khokhrapar (Pakistan) and Munabao (India) promotes tourism between Indian

and Pakistan. he Fairy Queen running between Delhi and Rantamobore promotes tourism

between Delhi and Rajasthan. he Himsagar Express between Kanyakumari and Jammu

awi connecting one end o India to another end provides opportunity to undertake longest

train travel on Indian railway track.

hese are the some o the popular passes

➢ INDRAIL pass in India

➢ Amtrak Pass

➢ Australian Pass Benelux ourrail

➢ Canada Rail

➢ Eurail pass➢ he Eurail Select pass



53

➢ Euro star

➢ Euro star plus

➢ Inter-Rail

➢ Freedom / Eurodomino

➢ German Rail pass

➢ he Holland Rail pass

➢ Japan Rail pass

➢ he Polrail Pass

➢ Scanrail

➢ Swiss Rail Pass

➢ rans-Siberian Railway

➢ renitalia Pass

➢ UK Rail

Regional Economic Growth

Apart rom increasing lie expectancy o People in East Asia, people now eat better

ood as compared with people in South Asian and other developing economies. Japan,

Hong Kong, Singapore and China are the emerging economies. Economic actor includes

the growth rate o Gross Domestic Factor, National Income, Purchasing power, export and

import. he GDP and per capita income o those countries is signiicantly high. People

have much disposable income to spend on holidays. For example, outbound travel in those

countries is signiicantly high and they contribute to the growth o regional tourism.

Political Situations

he global trade and commerce is being aected due to the political unrest in some

part o the world. More importantly, political instability in Far East and Middle East haspartly made impact on the growth o tourism in that region in particular and in other

parts o world in general. For example, Nepal is yet to come to get a stable political system.

Pakistan and Aghanistan have been acing several internal insurgent activities that aect

the regional tourism. hereore, intra-regional tourism is a toll o the political turmoil in

some o regions in the world. Bilateral and multilateral trade relationship can only resolve

the issues and help tourism grow in those regions. Regional bodies like SARRC, SAFA,

ASEAN and European Union promote regional cooperation through bilateral dialogue.



54

Rising Middle Class

As reported in many reports, middle-class population is rising in all countries. hey

have disposable income and urge to travel distance places o holidays as they are the irst

generation travelers. It is predicted by National Council o Applied Economic Research(NCAER) that hal o India is expected to turn middle class between 2020 and 2040. It is

indeed a act that more middle-class population is travelling and buying outbound packages

in India. oday, outbound market is expanding due to the liberal spending habits o the

middle-class urbanites or holiday packages.

Rising Double-Income Family

Working together and spending lavishly has become a new trend in India. It hascertainly become possible due to the upsurge in trade and commerce in India or the last

two decades. Many are getting employment in inormation and communication sectors and

they earn substantially. he concept o double income is that both husband and wie work

together and both meet the expenditures together. hus, the number o double-income

amilies is increasing in urban areas and it has its own positive impacts on travel trade.

Increasing Senior Citizen Population

he numbers o senior citizens have increased and the central and state governments

in India are oering incentives and beneits as the social security measures or senior citizen

to undertake travel. Senior citizens, earlier travelled by First or Second AC in the railway,

now are inding domestic and international air travel aordable or them.

he growth o the senior citizen population and the corresponding oers will push

to the growth o travel trade. For example, ravel Corporation (India) Pvt. Ltd (CI) and

IRCC have come out with senior citizen specials with an all inclusive package cost. For

example, the Chennai-based Hi-tours has also come out with a package or this age group

to oer tours to Singapore, Malaysia, Colombo, Dubai and Mauritius.

Changing Pattern of Employment

It reported that pattern o employment is changing in many developing countries.

here is a shit rom traditional occupation to modern lucrative employment in trade and

industries. For example, students get placed on campus as soon as they complete the course.

his has its own impact on travel trade.



55

Changing Lifestyle

It is certainly expected that changes in liestyle have made much impact on travel

trade today. he pattern o liestyle has undergone drastic changes as compared to 1960s

and 70s. People spend or the moment due to the demonstration eects. Young populationis travelling or the purpose o education and knowledge. Shoddy products, sub-par services

and unpleasant purchase experiences are no longer tolerated or orgiven. ravelling with

amily in a weekend has become ashion or the urban dwellers. People look or best brands,

best quality and best services rom airlines, hotels and travel agents.

➢ Aligning travel with ashionable clothes, homes and investments

➢ Late marriage and small amily

➢ Living relationship or single

➢ Spending on individual travel

➢ Considering travel as social status

➢ Considering travel as a part o quality o lie

➢ ravelling as a source o seeking knowledge

➢ Introduction o paid holidays or incentivized travel

➢ ravelling with children to combine to visit to amous places o interest

New Travel Trends

he tourism statistics o the UNWO indicated that the countries in Middle East,

East Asia, South America and Eastern Arica have witnessed growth o outbound and

domestic travel. Pleasure travel is a discretionary item in amily budget in those countries.

he budget includes basic travel necessities such as transportation accommodation

sightseeing, shopping etc. his has become possible due to the introduction o non-inancial

compensation to the employees in the public and private sector. People are travelling to

many unexplored places o interest. A new trend is witnessed that is the choice o shorter

breaks with more requency o travel in the holidays. here is a change in the demographic

proiles and trends to healthier liestyles

Branding Tourism Destinations

Brands create product dierentiation and represent a promise o value. Brands incite

belies, evoke emotions and prompt behaviour. It gives a clear personality to a product or

destination. he ourism Boards o Dubai, Singapore and Switzerland utilize Bollywood

industry o India to promote their destinations.



56

Availability of Trained Human Resources

he shortage o trained guides and waiters used aect the experience o visitors.

here is a big change due to the initiations o government to train people to work in travel

sector. he availability o trained manpower has changed the service quality and proessionalinstitutions have customized the curriculum to impact quality teaching and training to

students to work or travel sector more eiciently and eectively.

Exemption Sales Tax

he low yielding and volatility in travel agency and tour operation business, the

governments are providing maximum tax relie to the travel trade players.

Proactive Role of Travel Trade Association

rade intermediaries have ormed several associations at the local, regional, national

and international level to ight over the issues which are crippling the growth o the travel

trade business.

Travel as Bargain

In the liberalized era, travel agencies and tour operators are very innovative in

designing package tours. People, who wish to travel, can ind several alternatives and options

to get delightul experiences. Package tours include all sorts o travel and hospitality related

services which can be bargained and amended to the wish o the clients’ requirements. Both

travel trade intermediaries and clients get beneit with the concept ‘ravel as a Bargain’.

here is no rigidity in the negotiations o cost o the travel products. Clients are empowered

to select service components and opt out i the price o travel services is not suitable. he

bargaining power o clients or travel product has given clear indications to the tourism

operators to look into the service quality travel products.

Accommodation Sector

Hotel is a major constituent o travel agency and tour operation business. he

scarcity o hotel rooms in metro cities and other major centers in India is aecting the

package tour business. However, many new multinational hotel groups have established

their prime properties in these places due to the announcement o 100 per cent Foreign

Direct Investment (FDI) and the problems o international standard rooms are partly solvedin India.



57

Toll Free Numbers

our operators have provided the oll Free Numbers on their websites and tour

brochures or customers to contact without any cost or calling and enquiring about package

tour. hese numbers are customized with auto reply so that people can call as many times aspossible to get inormation clariied about package tours. For example, the sale o package

tours must have an impact rom the introduction o toll ree number.

Travel Loans

he payment options are very easy and aordable as ar as buying package tour

is concerned. One can purchase package holidays and make the payment on an easy

installment basis. our operators regularly advertise in some o the captions like “interestree travel” or “easy payment plans” “low down payments” and “no credit checks” to enable

buyers to travel.

Summary

he travel sector, in the recent years, has been inluenced by the actors which are

not only important or the development o the travel trade but also very signiicant or the

development o tourism industry as a whole. he growth o travel industry has become

practically possible with the inluence o these direct and indirect actors. Various actors

aected the growth o the travel sector in the ancient time. hese actors have also aected

the growth o air travel and the travel trade. E-bookings and m-bookings, passenger saety

and security and amenities are the new trends o travel trade. Moreover, socio-economic

and political actors have also aected the growth o the travel sector in India in the new

millennium.

Self Assessment Questions

1. How did the Origin o ravel Agency Business start in the world?

2. Present the evolution o the modern travel agency business by Cox & Kings.

3. What did trigger homas Cook to start the travel agency business in England?

How he became a successul travel agent?

4. Discuss the contribution o homas Cook to the world o travel agency today.

5. How did the travel agency business in India start? present the role o some o the

ounding travel agents in India.



58

6. race the origin o American Express company.

7. Which were the landmark contributions o American Express Company to the

modern travel agency business in the world?

8. How did the traveler’s cheque o homas Cook become popular? and why did

travellers buy the cheque rom American Express Company?

9. Which were the diversiications o business o American Express Company?

10. What was the travel agency business scenario during the pre-independence

period?

11. What are the new business practices o modern travel agency business in India?

12. Discuss the Merger in Indian ravel Agency Business. Was it unavoidable or the

merger?

13. Why travel agency is called as a retailing point or travel products? Explain.

14. Explain briely the dierent types o travel agents.

15. Distinguish the characteristics o retail and wholesale travel agents.

16. List the important roles and responsibilities o a large travel agent.

17. Who is a tour operator? And explain the service provided by the tour operators in

the package tours.

18. Explain dierent types o tour operators and their special eatures with examples.

19. Which are the activities o specialized tour operators?

20. Which are the roles and characteristics a large tour operator?

21. What is the meaning o linkages and integration? Explain dierent types o

integration in the travel agency business.

22. Which are the service providers to the tour operators? How the integration with

the principal service providers is made or deigning the package tours.

23. Discuss the contemporary actors inluencing the travel trade business.

24. How has the changing liestyle inluenced the travel behavior in the modern

society?

25. List the popular rail passes in the world and list the country they belong to.



59

CASE STUDY

Business to Business (B2B)

Customers, people and business organizations have taken advantages ocommunication technology with the help o internet and intranet. People leisurely and easily

communicate with sellers and search about the products (goods, services) on the internet.

Further, the process o buying travel and hospitality products start with the evaluation o

the several alternative sources that are available on the internet. It is now helping customers

to make a comparison between prices o the products.

hey inally reach at the stage o taking buying decisions. Even though, customers

have ound the direct communication with sellers very cumbersome or which a typicalsupply chain have emerged with multiple business to business transactions in travel,

hospitality and tourism business. As travel agents or tour operating companies purchase

components varied services rom the principal service providers to assemble them into

an appealing or attractive tour packages. As such raw materials are procured or use in its

manuacturing processes and the inished products are then sold to individuals via business

to consumer transactions.

Business to business is the process by which businesses employ a multi-layered strategy

consisting o web communications, email, media campaigns and relationship management

or the purpose o converting targeted business prospects into customers. B2B reers to

business that takes place between companies, rather than between a company and individual

consumers. his business ormat allows deeper integration between the manuacturers and

distributors or wholesalers involved in tourism production and distribution processes.

While the B2C makes the tourism product more easily available to direct customers.

As the desires o the customers vary rom individual to individual, and there have been several

changes over time. his kind o business requires high lexibility along with ast customer

responses. he travel companies as distributors or wholesalers can act in a aster and more

eicient way. It becomes aster mainly when there is a high level o integration allowing

close interaction with other companies (suppliers or customers) involved in production and

supply chain process. It results in the beneits or the whole chain o suppliers converging

to the consumers.

he business to business concept in package tour operation o homas Cook explains

that there exists a perennial business linkage between homas Cook as an agent, operationand consolidator with the principal service providers like hotels, airlines, coach and car



60

rental companies, catering services, theme parks, etc. At the same time, Makemytrip.com

has become a leader in online travel agency business with much importance on B2B ormat

o running and maximizing the revenue.

Big companies like airlines, hotel chains and small companies (even a one-person travel agent) can work together with more eiciency. Irrespective o the locations

geographically, integration can be possible through web technology. Several managerial

processes are involved or processes compatibility, inormation channels and trust or

ensuring a high degree o standardization. It has become possible to operate as a single

virtual enterprise.

he tourism marketplaces are illed with a large number o tourism service suppliers

targeting it reach a multiplicity o tourist markets. hey usually target the tourists directlyand develop positive messages about their products through promotion channels. hey

inally work with intermediary distribution channels to sell a range o services tailored to

the customers’ needs.

Analysis, Strategy and marketing mix are the key tools in producing, promoting

and distributing tourism products at several geographical locations to diverse customers.

Inevitably, there are many travel organizations involved in commercialization o business

strategies.

he concept o Business to Consumer (B2C) explains that tourism service suppliers

can use a range o direct marketing channels such as database and internet marketing to

attract customers directly by removing other complex channels. he advantage is having a

greater control over the message sent and the type o tourist attracted. he disadvantages

include a greater inancial risk and it has high start up costs. It is however ound that the

trend o business turnover o online travel companies including the online segments o

traditional travel companies is not so encouraging as it is seen rom the outside.

In the B2B, the main ocus is laid on the suppliers to transact through intermediaries

or selling individual services or packaging them or doing the marketing and booking.

ourism suppliers beneit rom outsourcing the cost and risk o marketing. he advantages

are diversiication o markets that can reduce risk, increase a potentially secure level o

business and ensure the ixed commissions. All these can make the travel companies to

consolidate the inancial planning and management. However, the challenges are less

control over marketing messages, markets and income streams.



61

Most oten, tourism suppliers combine the (B2C) and via distributors (B2B). In

the latter case, intermediaries are used to provide a baseline level o business to ensure

minimum occupancy rates or load actors. It provides a contribution towards ixed costs o

capital repayment and salaries. At same time, in the B2B or B2C ormat, direct marketing

is also preerred to stay connected with the repeat visitors by relying on particular marketsegments and or speciic promotions. Finally, travel companies can only be successul in

the online business with the sound knowledge o management o unds and the interest o

intermediaries in the supply chain. he crucial question is that online travel companies

have streamlines the supply chain network and supplier o tourism companies have almost

resorted to the online transactions i.e. B2B and B2C. Online ormat shall take loner time

to resolve the issues and challenges related to supply chain and retailing o travel products.

Questions

1. What is online supply chain? And how it is networked in case o tour operating and

travel agency business?

2. What are the advantages that online travel companies accrue rom this mushrooming

o online transaction o B2C.

3. Has B2B business become an acceptable business ormat in tour operation and travel

agency business?

4. What Makemytrip.com has not been making more proitability despite heavy

investment and robust supply chain?

****



62



63

UNIT - II

Unit Structure

Lesson 2.1 - Functions o ravel Agency and our Operation

Lesson 2.2 - Setting Up a ravel Agency and our Operation

Lesson 2.3 - Sources o Income in ravel Agency and our Operation Business

Lesson 2.4 - Diversiication o ravel Agency and our Operation Business

Lesson 2.5 - ravel Documentation and IAA Accreditation and Recognition rom

Government

Lesson 2.1-Functions of Travel Agency and Tour Operation

Learning Objectives


➢ Provide reliable, accurate and need-based travel inormation

➢ Understand the unctioning o Reservation o ickets, Hotel Rooms, Ground Services,

➢ Explain the importance o Marketing and Publicity and Selling package tours

➢ Find the importance o Research, training and Development

➢ Understand the need or responsible and ethical tourism practices

➢ Design Package or FI, GI and FAM tour

➢ Coordinate with Public and Private our Organizations

Introduction

International tourist traic is expected to cross one billon and it is projected to

touch 1.5 billion by 2015. One can imagine the volume o tourism business worldwide in

this current decade. he role o tour operator and travel agent is signiicant as they areexpected to contribute so much or achieving this target o the UNWO. As such, tour



64

operators and travel agents promote destinations through their dierent packages and they

are linked with service providers at the orward and backward points. As a business irm,

a big tour operating company or a large travel agent operates the business activities that

in turn help them yield revenue. here are more than a dozen unctional or operational

areas that directly and indirectly determine the quantum o business that a travel agencyor tour operation irm manages or proit as well as customer satisaction. In this lesson,

major unctions o travel agencies and tour operators include travel inormation, booking

tickets, itinerary preparation, designing o tour packages, travel documents, insurance,

oreign exchange, ranchising, conducting tours, marketing and publicity, research and

development, training and development, etc. able presents the unctions o travel agency

briely.

Functions of Travel Agency and Tour Operator1 Provision o ravel Inormation Places o ourist Interest, Connectivity, Climate

Culture, Customs, Currency, Health and Security

Checks Permits and Immigration

2 Market Research &

Development

Package tours

Destinations and Attractions & Other Services

Market Study, Customer Purchase Behavior

3 Reservation o ickets Airlines, Railways, Buses, Passenger Ships, Events

4 Reservation o Hotel Rooms Hotels, Resorts, Motels, Home-stay 5 Reservation o Ground Services Cars, Coaches, Caravans, Entertainment Entries,

Guides, Interpreters

6 Selling Cruise Package Linking with Small Retail Agents, Negotiating

Commission with Cruise Company

7 Preparation o Itinerary Collection o First-hand Inormation

8 Costing Package our Estimation o Fixed and Variable Costs

9 Designing o Package our Assembling All Elements o Services

10 Conducting FI, GI & FAM

our

Uploading Services to Ground Operator

Issue o Exchange Order to Clients and Service

Providers

Collection o Feedback and Release o Final

Payments

Participation in FAM ours

11 Promotion & Publicity Marketing, Sales Promotion and Publicity

12 Reservation and Cancellation Booking Rooms, Airlines, rain and Coach Seats



65

13 Management o Ground

Services

Uploading Responsibility to Ground Operator

14 ravel Documents Handling Enquiries, Counseling, ravel and

Destination Inormation

Passport, VISA

15 Preparation o Annual

Budget

Cost Estimation

Allocation o Budget to Dierent Departments

Management o Finance and Accounts

16 Corporate Social

Responsibility

Corporate Social Responsibility towards

stakeholders, clients, community and quality

ethics

17 raining andDevelopment

Manpower Planning, In-house and Outhouseraining

18 Maintaining Relationship With

ourism Ministry

Members o rade Associations

19 ravel Insurance Personal, Baggage, ravel Break-up, Accidents,

Insolvency

20 Currency Exchange ransaction o Buying and Selling

Renewal o Authorization, Maintenance o Stock

o Currency

21 Operation o MICE Meetings, Incentive ravel

Conerences, Conventions, Exhibitions, Seminars

Symposiums

22 Disaster Preparedness Contacting Police and Disaster Rapid Action

Force

23 Use o Inormation echnology Hiring I services and Purchas o Latest I

Gadgets

Provision of Travel Information

Inormation is an essential unction o travel agency and tour operation. An

inormation seeker can become a customer to buy package tours when detailed inormation

is given to customers. Inormation must be clear and it must describe the places o tourist

interest pertaining to climate, accessibility, amenities, acilities, activities, people, culture,

etc. More particularly, tour brochure contains description with images about the places,

hotels, transports and other inclusive services. hus, travel agency and tour operatorsprovide inormation ree o cost through telephone and internet. For example, Cox &



66

Kings and SOC have created toll ree number or inormation seekers. Auto reply or reply

through customer care executives disseminates inormation. Speciic inormation like travel

mode, accommodation, meal plan, attractions, activities and events at a destination is also

provided.

Market Research and Development

ourism is a new generation business and many entrepreneurs ind it challenging

to be successul in their business ventures. Customers are more inormative about the new

destinations and inormation is readily available on the inger tip. ravel products are now

becoming more competitive and customers have more bargaining power in the marker. It is

no longer monopoly package tour market a handul o ew players like homas Cook and

Cox and Kings.

So much innovation has taken place in package tour business. In view o the ast

changing market, travel agents and tour operators do have any choice other than selecting

the ways o resorting to research on customer satisactions various parameters o services

and the quality o destinations. hus, research and development activities are carried out

continuously or exploring new destinations, events or attractions and assessing the eects

o package tours.

Research work is done on trends o market, itinerary, elements o services in package

tours, customer preerence, branding and costing o products. Large tour wholesalers are

committed or research work and ield-based study or assessment o products. It is the tour

wholesaler that shows interest in research and development work. For example, Duniya

Dekho is an international outbound package o Cox and Kings and it has been appealing

the customers or the last several years. Research helps in the innovation o travel products.

Reservation of Tickets

ravel agencies and tour operators sell a variety o products but reservation o tickets

is still one o their sources o revenue. Reservation o airlines tickets, railway tickets, cruise

lines and bus tickets can be done either at agency counters or through reservationengines

available online these days. Due to sti competition amongst airlines and low cost carriers

in India and globally to an extent, airlines are working on zero margin commission or travel

agencies. In the recent years, the scenario is slowly changing and online travel agencies

especially are selling tickets online. Global Distribution Systems have changed the way

ticketing used to be.



67

Reservation of Hotel Rooms

he Computer Reservation System (CRS) or the Global Distribution Systems have

enhanced the simpliications o reservation o hotel rooms. Hotels put up all the necessary

inormation in advance on their web pages. It includes type o hotel, room, acilities andservices, meal plans, tari and seasonal oers. It gives wider options to customers to search,

compare, chose and inally book a room o their choice. Online booking can be done with

the online transer o payments through internet banking or debit/credit cards upon the

arrivals.

Reservation of Ground Services

Ground handling operators o destination management operators have the soleresponsibility o providing cars, coaches, caravans, entertainment entries, guides,

interpreters etc as per the contract or exchange order o the principal agents. our operators

select the ground operators by taking several actors into considerations. Notably, the past

track record or operating the services is assessed beore uploading the services..

Special Services or Charter Operators are as ollows;

➢ A detail easible plan is prepared to select the destination and options are given to

the charter tour companies to select as per their preerence.

➢ Arrangements are made to take the team to do destination inspection and

amiliarization. It helps the overseas tour operator gain conidence ater studying

the acilities at the destinations.

➢ Hotel selection and reservation is taken into consideration when charter tour clients

are largely aluent class tourists. ourists generally visit the conventional places like

Agra, Varanasi, Bodh Gaya and Konark

➢ ransers and sightseeing are also organized as per the itinerary and any change in

the program is not permitted.

➢ As charter lights land in India with a big group o tourists, liaison with Govt.

Authorities likes the Airport Authority o India, Ministry o External Aairs, and

Ministry o Home Aairs. Clearances are to be sought to conduct the charter tours

to India.

➢ Pre/post charter tours can be arranged on the demand o clients.



68

Selling Cruise Package

he business o cruise lines is growing unlike air ticketing in case o revenue

maximization. he new-age travelers wish to have experience o cruise line and it has

become aordable or lower middle-class person. It has limited scope or direct sales buttour operators and travel agents largely sell the package tours. ravel agencies and tour

operators have identiied cruise packages to prospective clients as more lucrative. Most o

these agencies are promoting and marketing cruise packages with a variety o oers and

discounts to attract tourists. Special Services or Cruiseare as ollows;

➢ Planning o tour itinerary with all justiications and execution with the inal

conirmation o cruise companies.

➢ Beore the arrival o groups, a team o executives come or port inspection. our

companies take the team to the ports, ix the appointments with the port oicials,

superintendent o police, tourist oicers, archaeology superintendent as the tourists

who travel in the luxury cruise lines are mostly high end clients and their choices and

tastes are very special. he groups generally visit the historical and archaeological

sites.

➢ our companies evaluate the strengths o ground operators in terms o operational

elements such as transport, guides, traic, parking places, saety, hygiene, carrying

capacity at the destinations, toilets, road conditions, etc. hey take the stock o

operational capabilities o ground operators and inally look into easibility side o

conducting the tours.

➢ Shore excursion pre/post tours are also conducted.

➢ Day return charters are also arranged.

➢ urns around operations are also operated.

Preparation of Itinerary

Itinerary is an important exercise that tour operators engage senior executives to

design in a methodical way. Itinerary relects the nature o tour, types o services and duration

o tour. Package tour is operated as per the descriptions and instructions in itinerary. our

operators make ull-proo survey o the places o tourist interest, acilities and amenities, etc

beore inalization o itinerary. In brie, the sale o package tour is determined by itinerary

and programmes. he process gets initiated two or three years beore the launch o package

tour in the market. It involves collection o inormation related to the duration o stay at a

particular destination and check-in and check-out time.



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Costing Package Tour

Costing is an important activity o a tour operator while developing package tour.

It includes variable and ixed costs. Itinerary preparation and costing go together. our

operators take all precautionary measures to reduce the cost that helps in maximizing proitsand passing beneits to customers. hus, tour operators go or bargaining and negotiating

with primary service providers or best possible or competitive rates. For example, hotels

oer attractive discount or lat discount on the sale o bulk rooms. hus, it is a key unction

o tour operator to do costing systematically to optimize the beneits rom the available

resources.

Designing Package Tour

Gone are the days when there was no market or package tour and customers used

to take one or two elements o services rom travel agents. oday, there is a huge market or

organized inbound, outbound and domestic package tour market.

hus, tour operators are now devoting their ull resources or developing innovative

package tour as it is the business o tour operator to generate revenue as compared to

traditional ticketing business. Expert and experienced executives are assigned the work

o developing packages or dierent segments o customers. In order to design attractive

package tour, tour operators ensure or good itineraries, amiliarization trips, easibility o

itineraries. It is ollowed by package tour designing, costing and promoting package tour

directly or through travel agents. It is an important unction as it earns maximum proit or

tour operator.

Conducting FIT, GIT and FAM Tour

our operator is more particular about the operation o FI, GI and FAM tour in a

proessional manner. Developing an appealing package tour does not end the responsibility

o tour operator rather responsibility increases or conducting tour or individual and group

travelers. It requires dierent types o ground arrangements or FI traveler as compared

to GI travelers. our manages, travel associates, interpreters, arrangement o guides,

processing o travel ormalities are some o the issues to be taken care o. ravel agencies

and tour operators also conduct FAM tours apart rom FIs and GIs as part o easibility

o the itinerary/package tours or as promotional methods in collaboration with destination

promoters and other service providers.



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Promotion and Publicity

Marketing and publicity o tourism places o interest is an important unction

o tour operator and travel agent. our operator designs tour packages and sells directly

to customers or through retail travel agents at various locations. hey are primarilyintermediaries or marketing tour packages, hotel services, MICE, air services, car rental

services, travel insurance etc. Marketing is a key unction that a tour operator earmarks

budget to spend on advertisements, sales promotions and publicity.

here are various marketing strategies through which tour operator achieves

the sales target. hey generally take the help o print and tele-media or marketing and

publicity o tour packages and individual components. Some o the travel agents give

advertisements in local news paper and regional television channels to educate the potentialbuyers o package tours, cruise tour, saari tour, etc. For example, SOC, homas Cook

and Cox & Kings give advertisement in English News Channels like CNNIBN, NDV

and IMES NOW. Local travel agents prepare small pamphlets displaying eatures o tour

package or discounts in air tickets and send through news paper hawkers or their sales

promotion sta.

Publicity is a promotional method that travel agents and tour operators preer to

popularize the products with minimum costs. Participating in road shows, exhibitions,

mass plantations, etc helps in the promotion o package tour.

Reservation and Cancellation

Reservation and cancellation are two important unctions o travel agents and tour

operators. Booking o air and bus tickets, hotel rooms and cruise line is the primary activity

o travel agents and tour operators. here are systematic procedures or making reservation

o rooms and airline seats. Reservation registration orm is illed manually and electronically

and gets it sent to hotel or airline or reservation. he procedures or cancellation o

reservation o rooms and tickets are ollowed as per the agreements. In a large travel agency,

there must be separate department to manage reservation and cancellation.

he Global Distribution Systems have acilitated the process o reservation o hotel

rooms. Hotels provide necessary inormation pertaining to the type o room, acilities and

services, meal plans, room tari and seasonal oers or customers to search, compare, select

and book rooms o their own choice. Online payment through internet banking or debit/

credit cards is also made available.



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Management of Ground Services

Both travel agents and tour operators can act as ground operator as a part o

diversiication o business. ravel agents sell domestic and outbound package tour and

conducts sightseeing as a ground operator. It is hardly to see an independent groundoperator which exclusively deals with services at destinations. our operators also provide

the services as ground operator at important port o entry o inbound traic into the country.

Managing ground services is an important unction o tour operator as it involves

direct interactions between guests and ground operator. Service conditions included in

package tour are realized at the destinations when ground operators. Ground operators

provide a variety o ground services like cars, coaches, caravans, entertainment entries,

guides, interpreters etc. our wholesalers upload the services and send tour voucher toground operators to arrange the services at destinations. hese arrangements are made in

advance and ground operator conirms with tour wholesaler about the services.

Travel Documentations

ravel documentations are processed or FI and GI package tours. ravel

documents include processing o passport, visa and health certiicate along with currency

endorsements beore the commencement o tours. he most important task is to ollow

the issue o visa rom Consulate Oices. It takes time to get the VISA clearance rom the

embassies. As ar as tourist visa is concerned, there is no much hassle to get visa processed

when it is pursued by tour operator. Visa is an endorsement on a passport indicating the

holder is allowed to enter, leave or stay or a speciied time period in a country visited.

Health certiicates, vaccination, insurance, oreign currency and restricted area permits are

also processed much beore the commencement o tour. All these ormalities are managed

by travel agencies and tour operators to help customers or member o GI and FI travel

comortably.

Preparation of Annual Budget

Financial management o travel agency and tour operator is an important unction.

entative income and expenditures statement is prepared to ascertain the company’s

inancial position. Budgeting or dierent activities is prepared taking dierent business

diversiication plan into consideration. In case o a multinational company with branches

across the countries, each branch submits the annual income and expenditures to the

Regional Oice and it is inally consolidated and submitted to the Corporate Oice orpreparation o annual budget. Majority o travel agents and tour operators approve annual



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budgets in the apex level meetings. Without proper budgeting and suicient allocation o

unds, it is diicult to ind the growth o business in a given inancial year.

Corporate Social Responsibility

Ethical and air-trade, responsible, pro-poor and sustainable tourism aims to provide

maximum protection to local ecology and environment. hese tourism philosophies teach

best practices to travel agent and tour operators to ollow and contribute to local destination

and community. our operators share the revenue or helping educational empowerment or

social welare. he concept o Corporate Social Responsibility (CSR) is explained as a social

obligation on the part o a irm or organization towards the welare o communities. For

example, IAO, New Delhi is involved in counter pollution and contamination programmes

like Carbon Neutralization and Carbon rading. his national body is also unding to theNGOs or plantation programmes. hus, the role o travel irms through CSR stands vital

to travel industry.

Training and Development

ravel agency and tour operation deals with intangible and perishable aspects or

which the job o qualiied and skilled human resource is needed to provide services. In the

past, training and development was not given due importance as it was run by members

o amily. ravel agency was a amily business and dierent attributes were generally

inherited rom the senior members o amily. Many small travel agencies have become

large business enterprises with more branches and diversiied business. Majority modern

travel agencies and tour operators are now visiting or on-campus placement to tourism and

travel management institutes. In-house training is conducted or the employees with help o

proessional trainers or senior executives. Senior managers or executives are also sponsored

to participate in Management Development Programme (MDP). raining curriculum

highlights on the improvement o sot skills and product knowledge and the MDP imparts

on strategic business decisions. For example, IIM, Gwalior is an autonomous body o

Ministry o ourism, Government o India and it designs dierent courseware or industry

executives rom travel and tour operation. It includes ticketing and tour operation, cargo

and travel agency management.

Maintaining Relationship with Tourism Ministry

Various operations and activities o travel agents and tour operators are regulated

and supported by the National and State ourism Organizations. As per the guidelines oourism Policy, a travel agent or tour operator must be an enlisted and recognized business



73

irm or enterprise to run the business. he Ministry o ourism also provides links to

recognized travel agents and tour operators in the oicial websites. At the same time, it

encourages them to take part in amiliarization tour and exhibitions within the country or

abroad.

Membership of National and International Travel Organization

Memberships o dierent travel and tourism bodies provide much exposure to the

members in annual conventions and meetings. Apart rom using the logo in letter head,

signboard and websites, it helps the members meet oreign and domestic travel agents

to initiate new business. ravel Agents and our Operators usually become the active

members o Indian Association o our Operators (IAO), ravel Agents Association o

India (AAI) Universal Federation o ravel Agents Association (UFAA), Paciic Asiaravel Association (PAA), American Society o ravel Agents Associations (ASA) World

Association o ravel Agencies (WAA or sharing common data and policy suggestions or

mutual beneits.

Travel Insurance

ravel insurance is a new business area that constitutes an attractive source o

revenue. Customers are much aware o saety o their travel and compensation o package

tour. here are attractive insurance schemes introduced by insurance companies to take

care o lie and package tour insurance. Premiums or these two purposes are added into

the cost o package tour or sometimes it is excluded rom the cost o package tour. ypical

travel insurance may cover insurance or lie, accidents, medical treatment, baggage loss,

trip cancellation and similar losses.

Currency Exchange

All outbound and inbound tours need authorization rom Reserve Bank o India

(RBI) to do the transactions o receiving and paying through dierent oreign currencies

like US Dollar, UK Pound, Euro, etc. hese oreign exchange dealers are governed as per

the Foreign Exchange Management Act (FEMA). A minimum commission is charged to

customers as per RBI rules.

Operation of MICE

Event management is today a completely proessional business. Organising seminar,

conerences, conventions and exhibitions is also being undertaken by travel agencies and

tour operators apart rom their regular travel services though there are specialised event



74

management companies or handling such events and programmnes. It may be noted that

most large travel irms are now oering exclusive Meetings, Incentive travel, Conventions/

conerences and Exhibitions (MICE) packages which are handled by their MICE divisions.

Disaster Preparedness

Due to growing uncertainty about natural and manmade disasters such as cyclones,

loods, earthquakes, tsunami, landslides, accidents, ires, stampedes, terror strikes and

others, disaster preparedness is the most inevitable unction o travel agency and tour

operations. Saety and security o visitors is prime responsibility o the operators and they

should be prepared to handle any such disasters. A team o proessional is trained to handle

such incidents and avoid any harm to their clients to a great extent. hey also coordinate

with the local disaster management teams to ace any such challenges.

Use of Information Technology

Inormation technology has become an enabler or the growth o the travel agency

and tour operation business. ravel agencies have no choice but to adopt new technologies

to maintain quality standard o services. Most o the modern travel agencies are automated

to deal with the clients. It enables to optimize productivity with the extensive use o

technology. he modern gadgets include telephones, ax, electronic mail, photocopiers

and computers as essential communication equipment or travel inormation. Proper use

o communication technology can reduce time and costs. he sta members are selected

on the basis o their adequate computer skills. he implementation o the MIS system

can identiy the problems and hence, it can generate and evaluate the alternative course

o actions ater collecting the necessary eedback. For example, the e-ticketing is a global

phenomenon to earn commissions on ticketing.

Summary

our operators and travel agents have been doing several traditional and modern business

unctions to diversiy the business. he objective is to directly and indirectly expand the

quantum o business. he major unctions o travel agencies and tour operators include

travel inormation, booking tickets, itinerary preparation, designing o tour packages,

travel documents, insurance, oreign exchange, ranchising, conducting tours, marketing

and publicity, research and development, training and development, etc.

****



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Lesson 2.2 - Setting up a Travel Agency and Tour Operation

Learning Objectives


➢ Understand the business opportunities in travel agency and tour operation

➢ Be amiliar with the operational areas o travel agency and tour operation

➢ Know the procedures or starting a travel agency and tour operation

➢ Find various hurdles in establishing this business irm

Introduction

Starting small or medium or large business irms needs methodical approach. o

start a large actory like Steel or Aluminum or Oil Reinery, there requires all managerial

approaches to lay a solid oundation o business. his approach is almost same in case o

setting up a small or large travel agency irm. It is a business that an entrepreneur should

have knowledge, experience, commitment, patience, inance, etc to run and expand the

business without having ailures. here are all probabilities to ace losses that may make

a travel agency irm to close the business and there are also more possibilities to make

optimum proits rom the minimum investment. Possessing one skill may not help someone

run travel agency.

hus, it requires more skills and experiences to run the travel agency business as it

deals with more learned and enlightened customers. ravel business now aces competitionand making proit in the travel business is not as easy as it was there beore one decade

ago. he scope o travel agency and tour operation business is very vast when the world is

witnessing mushrooming growth o international trade. As a result, the number o business

and leisure travelers has been increasing or the last several years. In this dynamic business

scenario, a travel agent is required to be smart in dealing with clients; providing them

quality services; and taking the business very seriously. Creating a new customer needs

more eorts and expenditure than maintaining relationship with the existing customers.

In this lesson, you will read about the procedures or arranging unds, indentiying a betterlocations etc.



76

Setting up a Travel Agency and Tour Operation

ravel agency or tour operation business is managed and operated by someone who

must be proessionally qualiied, skilled and experienced. Hundreds o travel agencies have

ventured into the business with much expectation and many o them just perish in the duecourse o time due to several reasons. hus, starting a travel agency counter does not take

much time rather it takes longer time to sustain and grow the business in the competitive

travel market. For example, Subash Goyal, the present president o IAO and Managing

Director o Stic ravels, took more than 20 years to reach at the stage o consolidation in

the travel agency business. It is usually seen in travel trade that steady expansion o dierent

areas o operations widens the scope or more diversiications and consolidation. Hundreds

o IAA approved travel agents have closed the business orever due to the zero commission

in the sale o airline tickets. However, many o them have switched over to package toursand MICE business to stay on the business as an alternative business model.

Proessional institutions oer training programmes to enhance capacity to take

the responsibility and authority to start own enterprises. ravel agency is traditionally a

amily-run business and in most cases, travel agencies were run by housewives. It could

be managed with reasonable skills and knowledge. At the same time, majority o travel

agents were dealing with one or two components o services such air and train tickets.

hose two areas o business used to provide standard rate o commission. Nevertheless,

the business o travel agency and tour operation has undergone radical changes with so

many diversiications. oday, travel agents are more ocused into hotel bookings, sale o

package tours and processing o travel documents. Similarly, tour operators do ocus much

on diversiication o package tour business as the trend o travel is changing due to the

change in income, traits and liestyle.

he business starts rom the demand o consumers. Consumer is the king and sellers

shall have to treat him like God as satisying consumer is the ultimate objective o any

businessman. Gone are the days when producers manuactured products without taking

the needs and demands o consumers. In the present market, the behavior o consumers

is studied beore bringing the products to the market place. When there is a growth o

any business at a particular place and time, it explains that more consumers are willing to

demand or the products.

he common interest o any travel agents or tour operators is to make proits to

manage the ixed and variable costs. Some o them are interested in oering services with

premium price to the target customers and others do oer services to budget customerswith the target o selling more. An intelligent travel agent is one who makes all possible



77

eorts to maximize returns at a ast rate by increasing volume o sale or reducing the cost

o selling and operating conducted package tours.

It is essentially important to highlight the margin o proit as a main motive o travel

agents and tour operators to invest more or expansion as the business gets stability or it isabove the break-even point. For example, homas Cook is a ull-ledged travel agency or

more than one-and-a-hal century and the success o this travel agent is diversiications

and selection o market place or its products. In addition to the growing demand or travel

agency services, there are increasing numbers o entrepreneurs interested in setting up and

running the travel agency business. With a little amount o initial capital, one can start

running a travel agency.

ravel agents and tour operators act as intermediaries in the network o traveland tourism business with the service providers with orward and backward linkages or

optimizing the investment and providing business opportunities to the hotels, resorts,

airlines, railways, cruise line, restaurants, emporiums, theme parks, theaters, events, etc. As

such, the irst encounter takes place between travel agents and customers or the purchase

o package tours or any other elements o services. Keeping this unique eature o travel

business in mind, it is essentially important to ind the best possible ways or establishing

travel agency or tour operation or growth o business in the uture.

ravel agencies or tour operation units are located at the prime places in cities,

towns and tourist centers or easy accessibility o customers and vice-versa. his is a typical

business that attracts those customers who largely take the travel assistances or making

hassle-ree travel. his is the reason why travel agents are situated in good localities to meet

customers regularly. Interactions cannot be substituted with web technology as customer

relationship is established through internet. As a result, online travel agents have orayed

into the travel market and have posed challenges to the traditional travel agents.

Locations in prime or posh area in city provide several advantages to many travel

agents to maximize the advantage or which ixed and overhead costs along with other costs

also increase accordingly. Advantages o locations include easy accessibility and visibility or

beneits o customers. More importantly, walk-in customers do ind convenient to visit the

oice premises o travel agents or the purposes o booking, conirmation, reconirmation

and cancellation.

Setting up main or branch oices in good locality provides more opportunity to visit

clients or personalized services. Cost or maintaining oices around big government andcorporate oices is high. But it gives much advantage to travel agents to establish regular



78

contacts with clients in day-to-day basis. When travel agents operate oices rom a distance

place rom clients, it becomes cumbersome to visit the clients. When we take the example

o location o travel agents, you may ind travel agents near the railway stations, airports,

bus stand and corporate areas. For instance, one can ind several branch oices o homas

Cook in New Delhi, Bangalore and Chennai. ravel agents must be ocused on the areas obusiness or which location can be decided.

hese are the ollowing criterion or starting travel agency or tour operation unit.

Selection of Ideal Location

Selection o suitable location gives added advantage to a travel agent or tour operator

to grow in the competitive business environment. It solves maximum problems in openingtravel agency or tour operation oice. It takes longer time to ind an ideal location. Location

is inalized ater taking the potential area o business into consideration. A travel agency or

tour operator operates and manages its business activities more eiciently and productively

when it is located in an easily accessible place. he advantages and disadvantages o a

particular location are evaluated meticulously. At the same time, location o other travel

agents in the same locality is thoroughly studied. Most o the travel agents preer to open

their oices in the busy commercial areas.

Location must be identiied near the corporate oices, banks, airlines city oices, bus

stands and railway stations. Ideal locations help in multiplying the revenue opportunities

o travel agents or tour operators in the uture. Formal and inormal ways o identiying the

sites are usually done to help ind locations without having much hassle. Some travel agents

generally ind the oices through some known sources and some o them manage to ind

them through advertisements in the local news paper.

Selection of Office Premises

Selection o appropriate site increases the responsibility o inding proper building

or oice premises. Building should be preerably ground loorand there must be enough

parking areas. It is always preerred to ind ground loor or the convenience o customers

or an easy access to the oice. For example, elderly customers or disabled customers can

have easy access i there is a ground loor premises. Building must have the required space

as prescribed by the IAA or any other recognized organizations.

In order to make the working place comortable or sta members, it should bewell maintained and should preerably be air-conditioned. he building should have



80

the business. he accountability shall be more to survive in the business. Usually, the bank

oices evaluate the easibility report and visit the oice premises o travel agency. On the

basis o the report, travel agent is granted loan to run the business.

In the present days, running a travel agency with the support o banks or governmenthas become so easy that many travel agents do participate in the promotion o tourism in

overseas on the cost o government. Many amily-owned travel agencies are not able to

expand the business as they have the ear o running the business with the help o banks.

here are two genuine reasons. First, it is a seasonal business and second, the business aces

serious risks due to the socio-political risk actors.

Opening Current Account

For the day-to-day operation o transactions, current account should be opened

with the commercial banks preerably located near the oice. Current account should be

transacted with the bank that lends money to open travel agency oice. he advantage o

maintaining current account is that there can be unlimited withdrawals in multiple times in

a single day.

It is however suggested that minimum balance depending on the inancial capacity

should be maintained with banks. It may help in meeting certain emergency expenditures.

Inormal arrangements should be made with the bank in such a manner that bank must

extend cooperation in clearing cheque or the periodic payment to airlines, hotels and

cruise lines. Most o the travel agents make ormal request to bank to make clearance o

cheque i there is no suicient balance in the account.,

Hiring and Retaining Qualified & Trained Staff

ravel agency is a service oriented business and its primary job is to retail the

services o primary producers o tourism business. Retailing is nothing but selling the

products to customers directly. It certainly requires experienced sta with proper training

and qualiications to increase the sale o elements o individual or inclusive services beore

the target time. For example, sale o a group tour to hailand has to complete within the

irst month o the opening o bookings. hus, a team o executives get busy in pushing the

sale with lots o sales promotion schemes as per the instructions o the wholesale travel

agents or tour operators.

hus, the job is not as simple as it is perceived to be. ravel agents should recruitthe requisite number o sta given the volume o business. Oversta may increase overhead



81

expenditures and under sta may aect the operation o business. ravel agents should

have sta with the right qualiications and training as it is essential or obtaining approval

and recognitions rom various agencies. Emphasis must be laid on selecting sta to carry

out the duties and responsibilities diligently with dexterity.

hus, travel agents preer to visit dierent campuses o tourism institutions to

conduct interview instead o hiring through open advertisement due to lack o limited

manpower supply. As the attrition rate is relatively high in travel agency business, travel

agents should be careul o selecting candidate with much emphasis on commitment and

interest in serving the organizations. his can be ascertained rom the personal interview.

Customized Transport

ravel agents and tour operators own customized car, mini and large coach to

manage the operation o individual and group tours. In case o the requirement o additional

transport, recognized transport operators provide the services as per the booking rom

tour operators. As such, a tour operator can become a ground transport operator when it

handles the tours at the main cities and travel agent when it retails the products o principal

suppliers in tourism. Acquisition o own leet o transport is required only when the volume

o tours is more. For example, Southern ravels has opened branch oices in many big cities

in India to operate tours with their own transports.

More importantly, car or coaches should be customized to ensure more comorts

and amenities. For example, microphone, collar mike, speaker, rerigerator, etc are added

in luxuory coach. It reduces cost on the services and increases the margin o surplus or

owning the transport. Majority o tour operators hire transport services rom authorized

transport operators and transport operators themselves act as ground operators at many

cities and tourist destinations.

Recognition from Airlines

Airlines do authorize travel agents to retail the tickets directly to customers. ravel

agents submit the necessary documents or obtaining accreditation and airlines appoint the

agents or booking the tickets. Apart rom securing authorization rom individual airlines,

travel agents also get accreditation rom IAA with the ulillment o certain mandatory

procedures to deal with the issue o international airline tickets. Accreditation rom airlines

can enable the travel agencies to enhance sales o services. Customers preer to get their

tickets booked through the accredited agents than the sub agents.



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Obtaining Franchise from Cruise Line and Multinational Travel Agency

Many travel agents take ranchise rom cruise liners or large travel agencies to retail

the package tours directly to customers at smaller cities. ravel agents shall have to go or

agreements with the principal agents or cruise liners to sell the various elements o services.Commission or incentives are decided at the time o signing agreement. For example, homas

Cook, Cox and Kings and SOC get the package tours promoted through their ranchise

agents at various ier-III cities in India. It gives very attractive volume o commissions to

ranchise agents. ravel agents should keep the option open to go or ranchise or General

Sales Agent (GSA).

Membership of Local, National and International Associations

ravel agents and tour operators handle complex businesses that involve customers

and suppliers at two dierent ends. Many government policy decisions generally aect the

interests and operation o business or which travel intermediaries ace unwanted problems.

More importantly, tour operators do ace the problems o change in rules and regulations

o government on the operation o organized tours. Whether it may be visa ormality or

oreign currency or service tax, inter-state permit tax, travel agents and tour operators

represent the issues to the respective authorities or avourable solutions under a banner o

an association. For example, IAO, AAI and UFAA work or the interests o travel agents

and tour operators.

Parking Area

Parking space must be available near the oice or vehicles. While selecting the

location o travel agency or tour operation, it essential to have the parking area as it is a

precondition or obtaining recognition rom the Ministry o ourism as transport operator

or tour operator.

I the oice is located in a very busy commercial center, parking space may be

earmarked away rom the oice areas. he parking space is required or vehicles to keep

them at sae places. hereore, travel agents or tour operators or ground operators generally

go or leasing out parking space o local municipality.

Managing Capital and Cost

A travel agent assesses the strengths and weaknesses o the business in the competitiveenvironment as it involves costs or producing and delivering services. Opening a small



83

travel agency oice does not need much paid-up capital. It may need or more investment

as the business gets diversiied. In the ormative period, a travel agency aces much hardship

to run the business while the bearing o operational costs.

It becomes so much liability on the travel agents that many travel agents shut downthe oice and move to some other business. An experienced travel agent shall not leave the

business with a small jerk o business volatility or rising operating costs. It needs practical

experience and oresight to run and expand the business as competitors shall not be riendly

to other travel agents rather they create obstacles to them.

Investment o ixed capital is required to run the business. It includes oice building,

interior, technological gadgets, electricity, water, telephone, employees, purchase o cars

and coaches, deposit o security amounts with IAA, airlines and principal travel agency orranchise and security deposits or RBI accreditation.

he variable cost comprises the payment or booking rooms and or obtaining

ticket stocks, payment to the guides, balance cash in the current account, maintenance o

transport, and oice rooms.

Promotional costs include preparation o brochures, pamphlets, websites,

advertisement in television, newspaper, magazines, attending meetings and conerences,

travel airs, conducting amiliarization trips, entertaining potential clients, providing gits

and compensation.

Cost on Obtaining IATA Recognition

he volume o investment increases with diversiication o business and travel

agents have no option, but to manage the business with the help o loating transactions. It

is a dream o every travel agency to be an IAA recognized agent to sell the international

airline tickets. In the current time, the business o airline tickets is no longer alluring or

travel agents whereby many o them do not even give their minds and energy towards the

sale o airline tickets due to the paltry commission.

Further, a bank guarantee o Rs. 20 lakh is mandatory to be deposited to become

eligible to apply or IAA recognition. An Agent may submit a ixed deposit or any ixed

asset, land, gold, silver or diamond, etc to secure guarantee or the worth o Rs. 25 lakh rom

the banks. he amount o ixed deposit may vary depending on the number o tickets that

an agent requisitions in a ortnight.



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On the contrary, it is obligatory to deposit 25 per cent o the total bank guarantee

in cash in order to take the stock o tickets. While applying or IAA recognition, an agent

spends heavily on reurbishing the oice premises as per the guidelines o IAA. IAA

approval procedures increase the ixed as well as variable cost o travel agents. hus, a

proessional travel agent having desire to get IAA approval must be prepared to spend onthe bank guarantee and ambience o oice premises.

Cost on Acquiring Latest Technological Gadgets and Transports

he change o technology throws many challenges to travel agents. It involves heavy

expenditures on replacing the updated computer, lab top, mobile handset, xerox copier

machines, scanners etc with the outmoded technological gadgets. It is a part o sunk costs

and depreciation costs.

ravel agents do not have any choice, but to spend on acquiring latest computer

systems, mobile, lap top, colour printers, camera etc beore customers use them. At the

same time, replacement o old vehicles ater a ixed period o use must be phased out or may

be sold beore it gets outmoded. In the recent years, requent changes o luxury cars and

coaches have increased the cost o buying latest cars to cater some high-end clients. Interior

designs o vehicles are also changed rom time to time. In the short run, travel agents ind

it diicult to manage these costs in the short run, but it becomes less burdensome in the

long run.

Travel Agency Organization Structure

A large travel agency or tour operation unit unctions through the hierarchal

organization structure or better co-ordination across the departments. In case o the

ormal structure, responsibility is delegated along with authority to each department to take

decisions at their own level and share it with each member. A ormal structure produces

better output, gives better clarity o decisions and avoids ambiguity. I there is no such

structured organization, there will no accountability o department to the higher authority.

ravel trade has evolved through dierent periods and it was a small business outit in the

19th century and it has been a huge business since the economy was liberalized worldwide

in the last quarter o 20 th century. here is no choice to run the travel business without

proessional culture and well-knitted and easible organizational structure.

he unctioning o many large travel agencies has deined organizational structures

or sustainable integration between the departments and eective communication. Manytravel agencies have restructured to win over other t competitors in managing the customers



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and operations. A large travel agency accomplishes the policy, planning and budgets, joint

negotiations with suppliers, preparation o inormation system, reports, innovative and

cost eective solutions, consistent quality standards, payment options and management

o travel budget through the establishment o a robust ormal organizational structure. In

the competitive business scenario, qualiied and trained manpower with delegations oauthority is being incorporated in the company policy and culture.

For instance, CI has restructured its organizational chart in order to redeine

accountability ater it got merged into homas Cook. his can only be possible when it

adopts all modern management practices.

he recognized travel agencies and tour operators in India go by the guidelines o

the government or eective management o business as this typical business involves lotso accountability to the customers being a service sector. hus, it requires a very broad

ramework o organization structure to unction and get consolidation in a short period o

time. he executives o a large travel agency like Cox and Kings are empowered to delegate

work to the respective heads o departments.

A well-drawn organization structure enables unctional and operational areas o the

travelagency and tour operation business or improvement o quality services and

accountability. For example, as many as 3200 employees are working in various oices at

Kuoni India. he organization structure o the Kuoni ravel Group includes shareholders

the board o directors and the managing director along with general managers, inance

controllers and chie executives in the organizational hierarchy.

Delegation of Authority through Hierarchical

he organization structure usually consists o the CEO and MD as the top

administrative and operating head o the company ollowed by the Chie Operating Oicers

(COOs the Chie Financial Oicer (CFO), the Chie Human Resource and Chie Inormation

Oicer (CIO). he COOs would handle the outbound, destination management, business

travel, and visa services. he chie-HR manages the recruitment, selection, perormance

appraisal, training and development and promotion. Executives in various capacities across

departments report directly and indirectly to the branch head.

Summary

Investing on travel business may be risk i it is not taken into considerations o thenature o unction o business. he travel agency and tour operation business have become



86

a key contributor to the tourism revenue. hus, a travel agent or tour operator must possess

knowledge, experience, commitment, patience, inance, etc to run and expand the business

with a mindset to ace challenges. ravel business now aces competition. Making proit

in the travel business is not so easy today. A travel agent or tour operator is required to

be smart in dealing with clients; providing them quality services; and taking the business very seriously. All those points starting rom selection o location to the establishment o

organizational hierarchy must be looked into beore investing in travel business.

****



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Lesson 2.3- Sources of Income in Travel Agency and Tour Operation Business

Learning Objectives


➢ Be amiliar with operational areas o travel agency and tour operation

➢ Know the ocus to be emphasized to generate more revenue

➢ Find various ways to earn proit or running the travel irm

➢ Evolve a sustainable mechanism to reach at the break-even point

➢ Develop a revenue model to generate more proits

Introduction

Earning proit rom investment in a business irm is generally expected ater the sale

o the products or delivery o services. Aiming at proit along with the ocus on customer

satisaction is the ultimate objective o each travel agency irm. Small or big investment has

to have maximum returns. Each business irm attempts to make more proit rom minimum

investment in a short period o time. ravel agency or tour operation business is a type o

business that deals with service or those who come under the high income bracket.

his business is also not ree rom uncertainly and risks like luctuations o demand

due to several uncontrollable actors. Once upon a time, travel agency was a amily business

and it was managed by the emales in the amily. It has now become a very lucrative business

and multinational companies are now investing on acquiring the travel agencies. hus, eachtravel irm strives hard to ind a sustainable business model to earn revenue with minimum

risks. It does not happen in all cases as the service quality and goodwill determines the

volume o revenue that a travel agency can earn annually.

It is basically a seasonal business and the low o revenue gets disturbed in the o

season. ravel agencies, thereore, do not concentrate more on core business like ticketing

and car rental or local clients and customers. It is, however, noticed that travel agents or tour

operators try to be specialized in one or two areas o business. Some travel agents promotecruise packages and some other promotes pilgrimage packages. It is better to ind a revenue



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model rom a business that is sustainable. In this lesson, you will ind the descriptions on

sources o revenue o travel agents and tour operators.

Sources of Revenue

Any business irm aims to maximize proits by increasing the sale products or

services. he primary aim is to reach at Break-Even Point in a short period o time rom the

investment. It is a stage in every business that the total cost o producing the products or

services must be equal to the total revenue.

here are gross and net proits. Gross proits are calculated by taking the total sale

into consideration, whereas net proits are calculated by deducting the cost o production.

It includes the entire process o production starting rom hiring building on rent or travelagency or tour operation oice to the payment o monthly salary to the employees. he

amounts o gross and net proits compared to investment must be substantial high.

A travel agency is a business irm to generate revenue through various sources o

revenue as it is diversiied in case o modern travel agents. All those proits are derived rom

the sources o commissions as travel agents or tour operators run the business or obtaining

commission. our operators work or markup besides commission rom various primary

service providers. he amount o commission is determined by the kind o network that a

travel intermediary establishes during the course o running business.

A travel agent tries to ind various traditional source o earning revenue along with

the emerging ways o maximizing revenue through commissions. It is however certain that

business expansion plan o a travel agent are determined by the amount o net proits that

can be maximized in a particular period. However, various traditional sources o income are

still considered as core business strength. Commissions o travel agents and tour operators

largely comprise sale o air, train, bus and erry tickets, car rentals, sale o package tours,

booking o hotels, insurance and oreign exchange.

he niche areas include meetings, incentives, travels, conerences, exhibitions and

expositions, educational tours, event management and thematic tours. hese are all one

or other orms o organized inclusive package tours or group and individual travelers.

Moreover, the emerging sources o business include group inclusive tours (GI) and

independent package tours or FI.

he air ticketing business about 20 years ago in India may be compared with thepackage tour business today. Commissions rom the sale o domestic and outbound package



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tours constitute the main source o income o travel agents. An increasing number o travel

agents ocus on taking ranchise or GSA or dealing with packaging services or revenue

maximization.

In the present travel agency business environment, negotiation with airlines orhotels or the sale o airline seats and rooms in bulk has created a new type o agent i.e.

consolidators.

hese large consolidators are retailing individual element or group services with a

mark-up that helps the travel agents to increase the average sale and proits. Lower revenue

during the lean period can be balanced with the huge sale during peak period.

he emerging sources o revenue are generated rom MICE activities, travelcounseling, online booking and consultancy services to corporate houses. In the cut-throat

competition, specialized services are given much care so as to keep maintaining the level o

proit even during the o-season.

he amount o proit is a direct unction o a travel agent’s capacity to make

negotiations with the primary service providers or special rates or commissions or the

bulk sale. Figure illustrates about linkage o proit sharing through various transactions

between travel agents and tour operators and primary service providers.

Linkage of profit sharing between tour operators and primary service providers

Bookings, Cancellation, Revenues, Performances

Flight Times, tariffs, Availability, Commissions, Confirmations

Location, Room Availability, Rack Rates, Commission levels

Airlines

Tour

Operators

Hotels

Information

Revenues& Information

Revenues& Information

Information

Information

Revenue

Information & Commission

Travel

Agents



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here are varied sources o revenue o a travel agent and tour operator to maximize

given the capacity o resources. hese are the ollowing conventional as well as emerging

sources o revenue earnings in the travel agency and tour operation business.

ravel agents and tour operators cannot do away with the ticketing business eventhough airlines have curtailed the rate o commission. Some airlines have even abandoned

the traditional commission and reintroduced the lat commission on the total sale o

tickets. It is however proved that online travel agents cannot overpower the so called street

corner travel agents due the nature o travel and tour business. All online travel agents have

authorized travel agents to maximize the sale o tickets.

It is technically called B2B or business to business. Whether it is domestic or

international airline tickets or cruise line tickets or train tickets or bus tickets, the role otravel agents or tour operators in increasing the sale o these tickets cannot be ignored given

the reason o rising B2C business through internet. Out o all, cruise lines sell the individual

service like berth plus breakast or ull inclusive services through travel agents and tour

operators. For example, ly-drive package is promoted by travel agents and maximum sale

is achieved with the help o travel agents. Cruise lines oer commissions on the sale o

package and transer o commission is settled monthly or quarterly.

At the same time, airlines deal with IAA accredited travel agents or sale o tickets

with the provision o capping the commission between one and three per cent commission.

For the sale o train and bus tickets, travel agents charge service or transaction charge to

customers or reservation and cancellation o tickets. On the other hand, tour operators go

or bulk sale o hotel rooms, airline seats and cruise line berths or which heavy discounts

or special rates are provided by the primary service providers.

Commission from the Sale of Package Tour

Selling package tour has become an appealing business option or travel agents.

here is a growing demand or organized domestic, inbound and outbound package tours

rom branded travel companies. ravel agents sell package tours directly to customers on

the price printed on tour brochures. our operators or wholesalers appoint retail travel

agents to sell package tours on the basis o various terms and conditions.

For sale o package tours, tour operators oer 10 per cent commission on the total

sale o package tours along with incentives or making target sale. For example, homas

Cook and Raj ravels reach out customers at various small towns and cities through theirauthorized travel agents.



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Commission from Hotel Room Reservation

ravel agents generally ind the sale o hotel rooms or certain duration very lucrative

and attractive as compared to other sources o income. Even though online bookings are

made available directly or customers, all categories o accommodation operators alsoconsider the sale o rooms through retail travel agents very convenient and easible. Hotels

oer 10 per cent to 20 per cent commission or the sale o room along with special oers to

tour operators or the bulk sale o rooms and ree rooms to group leaders or executives o

travel agents.

Commission for Booking of Transport

Earning commission or reservation o ground transport is a traditional source thateach travel agent heavily depends while booking dierent types o transports or their own

clients. here are transport operators having hundreds o vehicles or running on hiring

purpose. our operators hire rom them or city sightseeing and excursion purposes.

ransport operators oer 10 per cent commission on the total transaction o booking o

transport service.

Profits from Organizing MICE Activities

ravel agents also organize MICE activities or business houses and companies.

Specialized event management companies deal with trade air, exhibitions, conerence,

conventions, congress, political rally, yoga camp and meetings o dierent scale and size.

he wholesalers o these activities promote directly and through retail travel agents.

Event management or destination management companies oer commission to

travel agents. For example, Creative ravel, New Delhi is a wholesale agent or a tour operator

known or its MICE business. For example, he HRG SIA generatesrevenues rom sale o

air tickets, sightseeing tours, hotel bookings, conerence hall bookings, exhibition bookings,

ground transport, and outbound tours.

India is one o the proitable wings o the Kuoni Group o ravel in India. It has

been working in partnership with the Hogg Robinson Group (HRG) since 2007.he group

is a 160-year old company with a global network across 89 countries known or its high

quality in delivering corporate services or multinational corporate houses and business

conglomerates. HRG SIA India handles about 500 multinational and Indian corporations.



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he portolio o services includes corporate travel management, sports, consulting,

expense management and events and meetings management. Its corporate travel division

provides outbound, destination management, business travel and visa services. he company

with its 15,000 employees has a total turnover o approximately $12 billion.

Commission from Transaction of Foreign Exchange

Many travel agents and tour operators obtain authorization rom Reserve Bank o

India (RBI) or selling and buying o oreign currency . At the same time, inbound tour

operators get authorization or receiving the payments in oreign currency or sale o

package tours oreign nationals whereas outbound tour operators make the payments in

oreign currency to hotels and ground transport operators.

hus, travel agents do the retailing o oreign currency directly to customers who

plan to travel abroad. ravel agencies also earn commission rom the wholesale oreign

exchange dealer or the transactions o oreign currencies. Most o the oreign exchange

dealers deal with US dollar, Great Britain Pound, Singapore Dollar, Australian Dollar, Euro,

Yen and Franc. Out o all the currencies, US dollar, Pound and Euro are largely transacted

or sale o inbound package tours in India.

Commission from Insurance

Insuring package tours is a part o general insurance. our operators take the

insurance services rom insurance companies or package tour and suggest the clients to

go or insurance policy covering medical aid on emergency. here are merits o taking

insurance policy while travelling on tour. Insurance companies oer commission on the

insurance policy.

Revenue from Bank Interests

his is an implicit ways o earning income. his source o income o travel agents

and tour operators must not be ignored as travel agents and tour operators receive advance

payments or booking hotel rooms, airline seats and berth in cruise lines, airline and train

tickets, hiring coach or light vehicles. he payments to all these agencies are made in a gap

between 15 days and three months. ravel agents and tour operators get time to rotate the

money or go or term deposits or which he can get interest or make the down payments or

borrowing loans rom banks.



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Credit and Debit Card

ravel agents take the payments through credit cards or debits as an importance

source o income as they get the commission rom banks. Many customers ind convenience

to make payments through credit cards when it is acceptable to both. he concept o travelnow and pay latter has gained more acceptances.

Financial Benefits of Travel Agency and Tour Operator

Given the nature o growth o travel agency sector, Makemyrip.com has brought

out a very big sensational development in India with the launch o online travel portal

rom the USA market to Indian market. It is a noticeable development in travel industry

with the rising numbers o users o internet or booking, cancellation, conirmation andinormation or hotel rooms, airline seats, bus tickets, package tours, train tickets, erry

tickets, theater tickets, etc. It is user riendly, economical and accessible or all. his has

resulted in increased access to websites o online travel intermediaries and service providers

or inormation, reservation and cancellation.

here is a concept namely “compensation mix”. It comprises commissions, overrides,

bonuses and other incentives like ree air tickets, hotel rooms and amily package. Eective

management o travel agency products needs the promotion and marketing strategies

to increase more sales and ensure customer satisaction. hus, travel agencies and tour

operating companies are largely beneited rom the expansion o online travel markets and

a shit o aith in online transactions o intangible services.

ravel agencies in terms o maximizing proits take the help o internet to create

several possible combinations o services or all segmented customers. For example, SOC

has the toll-ree number or helping inormation seekers to collect inormation rom auto-

generated voices or making reservations. It is the ways through creating loyal customers

and save the cost. It is certainly evident rom the trend that a supplier in tourism business

cannot dominate the target buyers without the toll ree number.

he cost or maintaining the toll-ree number is ar better than the cost o

advertisements. At the same time, travel agents provide brochures o package tour detailing

about the name o airline and hotel along with one-to-one assistance or helping customers

igure out the destinations. ravel agencies take all possible measures to reduce the costs

o operation o tour. One such example is travel insurance with which travel agents protect

them rom losses.



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Travel Agency Business Returns

As ar as the sources o proitability are concerned, travel agents usually make it

through more sales o services. here can be two ways o increasing the margin o proits.

One way is to increase the sale o each unit o service with minimum proit margins and otheralternative way is to provide unique services with premium price. It is however clear rom

the practices o travel agency business that the sources o proit or a global conglomerate

or a small travel agent with limited service do have not much variation.

Apart rom the IAA commission, travel agents earn commissions on other value-

added services such as the sale o oreign exchange, packaged tours, and hotel bookings.

However, such global conglomerates have low operating margins due to the high overhead

costs on salaries, administration and communications. hese are the ollowing sourceso commission that travel agencies receive rom the transaction o business. Sources and

appropriate percentage commission is presented in able.

Sources of Commission

Sl.No. Sources o Generating Commission Commission

1 Sale o Domestic Airlines ickets 1%

2 Sale o International Airlines ickets 1-3%3 Renting Luxury Coach 10%

4 Booking and Cancellation o Rail ickets ` 50- ` 100

5 Sale o Ferry ickets 10%

6 Sale o Cruise Line Package ours 10-20 %

7 Bookings Hotel Rooms and Venue or MICE 10–20%

8 Renting Cars 5–10%

9 Sale o Inbound and Outbound Package ours 10–20%

10 Sale o Amusement Park ickets 5 %

11 ravel Insurance 2%

12 ransaction o Foreign Currency 2%

Apart rom these conventional sources o commission, travel agencies also make

good amount o income rom the deposits o advance rom the saving bank and ixed

deposits.



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Threats in the Travel Agency Business

he distribution cost o airlines moves around 15 per cent to 19 per cent. raditional

airlines have adopted the reduction o distribution costs. Airlines have negotiated with the

GDS providers to reduce booking ees and decide the travel agency commissions rom IAA.

Airlines have almost closed the city booking oices or have moved to cheaper

locations. Airlines are increasing the FFP (requent lyers’ programmes) and share the web

site commonly with e-ticketing to reach customers directly. he airlines resorted to zero

per cent commission in order to cope with rising uel prices, competition, and other costs.

IAA accredited agents have aced a major setback o loss o revenue due to the

practice o zero commission IAA agents have resorted to the business process outsourcing(BPO) and other consultancy business. Another challenge is the huge initial investment

or running an IAA accredited agency. It should be to the tune o 20 lakh, and the agency

has to retain qualiied and trained personnel to deal with the are construction and issue

o tickets. A large number o employees are shiting rom more than 2000 IAA-accredited

agencies to BPOs. he sector will risk losing50,000 crore.

he ollowing risks need to be looked into in the travel agency business.

➢ Expensive car rentals

➢ Online booking

➢ Breakdown o rental duration

➢ Commission cuts or travel agents

➢ Service tax on oreign exchange payments

➢ Sta poaching

he travel agency has certain other risks while running the business. Besides the

internal risk actors like airlines commissions cut and online air ticketing, there are other

risk actors like seasonality concern, political instability, health and security, vehicle parking

concern, lack o sophisticated ground transportation, condition o roads, cancellation and

delay o light operations, lack o acilities and amenities at the airports, railway stations,

and destinations, environmental pollution, rising inlation, strike and demonstration, rising

uel price, lack o community support, natural calamity, and compensation are the major

socio-political risk actors.



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Summary

he small travel agencies have a much lower cost base. hey share the commission with

the clients. ravel agencies ocus on areas like ticketing (air, train, and cruise), domestic hotel

bookings, coach reservations, car rentals, package tours, conerences, meeting arrangements,and trade airs or earning revenue. In the present time, the maximum revenue o travel

agencies is generated rom car rentals and package tour commissions. Many travel agencies

in the small cities have ocused on the outbound and domestic package tour business or

higher commissions. our operator acts as wholesalers and they do not generally work on

the commission rather they work on bulk discounts or lower sale o all principal services.

For example, tour operators buy the hotel rooms in bulk in a peak season or sign contract

with hotels or the sale o rooms or which provision or special rates along with discounts

are decided across the table.

****



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Lesson 2.4-Diversification of Travel Agency and Tour Operation Business

Learning Objectives


➢ Understand the need or diversiication o business

➢ Find dierent areas o diversiication or earning more revenue

➢ Explain the strategies to manage and maintain diversiication

➢ Know the beneits o diversiications

Introduction

he traditional travel agents and tour operators are no longer limited to the periphery

o business with the ticketing, hotel bookings, package retailing, etc. hey have switched

over to the new upcoming business areas like insurance, corporate travel, oreign exchange,

cargo and MICE. Airlines have stopped paying ixed commissions to the travel agents

or the sale o tickets. Revenue rom the sale o airline tickets constituted major chunk o

revenue o travel agents and it has become a non-entity in the revenue o travel agency.

Hundreds o IAA-accredited travel agents were orced to shut down the ticketing business

and majority o them have moved to some other business. his lesson will help you give

clear understandings on how the modern travel agents and tour operators have ventured

into the diversiied businesses.

Need for Diversifications

ravel agency is an organized sector in the tourism business worldwide. ravel has

become easier and more enjoyable with the innovative methods o providing personalized

services to the customers. he role o modern travel agency and tour operation units has

also become increasingly important or business and leisure tourists when the expansion o

international trade and commerce is extremely rapid. he travel agent is a trade intermediary

in the tourism distribution channel to sell the products o principal service providers.

ravel can be leisure, holiday, pleasure, recreation, relaxation, and business. Allthose need systematic planning and scheduling through tour operators. In doing so, travel



98

agencies connect the customers with the hotels, motels, airlines, transporters, cruise liners,

and caterers. Many individual wealth tourists do not make their own travel arrangements

and they take the help o proessional travel agents. People can directly collect data about

destinations, acilities, services, price, schedule o services, mode o payment, compensation,

etc with the advancements in communication and inormation technology.

Many travel obstacles have been removed. It is longer an unsae, burdensome and

unconirmed travel. Customers generally book services over the telephone or Internet or

which online money transer is done to conirm the bookings o airline seats, train berths

and hotel rooms. his is a convenient method o organizing the vacation trip through travel

agents or tour operators. ravel agency business has solved many travel related problems.

It is now the easiest way o making travel arrangements and making the journey, tour and

stays enjoyable and memorable. In this context, the dependence would be obviously morewhen the travel agents provide complete travel solutions to the customers. It is important to

branch out the business or proit maximization.

Significance of Diversifications

A travel agency is a retail business entity to sell travel related products and services

to customers. It acts as an intermediary to deliver services o the principal suppliers. Most

travel agencies open independent department or making the corporate travel arrangements.

For example the general sales agents (GSA)also diversiy the business with the wholesale

authorization o airlines, cruise line or hotels. he most signiicant area o business is the

package holiday, car rental, hotel bookings, travel insurance, oreign exchange and MICE.

he main objective o diversiication is to increase the volume o business and immunity.

For example, Air India sells the tickets through its travel distribution chain.

It is the Global Distribution System (GDS) that helps in booking the complex air

tickets. he most popular GDS are Amadeus, Galileo, Abacus, Sabre, and world Span. he

GDS works on the VPN (virtual private network) and connects the computers o passenger

sales agents with the reservation systems o dierent airlines. he payment through the

billing settlement plan o IAA is also done through online. ravel agents and the GDS

have shared a symbiotic relationship or the past two decades. he travel agency and tour

operators establish linkage between tourists and the tour wholesalers, hotels, and airlines.

Special Incentive Travel Division

In the era o globalization, many companies promote the incentive travel as animportant source to attract and retain employees through exotic holiday trips. ravel



99

incentive programme includes the development o intra-company communications, sales

promotion campaigns and establishment o quotas. Compensation on the sale o travel

services such as transportation and hotel or a ull-service company is usually received

in the orm o proessional ees, expenses, and normal commissions. For example, a small

incentive and meeting planner concentrates on the sale o some important elements o apackage tour.

he modern travel agents have entered into the incentive travel business. It is as old

as the concept o paid holidays during the industrial revolution in 18th and 19th century.

Incentive travel is a popular concept in the corporate sector. ravel agents and tour operators

now diversiy the business towards the incentive travel o corporate employees.

he corporate houses sponsor the travel as motivational incentives or their employeesor which the authorized tour operators are appointed to deal with the arrangements o all

inclusive packages. Incentivized packages are oered by proessional travel companies to

assist sponsored companies with designing, promoting and executing programmes. ravel

wholesalers sell the customized or ready-made group package tours to corporate houses

like AA, Vedanta and NALCO. In some cases, the wholesalers sell tour packages directly

to companies as retailers when they have branch oices in the city in which companies are

located.

Travel Insurance

ravel insurance covers against unexpected events during the tour. It may occur as

many things do not have in the control o human beings. Problems during the tour can be

as small as a biting an insect to as big as acing atal accidents. ravel insurance can help

in overcoming all these problems. It may catch an inection or a delay in light, a hijack

or an emergency medical assistance required. hese hassles disrupt travel plan and put an

individual in a critical condition.

ravel insurance covers or a limited number o days and up to a limited sum.

raveller can align both these with the duration o travel and the costs o valuables carrying.

he duration can also be extended during the trip. Most o the insurers have a hospital

network associated with them through which they provide cashless hospitalization.

ravel insurance is insurance that is intended to cover medical expenses, inancial

deault o travel suppliers, and other losses incurred while traveling, either within one’s own

country, or internationally. emporary travel insurance can usually be arranged at the timeo the booking o a trip to cover exactly the duration o that trip, or a multi-trip policy can



100

cover an unlimited number o trips within a set time rame. Coverage varies, and can be

purchased to include higher risk items such as Winter sports.

ravel insurance protects tourists against personal and baggage loss. Insurance is

the subject matter o solicitation and travel related insurance products are high on serviceexcellence with world-wide coverage and are a great value or money. here are dierent

types o insurance schemes. For example, the CI has an understanding with AA AIG

to take care o insurance o clients during package tours. ravel care is a policy to provide

protection to individual tourists and this scheme is meant or classic, executive, and

premium package tours. he ollowing are acilities covered under the insurance schemes:

➢ No medical tests are required

➢ Settlement o claim within seven days ater completion o the claims procedure

➢ Issuance o policy within minutes

➢ Covers persons in the age group o six months to 70 years

➢ Covers trip duration rom 1 to 90 days

➢ Medical emergency assistance

➢ Direct settlement o in-hospital medical expenses abroad

➢ Arrangement o hospital admissions

➢ Arrangement or emergency medical evacuation and repatriation ➢ Emergency travel services

➢ Embassy reerral services

➢ Claims procedures inormation services.

MICE

he International MICE

MICE market in India is growing. More people are travelling to India or business

since the opening o Indian economy in 1991. Even the India ourism oices overseas put

a greater emphasis now on to promote MICE segment over leisure as this ensures volume

and increased revenue. It is estimated that 25% o the overall tourist arrivals in India could

be rom MICE segment.

he Government has provided some assistance to the MICE industry through

inancial help in preparing bids or international events. Some State Governments are alsohelping to set up convention centres near the large metro cities. Industry players are coming



101

together to collectively work or promoting India as a preerred MICE destination or the

discerning international traveller.

he changing economic scenario however, with India and China as the two leading

global economies, has highlighted India or the commercial and business potential it oers.raditionally, Europe and North America were the conerence destinations. In the last 2-3

decades have seen the emergence o Asia as a preerred venue, and there is an upward surge

in India’s MICE industry.

India now ranks 22nd in the world and 5th in Asia, in terms o revenue generated by

the MICE industry. here are many cities across India that oer conerence venues – New

Delhi, Hyderabad, Mumbai, Pune, Jaipur, Bengaluru, Chennai, Agra, Kolkata, Goa.

Many o these cities have new convention centres or hotels that can comortably

host medium to large conerences- notable are the Birla CC-Chennai, BIEC-Bangalore,

BEC Mumbai, the HIEX Hyderabad, and Lavasa- Pune. Other cities like Delhi, Goa, and

Kochi have venues which are hotels that have excellent acilities or hosting conerences,

including halls, conerence rooms, hotel rooms, exhibition area, on-site catering and audio/

visual acilities.

here is no hard and ast rule to ollow how to attract MICE clients. he essential

is to orm a proper team with Airlines, Hotels, ransport People, Cultural organizations,

boutiques and reach to the target markets MNC’s who have MICE business clients and

showcase the products and travel agency are already in contact with all o them.

Direct marketing pays more result than just advertisements. Mice promoters gener-

ally target banks, automobiles & aviation industry, consumer durables construction organi-

zation, Rail bodies, pharmaceuticals, departmental store chains, and I. companies- hey

have year round MICE business to oer. Reach with competitive packages or business trav-

ellers & reach major cities is the success norm. he products should be out o the ordinary.

With higher margin in this type o market, our tour operators are now actively

pursuing these segment clients oering Island holidays, goling holidays, Farm House / ea

Garden tours etc. as unique experience. o promote MICE segment in a big way where there

is regular exposure o the convention acilities, bidding etc. which are being done through

Indian Convention Promotion Bureau.( I.C.P.B.)

hey are also present at various MICE events overseas as a team with specialized touroperators and event management team. Hotels have special team or MICE marketing. Also



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airlines are now conscious o this segment that can provide business even during economic

downturn as business people need to travel all the year round.

India has always been a unique conerence destination with its vast array o scenic,

heritage, art and crats, architecture, nature and wildlie, cultural, culinary, spiritual andtherapeutic attractions. Creativity and the rich cultural heritage help in conceptualising

unique events that are truly unique and one-o-a-kind socialising with erstwhile. Royalty in

their palaces, participating in an actual Indian wedding, yoga and meditation, therapeutic

sessions are some o the out-o-box events that can be planned and executed. he traditional

warmth and hospitality, the colours and pageantry, the richness and diversity makes India

very attractive or international conerences.

Foreign Exchange

Forex is the biggest inancial market in the world. It is a source o income to many

traders and banks o the world. It is not tied to any stock exchanges in the world. In act,

it is over-the-counter (OC) market. It helps international trade and investment. Market

participants have also been provided with greater lexibility to undertake oreign exchange

operations and manage their risks. his has been acilitated through simpliication o

procedures and availability o several new instruments.

he oreign exchange market in India started in earnest less than three decades ago

when in 1978 the government allowed banks to trade oreign exchange with one another.

oday over 70% o the trading in oreign exchange continues to take place in the inter-bank

market. he market consists o over 90 Authorized Dealers who transact currency among

themselves and come out “square” or without exposure at the end o the trading day.

It is the mechanism by which the currencies are related to each other. he values o

dierent currencies are determined in the oreign exchange market. An individual or an

institution, anybody can trade in currencies. he trade takes place in pairs i.e. one currency

is purchased and other is sold in a simultaneous transaction. he rate at which the trade

takes place, i.e. exchange rate is determined on the basis o interaction o market orces

dealing with supply and demand.

he oreign exchange market is a place where the major eight currencies o the world

are traded through dierent inancial instruments at dierent types o the rates. his market

is the most liquid market in the world which operates 24 hours a day except on weekends.

he major participants in the market are banks, irms and companies, individuals (throughbrokers), central banks, non banking inancial institutions, oreign exchange companies,



103

etc. who trade in dierent inancial instruments like options, orward contracts, utures,

swaps and spot transactions.

Courier Service

he EDS (Express Delivery Sector) industry provides services that include integrated

door-to-door transport and quick delivery o time-deinite shipments o documents,

samples, parcels, etc.

Although it generally acilitates transportation o documents, samples, gits and other

high-valued time-bound items, the requirement o ast delivery oten overrules the weight

limits or the size o consignment shows the dierent stages o the express delivery – rom

collection o consignment rom customer in one country (or example, India) to deliveryto customer in a dierent country (or example, the United Kingdom). One o the key

eatures o this industry is that it handles custom clearances and reduces the requirements

o multiple agents such as reight orwarders and customs house clearance agents.

Globalisation, liberalisation and increase in cross-border trade and investment lows

have contributed to its growth. With the development o the global supply chain, corporations

across the world are now optimising costs and maximising eiciency by ocusing on their

core business activities and outsourcing noncore activities like transportation and delivery

to specialised service providers such as EDS companies.

he EDS/courier industry in India has undergone signiicant changes. Family-owned

courier businesses have grown and developed into EDS companies providing integrated

services.

here have been a number o mergers, acquisitions and tie-ups, which has resulted

in some consolidation. Nevertheless, the express/courier industry in India is still highly

ragmented with a wide variety o companies oering dierent kinds o services.

here are our main categories o express/courier companies in India, apart rom

India Post, which also oers express mail services. hese include the global integrators, the

large Indian companies, regional players and small courier companies.he express industry

is time-sensitive and, thereore, unlike logistics/reight orwarders etc. rarely use maritime

transport services that carry the bulk o international cargo.

Within transport, road transport is an important means or delivery o parcels andother items within the country and between countries in geographical proximity to each



104

other. Access to road transport acilities within a country and ability to operate trucks, vans

etc; aect the ability o a Foreign Service provider to provide courier/express services.

Coffee Shops

Some agencies begin to oer other services, and a very recent example has been the

launch o Caé de Voyage in Milton Keynes, where the growing public trend towards using

coee shops has been matched with the opportunity to oer a higher level o customer

service (including a ree cup o coee) to dierentiate this particular travel agency’s product

oer rom that o the major multiples.

SMS Marketing

SMS marketing is an eective strategy or service businesses to connect with their

clients with the aim o improving sales. Service based businesses require a high level o

personal connection.

Short Message Service (SMS)

Short Message Service (SMS) is a communication tool that provides a convenient

means or people to communicate with each other using text messages via mobile devices

or Internet connected computers. Solutions or e-Marketers are available to deliver bulk

o SMS messages to large group o people, instead o sending SMS messages one by one

manually.

Other utilities can collect phone numbers rom imported text iles or contact

inormation stored in mobile phones. here is a good number o text messaging marketing

campaigns businesses that travel agency can use or increasing their client or giving the

SMS marketing services to their business client. he most eective ones are given below:

SMS Alerts

hrough the SMS alerts, the business is able to contact their clients through text

message alerts. hese alerts assist the clients to stay inormed about the company products

or services, news, sales and virtually any other inormation that the company would want

to share with its clients. For instance, Sender can send an SMS reminding them when they

should book their next appointment or when they should expect a discount oer.



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Text to Screen

As the clients are engaging with the service, the travel agency can create additional

attraction by encourage them to text their opinions, recommendations and suggestions.

his approach is particularly eective when trying to analyze and understand the behav-iour o consumers. his is an interactive and exciting method in which clients are able to

participate.

Text to Win

he text to win campaign is also very exciting. he clients are encouraged to text a

keyword or phrase to the SMS short code o the campaign in order to win something. he

prize should be alluring enough to encourage enough participation rom the clients.

Mobile Coupons

Utilize the mobile coupons with the aim o retaining the clients. One major advantage

o the mobile coupons is that they are very simple to set up and quick to send out. hey

work instantly and are very eective when sales are slow. By simply sending out the mobile

coupons, clients will begin lining up or your service.

ext message orm o marketing is an eective promotional tool or service business.

As its set up is simple and it can be implemented very ast at low costs, the travel agency can

easily start. here are very many dierent kinds o campaign types to select rom. hose in

the service industry can greatly beneit rom this orm o marketing.

Miscellaneous Services

A travel agent is a one stop solution to add eiciency to proessional destination

management services and a host o leisure activities ( It caters to all aspects o conerences,

business meetings, event management meets, seminars, exhibitions, and launch o new

products and incentives. Every event is customized to suit the speciic requirements o the

customers.

All details are handled with utmost care right rom the pre- and post-event prepara-

tions to settlement. Miscellaneous services are required when agents deal with corporate

and leisure travel. For example, document services, transer, and pickup services, reconir-

mation o hotel rooms and airline seats, participation in amiliarization tour, contributionto ecology and environment conservation, and participation in the tourism development.



106

For example, multinational travel agencies like Cox & Kings oer brilliant business travel

options to diverse groups, individuals, and corporate incentive travel packages.

hese travel agencies set a high target or their trade air divisions and have much

simpliied business travel to acilitate clients to promote their products across the globalmarkets through international trade airs. In the trade air packages, the overseas business

delegation visits through industry associations, councils, and commercial chambers.

Indian meals, city tours and, technical add-ons, such as actory visits and buyer-

seller meets, are included in the package. For example, the trade airs division o Cox &

Kings is an extremely eicient and specialized division that ensures meticulous planning

or conirmation o hotel rooms, Indian meals, city tours, and buyer–supplier meets.

Diversification Strategies

Diversiication strategies are used to spread out irms’ operations by adding

markets, products, services, or stages o production to the existing business. he intention

o diversiication is to allow the company to enter lines o business that are dierent rom

current operations. When the new venture is strategically related to the existing lines o

business, it is called concentric diversiication and when there is no common thread o

strategic it or relationship between the new and old lines o business are unrelated it is

called conglomerate diversiication.

When a tourism irm is selling an existing product that it currently oers to an

existing market that it already serves, it is pursuing a market penetration strategy. echniques

designed to increase sales will result in deeper market penetration, thus increasing market

share. his can be done in one o two ways.

First, market penetration reers to selling more o the tourist product to the existing

customer base. Market penetration can be accomplished either by increasing the size o the

contents or amounts that the customer buys, such as airlines using loyalty schemes, or by

increasing their usage rate.

Secondly , the irm may choose to go with a tourist-market –broadening strategy.

his means increasing the number o target customers within the same existing tourist

market. New customers are hard to come by when you consider that this usually requires

converting them rom the tourist brand that they normally purchase.



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Horizontal Diversification

Horizontal diversiication means to diversiy into new tourist products, but targeting

the existing customer base as the potential customer base as the potential customer. Oten

irms eel that they have established a brand loyalty with current customers or a certainknowledge o their markets which allows them to introduced new products. For example:

I a travel agent, who normally books holidays, diversiies by purchasing a company selling

travel insurance. he travel agent is serving those same customers, but in a new manner.

Horizontal diversiication can be distinguished rom horizontal integration by the

newness o the tourist product to the irm. For example: I the travel agent had purchased

a competing travel agency it would have been as an example o horizontal integration. he

advantages o horizontal diversiication are distinct.

First, the tourism irm is oering an additional product to a current customer

base, so not as much eort has to be expended to locate new customers. Secondly , i the

tourism irm already has signiicant knowledge o or amiliarity with the customer base’s

buying habits, then they can be more eicient in the ways that they serve them. But a major

disadvantage o horizontal diversiication schemes.

In act, it may have exposed itsel to even greater risk by investing even more in the

same tourism market. In the example, i the travel industry endured a serious downturn,

then the irm would suer potential losses rom both the travel agent side and the travel

insurance side.

Concentric Diversification

Concentric diversiication entails the introduction o a new tourist product to a new

but related market. By related we mean that the tourist market must be somewhat similar to

the irm’s existing market in either a marketing sense (e.g. - customers demographics needs)

or an operational sense.

Concentric diversiication occurs when a irm adds related products or markets. he

goal o such diversiication is to achieve strategic it. Strategic it allows an organization to

achieve synergy. In essence, synergy is the ability o two or more parts o an organization

to achieve greater total eectiveness together than would be experienced i the eorts o

the independent parts were summed. Synergy may be achieved by combining irms with

complementary marketing, inancial, operating, or management eorts.



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Conglomerate Diversification

Conglomerate diversiication is also known as lateral diversiication. It involves

marketing o tourist products. his is not a usual method o expanding the business. It occurs

when a travel agency or tour operator diversiies into new areas o business. he primarypurpose o conglomerate diversi ication is to ensure proitability. It can be possible with the

help o synergetic approach. his can be achieved through the application o management

expertise or inancial resources. Attention is given to use diversiication strategy in

marketing travel products or production o synergy with conglomerate diversiication.

Summary

he traditional travel agents and tour operators do not have more options and theyonly ocused on the ticketing, hotel bookings, package retailing, etc. In the competitive

environment, emerging business areas like insurance, corporate travel, oreign exchange,

cargo and MICE. Airlines have stopped paying ixed commissions to the travel agents or

the sale o tickets give more revenue as compared to the conventional sources o income.

Revenue rom the sale o airline tickets has become zero in the revenue o travel agency. At

the same time, IAA-accredited agents do not resort to the sale o tickets rather they go or

diversiications. It is quite risky to resort to the conglomerate diversiication strategy as it

may increase the problems in the administrative unctioning associated with operating o

unrelated businesses. Managers rom dierent divisions may have dierent backgrounds

and may be unable to work together eectively. Competition between strategic business

units or resources may entail shiting resources away rom one division to another. Such a

move may create rivalry and administrative problems between the units.

****



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Lesson 2.5 - Travel Documentation and IATA Accreditation and Recognition

from Government

Learning Objectives


➢ Understand various types o travel documents;

➢ Explain the meaning and requirements o each travel document;

➢ Know the processing o travel documents; and

➢ Understand the need or accreditation and government recognition

➢ Know the procedures o accreditation and recognition

Each tourist must carry the valid travel documents while travelling into oreign

countries or restricted areas in their own countries. he processing o travel documents

involves some technical ormalities that generally take time or travel agents to get them

issued on behal o clients or customers. ravel agents are authorized to deal with travel

documents with authorized money exchangers, oreign consulate oices, passport oices,

income tax oices, insurance oice etc. ravel documentations are processed or clients and

customers beore their conirmation or purchasing package tour. here was not a separate

department to arrange the necessary travel documents in the travel agency.

Now, travel documents include passport, visa, currency certiicate or endorsement

o currency in the passport, travel insurance, income tax statements, health certiicates, etc.

ravel agents should have experienced sta to handle the travel documents. It is essentiallyimportant or group travel that issuance o all travel documents must be done much beore

the starting o tour. ravel agents or tour operators collect processing ees and it now

constitutes an important source o revenue. his lesson will present the processing o travel

documents as an important unction o travel agents and tour operators.

Passport

A passport is a document, issued by a national government or the purpose o theidentity and nationality o its citizens. It is used or obtaining visa or international travel.



110

A passport contains the name, date o birth, sex and place o birth. A passport normally

entitles the passport holder to present or identiication and return to the country. Rights to

consular protection arise rom international agreements and the right to return arises rom

the laws o the issuing country.

A passport is issued to a person aresh. A passport is issued aresh in case o expiry

o the old passport. he procedures remain same as it is or applying irst time.

he Passport is given through the Consular Passport and Visa Division (CPV) o the

Ministry o External Aairs, there are about 35 locations in India rom where passports are

issued and around 160 Indian missions abroad.

Types of Passport

here are three types o passport. hese are as ollows;

Regular Passport

It is issued or normal travel purposes such as business or vacation. he colour o the

passport cover is Navy Blue.

Diplomatic Passport

It is issued especially or Indian diplomats and top ranking government oicers or

visiting overseas or oicial tours. he colour o this passport cover is Maroon.

Official Passport

It is issued to those Indian who represent the government or oicial or business

purposes. he colour o this passport cover is White.

Passports and travel documents remain to be invalid to certain countries

As per the issue o Notiication by the Central Government, a oreign country is one

which is involved external aggression against India or is assisting other country committing

external aggression against India; or a country where armed hostilities are in progress.

ravel to those countries must be restricted in the public interest because such travel would

seriously impair the conduct o oreign aairs o the Government o India.



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Procedures to Apply for Passport

he passport can be applied in the Passport oice or the District Passport Centers.

he applicant can also apply online or issuance o passport. he application must be illed

online and registered. his application orm must be illed by hand. he application ormalong with the ee, passport size photographs and other documents must be submitted at

the passport oice. he date and time to reach the passport oice or applying must be

urnished while registering the same online.

Enclosure of Documents for Issue of Passport

For the adult o general categories ` 1,000/- shall be deposited along with the orm

towards the processing ee o passport.

a) o be Filled-in Form 1

b) o be Filled-in two personal particulars orms. I the applicant stays more than one

address during the last one year, ill-in those many set o personal particular orms 1.

c) o be urnished the proo o residence. One must submit one more proo o residence

i only ration card is provided.

d) he Birth Certiicate must be issued rom the Competent Authority (Born ater 26-

01-1989) and must be urnished along with the orm.

e) he proo o 10th pass certiicate must be enclosed or Emigration Certiicate Not-

Required (ECNR).

I the applicant is a Government/Public Sector Undertaking/Statutory Body

Employee, they must provide two additional documents: Identity Certificate and Notarized

Affidavit.

Issue of Passport under the Tatkaal Scheme

` 1,500/- must be deposited in addition to the normal ee ` 1000/ i it is to be issued

with 1-7 days. An additional ` 1,000/- must be deposited in addition to normal ee i

passport is to be issued within 8-14 days.

For Children of General Categories Fees

I a child is less than 15 years, the amount o ee is is ` 600/-and i more than 15 years

it is ` 1,000/ up to 18 years +



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Documents required as mentioned above from (a) to (d) and

e) he copy o the parents’ passport copies (irst 4 pages and last 4 pages).

) Documents o marital status o parents.

Regulations applicable to foreigners in India

he extant Acts dealing with entry, stay and exit o oreigner nationals in the country are:

i) Passport (Entry into India) Act, 1920.

ii) Foreigners Act, 1946.

iii) Registration o Foreigners Act, 1939.

Arrival formalities

Every person entering India by air, land or sea is required to complete the

disembarkation or embarkation card (D/E card) Perorma as given in Form ‘D’ o Registration

o Foreigners Rules, 1992.

Residential Permit

Residential permit is issued at the time o registration. Permits validity and the

period o stay are speciied in the visa. For extension o the Residential Permit, application

should be submitted at least two months beore its expiry to the nearest Registration Oicer

in the prescribed orm.

Departure Formalities

Every registered oreigner who is about to depart inally rom India shall surrendertheir certiicates o registration either to the Registration Oicer o the place where the

oreigner is registered, or o the place rom where intends to depart, or to the Immigration

Oicer at the port or check post o exit rom India.

I the certiicate is surrendered to any authority other than the Immigration Oicer

o the post or check post o exit, a receipt indicating such surrender o the document may

be obtained and shown to the Immigration Oicer.



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Visa- A Key Travel Document

A visa is a certiicate prepared by the immigration oicials o the oreign country

with stamp marked on a passport ater veriying the person’s credentials. It gives the person

the right to enter a country and stay or a temporary period. Applying or visa to India mustbe submitted to the High Commission o India in the country o the person who wishes

to travel to India. A oreigner coming to India requires a passport and an Indian visa. he

oice o High Commission decides the duration o the visa. he applicant may either go in

person or apply through post. It is the Consular Passport and Visa Division (CPV) o the

Ministry o External Aairs that issues the visa to the oreigners.

Procedures to Apply for Visa

he applicant may either go in person or apply through the post. he Visa to India is

applied to the High Commission o India in the country o the person who wishes to travel

to India. Non-resident Indians (NRI) and Persons o Indian Origin (PIO) do not require a

visa to enter India i they possess an Overseas Indian Citizenship (OCI) or a PIO card. his

card gives them the reedom to visit India at any time throughout their lie. hose NRIs and

PIOs do not have this OCI or PIO card can apply or a Visa through the normal procedure.

Visa Guidelines

Following documents are required to be submitted or visa:

1. Filled-in visa application Form

2. Additional visa application orm to be illed up by Foreign Passport Holders

(i) Visa application orm must be illed correctly. Incomplete applications and

applications with wrong inormation shall not be processed.

(ii) Name and other relevant particulars must be illed in as per the details in the

passport.

3. Passport: It should have a minimum validity o six months on the date o application

with at least two blank pages.

4. Photographs: Latest two identical passport size (4”x4”) photographs (black/white or

color) depicting ront post against light background.

5. Supporting documents: he visa application should be accompanied with supportingdocuments on type o visa applied or.



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6. Visa Fee: here is dierent ee schedule or the amount o ee, or the dierent type

o visa. Visa ee is accepted only in cash.

Category of Visas

Gratis Visa

It is granted to diplomats and oicials or UN oicials travelling on duty or those

travelling to India on invitation o Government o India as its guest. Gratis visa is also

granted to those who travel on the scholarship under Cultural Exchange Programmes.

Diplomatic/Official/UN Official Visa

It is granted to Diplomats or Oicials assigned to their countries Missions/Posts

in India or Diplomatic or Oicial or UN passport holders working in UN or international

organizations located in India and their spouses or children holding any type o passport

are granted diplomatic or oicial visas

Transit Visa

It is issued to a person who wishes to travel through India to reach another

destination. he applicant should possess an air ticket or onward journey to a destination

beyond India.A transit visa isvalid or up to 15 days and up to two entries. It is issued to

oreign nationals passing through India on their way to another country.

Entry Visa

It is issued to a Person o India Origin (PIO), oreign spouse o Indian national and

to spouse or children o oreigners holding any type o visa other than tourist/transit visa.

Tourist Visa

It is issued to oreigners who do not have a residence or occupation in India and

whose sole objective o visiting India is recreation, sightseeing, casual visit to meet riends

and relatives etc.

(i) Indian Missions or Posts abroad may issue multiple entry tourist visas or a

maximum period o ten years to US nationals and ive years to UK nationals, withthe stipulation that stay during each visit shall not exceed 180 days i desire to stay



115

or more, then should register with the concerned FRRO/FRO within 180 days o

arrival.

(ii) Indian Missions/Posts abroad may issue multiple entry tourist visas or a maximum

period o ive years to nationals o Argentina, Belgium, Brazil, Chile, Finland,

France, Germany, Iceland, Japan, Luxembourg, Mexico, Netherlands, New Zealand,

Norway, South Korea, Spain, Switzerland and Vietnam with the condition that stay

during each visit shall not exceed 90 days.

(iii) In respect o oreigners holding multiple-entry tourist visas valid or 5/10 years,

there should be a gap o at least two months between two successive visits, the

condition o two month’s gap can be waived. In all such cases, the oreign national

should register with the FRRO/FRO concerned within 14 days o arrival.

(iv) ourist visa is neither extendable nor convertible into other type o visa except, in

very exceptional circumstances.

Employment Visa

his type o visas is valid or one year at a time and is granted to oreigners provided

the oreigner is a skilled and qualiied proessional, engaged by a company, organization,

or undertaking in India on contract or employment basis at a senior level, skilled position

such as technical expert, senior executive, or in a managerial position. Proo o employmentin the orm o employment contract like an appointment letter, contract letter, applicant’s

resume and proo that the organization is registered in India are required. Duration o

visa would depend on the period o the contract and grant o visa under this category are

decided on case to case basis.

Project Visa

Project visa is a sub-set o employment visa and is granted to oreigners employed

or executing Steel and Power Sector Projects.

Student Visa

Student visa is granted to a oreigner coming to India to pursue a course o regular

and ulltime academic studies in a recognized institution. It is valid up to ive years or

duration o course (whichever is less). he applicant should urnish proo o admission in a

recognized/reputed educational institution and evidence o inancial support.



116

Journalist Visa

Journalist visa is issued to proessional journalists, press-persons, ilm-persons

other than commercial etc, and similar personnel in the ield o inormation such as travel

writing, travel journalism, travel promotion or photography, travel television production,and those who write on ashion, costumes and sports. It is normally valid or up to six

months

Business Visa

It is granted by Missions or Posts to oreign business persons to set up industrial/

business venture or to explore possibilities to set up industrial or business venture in India

or to buy or sell the industrial or commercial products. Proo o inancial standing andexpertise in the ield o intended business must be produced. It is valid or up to ive years.

Missionary Visa

A Missionary Visa is issued to the person who visits India or religious reasons.

he visa is single entry visa. Visa to oreign missionaries, other than those holding no-

objection certiicate to return to India or endorsements, are granted only ater clearance by

respective Ministry or Department in India.

Mountaineering Visa

Visa or mountaineering expeditions is granted only ater clearance by concerned

authorities in India.

Conference/Seminar Visa

his type o visas is granted to oreign delegates to international conerences, semi-

nars etc conducted by Government bodies, Public Sector Undertakings or Government-

aided bodies and NGOs provided necessary clearance by the Nodal Ministries or Depart-

ments o the Government o India/State Governments is sought.

Research Visa

Missions or Posts may grant Research Visa depending upon recognition o the

research institution and eligibility o the applicant, except scholars o certain nationalitiesor/and where research work involves visits to Restricted or Protected areas in India or areas



117

aected by terrorism, militancy and extremism etc. It is valid up to three years or duration

o research project, whichever is earlier. he person is required to apply or this visa six

weeks prior to the date o travel.

Medical & Medical Attendant Visa

Indian Mission or Posts abroad may issue Medical Visa (MED) to oreign nationals

visiting India or medical treatment in recognized specialized hospitals or treatment centres

in India. Visa is permissible or treatment under Indian system o Medicine also. It is valid

or one year or the period o treatment, whichever is less. Attendants/amily members o

patients or medical treatment shall also be granted Medical Attendant visa (MEDX) co-

terminus with the Medical visa o the patient. Attendants should be spouse or children or

those having blood relations with the patient only two attendants are allowed.

Universal Visa

Universal visa is a multipurpose lie-long visa which Indian Missions and Posts

abroad or the Ministry o Home Aairs may grant to Foreigners holding Overseas Citizens o

India (OCI) card. he holder o universal visa can study, do business or take up employment

in India and is exempted rom the requirement o registration with FRRO/Police authorities

or any length o stay in India.

ypes o visa and their abbreviations are presented in able

ypes o Visa

Sl.No. Type of visa Abbreviation

1 Diplomat D

2 Oicial O

3 UN Oicial UD

4 ransit R

5 Entry X

6 ourist

7 Employment E

8 Project P

9 Student S

10 Journalist J



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11 Business B

12 Missionary M

13 Mountaineering X

14 Conerence/ Seminar/Meeting

C

15 Research R

16 Medical MED

17 Medical Attendant MEDX

18 Universal U

Registration

Foreigners entering India on Student visa, Employment visa, Research visa and

Missionary visa are permitted to stay more than 180 days and they are required to get

themselves registered with the respective Foreigners Registration Oice within 14 days o

their arrival in India. Foreigners holding any other type o visa valid or more than 180 days

do not require registration i the period o their stay in India on each visit is less than 180

days. However, they must register themselves within 180 days o arrival i the period o their

continuous stay exceeds 180 days.

Children below 16 Years

As per the Registration o Foreigners (Exemption) Order, 1957, children below the

age o 16 years are exempted rom the requirement o registration. Each stay must not to

exceed 180 days, hence no registration is required.

Transfer of Visa

For transerring an Indian visa rom an old passport to a new passport, the regular

visa application orm with 2 photographs is required along with a ee o NIS 30. A person

can also travel on a valid visa on an expired passport i the visa has not been cancelled. In

such a case, the person must carry the new passport as well as the old passport.

Foreigners Registration Oicers in India are located in New Delhi, Mumbai, Chennai,

Amritsar and Kolkata. At other places, the Superintendents o Police (SP) o the Districts

are Registration Oicers or Foreigners.



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Surrender of Certificate of Registration

he Registration Oicer would issue a Certiicate o Registration. he oreigner

should surrender these certiicates at the oice where they are registered or o the place

where they intend to depart or to the immigration oicer at the port/check post o exit romIndia. I the certiicate is surrendered to other than the immigration oicer at the port/

check post o exit, the oreigners should produce the receipt indicating such surrender o

the document to the immigration oicer at the post/check post or exit.

he ollowing types o India visa are issued to oreign nationals in accordance with

the purpose o their visit. Details o requisite documentation may please be accessed at the

website o concerned Mission/Post or Ministry o Home Aairs, New Delhi. he details o

visa provision are presented in able

Visa Provision

Type of VisaPeriod for

which granted

Entry – Single (S),

Multiple (M), Double

Documents required

with application

Extendable

in India

Tourist 180 days M - No

Transit 15 days S/ DoubleReturn/ onward journey

ticketNo

Business 5 years M

Documents to prove

bonafde purpose

(Company’s letter etc.)

Yes

Employment1 year/ period

of contractM

Proof of employment

(appointment document),

terms and conditions

Yes

Student

Period of

course/ 5

years

MProof of admission in

Indian InstitutionYes

Foreigners of

Indian Origin5 years M

Proof of being of Indian

OriginYes

Tourist Visa on Arrival

Government o India has introduced ourist Visa on Arrival (VOA) scheme or the

nationals o eleven countries, namely, Japan, Singapore, Philippines, Finland, Luxembourg,

New Zealand, Cambodia, Laos, Vietnam, Myanmar and Indonesia. Now, it has exceeded toorty countries.



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he VOA is allowed or a maximum validity o 30 days with single entry acility

by the Immigration Oicers at Delhi, Mumbai, Chennai and Kolkata Airports on payment

o a ee or per passenger (including children) is US $ 60/- or equivalent amount in Indian

rupees.

he VOA is allowed or a maximum o two times in a calendar year to a oreigner.

VOA shall be non-extendable and non-convertible. he oreigners o above mentioned

countries may avail o VOA or a period up to 30 days or tourism, medical treatment, and

casual business or to visit riends or relatives, etc.

he VOA service is not applicable to the holders o Diplomatic or Oicial Passports.

Existing procedures or guidelines, as applicable to these countries or this category, shall

continue to apply. Further, VOA is granted to the oreigners who have permanent residenceor occupation in India, such persons can visit India on normal visa, as applicable.

he VOA shall be provided only at selected international airports namely, Delhi,

Mumbai, Chennai and Kolkata and not at any other Immigration Check Post (ICP). he

visitors are required to ill a simple Visa application Form on arrival at the concerned

airport. One Passport size photograph is required with the application.

Indian Diaspora

Indian Diaspora is those people who migrate to other countries or work or business.

he NRIs and PIOs are the people who come under this category. he Indian Diaspora is

spread to over 110 countries and the characteristics o this group also vary.

he countries are classiied as Old Diaspora and New Diaspora countries. he

countries that come under the category Old Diaspora include Malaysia, Mauritius, rinidad

and obago, Fiji, Guyana, and Suriname. he countries under New Diaspora are the

developed countries like USA, UK, Canada, Australia and New Zealand.

Besides these two classiications, a large number o Indians live in the Gul countries.

he people in gul countries are mostly rom Kerala. here is a Diaspora Services Division

o the Ministry o External Aairs that deals with all subjects related to Overseas Indians

including the NRIs and PIOs.

heir matters are not speciically allotted to any other Departments o the Indian

Government. Some o the schemes o the Diaspora Services Division are



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➢ Overseas Citizenship o India (OCI)

➢ Know India Programme (KIP)

➢ Scholarship Programme or Diaspora Children (SPDC)

➢ racing the Roots

➢ Establishment o PIO/NRI Universities in India.

Overseas Citizenship of India (OCI)

Foreigners o Indian Origin (except Pakistan and Bangladesh) are eligible to apply

under OCI scheme, i he/she possesses evidence o sel or parents or grandparents:

➢ Being eligible to become a citizen o India at the time o commencement o Indian

Constitution i.e. 26.01.1950. or

➢ Belonging to a territory that became a part o India ater 15.01.1947. or

➢ Being a citizen o India on or ater 26.01.1950.

Provided that no person, who is or had been a citizen o Pakistan, Bangladesh or

such other country as the Central Government may, by notiication in the Oicial Gazette,

speciy, shall be eligible or registration as an overseas citizen o India.

Person of Indian Origin (PIO)

he Person o Indian Origin (PIO) is a person who is o Indian origin but not a

citizen o India. A person who is a oreign citizen not being a Pakistan or Bangladesh citizen

or other countries speciied by the Indian government gets a PIO Card issued i

➢ he person at any time had an Indian passport or

➢ he person or his parents were born in India or was a permanent resident o India or

➢ he person is a spouse o an Indian citizen.

A person who holds a PIO card enables the person to travel without the need o a

visa and other beneits. hose persons o Indian origin up to the ourth generation only are

eligible or this scheme. hose eligible or this scheme may be settled throughout the world

except Aghanistan, Bangladesh, Bhutan, China, Nepal, Pakistan or Sri Lanka. PIO card

should be accompanied with a passport. he validity o this card is or 15 years rom the

date o issue. he new PIO Card Scheme, 2002, is in operation since 15th September, 2002.



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Temporary Landing Permit

he Immigration Oicer has the right to issue a emporary Landing Permit (LP)

or a time period o 72 hours by retentions o the passport to any oreign national. A LP

is granted i oreigner does not have a valid visa and the oicer is satisied o the person’spurpose o visit and also the transiting oreigner has an onward journey ticket within 72

hours.

he nationals rom Sri Lanka, Bangladesh, Pakistan, Iran, Aghanistan, Somalia,

Nigeria and Ethiopia are not provided with the LP acility. I a oreigner needs to visit

India without a Visa, in case o emergency situations such as death o a amily member etc,

then LF are granted to them provided that the person has to produce a bonaide proo to

the FRRO/FRO-cum-District Superintendent o Police. he LF is granted or a period o15 days and i they wish to extend it, they are required to contact Ministry o Home Aairs,

Foreigners Division; New Delhi.

Protected Area Permit (PAP)/Restricted Area Permit (RAP)

he areas covered by the Protected Area Permit (PAP)/Restricted Area Permit (RAP)

regime. Under the Foreigners (Protected Areas) Order, 1958, all areas alling between the

‘Inner Line’, as deined in the said order, and the International Border o the State is declared

as a Protected Area. Currently, Protected Areas are located in the ollowing States:

(i) Whole o Arunachal Pradesh

(ii) Parts o Himachal Pradesh

(iii) Parts o Jammu & Kashmir

(iv) Parts o Manipur

(v) Parts o Mizoram

(vi) Whole o Nagaland

(vii) Parts o Rajasthan

(viii) Whole o Sikkim (partly in Protected Area and partly in Restricted Area)

(ix) Parts o Uttarakhand.

Foreigners (Restricted) Areas Order, 1963, the ollowing areas are declared as

‘Restricted’ Areas:

(i) Andaman & Nicobar Islands - Entire Union erritory

(ii) Part o the State o Sikkim



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The Guidelines for Obtaining Protected Area Permit/ Restricted Area Permit

Every oreigner, except a citizen o Bhutan, who desires to enter and stay in a Protected

or Restricted Area, is required to obtain a special permit rom a Competent Authority. It

is delegated with powers to issue such a special permit to a oreigner on application. heapplication or special permit must be reerred to the Ministry o Home Aairs or prior

approval, at least eight weeks beore the date o the expected visit.

With a view to promoting tourism, some areas (notiied by the Government o India

rom time to time) may be visited by oreign tourists, either in groups, or as a couple in the

case o a husband and wie, or by individuals, ater obtaining the necessary permit rom the

competent authority.

Without the prior approval o the Ministry o Home Aairs, citizens o Aghanistan,

China and Pakistan and oreign nationals o Pakistani origin shall not be issued a special

permit.

Customs Rules

Free import (import by non-residents, however, is only permitted i they enter India

or a stay o not less than 24 hours and not more than 6 months, provided they visit India

not more than once a month).he jewellery, up to a combined value o INR 50,000, or male

travellers or INR 100,000, or emale travelers is permitted to be carried.

he travel souvenirs are imported by nationals and residents o India or i being

o Indian origin provided being 10 years o age or older. Goods in excess o the maximum

permitted amount shall be subject to an import duty o 60 per cent.

Additional Information on Regulations

Firearms: It is advisable to obtain a possession licence in advance. A ourist Baggage

Re-Export Form (BRE) is issued upon arrival to tourists or re-exportation o their

expensive items duty ree.

Replica Guns:It requires a Permit or Import.

Radio Controlled Helicopters:Only those operating at 27 MHz are permitted.

Seeds and Plants: he import o seeds and plants or the purpose o sowing, planting

and propagation, consumption, research and breeding requires an import permit



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Livestock and Livestock Products:he import o these, by any means including

cargo or baggage is restricted and requires a sanitary import permit as well as a No

Objection Certiicate (NOC).

Currency Rules

Foreign currencies include currency notes, traveller’s cheques, cheques, drats etc.

(Re) exchange only through banks and authorized money exchange points.

Unlimited amount oreign currencies can be imported. However, amounts exceeding

USD 5,000 (or equivalent) in cash, or USD 10,000 (or equivalent) in traveller’s cheques

must be declared. Only up to the amount is imported and is declared.

Local Currency (Indian Rupee-INR)

INR 7,500 or residents o India, except when arriving or departing, to or rom Bhutan

and Nepal. For residents arriving rom Bhutan and Nepal, there is no limit in amount o

INR only the INR 100 may be carried not o higher denomination.

Health Regulation

Any person, Foreigner or Indian, (excluding inants below six months) arriving

by air or sea without a vaccination certiicate o yellow ever shall be kept in quarantine

isolation or a period up to six days.

here is no health check requirement by Indian Government on passengers

leaving India. Persons leaving or a yellow ever inected area are advised to get vaccinated

themselves and to be possession o valid yellow ever vaccination certiicates beore they

leave the country.

Persons exempted from production of vaccination certificate

he ollowing types o persons are exempted rom production yellow ever

vaccination certiicate:

➢ Inants below the age o six months are exempted.

➢ Any person suering rom some chronic illness and poor resistance is thereby

exempted rom being vaccinated.



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Crew and passengers o an aircrat transiting through an airport located in yellow

ever inected area provided the Health Oicer is satisied that such persons remain within

the airport premises during the period o stay.

Travel Baggage Rules

Baggage is the belongings which a passenger carries on his/her journey. A person

can carry a ixed weight o baggage while on their travel in airlines. here may be marginal

dierences in the number o items check in though almost all the airlines o all the countries.

he same rules or the weight o the bag may be carried on their journey. he travellermust

get the clearance rom the customs oicer and this must be made with a declaration by the

traveller ater illing up the prescribed orm. In India, the items coming to India and taken

out rom India come under the Exchange Management. Custom duties must be imposed onthese articles at a speciic rate.

he baggage rules may vary based on the duration o the persons stay, age or their

country. Every passenger has a duty ree allowance according to which the person can carry

any item without paying any duty charges. But in case when the value o the items exceeds

the duty ree allowance then the person must pay the customs duty or the excess value. he

personal articles are exempted rom paying any duty charges.

The items that are not permitted to carry include the following:

➢ As ar as gold and silver jewels in excess o permitted limit is concerned, the maximum

limit or emales is Rs.20,000 and Rs.10,000 or males.

➢ Indian currency exceeding the amount o Rs.1000.

➢ Harmul drugs such as coca lea, cocaine, hemp, charas, opium, morphine, etc, and

also their mixtures or derivatives.

➢ Vulgar material that includes obscene magazines, books, pamphlets, drawing,

painting, representation, igure, or any such item.

➢ Some other restricted items include plants, parts o plants, soil seeds, ruits, dry

ruits, vegetables, lowers, coee seeds, coee beans, cottons and un-manuactured

tobacco.

➢ Pet animals and birds are allowed, but in limited numbers only.

➢ Fire armaments.



126

he requirements o airline are dierent and the policies are subjected to changes at

any time. he passenger has to make sure that the handbag which they carry is light is not

oversized or overweight. Now, most o the airlines have reduced the weight and size o lug-

gage which a person can carry ree o cost. Almost all the airlines allow carrying overweight

or oversized baggage, but the traveller has to pay extra amount or the additional weight.

Baggage is cleared at the irst airport o entry in India. Baggage o transit passengers

with a destination outside India is exempted.

Check-in Baggage

he price o an airline ticket may include not only transportation or the passenger,

but also personal baggage. he are paid relects the kind o seat and service and also thebaggage allowance. It is called the Free Baggage Allowance. his allowance comprises the

checked baggage and also the cabin baggage. Each airline determines their own baggage

allowances and charges, whilst IAA determines how charges are applied or interline

journeys. he baggage al lowance shall dier depending on airline, route, class, are, etc.

Checked Baggage

Checked baggage may be deined in one o these ways:

he Weight Concept deines the amount o baggage entitled by the passenger’s ticket

in kilos. For example, an economy class passenger is entitled to 20 kilos o baggage and a

business class passenger to 30 kilos in international sector.

he piece concept is generally in use on lights within, to and rom Canada and the

United States. he Piece Concept deines the number o bags entitled as per the permissible

limits in the passenger’s ticket. Generally, two pieces o checked baggage are allowed per

passenger, each piece weighing no more than 23 kilos (50 lb) and measuring no more than

158 cm (62 in) adding the dimensions: height + width + length.

Cabin Baggage

Carry-on baggage must be it in the aircrat cabin which limits baggage to a size,

weight and shape to it under a passenger seat or in a storage compartment. Cabin baggage

should have maximum length o 22 in (56 cm), width o 18 in (45 cm) and depth o 10 in

(25 cm). hese dimensions include wheels, handles, side pockets, etc. Carry-on items mustremain with the passenger at all times and are the responsibility o the passenger.



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Dangerous Goods and Baggage

For saety reasons, all types o knives, sharp objects or cutting implements o any

kind and o any length, whether o metal or other material, and some sporting goods must

be packed in checked baggage. hey cannot be carried in the cabin baggage or with sel.

Travel Insurance

he insurance includes trip cancellation and interruption, medical, evacuation,

baggage and light insurance. Supplemental policies can be added to cover speciic concerns

such as identity thet or political evacuation. ravel insurance coverage can minimize the

considerable inancial risks o travelling, accidents, illness, missed lights, and cancelled

tours, lost baggage, thet, terrorism, travel-company bankruptcies, emergency evacuationand getting body home i death occurs in travelling.

Each traveller’s potential loss varies, depending on how much o the trip is prepaid,

the reundability o the air ticket purchased, state o health, the value o luggage, travelling

destination, the inancial health o tour company and airline, and the coverage which the

traveller already have (through your medical insurance, homeowners’ or renters’ insurance,

and/or credit card).

Insurance premium can vary dramatically, with most packages costing between 5

and 12 percent o the total trip. Age is one o the biggest actors aecting the amount o

premium. Rates go up dramatically or every decade over 50, while coverage is generally

inexpensive or even ree or children 17 and under.

Trip-Cancellation or Interruption Insurance Coverage

A standard trip-cancellation or interruption insurance policy covers the non-

reundable inancial penalties or losses the traveller incurs on cancel a prepaid tour or light

or an acceptable reason. rip cancellation is when traveller doesn’t go on trip at all. rip

interruption is when traveller begins a journey but have to cut it short; in this case, it will be

reimbursed only or the portion o the trip that traveller didn’t complete.

Baggage insurance: Baggage insurance or luggage that is lost, delayed, or

damaged is included in most comprehensive policies. Baggage insurance puts a strict

cap on reimbursement or such items as jewellery, eyewear, electronics and photographic

equipment.



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Flight insurance (crash coverage) is a statistical rip-o that heirs love. It is basically

a lie insurance policy that covers the traveller when on the airplane. Since plane crashes are

so rare, there is little sense in spending money on this insurance.

Collision Coverage: It is an important type o insurance or rental cars and it maybe included in some comprehensive travel-insurance plans or available as an upgrade on

others.

IATA Accreditation and Recognition from Government

Introduction

International Air ransport Association is an apex organization to give approvalto the travel agents to sell the tickets o international airlines. As per the agreements o

airlines, travel agents are authorized to issue the tickets to passengers and collect the are or

the same. his has become a easible way o increasing the sale o tickets and help airlines

ill the seats o aircrats. he commission or the sale o tickets is settled quarterly and the

ortnight payments or the sale o tickets are made through the Billing Settlement Plan

(BSP). It was a proitable and attractive business and it was the target o each travel agent to

get IAA accreditation.

hus, the Department o ourism gives approval to travel agents ater veriications

o documents and premises along with track record o business. Recognition is also a

certiication issued by the government and it helps the agents in getting the travel documents

issued. his lesson will present the need, procedures and beneits o IAA accreditation and

government recognitions.

IATA Accreditation

In the ear o Zero commission and easy accessibility o passengers to book the tickets

through online travel portals, many traditional IAA accredited agents are not inding it

as lucrative as it was 10 years ago. Given the amount o investments and manpower to

deal with this business, it is no longer an attractive business venture. However, many travel

agents wish to have IAA accreditation as it increases the credibility o selling the tickets in

the market. At the same time, any travel agent or tour operator as a business irm dealing

with customers is required to abide by the rules and regulations o Ministry o ourism,

Government o India to operate the business.



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Full Accreditation

Full accreditation authorizes travel agents to sell international and/or domestic tickets

on behal o IAA member airlines. It also allows access to IAA’s Billing and Settlement

Plan (BSP). It is an eicient interace or invoicing and payment between the agent, airlinesand transport providers. he ravel Industry Designator (IDS) is a unique code to allow

the bookings o travel agents and other tourism sales intermediaries to be recognized by all

industry suppliers.

Accreditation of IATA Agents

IAA accreditation greatly simpliies the business relationship between travel agents

and airlines. Some 60,000 IAA travel agents worldwide currently beneit rom IAAaccreditation, selling US$220 billion worth o airline tickets on behal o some 240 IAA

airline members.

ravel Agent Accreditation Beneits:

➢ Access to IAA airline members with a single Sales Agency Agreement which

authorizes the sale o international and/or domestic tickets.

➢ Access to IAA’s Billing and Settlement Plan (BSP), an eicient interace or invoicingand payment between the agent, airlines and transport providers.

➢ Unique identiication throughout the global travel industry with the “IAA Numeric

Code”.

➢ Use o the IAA Accredited Agent logo providing visibility and credibility on

premises and website.

➢ Agent sta eligibility or the IAA/IAAN ID Card, giving access to the special deals

o over 1000 suppliers.

➢ Standardized procedures to ensure air dealings with the airlines.

he IAA travel agent accreditation process is ruled by the Passenger Agency

Resolutions. IAA accreditation is a seal o approval recognized worldwide. IAA has

committed to working with all travel agencies to improve customer service and choice.

Note: he guidelines including application orm or receiving the IAA recognition etc.

may be downloaded rom websites www.tourism.gov.in www.incredibleindia.org



130

Summary

Carrying valid travel documents is mandatory to ensure hassle-ree travel within the

country and oreign countries. Processing o travel documents takes its own time and people

ace inordinate delay due to the technical ormalities. hus, the need o the travel agentsarose hundred years ago or making the travel more comortable and ensuring the issue

o travel documents rom the competent authority or clients or customers. ravel agents

are authorized to process the necessary documents on behal o the money exchangers,

oreign consulate oices, passport oices, income tax oices, insurance oice etc. ravel

documentations are processed or clients and customers beore their conirmation or

purchasing package tour. ravel documents include passport, visa, currency certiicate or

endorsement o currency in the passport, travel insurance, income tax statements, health

certiicates, etc.

International Air ransport Association is an apex organization to give approval

to the travel agents to sell the tickets o international airlines. As per the agreements o

airlines, travel agents are authorized to issue the tickets to passengers and collect the are or

the same. his has become a easible way o increasing the sale o tickets and help airlines

ill the seats o aircrats. he commission or the sale o tickets is settled quarterly and the

ortnight payments or the sale o tickets are made through the Billing Settlement Plan

(BSP). It was a proitable and attractive business and it was the target o each travel agent to

get IAA accreditation.


1. List the unctions o modern ravel Agency and our Operator.

2. Explain the important unction o travel agency as an important retailer or wholesaler

o various travel services.

3. Explain various unctions o tour operators or running tour operation business.

4. What are the steps involved in establishing travel agency business?

5. Which are the major challenges or a travel agency to establish and run the travel

agency business? Explain them with examples.

6. Which are the conventional sources o revenue or travel agents and tour operators?

7. Which are the emerging sources o maximizing the revenue in travel agency and

tour operation business?

8. What is travel agency business returns? List the prevailing percentage o commission

or retailing or wholesaling the various principal services



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9. Discuss the threats in travel agency business. How can these threats be managed

tactully?

10. What is the meaning o passport? Explain the meaning o dierent types o passport.

11. Explain the various procedures and enclosure documents or obtaining the passport.

12. What is visa? Explain dierent types o visa.

13. List the important documents to enclosures or applying or the passport.

14. Explain various provisions o visa and describe the tourist visa on arrival in India.

15. What is temporary land permit? Explain the meaning and guidelines or issuing

Protected Area Permit (PAP)/Restricted Area Permit (RAP).

16. Explain the various custom rules or an inbound tourist to India.

17. Explain the various currency rules or Indian going abroad or oreign tourists

visiting India.

18. Explain about the various health regulations or oreign visitors visiting India.

19. Explain the types o baggage rules and list the items not permitted as accompanying

baggage.

20. What is Accreditation o IAA Agents and highlight the beneits o accreditation.

21. List important inormation and particulars given in the application ormat.

22. Explain the guidelines or recognition or renewal or extension o the same or

approving travel agents.

23. Explain pledge or honorable or responsible or sustainable tourism practices by tour

operators as per the Govt. o India.

CASE STUDY

PATA and Responsible Tourism Practices

PAA is a non-proit travel trade association serving government tourist oices,

airlines, hotels and other travel-related companies throughout the Asia Paciic region. his

regional association provides leadership to the countries committed or the promotion

o tourism by coordinating and promoting environmental and economic sustainability,

cultural preservation, and social responsibility. PAA engages in the ollowing activities

related to sustainability and social responsibility:



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➢ PAA Charter o Sustainability and Corporate Social Responsibility

➢ APEC/PAA Code or Sustainable ourism

➢ PAA raveler’s Code

➢ PAA Sustainability and Social Responsibility (SSR) Committee Good Practices

➢ PAA Gold Awards (including environmental and social engagement)

➢ PAA Foundation.

he Code or Sustainable ourism has been adopted by both PAA and APEC as a

relection o strong commitment to tourism growth across the Asia and Paciic region or

viable and sustainable tourism.

➢ Conserve the natural environment, ecosystems and biodiversity ➢ Respect and support local traditions, cultures and communities

➢ Maintain environmental management systems

➢ Conserve energy and reduce waste and pollutants

➢ Encourage a tourism commitment to environments and cultures

➢ Educate and inorm others about local environments and cultures

➢ Cooperate with others to sustain environments and cultures

he PAA in collaboration with China International Heritage owns Exposition

organizes the China Responsible ourism Forum (CRF) every year. he orum aims

to help, protect and preserve the heritage and culture o ancient villages in China, while

responsibly developing these villages to boost tourism.

Consumer travel trends indicate that tourists want to travel responsibly and connect

with people and culture in an authentic way. he orum works on the threat that mass

tourism poses to these communities and their residents. More importantly, the orum also

highlights the value-based tourism activities in those villages.

Esteemed international and local Chinese experts discussed the ways o implementing

responsible tourism development and exchange o ideas in developing and managing

tourist sites and attractions. hey are also working towards the sustainable and scientiic

development strategies or deriving economic beneits rom cultural assets.

In keeping with PAA’s code or responsible tourism, Bali Discovery ours embraces

a program o environmental and cultural preservation.



133

➢ to adopt practices or conservation o the environment, including the use o renewable

resources in a sustainable manner and conservation o non-renewable resources.

➢ o emphasize on Conservation o the lora and auna habitat as well as all cultural

sites.

➢ o consider the community attitudes and cultural values and concerns, including

local custom and belie, in the design and execution o our tour products.

➢ o make compliance with all local, national and international environmental laws.

➢ o undertake environmentally responsible practices, including waste management,

recycling and energy use.

➢ o oster an understanding and respect or environmental and cultural conservation

values among our management, employees, contractors and customers.

➢ o encourage and accept criticism and input rom clients and employees in the never-

ending eort to preserve the natural environment.

➢ o share our vision o responsible tourism by providing guidelines and suggestions

to our clients at the commencement o all our tour programs.

It is however reported that international tour operators are the signatories o the

pledge or the responsible tourism practices at the destinations. Many o these practices or

principles remain to be the philosophy rather than the policies or implementation due tothe lack o harmony between tour operators and the government or destination management

agencies.

Questions

1. What are the responsible tourism practices o PAA?

2. What are the objectives and activities o the China Responsible ourism Forum?

3. How has the Bali Discovery ours embraced the PAA’s code or responsible tourismpractices?

4. Why many tour operators are ailed to obey the responsible tourism practices?

5. Do the responsible tourism practices o PAA remain to be myth or reality? Discuss.

****



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135

UNIT - III

Unit Structure

Lesson 3.1 - Concepts o Itinerary Planning

Lesson 3.2 - Resources or Itinerary Planning

Lesson 3.3 - our Formulation and Designing Process

Lesson 3.4 - Planning and Components o Package our or FI & GI

Lesson 3.1 - Concepts of Itinerary Planning

Learning Objectives


➢ Explain the meaning and types o itinerary

➢ Understand the need or itinerary planning

➢ Know the methods o preparing tour itinerary

➢ Draw sample itinerary o your own choice

Introduction

Itinerary is a systematic method o arranging places o interest. It enhances value

and appeal o package tour and provides maximum satisaction to customers. he salability

and marketability o any package tour is determined by tour itinerary. Customers always

check nature and type o tour itinerary that provides ample inormation about the operation

o tour. Places o tourist importance are logically arranged while taking the interest,

convenience, cost, availability o services, climate, terrain, sunrise, etc into considerations.

our operator has the sole responsibility o designing tour itinerary and it involves several

stages o inalizing itinerary. It requires several rounds o survey o tourist destinations,

priority o visits and connectivity. his lesson will present the meaning, types, nature and

importance o tour itinerary.



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Meaning of Itinerary

An itinerary is a schedule or an arrangement o programmes or events. It is prepared

or designing package tour. he origin, destination and en-route halting points and

duration o halts along with elements o services like hotel rooms, transports, activitiesand miscellaneous services are clearly described in tour itinerary. An itinerary gives

detailed inormation about nature, type, length and quality o package tour. Importantly, it

determines sales o package tour and it is aptly a selling point or alluring customers to buy

package tour.

Importance of Itinerary

Itineraries are also prepared or customers or air travel. he nature o air travel ortrain travel or road travel does not include other essential components o package tour. he

air or rail itinerary highlights on departure and arrival time o light or trains, terminal

or station details, number o light and trains, baggage limits, transits, seat allocation and

minimum check-in time in case o light and suggested arrival time at station. However, it

is an itinerary designed or FI and they themselves arrange other component o services.

However, it doesn’t explain the type o marketing plan and strategy or positioning or

branding package tour in market. An itinerary includes all kinds o requirement o package

tour and it is basically regarded as complete itinerary to satisy travel, stay and activities.

It is essentially important to ensure quality o package tour. he quality can be

measured rom the suitability, nature and comprehensiveness o a tour itinerary as it is

described in tour brochures. It gives much conidence and interest to undertake journey

to places o interest. Or else, it gives so much uncertainty and other problems in the tour.

hus, tour itinerary is printed in brochures with elaborate description o places o interest

and kinds o services. our brochures are printed ater expert team visits the places o

interest, properties and other on-site activities. Accordingly, it includes logical inclusion

and exclusion o services and sequential arrangement o a variety o eatures considering

the needs and pleasure o customers.

he core business o tour wholesalers or tour operators is package tour. A planned

itinerary eliminates much o the tension and problems at the time o operation o tour. For

example, when a particular tablet or injection is prescribed to heal the diseases without

experimentation or test, it may have serious negative impacts and there may be many side

eects. he same example may be applicable to use itinerary without having proper test.

Itinerary gives a rame through which package tour is conducted and other eatures are alsoincorporated to enhance value o package. hus, logical planning along with amiliarization



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trip is generally done to ensure precision in the operation o tour. here can be additions or

deletions as the process continues to produce an appealing itinerary.

Beore the inalization o tour itinerary along with the route, one or two FI or small

group tours are conducted to analyze the eedback o customers. One tour operator candesign package tour on the basis o itinerary as it is a inal product or sale. our operator

provides seamless itinerary and it can be tailor-made or customized or specialized. hus, it

is important to study the meaning and importance o itinerary planning and tour packaging.

Types of Itinerary

A tour itinerary is usually divided into ive dierent types taking the duties and

responsibilities o tour managers, vendors, coach drivers and escorts, interpreters andguides into considerations. So that, there are itinerary or tourist, tour manager, escort or

guide, vendor and coach driver. Itinerary may also be classiied as GI, FI, tailor-made and

special interest itinerary as per the convenience o tourists and tour operators.

Itinerary for Tourists

Itinerary is designed to give elaborate descriptions to help customers or members

o GI select package tour. It is used as the reerence or conducting package tour. A tourist

itinerary is basically a reerence or tourists to ollow during journey comprising place o

transit, sojourn, arrival and departure time, meal plans, check-in check-out time, mode o

transport, activities etc.

he unique eature o any itinerary is to meet the personal requirements o a tourist

that he expects rom tour operators to include as per the itinerary. ourist itinerary is more

useul or tour planners to check its easibility o operations. Destination survey through

ground operators is done to gather inormation. While designing tourist’s itinerary, the

ollowing aspects must be given due importance to make more precisions in operation o

tour,

➢ Purpose o tour

➢ Budget

➢ Accommodation

➢ ransportation

➢ Choice o destinations➢ Attractions



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➢ Activities at destinations

➢ Legal issues

➢ Behavior o local community members

Itinerary for Tour Manager

he role o tour manager is crucial to any package tour as he has to perorm dierent

duties rom planning to actual operation o the tour. Proessional expertise, knowledge o

dierent travel issues, crisis management and personal experiences helps in organizing a

tour. our manager’s itinerary includes the complete details o tour rom irst day to last

day. Apart rom the general details as listed in a tourist’s itinerary, a tour managers’ itinerary

also carries inormation about alternative arrangements, contact details, quick reerences,

dierential rates and tari details, details o coach drivers and escorts and guides. his helpsthe tour manager manage the smooth conduct o the tour as well as execute contingency

plans i required at times.

Itinerary for Tourist Guide

Itinerary is designed or escort or interpreter or guide and it provides common

inormation along with speciic inormation to them. A ground operator or handling agency

prepares itinerary containing the inormation about the name and nationality o guests, modeo arrivals, name o hotel, programmes, activities, time management etc. Other instructional

details include voucher to be countersigned rom guests, arrangement o loading and

unloading o baggage and valuable belongings, photography, helping physically challenged

guests and women. A guide or escort should essentially have experience o handling FI and

GI tour, managerial abilities to handle ground diiculties, crisis management, presence o

mind, etc. For example, a guide can make the tour interesting or boring and it all depends

on the ability o showing places o interest within the speciied time. his type o itinerary

contains summary o tours.

Itinerary for Accommodation and Transport Operator

Itinerary is prepared or hotels, transporters and other vendors or smooth conduct

o tours. Hotels or transporters shall have to provide services as per guest’s itinerary. Hotel or

transport is a vendor that works or tour operators. his is also called as vendor’s itinerary.

here must not be any deviations rom tour voucher. However, tour operator sends short

instructional itinerary or programme to hotels and transporting agencies to be ready beore

the commencement o tours.



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Vendors play a major role or the success o tour at a particular destination. he

speciic parts o tour itinerary instructs or making necessary arrangements in advance. For

example, welcome drinks and traditional reception upon arrival in hotel is arranged as per

vendor’s itinerary

Itinerary for Drivers

Itinerary is prepared or cab or coach driver to make proper coordination with guides,

hotels and guests. Inormation or a typical driver’s itinerary includes place and time o

arrivals, parking areas, name o hotel, route to hotel and other sightseeing places, cleanliness

o vehicle, checking air condition, break, public address system, etc. he summary oguests’

itinerary is generally handed over to drivers to ollow in tour. Driver’s itinerary contains

certain instructional inormation like attending duty with uniorm, starting air condition15 minutes beore the guests boarding coach, greetings guests, etc. For example, drivers are

instructed to reduce the speed inside the city and other important monuments, buildings

and market areas or viewing and photography.

hese are the ollowing steps or planning tour itinerary.

Reviewing and Analysing Competitor’s Tour

Systematic planning is required or developing an itinerary or package tour. A

comprehensive analysis o tour itinerary o other tour operators is done to ind the strength

and weakness o tour programmes. It is always better to have a unique programme that

must be elaborate, value or money and satisying. his review and analysis o competitor’s

itinerary is collected rom printed brochure. It gives much idea about tour itinerary and

other special eatures.

Working Out Duration, Frequency and Departure Point

Each tour itinerary is worked out with much emphasis on duration and requency o

tour along with stopover points. he ollowing ormat is generally used to arrange length o

stay, requency o visit and departure o place.

What is the time o departure? __________ am/pm

What is the time o arrivals? __________ am/pm

What is the requency o operating tour? __________ per/ wk

Where is the last departure point? __________ Domestic/International Airport

Whether the pick up or drop prevision is included. Yes No



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List the major locations in logical order and highlight them with significance

Itinerary must include key locations/cities/transit points. It must give a brie

description about the historical/cultural/natural signiicance o places o importance. It

is the work o tour operator to keep the places o interest in logical order while takingconnectivity, geographical disadvantage, priority, mandatory stopover point, time, comort,

etc into considerations.

Places o interest are listed out in case o FI and GI and these places are arranged

as per the convenient route map. his step reduces the cost o designing package tour

and provides ample time to guests to enjoy the places o interest. Highlights o places o

importance must be given in tour brochure or pamphlets. his is the ollowing way o doing

description.

➢ aj Mahal at Agra- he emblem o immortal love

➢ Red Fort at Agra- he symbol o gigantic architecture

➢ he Sun emple at Konark- he language o stone deeats the language o man

➢ he Eastern Group o emples at Khajuraho- Expression o lie in the stones

➢ Rock Cut emple at Ellora: Human achieves perection

➢ Backwater at Allepy: Nature has everything to entertain humans

Content and Description

Contents about lora, auna, history, culture and people in tour itinerary must be

collected and developed uniquely. Uses o proper wording and images o places must be

given due importance as potential buyers o tour packages get motivated rom the images.

his is the ormat given below to be used as illustrations or developing good contents and

descriptions.

Topic Main Points To Consider Resource Materials

Qutub Minar Built by Illtutmish and Completed

by Bulban

Books, brochures and pamphlets

to be collected rom ASI and other

libraries

Bharatnatyam he First Classical Dance o India Books, brochures and pamphlets

to be collected rom Kalamandap

Libraries



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Onam Harvesting Festivals Books, brochures and pamphlets

to be collected rom library

Fresco

Painting

A kind o vegetable paintings Books, brochures and pamphlets


Royal Bengal

iger

he national animal o India and

the king o predators

Books, brochures and pamphlets


Arrangement of Miscellaneous Activities

Any activities oered by third party suppliers or entrance ees determine the quality

o tour itinerary. In the worksheet o tour programme, number o activities, entrance ees,

toll taxes, restricted area permits, parking charges, etc must be listed out at the time o

preparing itinerary. For example short cruises, bike rides, entry into zoological parks, caves

etc. must be highlighted. his is the ormat to be used as illustrations to gather inormation

pertaining to miscellaneous services or activities.

Description of

Activity

Details of

Supplier

Cost Per

Person

Inclusion of Activity Tour Price

YES/NO

Odissi Dance Odissi Academy ` 500 Yes

Language Interpreter Freelancer ` 1000 Yes

Sound & Light Show ASI, Fatepur ` 200 Yes

Porter On-Spot ` 100 No ( Optional)

ips On-Spot ` 500 No (Optional)

Obtaining Permission to Access to Private and Public Properties

It is imperative to obtain permission rom the property owner prior to accessing any

private property or buildings. For example, tour operators obtain prior permission romking or custodian o the Udaipur Palace or their clients to visit. Visiting property managed

by the Department o Environment and Conservation must require prior permission.

When itinerary includes entering Aboriginal Land, Restricted Area Entry Permits must be

obtained.

Minute-Wise Day Programme

It is crucially important to map out tour itinerary with precision to ensure that

guests can arrive on time or activity in order to optimize the time allotted to each site in



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the sightseeing. A ull day sightseeing or excursion must distribute time across the places in

tour programme in such a manner than guest must not eel bored or deicient in enjoying a

particular site. Stop or lunch and shopping must also be relected in the programme. his

minute-wise programme is handed over to driver and guide to conduct city sightseeing

accordingly. he ollowing table may be used as illustrations o a typical ull-day sightseeingtour in Bhubaneswar city.

Stops Time Location Type of stop

Start 8.00 a.m. Oberoi Hotel Staring the sightseeing

Stop 8.30 a.m. Parsurameswar emple Seeing and Listening and Photography

Stop 9.15 a.m. Mukteswar emple Seeing and Listening and Photography

Stop 10.00 a.m. Lingaraj emple Seeing and Listening and Photography

Stop 10.45 a.m. Raja Rani emple Seeing and Listening and Photography

Stop 11.30 a.m. Brahmeswar emple Seeing and Listening and Photography

Lunch 12.30 p.m. Back to Hotel Lunch Break and Rest

Start 2.30 p.m. Khandagiri and Udaygiri

Caves

Seeing and Listening and Photography

End 4.30 p.m. Drive Back to Hotel

Testing Sample Itinerary

Sample tour itinerary is used on a amiliarization trip. I there are any laws or loop-

holes in tour itinerary, tour operators take immediate actions to correct and go or inal

printing tour itinerary. In the testing sample itinerary stage, capacity o hotels and ground

service providers, acilities and amenities at destinations, road conditions, local law and

order problem, etc are examined thoroughly. It is very important to do several ‘dry runs’ o

tour itinerary to ensure the lawless itinerary. Experienced executives must be associated

with sample tour itinerary tour and their constructive comments improve the quality o

package tours. In this stage, tour operators meet primary service providers and experience

the service quality.

Title of Tour

In this stage, an attractive or appealing title is given to package tour. itle must

represent the character o tour. For example, EA GARDEN PARY is a title o tour and

it is promoted or UK nationals interested to visit tea gardens in Assam and Darjeeling

area. his particular tour provides much scope or visiting tea gardens and interacting with

workers, visiting actory and tea museums. Many o the group members are emotionally



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attached with many tea gardens as their ancestors developed and owned many tea gardens

during the colonial rule in India. Many USA armers are now visiting apple gardens in Hi-

machal Pradesh. Similarly, South Indian emple our, Famers our and Museum ours are

some o the possible titles o tour.

Background Information for Preparing Itinerary

➢ Duration o the tour.

➢ Minimum time or visiting each city

➢ Purpose o travel and special interest.

➢ Selecting cities to be included in the itinerary

➢ Mode o intercity travel. (by road, rail, air)

➢ Selection o any special air are or rail are

➢ Selecting the hotels to be used.

➢ First arrival and last departure rom international airport.

➢ Inclusion o places requiring restricted area permits.

➢ Best time or visiting

Do’s and Do Not’s of Itinerary

Do’s

➢ Do add all places o halt with date and time.

➢ Do provide a brie summary o the city(s)/country and the sights.

➢ Do provide name o the hotel, type o vehicle, time o arrival and departure.

➢ Do include meal plans.

➢ Do provide links or additional inormation about the city, country, sights, restaurants,

hotels.

➢ Do provide as many relevant maps as possible.

➢ Do provide names and places written in the local language.

➢ Do provide unique inormation about the destination (Ex: scams and customs).

Don’ts

➢ Don’t add too many details which might cause conusion. ➢ Don’t leave directions ambiguous. here are lots o distractions when coming into a



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new city, be as speciic as possible.

➢ Don’t orget about the nature o group, age group, physical disabilities, eating habits

and language barriers.

➢ Don’t go overboard on the hotel recommendations. Most hotels are pretty similar in

a given price range.

➢ Don’t include shops which are not registered, restricted areas without availing

permits etc.

➢ Don’t orget about restaurant recommendations.

Itinerary for Group Inclusive Tour (GIT)

A Group Inclusive our (GI) itinerary ollows the ixed itinerary and schedule. Ina typical GI package tour, options are limited to clients or gusts or group members and

ollow it as per tour itinerary. he primary reason is that it is a ready-made package and

common activities are encouraged rather than individual interests. here is no scope or

alterations as many things are pre-arrangement.

Cancellation o rooms in case o group bookings is not allowed at the eleventh hour.

Any change in itinerary may create crises situations and disturbance and disturb distribution

channel. Services o a package tour along the itinerary like hotel rooms, cars, guides, lights,events, entry ees, toll taxes, etc are ixed and they are conirmed much in advance. Any

modiication results in loss and reduction o proit amount.

he entire schedule is spoiled. It practically becomes very diicult or operator

and supplier to rectiy or rearrange schedule. Immediate alternative changes may not be

possible and it incurs loss or all operators in the process. Groups with speciic travel limits

or individuals with the intention o moving with pre-arranged services may certainly preer

GI itinerary as it has the ollowing merits.

➢ Enjoying the companion o like-minded people

➢ Reduction o package price

➢ Conirmed pre-arranged services

➢ Accompanying group leader or tour manager

➢ Ensuring the arrangement o overnight halt at sae places

➢ Minimum cost or conducting several activities

➢ Economic o scale or tour operators



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Free Independent Tour (FIT)

Free Independent our (FI) itinerary is, on the contrary, preerred or its reedom

to select hotels, places, transport, guide and other services. Modiications may be possibleat the last hour due to change in programme or any untoward incidences. here are lexible

options and clients may meet personal requirements at their disposal. Clients may ask the

operator to make certain changes as per interest and preerred activities.

Operators can do the needul against the availability o lights, trains, vacant rooms

and other services. Such an itinerary lends good space or tourists to do activities o personal

choice and interest. An immediate change in the schedule and alternate arrangement is

possible unlike GI. hus, independent travelers preer FI tours as there are possibilitieso additions and deletions to the itinerary. However, FI clients are relatively aluent and

do as they wish. hese are the ollowing merits o FI itinerary.

➢ Enough scope to satisy personal interests

➢ Select the preerred rooms and transports

➢ Possibility o minimizing the price o package tour

➢ Arrangement o small elements o services

Tailor-Made Itinerary

An itinerary is customized in such a manner that most o the speciic travel needs

are tailored taking the aordability o customers and capability o tour operator organize

such tours. his type o itinerary is mostly designed or FI than GI package tour. he

itinerary satisies convenience and interests o tourists. our operators adopt the changes

as per the preerence and aordability o customers. Designing tailor-made itinerary needs

the involvement o highly experienced executives to ensure value or money or customersin tour programmes and help earn proits. our operators urnish inormation as soon as

they receive queries o package tours. For example, tailor-made itinerary is prepared or

single women travelers, small group, backpackers and business executives.

Special-Interest Itinerary

It is a type o tour itinerary that takes care o special interest or motivations o

customers by incorporating special events or attractions in tour programmes. Given the

increasing demand or visiting special tourism destinations ollowed by the creation



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o tourism product portolios, tour operators have made intensive market survey and

amiliarization trips to those special interest destinations to ensure customer satisactions.

Both group and independent travelers wish to visit special places o tourism importance.

It is however important or tour operators to strengthen resources and supply chain or

smooth operation o tours. For example, MICE operators and adventure tour operatorspromote special interest tour packages.

Summary

Itinerary is a methodical way o arranging the organized package tours. here are

advantages o conducting tour with help o tour itinerary. It adds value and appeal o package

and gives much scope or meeting the group as well as individual needs. our itinerary

increases the scope o sale o package tour. A typical itinerary includes places o touristimportance are logically arranged while taking the interest, convenience, cost, availability

o services, climate, terrain, sunrise, etc into considerations. our operator designs itinerary

ater several rounds o test or inalizing itinerary.

****



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Lesson 3.2 - Resources for Itinerary Planning

Learning Objectives


➢ Understand the various reading and inormation resources required or drawing

itinerary

➢ Know the methodical approaches in planning good itinerary

➢ Make use o the resources in more eective ways

➢ Know the diiculty in gathering the inormation as resources

Introduction

Itinerary describes the places o interest along with terms and conditions or easy

clariication o customers or clients. A good itinerary is one that minimizes cost and

maximizes return on investment o tour operators.

A customer or client looks or enjoying maximum in minimum time and cost as

it is the general psychology and tendency o an average customer. Providing best possible

options through itinerary is a strenuous task. But a tour operator makes on-site study to

provide best possible choices. It is like a test drive o a newly manuactured car.

A car is not sold in the market as long as it is not tested or its perormance on road.

In the same case, itinerary precedes the preparation o tour package and it clariies theservices to be included in the package. Designing itinerary is a task o senior and experienced

executives o tour operating company. hus, resources like inormation brochures pertaining

to places o interest, hotel and ground transport tari, train and airline are, guide charges,

toll taxes, entry ees, etc are collected much beore the preparation o tour itinerary.

Planning is done or preparing itinerary one to two year beore a tour package is

launched in the source market or sale. hus, this lesson will describe various concepts o

itinerary, collection o inormation and steps in designing itinerary.



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hese are the ollowing resources o our Itinerary

Information Brochures Destination

Destination is promoted as a product in tourism business through advertisementand publicity. It is a conventional method o introducing destinations and service providers

in distributions channels reer brochures collected, compiled and published by various

government operated tourism departments. A set o tourism brochures are sent to tour

operators as soon as it is printed or tour operators collect tour brochures rom nearest

tourist oice.

our operators and travel agents are involved at various stages o developing tourism

destinations on the basis o suggestions as they inally promote the destinations. Places ointerest depicted in tour brochures are largely circulated to tourism oices and tourists

collect tour brochures on ree o cost to read about destinations and decide to include places

o interest.

hus, eatures o tourism attractions are generally studied to include package

tour. Knowledge about destination is essentially important when it is to be marketed or

domestic and inbound tourists. Survey on tourist places o interest is primarily done to

gather inormation related to hotels, transport, guide services, amusement parks, public

events, culture, people, connectivity, climate, etc.

our operators make comprehensive analysis o tangible and intangible dimensions

o destinations. Majority o tourists are irst-time visitors and they get motivated through

images illustrated in brochures. Apart rom brochures published by the Mo, tour operators

also customize tour brochures detailing about the places o interests which are included in

package tour. his is an important resource that is used or preparing tour itinerary.

Hotel Brochure and Tariff

Hotels and other accommodation operators print colourul brochures along with

room tari under various plans or wider circulations among tour operators and direct

customers. Hotels do send a set o brochures and tari to tour operators during June- July

or inclusion o hotels in tour itinerary.

As such hotel is a part o tourism destination and promoting local places o attractions

is also an important responsibility o hotel. At the same time, business o hotel depends onthe quality o destination coupled with amenities and acilities. Both sot and hard copy o



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brochures are customized to project best o acilities and services o hotels to tour operators

as bulk o sale o rooms is done through tour operators.

While designing tour itinerary, it is essentially important to collect hotel brochures

and tari rom various hotel promoters or download the same rom respective websites ohotels. Apart rom making physical survey o hotel properties during amiliarization trips,

tour operators do reer hotel brochures or getting amiliar with type o room, acilities and

amenities, service quality, tari, discounts, locations, add-on services, saety, etc.

Evaluating a hotel’s room or ood service through tour brochures may not be

practically possible and it may however give certain inormation or preparing tour itinerary.

Hotels display maximum images and inormation in public domain and customers are

well aware o price, quality and acilities o hotels. hus, compilation and comparison ohotel rooms are thoroughly done to attract customers to purchase package tours. Itinerary

also relects the hotels and services to give maximum clariications to customers to eel

worth buying package tour. hus, it is an important resource or tour operator to reer or

preparing itinerary.

Ground Transport Brochure and Tariff

Local ground operator or destination service provider or destination management

agency is a primary service provider. Interaction with tourists or transport services is

direct. Like hotels and resort operators, ground transport operators publish brochures

highlighting on types o transports, acilities and amenities, services, saety, etc along with

tari or tour operators to reer while developing package tours.

Ground transport operators send brochures during June-July. At the same time,

tour operators collect brochures depicting the images o coach and car with acilities and

amenities or guests. As such, transport operators go or exclusive design o coaches or

sightseeing and excursions. Representatives o tour operators make physical veriications o

coach beore assigning the work to ground transport operators. hus, itinerary preparation

is done on the basis o transport and type o transport is also relected in tour itinerary or

better clariication to customers.

Railway Timetable and Fare

Some o important segments o travel in tour itinerary are arranged through trains

as it is convenience and aordable or customers. In these days, train travel is more preerred

or its comort, saety and are. For example, Amtrak, Eurail and Britail have maintained

world-class acilities and amenities or tourists to preer train travel than air.



150

Railways print timetable periodically and send it across to dierent railways oices

and market or sale. Recognized tour operators do receive the copy o timetable rom

railway operators as when there are publications o revised timetable. Apart rom luxury

train services like Palace-on-Wheels, Royal Orient, Fairy Queen and Deccan Odyssey, tour

operators reserve berth or customers in overnight and long-haul train in advance. heremust be a mix o train, road, air and cruise travel in most o tour itinerary as many o

lesser-known destinations or conventional destinations are not directly connected by one

o the modes o transport service. hus, reerring to timetable o railways and are generally

simpliies the work o drawing a complete tour itinerary.

Flight Timetable and Fare

Gone are the days when light timetable was printed and circulated to all IAA andPassenger Sales Agents (PSA) or reerence and inormation to passengers. IAA publishes

ABC Blue and Red air schedule or international sectors and these air schedule guide books

are made available to IAA agents. It is very useul when air itinerary is prepared beore the

calculation o airare or a passenger. Nevertheless, air itinerary is a part o tour itinerary.

hese timetables are arranged in alphabetical order and it is very easy to reer and

distinguish rom origin to destination airport in three digit letter. At the same time, one-

way and round-trip ares are given as per the global indicators. For example, airare rom

Delhi to New York via Atlantic is lower than the Paciic route. Moreover, airares calculated

as per the IAA are construction rules.

hus, airline schedule and are is largely reerred to prepare tour itinerary as business

tourists and high-end leisure tourists usually preer to use air travel to reach destinations

in shorter time and comort. Many airlines also publish their schedules along with many

code sharing airlines and send across their agents. Apart rom scheduled airare; airlines

also book non-schedule or charter airlines or various destinations. hus, it is essentially

important to subscribe or buy those light timetables on a regular basis.

Travel Information Manual (TIM)

ravel inormation manual provides much detailed up-to-date inormation on travel

ormalities or travel agents or tour operators to make use or preparing tour itinerary. It is

a very useul manual giving rules and regulations o issue o passport, health certiicates,

restricted area permits and currency certiicate. Country-wise inormation is given in

alphabetical order along with procedures or preparing documents.



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Issue o necessary travel documents is done on the basis o papers submitted by tour

operators. For example, a passenger travelling rom IAA Area-1 to IAA Area-II via Arica

must possess valid health certiicates as most o the regions in Arica are enlisted as spread

o contagious diseases. Similarly, applying or visa to USA embassy in India or an Indian to

travel USA on a tourist visa need certain mandatory papers to be produced or processing.Each tour operator has to have a latest IM to reer or preparing tour itinerary.

Local Festival Calendar

he value addition aspect o tour itinerary is the inclusion o local airs and estivals.

Each destination celebrates some estivals or other in small or big way across the year. our

operators collect local one or two dierent local calendar in the beginning o year to reer

to the airs and estivals.

I any big estival alls during the course o tour, tour operators incorporate such

event in tour itinerary or guests to enjoy estivals. For example, estivals like Dusshera or

Diwali are included in tour programme and guests are taken to various places in cities to

show the majestic decorations o gate, Durga idols and decorations, music and songs and

other activities.

Restricted Area Permits

he gazette notiication o government about restricted areas is circulated to tour

operators as it is notiied time to time. At the same time, tour operators also collect the

notiication directly to be aware o areas where tour operation is restricted completely or

regulated partially.

our operators also collect inormation about the contact address o Competent

Authority or issue o permission to visit these restricted areas. Do’s and do not’s are also

issued time to time to tour operators to ollow in the areas during the operation o tour.

For example, a recognized tour operator shall have to take permission or visiting tribal

markets in Odisha ater the due approval o District Collector on the basis o submission o

application and necessary documents.

Weather Forecasts

our operation is directly determined by orecast o weather. our operators

collect advance inormation rom Metrological Department about the nature o weather

at destinations. here are places where rain may occur at any point o time and tours are

cancelled or rerouted on the basis weather condition.



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hus, itinerary gives inormation about the expected temperature in day time and

night during winter or summer. he degree o precipitation is also relected in tour itinerary.

As tourists are very sensitive towards climate and weather conditions, tour operators are

very much meticulous about the weather conditions.

Local Culture and People

Inormation on local culture and people is collected rom published books and

literature. Ground operators also urnish inormation about local culture and people to tour

operators. our operators also get acquainted with people and culture during amiliarization

tours.

Various traditions and customs are the parts o culture and these are the inestattraction o tourists. Most o host community members are cordial and hospitable to

welcome guests to visit their villages and community. hus, tour itinerary relects on various

activities around tourist destinations and these activities can only be done with the help o

local community members.

Socio-Political Risks Factors

our operation business is very sensitive to many vagaries o natural and other risk actors.

Visitors take serious note o socio-political risks actors like communal riots, naxalism,

terrorism, war, cyclone, lood, tsunami, earthquake etc. hese uncontrollable actors stand

as obstructions to tour operation business as tour operators give heavy compensation to

clients and loss o advance or booking various elements o services in package tour.

our operators do not conduct tours in those areas which are prone to some type

o natural calamities at a particular month every year. hus, background data about

socio-political conditions on various destinations are collected through various sources

to take inal call o conducting tours. For example, the political turmoil in Libya, Israel,

Aghanistan, Pakistan and some o the countries in Arica stand as deterrence or tour

operators to conduct organized package tours.

Connectivity and Types of Transport

Inormation is collected rom the government oices about the connectivity o

various tourism destinations by road, rail, water and air. For example, road conditions are

generally checked with the help o local ground operators. It is an important actor thatdetermines the duration o travel, selection o type o vehicle, number o stops, etc. For



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example, road connectivity and conditions o many ecotourism, wildlie tourism and tribal

tourism destinations make the place more inaccessible.

At the same time, there are broad, meter and narrow gauge train lines that also

determine the duration o travel. For example, journey with toy train rom Silluguri toDarjeeling gives awesome experience provided guests do have patience o sitting long hours

in the train. Similarly, there are small, medium and large-bodied aircrats that are selected

on the basis o handling capacity o airports. It also determines the duration o travel and

comort. For example, most o the northeastern states in India are connected by air and

small aircrats ply the air services. It gives much discomort to passenger during the change

o altitude.

Many destinations can only be connected by water transport and there arecountryside boats, motorized lunch, passenger ship, etc or transerring visitors rom one

point to another. For example, Sunderban National Park can only be accessed with the help

o motorized boats and the boat journey can only give the joy o enjoying mangrove orest

and wildlie while cruising in dierent creeks. For example, there are three ways o visiting

Mata Vaishnava Devi. hese means are helicopter, steps and pony. here are some places

that can also be accessed by ropeways.

Most o the destinations in Nepal can be reached with the help o ropeways. hus,

it is essential to maintain databank about connectivity o places o tourist interest with the

help o types o transport or preparing lawless tour itinerary.

Use of Various Maps

our operators do maintain a collection o world map on road, rail, water, and air

transport network on a regular basis. At the same time, tourism destination maps are also

reerred or designing tour itinerary. For example, places amous or textiles, handlooms

and handicrats are presented in an exclusive map.

hese maps become handy or tour operators to make best use o them or identiying

locations o place, connectivity by road, rail and air. In these days, there are customized

maps or travel agents and tour operators to use them or drawing tour itinerary. Indian

Railways print map o network o train services and Air India also print the route map

across the world. Cruise liners also publish the route maps o their operations.



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ERP Software

here are customized sotware resources or designing complex tour itinerary in a

raction o minutes. Gone are the days when senior executives used to make lots o exercise

to gather inormation or preparing tour itinerary. It is now simpliied with sotware thathelps in minimizing time and cost or drawing itinerary with multiple options.

However, auto-generated itineraries are manually veriied or avoiding mistakes.

Most o the tour operators have acquired the sotware and use them optimally. It is high

time to make tour cost eective and value addition or customers. Creating multiple options

and combinations satisy dierent segments o customers. hus, it is essentially to have

customized sotware or creating attractive tour itinerary that can increase margin o proits

and increase the scope or guests to enjoy maximum.

Technology and Internet

our operators and travel agents set aside special unds introducing e-governance

system with the help o technology and internet and intranet. A big tour operating company

and travel agents maintain intranet or dissemination o inormation across the departments.

Sharing inormation can become easier and aster with the help o e-governance. For

example, collecting inormation or tour itinerary preparation rom any department can

be done in a simple request. hus, tour operators acquire new technology time to time as

customers are becoming more tech-savvy.

Valuable Tips for Preparing a Good Itinerary

our operators make sure to avoid misunderstandings with their customers and

service providers in their distribution network in case o package deals. Clariications on

each item o service are given in the itinerary.

In order to avoid conusions and hitches, services are provided as per the contract and

promises in the tour itinerary. he itinerary may be changed rom time to time provided the

taris o transporters, accommodation providers, and guides remain unchanged. I there is

any change in the tour programme, both clients and tour operators may be aected severely.

All these our types o tour itineraries should avoid too much mental and physical

strain. our itineraries should not be too slow or too exhaustive; they should be moderate

to an extent that all the group members, regardless o their age, can enjoy the tour. o saveunnecessary expenditures, the tour should avoid backtracking or doubling-back that may



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cause a lot o obstacles to operate and increase unnecessary costs. Clients are normally

advised in the itinerary to eat and drink rom known places.

he itinerary is prepared in a manner that decreases excess burden on each day and

the journey or sightseeing is conducted in a comortable way. I the itinerary is prepared orthe physically challenged or elderly persons, it does not include too much sightseeing and

surace journey. he itinerary generally suggests tourists to avoid visiting expensive tourist

shops, expensive restaurants, using unauthorized tourist transport, unauthorized tourist

guides/tour escorts/drivers, and unauthorized money exchangers.

he itinerary also suggests tourists to avoid keeping their valuables (travellers’

cheques, currency notes, cameras, videos, and documents) at restaurants, hotels, shops, and

in transport vehicles. he itinerary advices tourists to rerain rom entering restricted areaswithout prior permission. It also advices them to rerain rom photography or videography

in places (deence areas, airports, and sea ports) where it is not allowed.

Summary

Itinerary describes the places o interest along with terms and conditions or easy

clariication o customers or clients. A good itinerary is one that minimizes cost and

maximizes return on investment o tour operators. A customer or client looks or enjoying

maximum in minimum time and cost as it is the general psychology and tendency o an

average customer. Providing best possible options through itinerary is a strenuous task. But

a tour operator makes on-site study to provide best possible choices. It is like a test drive o

a newly manuactured car.

****



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Lesson 3.3 - Tour Formulation and Designing Process

Learning Objectives


➢ Understand how an organized package tour is ormulated

➢ Explain dierent key concepts o tour ormulation process

➢ Describe various steps in designing a new package tour

➢ Know various processes in giving inal shape to package tour

Introduction

Organized package tour is designed with much emphasis on customer satisaction

and loyalty. A repeat customer is preerred in package tour business. our operators various

loyalty programmes to attract more new customers along with old customers. his can

only be possible through continuous innovations in improving the appealing o package

tours. Package elements or services are included and excluded depending on the segments

o markets.

hus, tour operators do make in-depth market study on the actors such as great

risks, high breakevens, high quality product and competitive prices. Various actors are

responsible or directly determining the tour ormulation process. hese actors also aect

the volume o sale o package. In this lesson, there are 11 stages o developing an attractive

package tour and it will be described in this lesson.

Package Tour Formulation Process

Formulation o a package tour involves managerial approach and the process involves

proper planning, itinerary preparation, designing, costing and marketing. Research and

development o irms invest time, money, experience and knowledge in the ormulation o

package tours. Beore they are launched on ull scale, marketing divisions do pilot launch

and check easibility and possible acceptance o their new package tours. Below is a detailedsequence o steps ollowed in the ormulation o tour packages:



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Market Research

Marketing research involves study o the economy o the country to visited, oreign

exchange rate, demand or the product, consumer proile, competitors in the market,

studying the product components like sightseeing, transport, baggage allowance, groundservice etc., sales status, channels o distribution, promotional measures.

Prepare an Itinerary

A well planned itinerary holds the key or success o a package tour. It needs to

incorporate exciting places o interest and enough scope or events and activities.

Identify and decide on mode o travel, hotels, destinations, dates, capacity and others.

Sign contracts with principal service providers: Agreements with various service

providers well in advance is important. Contracts or timely delivery o services by hotels,

transportation, entry permits, ground handler etc. has to be signed.

Costing of the Package

Ater having signed contracts and designing o package systematic costing o the

package will be done which includes cost to incurred towards all elements o a package tour

are summed up and then package is given a mark-up price beore a price tag is decided

upon.

Preparation of Brochures and other Promotional Material

Promotion material is another important aspect in the ormulation process. Both

print and electronic media are widely used but brochures are integral part o it which play

a major role. Hence designing and printing attractive brochures and other material is ready

to used or marketing.

Marketing of the Product

In line with demand requirements o the markets right kind o marketing strategies

are ramed and then the product is marketed through the above listed means o promotion

material.



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Documentation

his last step in ormulation process includes copy o the clients itinerary, tour

vouchers, travel and other entry tickets, luggage labels and other useul inormation or the

clients.

Summary

Organized package tour is designed or customer delight and loyalty. It all depends

on the ormulation process to ensure the quality o tour itinerary. our operators launch

loyalty programmes that can be possible through continuous improvement in the quality

o services and places o tourism importance. Some o the package elements or services

are included and excluded depending on the nature and types o package tours. hus itneeds comprehensive analysis to reduce risks and increase the possibility o reaching high

breakevens, high quality product and competitive prices. Each tour operator largely ollows

this ormulation process to prepare the competitive tour itinerary.

****



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Lesson 3.4 - Planning and Components of Package Tour for FIT & GIT

Learning Objectives


➢ Understand the meaning o FI and GI

➢ Explain the meaning o SI or FI and GI

➢ Know the process o drawing systematic planning

➢ Describe various components o package tour

Introduction

Planning is a methodical approach or accomplishing the uture course o actions.

It is also essentially needed or business o tour operation as various actors determine the

volume o demand and supply o sale o package tour. our operators take all precautionary

measures to overcome the marginal variations in sale and operation o package tour.

Planning may not be helpul to the tour business due to the nature o tourism business.

ravel agents and tour operators chalk out plan to examine the strengths and weakness o

package tour business.

here are various stages through which planning are done to develop package

tours or emerging segments o customers. For example, Cox and Kings have designed the

package tour or Bharat Dekho or domestic customers in India. It is important to examine

the inclusive and non-inclusive components o package tour. Components o package or

FI vary rom GI in case o common interest tour and special interest tours. his lessonwill explain planning and components o package tour or FI and GI customers.

Package Tour Business

Packaged tours have revolutionized the way people travel in the modern day. he

concept o package tour is as old as the introduction o paid holidays, annual paid holidays

and homas Cook holiday programme. his concept has received rapid attention in the

world. Packaging is the combination o related and complementary services into a singleprice.



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Package tour is the sum total o variety o services oered to the tourists in one price,

which normally less expensive than that o each individual items. Such tour largely includes

the services o accommodation, transport, ood, guide and other ground and miscellaneous

services. ransport and accommodation orm a signiicant proportion o the cost and

service o any organized package tour.

Package tours not only save time and money or tourists but also help suppliers to

ensure sale o their services thus balancing the demand and supply in the travel market.

our operator being a consolidator or wholesaler assembles primary and miscellaneous

services with his own price tag. However, packages are designed or the independent and

group tours ater comprehensive research and analysis beore it is launched in the market.

Group Inclusive Travel (GIT)

Group inclusive tours (GI) are comprised o groups o travelers that share a particular

mutual ailiation, such as belonging to the same club or business organization. Such a tour

is generally conducted with a ixed itinerary. his type o tour is mostly conducted with

ixed itinerary. here can be short-haul and long-haul travel in case o the GI. he ormer

is meant or the MICE activities and the latter is apt or the leisure and pleasure activities.

Group tour packages are comparatively cheaper as compared to the FI tour packages.

here is bulk o sale o hotel rooms, airline seats, and coach services in group organized

package tours. his type o tour diers rom an escorted tour in that the travelers in a

GI share a commonality, while the members o an escorted tour share no common bond

other than perhaps living in the same region. ourists on special-interest tours travel to a

particular destination or an experience that relects their mutual interests, and travelers in

GIs orm a group merely to pool their purchasing power and realize savings.

Free Independent Tours (FIT)

our packages are customized with personalized services or the Free Independent

ours. Such deals oer lexibility in selecting services o their choice and interest and added

to a tour package. hey allow travelers more reedom to vacation on their own without

ollowing a scheduled itinerary or traveling with a group, yet these tours oer the traveler

the convenience o paying or all acets o a trip prior to departure, including transportation,

transers, lodging, sight-seeing excursions, and oten some meals.

he business o FI is operated to reach out the niche customers as it satisies theliestyle and travel behaviour. hose tourists traveling on an independent tour outside their



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home country are reerred to as FIs, and those ree independent tourists traveling inside

their home country are reerred to as Domestic Independent ravellers (DIs).

Steps involved in developing your package tour

➢ Identiy the experiences and eatures o target market desires by undertaking marker

research.

➢ Set clear sales and customer expectation objectives or package tour

➢ Evaluation o area attractions and traveler services.

➢ An appealing list o experiences.

➢ Attractions and support services to sell package necessarily.

➢ Developing a package concept by including setting a theme and a market position

(economy, deluxe or other), and the speciic products to be oered chosen on the

basis o the best it with the target market

➢ Pricing the package on a per-customer basis.

➢ Establish management and quality control systems to coordinate your plans with

package partners,

➢ Establish credit policies, contingency arrangements, customer communications and

tracking o results

Packaging: A Tool for Tourism Product Marketing

ime is a most valuable thing or the travelers in the recent times. Families with double

income ind it almost diicult to make schedule o their vacation time and amily members

are also busy in their jobs or activities that also stand as a barrier to their vacation. It is

also certainly impossible n impracticable on the part o an individual to think or long

vacations. However, in spite o the work pressures and paucity o time, more amilies andindividuals are taking long weekend or holiday vacations, or extending business trips into

short getaway vacations.

Packaging is a popular method used or attracting these customers, since packages

make travel easier, convenient and hassle ree. In tourism and travel industry, packaging is

the process o combining two or more related and complementary oerings into a single-

price oering. A package may include a wide variety o services such as lodging, meals,

entrance ees to attractions, entertainment, transportation costs (air, auto, train, cab or

bus), guide services, or other similar activities.



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Packaging can also create a variety o beneits or participating distribution channels.

Why package tour is a popular proposition and what are the components o successul

packages. We should identiy reasons or the increased popularity o packaging and address

issues a business should consider when developing a package.

The customized tours can greatly benefit the clients in the following ways;

➢ Personal urge or visiting the places and enjoying the events and activities can be

possible to a great extent.

➢ It is aordable as the selection o destinations and elements o services are suggested

by the clients.

➢ Adequate time can be earmarked or certain places or example photography and

cultural program.

➢ Modiication o tours and services are mostly allowed.

➢ he services can be enlarged depending on the client’s ability to pay.

➢ With the quality o services, clients can be used as the promoter o the tours.

➢ Many customized ainity group packages can be organized.

Factors Influencing Pricings

➢ Seasonality

➢ Fluctuations in business between high and low seasons.

➢ Operating costs includes general overheads,

➢ Promotion and labour costs which can vary, depending on business peaks and

troughs.

➢ Competition

Package Tour and its Increasing Demand and Value

Packaging is the process o combining a number o inter-related tourism products

and services that are oered together to oer an inclusive experience or travelers. hey

are brought together into a suitable single product at a lower price than i they are bought

individually. Packages are designed to appeal to a speciic target market. he best packages

oer unique and appealing experiences or series o experiences to tourists at a much greater

value.



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Benefits of Packaging to Tourism Operators

➢ Opens new markets and increases sales

➢ Provides an opportunity to develop

➢ Sales in slow periods

➢ Your product becomes more

➢ Marketable when it partners with other,

➢ Compatible products

➢ You share marketing costs,

➢ Increasing reach beyond your own resources

➢ ime savers

➢ Increase the seasonality o destinations

➢ Less cost / price

➢ Earn oreign currency

➢ Better quality o products

➢ Proessional services

➢ Wide variety o tour packages

➢ Provide bulk business to organizers.

➢ Greater convenience

➢ Greater economy

➢ Ability to budget or trips

➢ Implicit assurance o consistent quality

➢ Satisaction o specialized interests ➢ Added dimensions to traveling and dining out

Packaging your product is something that you can undertake independently or that

may be done by a tour wholesaler or other packaging proessional. You can obtain together

with other business people, work out a tour package, and market the package jointly. he

components o a typical package include attractions, events, activities, transportation,

accommodation, meals, drinks and taxes.



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These are the essential components of GIT and FIT package tours

Accommodation

Accommodation is an important element o package tour and it shares a good amount

o the total cost o package. Accommodation can be o primary and supplementary. Primary

service providers are the category star hotels, resorts, business hotels, and international

hotels who are the conventional accommodation operators with the provision o providing

room cum ood services and allied services. Lodges, home stays, guest houses, bungalows,

service apartments, etc.

here are supplementary service providers. Depending upon the nature o the

groups and package operators include the right kind o a hotel accommodation into the

package. Comortable and sae stay is always a serious concern o tourists and this elementdetermines the strength o a tour package.

Attractions/Sightseeing

Adding the most appealing attractions in a package tour sightseeing is one o the

most important elements o a package tour. he best o experiences are counted on the kind

o sightseeing is conducted and not to orget inclusion o attractions to a package tour must

be sequenced in such a manner that the customer satisaction is enhanced rom point to

point. he most exciting should always be listed last and the itinerary needs to be planned

in such a way. Sightseeing is no doubt the backbone o the whole tour package as it serves

the prime objective o the tourists visit to a destination.

Transportation

ravelling is part o any tour. ransportation thus becomes yet another ocal

component o a package tour. he journey o a tourist rom origin (place o residence) to

destination (host country or place o visit) involves tourists’ movement and it requires asuitable means o transport. Sae, comortable and quick modes o transport are wanting

o the tourists. Quicker means help tourists spend more time at the destinations and at the

same time can visit more destinations in a country. ransportation modes can be air travel,

railways, buses, ships, cars etc.

Airways: Air transportation in the modern days has had great inluence on the travel

industry. Package tours especially international tours have beneitted a lot. his is

a quick mode o transport and most oreign tourists preer travelling by air. he

component o air travel includes international and domestic light tickets and on-

board services.



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Railways: Railways are most used orm o transport or package tours in countries

like India and also Europe. It connects destinations which are away rom airports

or where air services are not available. For example, the Indrail pass, Eurail Pass,

Brital Pass and AMRAK are booked in advance to provide alternative and quickest

mode o transport and dierent experience to the visitors. IRCC in India is oering variety o package tours such as Bahrad Darshan.

Ships, Cruise or Ferry Services: Passenger ships and erry services are used or

water transport. For example erries ply between Chennai, Vizag and Kolkata to

Andaman and Nicobar islands. Certain operators are using the mode or package

tours to theses islands. For example, the Royal Virgo operates luxury cruise liners

or high-end tourists across the countries. Cruise Liners themselves promote the all-

inclusive packages and get it promoted through the wholesale and retail travel agent.hey include room, ood, drinks, sightseeing, entertainment, casino, etc on–board.

Bus Services: Bus services are mostly utilised in domestic tourism or short distance

package tours. his is being made use by regional tour operators to take tourists

to interior destinations as well which otherwise cannot be accessed either by air or

train. hough there isn’t much craze or bus services, they are part o any destination

tour or group tours.

Ground Services

Ground services are also equally important element o package tours. ourists

cannot do away with ground services when they are at a destination. For local conveyance

they need coaches, cabs, to know about places they may need guides and interpreters to

help them convey in the language o their tongue. Car rentals, luxury coaches, other motor

vehicles services are an active part o package tours enabling better travel with and around

a destination.

Events and Activities

Events are o dierent kind at destinations. Entertainment parks, theme parks, sports

and leisure clubs are used or a variety o event s and activities. Events such as meetings,

incentive tours, conerences, conventions, exhibitions etc are some time part o certain

package tours or package tours o such events are also oered by operators. Events and

activities may be oered as complementary to tourists to add value to the package.



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Insurance

Loss o baggage, loss to lie and sudden withdrawal o tour or complete break o tour

due to natural or manmade interruptions are issues related to travel. Insurance covers this

loss and tourists can ensure sae journey plus surety against loss. Insurance companies orinstance like Bajaj Allianz and AA AIG have customized travel insurance or the oreign

outbound travel or Indian travelers. Insurance now-a-days is included into the total cost o

the package or otherwise one can chose rom the travel insurance policies available in the

market.

Summary

Planning is a methodical approach or accomplishing the uture course o actions.It is also essentially needed or business o tour operation as various actors determine the

volume o demand and supply o sale o package tour. our operators take all precautionary

measures to overcome the marginal variations in sale and operation o package tour.

Planning may not be helpul to the tour business due to the nature o tourism business.

ravel agents and tour operators chalk out plan to examine the strengths and weakness o

package tour business.


1. What is the meaning and importance o itinerary? Explain with examples

2. Explain various types o tour itinerary with suitable illustrations.

3. List the steps or designing tour itinerary and explain each o the steps with examples.

4. Prepare a 10-day tour itinerary o your own choice comprising important places o

interest in India.

5. Prepare the minute-to-minute programme or the city sightseeing tour.

6. Explain the background inormation or preparing itinerary.

7. List the Do’s and Do Not’s while developing tour Itinerary. Which are the important

Do’s and Do Not’s that a tour operator must worry about?

8. Distinguish between Group Inclusive our(GI) itinerary and Free Independent

raveller (FI) itinerary.

9. List the resources or developing innovative tour itinerary.

10. Explain our o the important resources that largely determine the quality o touritinerary.



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11. Explain the valuable tips or preparing a good itinerary.

12. What is package tour? How is the process interwoven in a systematic manner?

13. Why is the tour ormulation process very important or tour operator?

14. What is package tour business? Discuss various intricacies and dynamics o thepackage tour business.

15. Distinguish between GI and FI package tour.

16. Explain the steps involved in developing your package tour.

17. Explain how Packaging is used as a tool or tourism product marketing?

18. How customized tours can greatly beneit the clients?

19. What are the beneits o packaging to tourism operators?

20. Which are the essential components o GI and FI package tours? Explain them

briely.

CASE STUDY

Challenges of Online Travel Agents

Global competition has orced local travel industry to adopt new global businessstandards to compete in its traditional markets. In return, the local travel and tour operation

companies are inding much diversiication o business in the new overseas and domestic

tourism markets. ravel agencies are becoming increasingly aware and prepared to ace the

burgeoning growth o online travel agents as a result o Internet. our operators have ound

the dependence on online business to decrease the transactional costs, including the costs

or users o tourism services.

For the sale o airlines tickets, airlines do take the help o online travel portals and

hotels also take the help o online travel agents or the sale o hotel rooms. he online

travel companies are aware o the consequences o online transactions and are taking the

advantage o the inormation and communication technology or the larger market share.

Giving varied discounting is a major trend o online travel agents to increase the

sales. he eect o B2B and B2C model has signiicantly reduced the cost and that results

in the reducing the prices o airline tickets, hotel rooms, etc. For example, consolidator

like Groupon has entered into the market oering discounts o 50 per cent or more when

more customers sign up or a vendor’s oer. he range o products and services being sold

continues to ind better market areas.



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In addition, hotel chains increasingly bank on the social media sites like Facebook

and witter to build a network o potential customers. Hotels oer limited-time special

oers to sell o the unused room inventory during the o season. A second key trend

is personalization o tourism services. Everyone wants the tailored-made programmes to

their needs.

raditional travel agencies still ace the big challenges in their shit online. he irst

challenge is to develop the multi-channel strategy that is not an easy task to accomplish as

ar as the constraints o travel business is concerned. ravel agencies trace the background

o customers and reach them over the Internet, mobile and social media channels.

he most important challenge that traditional travel agencies are acing is to ind

the right mix in their online product and services oers. In order to make their onlinechannel more proitable and alluring, they include additional products such as hotels,

(dynamic) holiday packages and light related ancillary services like airport VIP lounges

and ast tracks or priority boarding.

Low internet penetration was the major challenge or the online travel companiees.

Another challenge is the habit o Indian travellers. he habit o buying an air ticket through

a travel agent and booking a hotel room through calling the hotel directly takes long time

to change. It is essential to change the habit that online travel agents are doing all possible

eorts to covert the traditional customers to tech-savvy users o online services.

Online travel is the driving orce in the e-commerce segment and has brought

about revolution in the travel market in India. It has global contribution o 70 per cent o

all e-commerce activities. However, the internet availability, broadband penetration and

the prevalence o online banking and credit/debit card is very low India. he volatility in

the aviation industry not only impacts the inventory and pricing, but also the consumer

sentiment while buying a travel product. It is reported that that the online travel portals are

acing numerous new challenges such as rapidly rising costs, meeting customer expectations

and enormous economic pressures. At the same time, the challenges o the India Online

travel agents are given below.

➢ Problems in deciding the distribution o products through multiple online and

oline sales channels while managing inventory.

➢ Pressure to up sell and proper management o the seats sold out.

➢ Diiculty in deciding the charges as a lat ee or a commission.

➢ Changing economic conditions

➢ New inancial regulations



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In view o the above challenges, the online travel agents are still bleeding with losses

or many o them are toying hard to reach the breakeven point. In one hand, the users o

online purchase o travel services and solutions are becoming more and the dependence is

also becoming more. Can these challenges be overcome? How long it will take?

Questions

1. What are the critical eatures o an online travel agent?

2. Why there is an increase in number o market share o online travel agents?

3. Why the online travel agents are bleeding with losses?

4. What are the challenges beore the online travel agents?

5. Can the challenges be overcome? Suggest your ideas to handle the challenges

****



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UNIT - IV

Unit Structure

Lesson 4.1 - Classiications o our Packages

Lesson 4.2 - Components o Package our

Lesson 4.3 - Package our Costing

Lesson 4.4 - Components o our Costing and Preparation o Cost Sheet

Lesson 4.5 -our Pricing and Pricing Strategies

Lesson 4.6 - Package ours o homas Cook, SOC, Cox & Kings and CI

Lesson 4.1 - Classifications of Tour Packages

Learning Objectives


➢ Understand the meaning o packaging in tour operation business

➢ Explain the importance o buying or selling package tours

➢ Describe dierent types o tour packages

➢ Know the uniqueness o each tour packages

Introduction

Package is a concept that is commonly used in packing some products in a box or

wrappers to increase the value through ensuring quality. It is seldom to ind the loose items

in the market as these items are taken as substandard products. At the same time, buying

two pens to get one pen ree is relected on the cover page o packets containing three

pens. Customers do not preer to buy loose edible oils and preer to buy packed edible oils

or preventing rom the adulteration. here is no big dierence in package tour business.

he dierence is that it assembles intangible and perishable elements. Package holidays are



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package tours which are escorted and not escorted by tourist guides. When it is a package

tour, it is a pre-arrangement or a prepaid trip that combines many travel elements like

attractions, accommodation, accessibility, amenities and activities. In this lesson, you would

read about the dierent types o package tours.

Definition of Tour Package

our package may be deined as “a total tourism product consisting of transportation

from market area to the destination, accommodation at destination and recreational activities

performed by the tourists”. Packages are largely developed by travel intermediaries such as

tour wholesalers and operators, incentive travel planners and convention/meeting planners.

Moreover, packages are also developed by primary service providers like hotels, airlines and

coach and car rental companies.

Packages Developed by Travel Trade Intermediaries

Many travel trade intermediaries, including tour wholesalers and operators, incentive

travel planners, some travel agents and convention/meeting planners promote organized

package tours. An independent traveller inds it cumbersome to prepare an itinerary

and arrange all these components. ravel intermediaries do purchase accommodation or

transport services directly rom suppliers. hey establish own outlets or via travel agent

or sale o package tours. At the same time, tour operators and local travel agencies usually

have good product knowledge and are ready to access to travel services. Arranging all the

travel services to tourists over a phone call or mail can also be possible given the network

o business o tour operator.

It is common or airlines, bus and shipping companies to have their own outlets

in large cities or the public to purchase directly. Even then, the current scenario does not

provide easy access to such services. hat is why a need arises or a customer to approach

the tour operators and travel agents to help them ind aordable and attractive packages.

Retailers such as travel agents sell individual components o a trip, transport tickets,

accommodation, excursions, but they may also put their own brand o tours together. he

most common way o distributing oreign holiday travel is through inclusive tours packaged

by tour operators and sold by travel agents. Some holiday packages are sold directly by

tour operators. his trend will continue, especially due to the technology revolution and

alliances with hotel companies and activity providers.



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Packages Developed by Others

Other packages are developed by suppliers, carriers, destination marketing

organizations, various clubs and special interest groups. he packages are usually purchased

directly rom the source (e.g., a hotel weekend package). It can also be booked through thetravel agents.

Types of Package Tour

All-Inclusive Package Tour

All-inclusive package is a generic term or packages to include all the elements that

travelers require or their trips, including airare, lodging, ground transportation, meals,recreation and entertainment and taxes. All-inclusive holidays have become popular option

or savvy spenders. hey not only allow travellers to budget or the bulk but also work out

cheap at the destinations.

Although all-inclusive holidays tend to be more expensive than sel-catering or hotel,

one can also ind some very aordable packages. hey are actually cheaper when ood, drink

and entertainment are included in the package. hese holidays can be very sociable breaks

providing a good amily mix and meeting with new people without worrying about how one

can pay or everything. he chance o meeting like-minded people is too high. Generally,

these holidays are ound in top destinations worldwide and in countries where the cost o

living is high. hey are sometimes considered as the only practical and aordable option.

Families with children eager to try all sorts o dierent activities are on holiday to

enjoy all-inclusive breaks as the plenty o entertainment options are included. Most o the

costs o package tour are paid beore GI or FI land at the destinations. It reduces the

worry about exchanging and carrying around lots o oreign currency either.

Items those are included in all-inclusive packages include Flights, Accommodation,

ransers, Food (minimum o three meals a day) and Snacks and ice-creams. Charges or the

same are made or items such as chocolate, crisps and sweets, Drinks. It is oten unlimited

with local alcoholic and sot drinks with an extra charge or international beer, wine and

spirits. Use o hotel acilities such as the pool, gym and the spa at certain hotels are included

in the hotel services. Individual treatments oten incur an extra charge, kids’ clubs and

activities, babysitting services, evening entertainment and organized activities and water

sports are some o the acilities o hotel. All-inclusive holidays are oered in a huge rangeo hotels including three, our and ive-star properties.



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Package Tours with Escorts

Escorted tours ollow a predetermined Itinerary and tour escorts or guides accompany

travellers. Escorted tours are normally conducted by a tour director who takes care o all

services rom the beginning to the end o the tour.

It normally includes lights, hotels, transportation, and transers to the airport/

hotel, meals and sightseeing. hey are typically conducted by motor coach. hey can be

ast-paced, with no more than break o two nights at each location.

his type o tour includes the service o a well-educated and trained tour manager.

Escorted tours are generally meant or the tourists who visit the destination or irst time.

Providing comprehensive inormation and assistance to the group about the destinationand imparting the duties and responsibilities o the escorts adds value to the tour.

Package Tours Promoted by Hosted

Hosted tours are a kind o guided tours. It is somewhat similar to the Escorted

tours. On the other hand, passengers are greeted by a local representative rather than a

our Manager. It is escorted to all activities and unctions. Local guides are arranged at all

locations to accompany the guests at the sites. Some meals, accommodations and sightseeing

may be included in the tour.

his tour is ideal or some customers who want some reedom with the comort o

guide services. For example, a group o German tourists come to India and Cox and Kings do

the transers to the hotel providing them guidance and inormation about local attractions

and entertainment. When the same group arrives at another destination in India, another

local travel agency greets them at the arrival points.

Independent Tours

An Independent tour does not include a guide or a host or a set routine o daily

activities. Independent tours are prepared/ ormulated or those tourists who wish to travel

independently. hese tourists usually spend 2 or 3 nights in each location visited and usually

only a ew locations are visited.

A tour guide is not included, but there is a host who would be available to help in

the arrangements o sightseeing. Selected meals and some sightseeing are also included,but ree time is given to guests to do on their own. ravel components include air travel,



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ground transers, accommodation, travel documents, sightseeing, activities, entertainment

and other services.

Sometimes an independent tour is an all-inclusive tour and sometimes it is not

because this tour provides reedom to customers to buy and plan the components accordingto their choice. his is one reason why the price o this tour diers depending up on the

components chosen. Most o the Indian ravel agencies in these days provide dierent

kinds o tours like Foreign Independent ravel (FIs) or oreign tourists and Domestic

Independent ravel (DIs) or domestic tourists.

Freedom Tours

Freedom tours are very popular kinds among the youth groups, riends, newlywedcouples and working classes. hese tours are designed as per the requirements o customers.

his can also be taken to the present day concept o tailor-made packages. ourists decide

how to travel, when to travel and where to travel and travel requirements are submitted to

service providers or tailoring a tour. Most o the travel agencies in India prepare such tours

according to needs and wants o the customers.

Fly- Drive Packages

Fly-Drive tours are single price packages that include return trip air are and a rental

car at destination. A Fly-drive holiday is a best way to see a country or a range o destinations

all in one trip. Fly drives give the reedom o the road to explore at your own style or simply

ly into a destination airport or hire a car. It is called as Fly-drive tour. his is one type o

holiday where tourists can plan their own itinerary. here is also another trend in where

one can book a light ticket and the same airlines can provide a rental car to the destination.

he price is inclusive o a light and a car. his is also a technique o popularizing the ly-

drive package tours.

Accommodation and Meal Package

Most resorts and certain other lodging properties promote packages that incorpo-

rate one more nights o accommodation, plus a speciied number o meals. his is dierent

rom all other tours. Customers book accommodation irst and when they arrive to stay in

the hotels they are provided with meals and required amenities or their stay. Hotel sta

provides inormation and suggestions regarding sightseeing, shopping and other entertain-

ment activities at the destination. On the request, suggested services can also be arrangedby the hotel sta charging the tourists. Accommodation providers play a major role here.



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Event Packages

Big events become the attractions or great holidays. here would be many events

round the calendar and each place would be amous or a special event. Every year, special

one-time events, estivals, entertainment and cultural perormances, or other occurrencestake place in India and throughout the world. Events like cattle air o Bihar, Camel air

o Rajasthan, lower estival o Uattrakhand, Snake boat race in Kerala, Dance estivals

in Mahabalipuram, Kajuraho and Konark are some o the examples o great events. our

operators and travel agents include these events as major part o package tour itinerary.

Event Packages include simple transportation and entry ee or registration ee, but may also

provide on-site lodging and meals.

Packages with Programming for Special Interest

he primary attractions o these packages are the special activities, programmes and

events arranged by one or more o the participants. his segment is very popular among the

youth and allo-centric tourists. Special interests like cycling biking, and rating, trekking,

mountaineering jumping and skiing, skating and ballooning are some crazy activities liked

by the youth. For example, Royal Enield bike rides in Himalayan ranges or the trekking in

lush green tea gardens o Kerala. Such special interest groups participate in large numbers

all over the country. It is seen very requently in Chennai. Special Interest Packages are

normally oered by lodging properties as an extension o basic accommodation and meal

packages.

Target Market packages

arget Market Packages are specially designed to meet the needs o certain target

markets. Market segments like children, youth, women, newly married, dierently-abled,

adults and old age groups are identiied and travel services are catered targeting these

segments accordingly. Packages including theme parks, zoological parks, water sports etc.

would it to the children segment. Youth would preer adventurous activities like skiing,

trekking, river rating, biking etc. our packages are tailored keeping all such requirements

in mind. Cultural, heritage and spiritual attractions can be included in the tour packages

that are prepared to serve the old age segment.

Incentive Tour Packages

Incentive tour packages are generally given to employees as recognition or theirbetter perormance in the organization. his incentive tour is actually a business tool to



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motivate the employees towards the goals and targets in the company. his tour packages

are usually given to groups with unusual travel package which may also include meetings,

exhibitions or conerences. Incentives tours are sometimes prepared under the stipulations

o organization and sometimes reedom is given to employees to select the destination o

their interest. hese packages include all the components o travel.

Convention/ Meeting Packages

hese package tours are prepared together including meetings and conventions or

they are also prepared individually. Convention tour packages are a bit dierent to other

packages. In these packages, registration and entry tickets to conventions are booked earlier

and then tour package is developed according to the time schedule o the convention.

Generally, these kinds o tours are pre-convention tours or post-convention tours includingconvention as part o the tour.

Meeting tour packages can be classiied in two ways. he irst kind is same to that o

the convention tour package where registration and booking o tickets to attend a meeting

is done and then pre or post meeting travel arrangements are prepared making it a meeting

tour package.

he second one is meeting as an event that is arranged or the delegates to meet

and the travel services are included in it making it a complete tour package. Such packages

include entrance tickets, guide ees and AC coaches to transer the tourists, accommodation

with breakasts and dinners. Lunches are usually provided at the convention or meeting

spot.

Affinity Group tour Packages

Ainity groups share common interests or common goals ormally or inormally.

It is common tendency that people like to travel with others who share their same values

making their group travel pleasurable. Ainity groups include hobby clubs, reading circles,

writing circles, social clubs, raternities and like-minded groups etc. Similar interest

groups tend to have their interest in activities like cycling, biking, painting, singing, art,

architecture, heritage, adventure and expedition cruise etc. and go on or tours including

such components. Sometimes these groups carry out non-proit and social responsible

activities at the destinations they visit. For example, orchestra group would give public

perormances, bikers would ride with a cause and trekkers would pick litter etc. at the

destinations. Sometimes, they prepare their own ood at the camping sites.



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Family Vacation Packages

Family Vacation Packages are prepared exclusively or a single amily. his is the

package where a amily can play together. Family vacations are some source o ondest

memories or both, the kids and the parents. Since a amily consists o kids, parentsand grandparents, it becomes diicult or an organizer to arrange all the travel services.

Promising a satisactory delivery to these groups is a tough job. Interests o all the members

are to be kept in mind. Generally kids become deciding actors in a amily vacation package.

he itinerary would be prepared keeping them in mind. Services like accommodation, entry

tickets to theme parks, water sports, meals, and group transers are included.

Weekend and Mini Vacation Packages

Weekend and mini vacation packages are a trend in India now. hese packages are

generally meant or the employees to break ar away rom their hustle and bustle o city

lie to rejuvenate their mind, body and soul with this short and cheap weekend and mini

vacation packages. Such packages are planned within the close vicinity so that the tourists

can complete trip within the stipulated time. hese trips are generally planned with riends

and loved ones.

Weekend and mini vacation packages are common in south India. Places like Mysore,

Pondicherry and Goa do attract many tourists as a part o weekend and mini vacation

packages. hey are located near to cities like Bangalore, Chennai and Hyderabad. Weekend

and mini vacations act as a stress busters to the week-long tired employees. Indian online

tourism companies like Makemytrip.com and Yatra.com are oering good weekend and

mini vacations packages. hese packages include accommodation, meals, sightseeing and

other interesting weekend activities like bike riding, cycle riding, beach activities etc.

Seasonal Packages

Seasonal Packages are specially prepared to enjoy seasons like the spring bloom,

winter splendor, summer sun, and all lea season etc. hese packages cannot be enjoyed all

around the year and are prepared in accordance with the tourists. It is a tough job preparing

such itineraries because a tour operator has to ind suitable places according to the best

reasons or the best season. he entire package and its components revolve around the

season and the place. Summer tours and winter tours are such kind.

People plan or summer tour to escape the winters and vice-versa. Bookings have tobe done more prior to the trip; late bookings would land us in disappointment o not getting



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the accommodation. Components like hop-on hop-o tours, transers, accommodation,

meals, and two wheelers or local accessibility are included.

Off-peak Special Packages

hese packages are specially designed to tap the market during O-Seasons. he

packages are made attractive adding new components to it. Creativity and innovation is

necessary to design such packages. ourists wish to experience the tourism at destinations

integrating into every aspect o it. For such type o tourists O-peak specials would help

a lot because the tourist inlow would be considerably less during O-peak. ourists will

have enough time to explore and enjoy every component o the destination. Generally, these

groups are small and the cost depends on the size o the group.

Foreign Independent Tour (FIT)

A special package arranged by travel agents or other oreign independent travel

specialist that its individual clients needs while they are travelling in oreign countries.

hese tours are preerred by wealthy and aluent travellers. his tour provides the comort

o travelling whenever a tourist wants to individually. hese tours are got tailored by the

personal travel agents.

ourists who wish to have such tours are very clear about where they travel, how

many days they travel, what transportation they use and what category o hotels they would

stay in and thus travel agents prepares the itinerary accordingly.

hese tours are prepaid and the entire cost o the package is paid to travel agent

including the cost o individual components. hese days it is quiet common that tourists are

educated and well versed with the technology and they preer to book all the travel services

by themselves wherein they can save money that is paid to travel agent. In most cases,

budget tourists go or this option.

Group Inclusive Tour (GIT)

his is an all-inclusive package with a speciied minimum size involving one or

more groups travelling on scheduled or chartered air service. his is the best method o

having an economic tour. ourists who eel insecure and alone can have such tours because

they are always in the group which is accompanied by a tour leader. Group Inclusive our is

one way to get the maximum beneits o the money a tourist spends and best services too.hese tours are prepaid partly or ully. I it is partly prepaid, the tourist is at his exposure



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and is given reedom to go around or shopping and other tourism related activities. Money

is spent rom the tourist’s pocket. he cost o these tours is high sometimes based on the

components included in it. It becomes diicult or individual to get that altered since it is

a group phenomenon.

Charter Tour

Charter tour is a trip or a package where the aircrat or other equipment is chartered

by a tour wholesaler, tour operator and other individual or group. When a large amilies,

group o riends or employees o a company wish to travel together, charter tours serve the

purpose. Separate light or vehicle is booked exclusively or the group. ourism Company

like homas Cook is well versed in such operations with their own leet. Charter tours are

expensive and the tourists are premium customers.

Destination Package

A package can be categorized by the destinations as it eatures. our package is

designed selecting all the components at a single destination. ourists are taken to that

speciic destinations and it is experienced to the ullest. Itinerary would be very simple.

Starting at the origin, reaching the tourist destination, staying at the destination, moving

to every corner o it, enjoying all the activities and then returning back to the origin is the

plan. Most o the times these destination packages are prepared keeping in view the special

events or estivals that occur at the destinations. For example, a visit to Pondicherry or

International yoga estival can be beautiully packaged into a destination package. his

package includes all the travel components like other tour packages.

Dynamic Packaging

his is a new trend in tour packaging. his enables the tourists to book their own

package based on their preerences o transport, accommodation, transers, meals, tour

guiding, sightseeing etc. instead o buying a pre-deined package tour. he pricing in

dynamic packaging is always based on the current availability.

ravel services are purchased rom the speciic seller. Dynamic packaging is the

automated recombination o the travel components based on the various conditions such as

the suppliers, trip characteristics, channels o distribution and terms o sale. hese packages

are generally sold online.



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However, in spite o all this dierent packages, it is not sure that tourists would go

or one o the above mentioned packages. ourists are now well educated and are aware o

the things that happen in the tourism industry. ourist’s preerences have changed a lot and

they do keep changing rom time to time. he tech-know-how tourists are advanced and are

booking their own packages through internet. he brick-and-click companies like Yatra.com, Makemytrip.com etc have come up to serve such tourists.

Summary

Packaging is commonly used in assembling some essential and related services to

enhance the value or money. It is seldom to ind individual items in the tourism market

as customers do not want to undertake travel with the conirmation o one single element.

However, there is no big dierence between all-inclusive and customized package touras each has its own merits and demerits. It assembles intangible and perishable elements.

Package holidays are package tours which are escorted and not escorted by the tourist guide.

his lesson presented the meaning o packages, importance o package and classiications

o dierent types o package tours with examples.

****



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Lesson 4.2 - Components of Package Tour

Learning Objectives


➢ Know the components o package tour

➢ Find the process o assembling the components

➢ Explain the meaning o each element o services

➢ Find the requirements o components or customized and readymade package tours.

Introduction

Package tour has become a well-established business ormat in providing multiple

travel solutions and proits. his business has been in existence since Cox & Kings oered

travel logistics to British Army in 1757. It is a three-century old travel business that has got

a systematic shape with so many innovations by many ounding travel agents in dierent

countries in the world. Package tour is conducted or independent and group travelers with

much personalized services at several places.

A sum total o services are combined together to meet the travel needs and comort.

hese services are assembled rom the primary service providers in special discounted rate.

our wholesalers or operators add markup on the actual cost o package tour. Package tour

has several components o services such as airare, room, sightseeing, guide, transer, etc.

Some o the packages are customized as per the request o customers and readymade as perthe convenience o tour wholesalers.

Package tours are designed in a dierent way by each dierent travel agent or tour

operator and the style o packaging it diers rom company to company, country to country,

market to market and destination to destination based up on the liecycle and liestyle actors

o tourists o that area. Even then there are travel components that are common or all the

packages and no one would take a step to neglect adding such components to the package.

In this lesson, dierent travel services are generally included in every package tour.



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Package Tour and Its Components

Package tours are meant or holidays

or excursions. It includes a variety o travel

services together to make a single combinedtrip. Package tour is a combination o

stable elements and unstable elements as it

is given in igure. he stable elements are

tourist attractions and tourist destinations,

whereas unstable elements are other travel

services like transportation, accommodation, meals and tourist activities. hey also include

tour guide or a tour leader. he duration and distance o these package tours can be short or

long ranging rom one day or overnight, or they can be up to a week or a month or more.

Package tours are generally sold on special ares called “Inclusion our Fares” which

includes air are, accommodation, meals, sightseeing, guiding, transers between airports,

railway stations, harbors, bus stations and hotels and entrance ees to attractions and

insurance services.

his is how they are known as package tours. Ater buying such packages, tourist

need not pay any extra amount to any other travel services except his personal expenses like

laundry, alcohol, shopping etc. hese packages are o two types. One is supplier oriented

package tour and the other one is wholesaler oriented tour package. Figure exhibits the

stable and unstable elements in package tour.

Types of Packages



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Components of a Package Tour

When we study at the package tours oered by tourism companies like homas

Cook, Cox & Kings, SOC, Makemytrip.com, Yatra.com and other government tourism

organizations, we come across many common actors that can be categorized in to twosegments. One is called as ravel arrangements and the other one is called Ground

arrangements. ravel arrangements category include only the transportation part and the

ground arrangements include the rest o the travel services like transers, accommodation,

meals, tour guiding, sightseeing, car rentals, entry tickets to tourist attractions and insurance.

Figure depicts the components o package tour.

\

Components of Tour Package

Travel Arrangements

Transportation

ransportation is an important component o the package tour. Acquiring inventory

orm the dierent travel service providers like roadways, railways, waterways and airways

is to be done religiously ar beore packaging a tour product. Generally transport services

are purchased in bulk and are sold with percent mark-up on each seat they sell. A well-

known and coordinated system o transport plays an important role in tourism industry.

he present transport system in India comprises several modes o transport including rail,

road, air and water transportation.



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Roadways

India has one o the largest road networks in the world, aggregating to about 33 lakh

kilometers at present and carries over 40 percent o the total traic across the length and

breadth o the country. All the major tourist destinations in India are well connected andproximity o a tourist attraction can only be reached by roadways but not through rail, air

or water ways.

In order to give boost to the economic development o the country, it is essential to

connect the major states or providing a way or connecting tourist places. he Government

has embarked upon a massive National Highways Development Project (NHDP) in the

country. he NHDP is the largest highway project ever taken in the country. he NHDP

is being implemented by National Highways Authority o India (NHAI). Extensive roadnetwork connects remote areas with towns, towns with cities and cities with metro cities

which also play a major role in transporting tourists to the destinations without many

hurdles.

Railways

Indian Railways with the tag line “Lie line o Nation” is the premiere transport

organization o the country is the world’s second largest under single management and

Asia’s largest rail network. It is a multi-gauge and multi-traction system covering the track

more than 1 lakh kilometers. Indian Railways runs around 11,000 trains everyday o which

7,000 are passenger trains with 6853 stations altogether. Indian railway network is divided

in to 17 regional divisions and these divisions take care o railways in their zones.

here are also luxury trains like Palace on Wheels (Rajasthan circuit), the Golden

Chariot ( Karnataka & Goa), the Deccan Odyssey (Konkan route), the Fairy Queen (New

Delhi to Alwar), the Maharaja’s Express (New Delhi to Agra), the Royal Orient rain

(Gujarat & Rajasthan) and Royal Rajasthan on Wheels running through various tourist

circuits in India. In tourism, railways play a critical role, unlike aircrats and coaches they

are ast, eicient and spacious carrying large number o people in one trip. Railway systems

in India journey through various parts o the country comortably connecting all important

tourist spots. Railways have become the essential USP o the tourism industry in India.

Airways

India was one o the irst countries to start aviation. Airlines have contributed insigniicant way to India’s tourism growth in recent years. It plays a major role in inbound



186

and outbound tourism. Airlines have now enhanced the eiciency and reduced the costs

making it available or all the sections o the community. Airlines have eased the transport

bottlenecks or tourists, business and trade travelers between metropolitan cities, towns and

smaller cities reducing unnecessary delays and enabling eiciency and productivity o the

Indian tourism to grow. he airline services are two types; they are scheduled services andcharter services.

Huge investments have been attracted in private airlines with consequential impact

on income generation or tourism. here has increased the scope o employment in the

airlines sector, besides associates activities like ticketing agencies, air traic control, airlines

ood supply agencies, airlines sta training or pilot training, airport coach and taxi service

agencies, etc. he number o oreign destinations now connected by regular or daily lights

rom dierent cities in India has increased maniold.

India is the second largest aviation industry o the world and is in third place in the

op 10 list o countries with the highest number o additional lights. India’s leet has got

about 600 lights and its civil aviation passenger growth is among the highest in the world.

International no-rills budget carriers, especially Asian low-cost carriers (LCCs) are playing

their role in carrying the budget class tourists. A number o airlines operate in India both

in public and private sectors, providing tourists with a plethora o lying options in terms o

their time table and also lying rates.

Air India is the government-run airline and still stands strong and is preerred by

many. Some o the private airlines in India include Jet Airways, Jet Connect, Indigo, GoAir,

Spice Jet, etc. Helicopter services by Pawan Hans Limited also unction or visiting various

places in India.

Airports Authority o India (AAI) has established integrated cargo terminals at

metro airports like Delhi, Mumbai, Kolkata and Chennai, wherein all the regulatory and

acilitating agencies are housed under one roo in order to acilitate aster processing,

movement and clearance o international cargo.

Waterways

Inland Water ransport (IW) has about 14,500 km o navigable waterways

compriseing Rivers, canals, backwaters, creeks, etc in India. At present, the operations

are carried out in a ew parts o rivers like the Ganga, the Bhagirathi, the Hooghly, the

Brahmaputra, the Barak River, the rivers o Goa, the backwaters in Kerala, the deltaicregions o Godavari and Krishna rivers and inland waters in Mumbai. he passenger and



187

tourist movement in this waterways are both organized and unorganized. here are ive

National Waterways in India, they are:

➢ National Waterway 1 – started in the year 1986 on Allahabad – Haldia stretch o

Ganges, Bhagirathi and Hooghly river system covering a distance o 1620 km.

➢ National Waterway 2 – stretched over the Brahmaputra river system rom Saidiya to

Dhubri with a total length o 891 km was started in the year 1988.

➢ National Waterway 3 – In the year 1993, over the stretch o West Coast Canal along

with Champakara and Udyogmandal canals, Kollam-Kottapuram waterways were

started with a total length o 205 km.

➢ National Waterway 4 – Bhadrachalam - Rajahmundry and Wazirabad - Vijaywada

stretch o the Krishna - Godavari river system along with the Kakinada -Puducherry

canal network, with a total length o 1,095 km in 2007.

➢ National Waterway 5 – Mangalgadi - Paradeep and alcher - Dhamara stretch o

the Mahanadi - Brahmani river system along with the East Coast Canal, with a total

length o 623 km in 2007.

he coastline o India is dotted with 12 Major Ports and about 200 Non-major Ports.

he Major Ports are under the purview o the central while the Non-major Ports come

under the jurisdiction o the respective State Governments which play their role in tourism

in considerable volumes.

Ground Arrangements

Accommodation

Accommodation is a very important component o the tourism industry. he demand

or accommodation arises when people leave home. hus, the need or accommodation is a

unction o need and aordability. he UN’s conerence on International ravel and ourism

held in 1963 emphasized the importance o traditional and supplementary accommodation.

he development o accommodation industry led to its incorporation in the policy and

planning o all the countries.

A hotel is a commercial establishment providing accommodation, ood, beverages

and rereshments or tourists during their stay. India stands among the top ity destinations

o the world and there is really a great need or rise in accommodation sector. o encouragetourism along with accommodation sector, government in recent times has taken some



188

measures to provide beneits to the sector. he center and states governments are also

working out a PPP (Public-Private-Partnership) model to increase the hotel capacity in

India.

Accommodation is a major generator o income and employment and their rate ishigher in accommodation sector compared to other tourism allied sectors. It is a labor

intensive industry and importance o all the types o labor like skilled, semi-skilled

and unskilled do exist equally. Due to the increase in volume o tourism business, the

accommodation units are growing at a aster rate than ever beore and every day more

rooms and beds are being added in tourism destinations across the country.

he Federation o Hotel & Restaurant Associations o India (FHRAI) is the Apex

Body o the our Regional Associations representing the Hospitality Industry. he FHRAIprovides an interace between the Hospitality Industry, Political Leadership, Academics,

International Associations and other Stake Holders. FHRAI is committed to promoting

and protecting the interests o the Hospitality Industry with more than 3824 members

comprising o approximately 2484 hotels, 1204 restaurants, 132 associate members and the

4 regional associations, FHRAI is truly the voice o the Hospitality Industry that brings

several million dollars to the exchequer and employs more than 17 million direct workers.

he accommodation sector is urther segmented to dierent types like premium hotels,

mid players, budget hotels, heritage hotels and unclassiied hotels.

Premium Hotels

Deluxe ive-star hotels are included under this category. hese are generally located

in business districts o metro cities and these are considered to be the most expensive.

Mid Players

Four-star and three-star hotels are included in this category. hese hotels cater to the

average oreign and domestic leisure travelers along with middle level o business travelers

and oer most o the luxury services without high costs since the tax component o this

segment is lower when compared with the premium segment.

Budget Hotels

Under this category, the irst and star hotels are included. It does not oer as many

services as the premium and mid players do, but provides the inexpensive accommodationto highly price conscious segment o the domestic and oreign leisure travelers.



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Heritage Hotels

Certain architecturally distinctive properties such as palaces and orts built prior

to 1950 converted in to hotels are named as heritage hotels. he Ministry o ourism has

classiied these hotels as heritage hotels and the cost o these hotels is high and servicesprovided here are luxurious and classic.

Unclassified Hotels

he letover uncategorized accommodation units all under this category. Rural

hotels, motels provide accommodation at lower rates. he price is the only selling point.

here is also trend or Home-stay and the time share properties across the country. ourism

departments are encouraging the host community to promote home-stay concept toovercome the shortage o hotel rooms in India. A part o home is converted to hotel room

and accommodation is provided to tourists with ood included in it and tourists are given

a good opportunity to mingle with the host amily. Owning o the same property by two

dierent owners in two dierent time intervals o a year is known as ime share property.

Attractions

Stretching rom the high mountains o the Himalayas to the shores o Kanyakumari,

rom the sacred Ganges to the sands o har Desert, India is a one-stop destination or all

those to experience its judicious mix o culture, heritage, spirituality and natural charms.

It has got a charismatic past, vibrant present and promising uture. India is the world’s

seventh-largest country and its more than one billion inhabitants are divided into two

thousand ethnic groups and speak over 200 dierent languages. India has an almost endless

variety o cultures, landscapes, monuments and places to explore.

From the ancient ruins, ascinating religious structures, exotic cities and diverse

landscape, there is an endless collection o tourist attractions in India ascinating the

visitors. Each attraction is a tourism product. May it be the culture, cuisine, local art orms,

souvenirs or the monuments?. hey play a vital role in attracting the tourists.

hese tourist attractions are scattered all over the country and are visited by

thousands o tourists. Attractions can be categorized as natural and it comprises mountains,

geothermal areas, orests and constructed attractions. It must be created and maintained.

Examples o constructed attractions are amusement parks, museums and art galleries,

wildlie parks, events, staged entertainment, cultural exhibitions, gardens and historicalbuildings.



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Tourist Attractions in North India

here are plenty o locations that are located in northern region and it ranks among

the popular tourist places o India. he tourist places India are amous or their scenic

beauty as well as rich traditional heritage. ourists can travel to a number o hill stations likeShimla, Manali, Ranikhet, Nainital, Srinagar and Dehradun. For the religiously inclined,

there are lots o tourist attractions and pilgrimage spots like Varanasi, Haridwar, Mathura,

Vrindavan, Badrinath, Kedarnath, Gangotri, Yamunotri, Amritsar and other places. In

addition to these, the various cities o North India like Delhi, Agra, Lucknow, Chandigarh,

Jammu, Ludhiana and Kanpur are also visited by thousands o tourists rom all parts o the

world.

Tourist Attractions in South India

Four states such as Andhra Pradesh, amil Nadu, Karnataka and Kerala orm South

India along with Union erritories o Pondicherry and Lakshadweep. hough all the south

Indian states are rich in scenic beauty, each one o the states has their own USP. Kerala

because o its backwaters, amil Nadu and Karnataka because o its heritage ad architectural

monuments, Andhra Pradesh with its cuisine and spirituality are attracting tourists at larger

scale. Major south Indian cities like Hyderabad, Chennai, Bangalore and rivandrum are

good tourist destinations. South India is also rich in natural and scenic attractions like

Eastern Ghats and Western Ghats, its serene beaches and Hill Stations.

Tourist Attractions in East India

East India consists o the states o West Bengal, Bihar, Jharkhand, and Orissa. he

East India part has many historical places and tourist attractions. ourists can visit many

temples like Jaganath emple, the Sun emple, the Bodhi emples, the Lingaraja emples

and the Rumtek Monastery. Cities like Bhubaneswar, Kolkata and Patna are amous and

provide good connecting link to all other tourist destinations o this region.

Tourist Attractions in West India

Western India consists o the states o Rajasthan, Goa, Gujarat and Maharashtra.

In addition to the states the Western India also includes the Union erritories o Daman

and Diu and Dadra and Nagar Haveli. Rajasthan is the most talked about tourist place

in Western India. Rajasthan tops the list in terms o cultural heritage. It is one o the top

ranking ourist Places India and is home to beautiul orts, castles, havelis, temples and

other cultural sites. ourists can go to places like Jaipur, Jodhpur, Jaisalmer, Bikaner, Mount

Abu, Ajmer and Chittor and so on and get a eel o the vibrant culture and heritage.



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Tourist Attractions in North-East India

Seven sister states o North East is a land o beautiul hills and plains with luxurious

green cover and a wide variety or rare and exotic lora and auna. Brahmaputra valley

with north east is a ertile plain on the basin o one o the largest rivers o the India hehilly terrain o the region ranges rom Nagaland in the east to the Meghalaya in the west

the Mizoram lies in the south while in the north lies the Arunachal Pradesh extends to

the snow-clad ridges o north east provides best opportunity to explore India’s beautiul

paradise. his region is looded with many national parks and wild lie sanctuaries. his

alluring land is one o the most treasured eco-riendly sites in the entire world, is still to be

touched by the outside world.

Transfers

Even though transers are not the major component o the package tour they are

worth mentioning. hey provide a good acility in transerring the tourist rom arrival

point to the accommodation point or origin pint to departure point. hey create the

impression about the whole tour package. Sometimes the transer services are also provided

as complementary but most o the times the transers are charged. ime punctuality o these

transer services plays a major role in convincing the tourist while on package tour.

Tour Guiding

our guiding plays a major role ater the tourist arrives at the destination. our

guiding is done by a tourist guide and tourist guide is the individual who spends maximum

time with the tourists at the tourist attraction during sightseeing. our guiding creates

image about the country and since a tour guide is considered as the ambassador o the

country, plays role in doing so. Country’s past, art, architecture, history and culture are

interpreted to the tourists. our guiding is taken as a proession by many people and they

help the tourists in all the requirements at a tourist attraction.

Sightseeing

Sightseeing oers variety o services. Services like hop-on-hop-o sightseeing,

guided sightseeing, pre-package bus programs etc. All the tourism departments o dierent

states and countries have their own pre planned or guided sightseeing which includes even

meals and rereshments. Sightseeing is the prior component or which a tourist travels to

the destination.



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Insurance

Among the travel arrangements or tourist, insurance is a very important aspect. he

insurance policies given to tourists cover the areas like medical care and hospitalization,

personal accident, cancellation or curtailment o holiday, delayed departure, baggage loss,money loss, personal liability etc. ourists have to ensure that medical coverage is suicient

to meet their needs in the countries where hospital care is very expensive.

Ancillary Services

Support services or ancillary services improve the quality o a tourist attraction. he

dierent kinds o ancillary services are:

Food and Beverage

Food and Beverage is most important experience or the visitors on holiday. Visitors

are very much interested in country’s local ood and wine. India is known or its variety o

cuisines. Given the range o diversity in soil type, climate and occupations, these cuisines

vary signiicantly rom each other and use locally available spices, herbs, meat, vegetables,

and ruits. Indian ood is also heavily inluenced by religious and cultural choices. Each

region o India is well-known or its typical kid o ood and beverage which plays a critical

role in making the tourist delighted.

Shopping

Shopping can be both an attraction and a basic acility which tourists expect at a

destination. his can include souvenir shopping or purchasing basic necessities. Products

which identiy with a destination are always popular. India has got that variety o arteacts

and souvenirs which attract tourist to shop with higher percent o participation at the

destinations.

Tourist Publications and Information

raditionally, this inormation is given in the orm o brochures but the Internet is

now an increasingly important source o inormation or tourists and or tourism operators.

Availability o current inormation or tourists is vitally important e.g. weather, local

transportation, attractions etc.



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ravel Guides such as the Lonely Planet series are immensely popular and continue

to be updated and extended each year. Some guidebooks are now taking the orm o travel

blogs and wikis such as Wikipedia and wiki travel. Since India is a country o varied languages

and cultures, inormation should be published and disseminated or the convenience o

domestic tourists and oreign languages or the convenience o oreign tourists.

Entertainment

his category includes local art orms, art galleries, cinemas, theatres, nightclubs,

bars, casinos and shows. Many tourists look or entertainment and expect these acilities to

be available especially in cities. he rural side o India has got a variety o art orms to attract

tourists. hey are perormed or tourists in open auditoriums and closed auditoriums. I

such entertainment is not available or tourists they get disappointed and would lead todissatisaction.

Summary

Package tour is an established business model or travel agents and tour operators

to make proits. Package tour is conducted or independent and group travelers. hese

services are assembled in a special discounted rate to make the price o the tour more lexible

and negotiable. our wholesalers or operators do lots o homework to study the amount o

markup to be added on the actual cost o package tour. he components o package tour

include airare, room, sightseeing, guide, transer, etc. Packages are customized as per the

demand o customers. It varies rom company to company, country to country, market to

market and destination to destination as various actors interplay in this business.

****



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Lesson 4.3 - Package Tour Costing

Learning Objectives

After reading this chapter, you should be able to

➢ Understand the meaning o cost

➢ Explain dierent types o cost

➢ Know the methods o costing components o package tour

➢ Know the actors inluencing tour costing

Costing is a central element in package tour business. our operators do costing in

a systematic and careul manner to reduce the risk o making loss. It means that risk o loss

may happen in tour operation business due to several uncontrollable actors. Buying services

in bulk rom dierent service providers in special discounted rate is the primary work o

tour operator in the o season i.e. June-July in India. Cost or package elements determines

the market price and quantity o sale o package tour. our operators primarily look into the

costs incurred or ixed and variable costs. Several internal and external actors determine

the cost o package tour business. his lesson presents you the meaning, types and methods

o calculating the cost o package tour along with actors inluencing tour costing.

Costing of Tour Package

Costing o a package tour includes the determination o the monetary value o a tour

package. he cost o package tour is explained as the total expenses are incurred to covert the

places o interest along with services into an appealing package tour. A tour company incursthe costs or transacting with the principal service providers. It assembles or purchases

individual components to give concrete shape to tour package. he cost is determined as

per clients or markets requirements or organisations strategies. our operators work out

ixed and variable costs.

Types of Cost

Fixed costs are changed when the number o packages sold increases over time.our operators include the cost o hiring buses and guides or interpreters. Fixed costs are a



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kind o expenses incurred beore any sales take place. hese costs oten include rent o the

building, urniture and salary.

Variable costs change according to the increase and decrease in the number o

customers in the group. hese include meals, accommodation, admission ees, and othercosts charged according to a rate per person. he cost o advertising, pamphlets and

brochures are also included in the variable costs. Furthermore, variable costs include the

actual expenses (direct costs) o rooms, tickets, and other package components incurred with

the sale o each package. he overhead and marketing costs are considered proportionately

or each tour package based on the costs o developing and marketing each package.

Fixed, variable, and overhead costs vary between 60 per cent and 70 per cent. hree

dierent costs are added with a 10–15 per cent mark-up to get the inal price tag or anindividual tour package. For example, Yatrik ravels plans to oer a weekend winter sports

package to Kashmir during the proessional skiing season. It includes tickets, room charges,

helicopter services, two meals, executive hotel services, skiing equipment, and rereshments.

Break-even analysis is a method used to determine the total sales needed to cover

the total costs. Hence the name break-even signiies that the total revenue is equal to the

total cost. his technique is used to evaluate alternative pricing levels.

Breakeven Point

➢ he point at which the income derived rom the sale o a tour is exactly equal to the

expenditures incurred in running the tour, i.e. no loss and no gain.

➢ It can be identiied in terms o the number o dollars o sales required (price multiple

number o participants) or in terms o the number o tour members required.

➢ It is the smaller number o tour members constituting the breakeven point and per

passenger cost will be higher.

Package Pricing Worksheet

A pricing worksheet relects the distribution o cost components in the package tour.

For example, when Rs 10,000 is the inal price o one tour package, the costs o the elements

o services in the package is divided into direct and indirect costs. Out o the gross margin

o proit, nine per cent is spent on administrative cost. he indirect costs comprising costs

on advertising, sales promotion, and publicity constitute ive per cent. hus, a tour operatorcan make a proit o around iteen per cent on each sale o the package tour that includes



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the commission or override rom the principal service providers. he average proit made

on package holidays is extremely slender. Many non-travel companies supplying consumer

products achieve a net margin on sales turnover o 10 - 12 per cent. able presents the tour

price structure

Tour Price Structure

Type of cost Cost component Percentage

Direct costs Accommodation costs 25

Airlines ticket costs 20

Surace transport costs 15

Agent commission 10

otal 70

Gross margin 30

Indirect costs s Administrative cost 9

Advertising and promotional costs 5

Others 1

otal 15

Net income/profit 15

Pricing of Package Tour

Ater ascertaining the cost o a tour package, tour operator analyses exchange rates,

estimates uture selling price and inalises the price o a particular package. he tour price is

not solely determined in terms o the cost but on the basis o expected rate o return, market

share and competitors’ price. here are dierent approaches to ix the price o package

tour such as total cost and marginal cost method, breakeven pricing, rate o return pricing,

skimming, penetration, going rate, dierential etc.

Cost Factor of a Tour Operation Business

A package tour business is carried with the help o methodical planning and

controlling o various down and upspring resources. he price tag o the package tour is

decided on the basis o the positioning and branding. our operators use the methods o

marginal pricing ater examining the market trends. he operational costs and margin o

proit is thoroughly examined by the tour operators to decide the price o the package. our

operators have the absolute reedom to zero in the price tag on the basis o mark-up and

buying power o the potential buyers.



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Some o the essential elements o the cost actor in the package tour business include

mark-up, net rate, and gross proit. Mark-up is the extra amount which the company can

maintain on each sale. our operators have the best bargain ability while negotiating with

the suppliers o services in order to secure services at the cheapest possible cost.

he net rate is the price that a supplier charges based on which prices or package

tours can be decided. Any amount o mark-up can be added beore arriving at the inal

rate meant or the buyers. he commission constitutes a major share o earnings in tour

operations.

Factors Influencing Tour Costing

Te average price to sell the product or can vary, some o the actors that influencepricing are:-

➢ Seasonality: It may vary your price depending on high or low season.

➢ Operating Costs: he higher the operating costs, the more expensive the prices will

need to be so that it cover all expenses.

➢ Competition: here is no point pricing the product out o the marketplace and the

company need to stay competitive or be able to justiy the high price.

➢ Demand: People pay more i there is a high demand in a region. Similarly, they pay

less i there is an abundance o choice.

➢ Tour or Accommodation Details : Dierent tour types o rooms are relected in the

package tours or the guests to know.

➢ Daily Costs (Fixed): o determine the ixed costs associated with operating business,

such as uel, labour etc...

➢ Daily costs (Variable): o determine the costs associated with taking passengers

on tour or letting out rooms, such as meals, third party activities, linen and room

cleaning

➢ Annual Business Costs (Fixed): o calculate the total costs associated with operating

the business, these costs occur whether the tours operating or not, it remains to be

ixed. For example costs that are ixed include insurance, marketing, lease payments,

bank ees, accounting ees and salaries.

➢ Average Capacity: he package tour business is based on actors such as visitationto the region, competitor analysis and customer eedback.



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➢ Accurate Forecasting: is also necessary or another reason. Yet another risk can arise

rom the unexpected loss o popularity o a country where the tour operator has

contracted heavily.

➢ Political or Security Concerns or Natural Disasters: yphoons or volcanoes, or

currency movements or new aviation or tourist taxes inluence the cost o package

tours. here is a high level o price elasticity between holiday markets.

Holiday Pricing

our operators set prices to ensure that as many aircrat seats and hotel beds are

used as possible. he main components are:

Season Pricing

Package holidays are normally organized into two seasons: Summer and Winter. In

the summer, more people wish to go to their holidays in August than in May. However, tour

operators need to keep their planes as ull as possible throughout the year. his is achieved

by varying the prices to relect the varying demand or holidays.

he summer period is the main time to travel both due to holidays and due to the

weather. here is a double pressure on demand. August is also the main month or holidaysthroughout India. here must be more pressure on beds rom all domestic markets. More

people wish to travel as there would be school holidays. here are only a inite number

o beds & aircrat seats, prices must rise or those periods. our operators are generally

committed to beds & seats or a ull 6 month season.

Flight Times

Most customers would preer to travel during the day, but some are prepared totravel at unsociable times i the price is right. his policy helps keep all the holiday prices

down, not just those using midweek night lights.

Regional Departures: he prices or lights rom regional airports are set to keep

aircrat as ull as possible. our operators are keen to provide regional departures or people

like to travel rom their local airport.

Single Room and Other Accommodation Supplements: Most tour operators

contracts with hoteliers and apartment owners are based on a price per room, whilst their



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brochure holidays are sold per person. As a result, per person price or a single traveller

includes the whole room cost. his applies to both single rooms in hotels and sel catering

units.

Tour Operators and Exchange Rates

A high proportion o the costs are incurred rom the oreign currencies, or hotels,

transers, airport charges etc. in the destination country. Also aviation uel is priced in US

dollars.

Summary

Costing is a key element in package tour business. our operators do costing in acareul way to decrease the loss and maximize the proits. Several uncontrollable actors

may create the risk o loss in tour operation business. Buying services in bulk in special

discounted rate by tour operator in the o season helps in managing cost or designing the

package tour. Cost or package elements determines the market price and quantity o sale

o package tour. our operators mainly consider the costs incurred or ixed and variable

costs. Several internal and external actors determine the cost o package tour business.

****



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Lesson 4.4 - Components of Tour Costing and Preparation of Cost Sheet

Learning Objectives

After reading this chapter, you should be able to

➢ Find dierent components o tour costing

➢ Explain the need or inclusion o each component in tour costing

➢ Understand the interlinks between the components o each cost

➢ Understand the need or developing a cost sheet

➢ Prepare an individual cost sheet

Introduction

Costing each element o package tour is a painstaking work or a tour operator while

developing new package tour. Calculation o costs o package services determines the price

o package tours and it helps in garbing new market. Many tour operators minimize the cost

o preparing package tour that helps them maximize proits. Reduction o unwanted costs

and negotiation with primary service providers or special rate largely help tour operators

make proits and pass on certain beneits to the customers or clients.

It is essential to include each element o cost that directly and indirectly determine

the inal price tag o a particular package tour. Including research and development costs

as an indirect cost also determines the price o package tour. Similarly, marketing and

publicity are two important costs that a tour operator includes them as indirect costs.Besides understanding and including each element o cost, developing a methodical cost

sheet is an important work o a tour operator to bring each implicit and explicit cost into

the calculation o total costs o package tour. hus, this lesson will explain each component

o package tour costing along with the preparation o cost sheets.

Fixed and Variable Costs

Fixed costs do not vary in the short run, but it varies in the long run. For example, thecost remains to be the same no matter how many rooms are occupied in particular day. It does



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not matter it is 1 or 20 passengers. But the costs would be the same. Variable costs change in

short run as well as in the long run also. It varies as per the variation o the sale o package tours.

able presents the difference between fixed and variable costs pertaining to the various activities.

Activities Fixed vs. Variable Costs

Example cost Fixed Variable

Fuel or a bus tour

Wages or a bus tour

Meals whilst on tour

Room cleaning

Activities whilst on tour

National park permits

Vehicle registration

Amenities or rooms (soap, shampoo etc...)

Cleaning o room linen

Various Components of Cost

he cost or developing a package tour decides the inal price o the package. hesale o the package tour is a direct unction o direct or indirect costs or ixed and variable

costs. he tour cost is explained as the sum total o cost incurred to combine related and

complementary services. For example, SOC as a tour wholesaler examines aordability

o potential customers and various cost components. Proit margin is added ater due

consideration o purchasing power o buyers and costs involved in designing the package

tours.

Furthermore, market demand determines the cost o tour packages and touroperators make all possible ways to make the services arranged in a very negotiable rate

with the principal service providers. here is usual variation o doing the calculation o

costs rom one tour operator to another. hese are the ollowing variable costs apart rom

the ixed costs.

Market Research and Development

he cost or market research includes the expenditure to gather date through ield

visit and analyze with the help o scientiic tools. It is also an attempt to study about the

destinations and the travel behavior and motivations o customers.



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Cost for New Product Development

he cost is incurred or discovery o new destination and development o new

packages. It includes the cost or preparing documents or planning. our operators incur

the cost on their amiliarization tour. he development o new packages needs allocationo cost.

Transfer Cost

International and domestic airares, rail travel, and transer and departure taris are

included in the cost component in case o the all-inclusive package tour.

Accommodation Cost

Accommodation cost is expected to be around 30 per cent o the total cost that is

decided ater the negotiations accommodation companies.

Sightseeing Costs

Sightseeing cost includes the cost o guide, entry ree, rereshments, coach, etc. he

calculation is done on per head basis.

Administrative and Transactional Cost

he cost o managing the preparation o itinerary and package tour is incurred.

his is an indirect cost or implicit cost. he cost includes salary and incentives, insurance,

inancial or legal expenses and recruitment and selection cost. he

Technical cost

he technical cost includes the acquisition o new sotware, hardware, and computers

or the reservation o air tickets and tour packages.

Cost for Training and Development of Staff

he cost o training the sta is incurred orm the revenue o the tour company. Front

line executives are given in-house training with the help o external or internal trainers,

whereas the managers are send or outhouse training to learn the strategic business decisions.



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Cost Marketing

he cost marketing is incurred rom the budget or marketing. Marketing cost

includes advertising and sales promotion or diversiication o the package tour business.

Cost for Sales Promotion

he cost is incurred or the sales promotion to increase the volume o sales o the

package tour by providing discounts, commission

Printing and Publicity Cost

he cost o printing tour brochures is incurred or designing and printing multiplecopies o the tour brochure on coloured glossy papers highlighting the tour itinerary and

other important eatures o package tours.

Cost for Bank Interest

he cost is also incurred to repay the rate o interest and principal or borrowing

loans rom the banks.

Sun Cost

he cost is incurred or the depreciation o ixed assets in the long run due to the

obsolete nature o sotware and hardware, and electronic gadgets.

Miscellaneous Cost

his cost includes porterage charges at airports and railway stations, tips at hotels

or airports, entrance ees, insurance premiums, gits, and welcome dinners. hus, while

costing a product, the tour company should concentrate on the our pivots namely- cost

consciousness, cost measurement, cost responsibility and cost improvement.

Tour Cost Sheet

Cost sheet is a detailed breakdown o the costs related to the speciic event. It is used

to provide an overview o items. It shows clearly what each item costs and helps determine

whether or not it is an expense that to be included. our Company has an opportunity to

review the total estimated costs. Itemizing the costs allows all the elements to be reviewed

beore it is included in each area.



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our cost sheet is a statement designed to show the total costs along with the breakup

o tours costs. he inormation relected in cost sheets is collected/ derived rom the

conidential tari rom the principal service providers. he conidential tari is prepared

ater negotiating the rates quoted by the suppliers like Hotels, Airlines, Railways and others.

A conidential traic is also prepared by the handling agency/destination company. hereis no ixed orm o or the preparation o a conidential tari and tour cost sheet. But in

order to make the cost sheet more useul, it is usually prepared in column orm i.e. transer,

sightseeing, hotels, etc.

`Note: “35” is the tour group number. When you see “divide by 35” it means that you

should divide the total number by 35 tour group members.

Name o our: __________________________

I. Transportation

Net Airare Per Person _________

ax, ees on airare per person _________

Motorcoach cost divided by tour group number (35) = _________

Parking Fees divided by tour group number (35) = _________

olls divided by tour group number (35) = _________

ranser Costs (buses, taxis, etc) per person _________

Ship or Boat travel (plus tax), per person _________

rain ravel plus tax per person _________

our Conductor’s ransportation (i not comped)

(cost divided by 35 people ) _________

II. Lodging

Hotel (including taxes), non commissionable

Name Per night cost x No.o nights divided by 2 (dbl occupany) ____ ____________

1. ____________ _____________ _____________ _____________

2. ____________ _____________ _____________ _____________

3. ____________ _____________ _____________ _____________



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III. Meals

A. Restaurants

Name 1. ________________ meal cost per person: ________________

2. ________________ meal cost per person: ________________

3. ________________ meal cost per person: ________________

B. Reception Party (First Dinner or Meal)

otal Cost ________________ divided by (35) ________________

C. Farewell Party (Last Meal)

otal Cost ________________ divided by (35) ________________

D. Meals for driver or escort (if not included) divided by (35) ________________

IV. Sightseeing

A. City Sightseeing Tours

Name o City

1. _________________ Cost per person: ________________

2. _________________ Cost per person: ________________

3. _________________ Cost per person: ________________

4. _________________ Cost per person: ________________

B. Step-On Guide Salary (Overall Fee Basis)

Name Cost Divided by 35

1. ________________ ________________ ________________

2. ________________ ________________ ________________

3. ________________ ________________ ________________



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C. Attraction Admissions

Name o Attraction

1. ________________ Cost per person ________________

2. ________________ Cost per person ________________

3. ________________ Cost per person ________________

4. ________________ Cost per person ________________

V. General Costs

A. Estimated Supply Costs _______ divided by (35) _________

B. Estimated Advertising Costs _______ divided by (35) _________

C. Estimated Oice Overhead _______ divided by (35) _________

D. Your salary or operating the tour _______ divided by (35) _________

E. Miscellaneous _______ divided by (35) _________

VI. Cost Per Person (Subtotal- Cost to operate this tour per person) _________

Advantage of a Tour Cost Sheet

➢ It discloses the total tour costs and the cost per persons.

➢ It enables the tour company to keep a close watch and control over cost.

➢ It helps in ixing up the selling price more accurately.

➢ It helps the tour company to submit quotations.

Whatever pricing policy is adopted, a tour company has to take into consideration, the:

➢ Market segmentation.

➢ Potential tourist perceptual assessment

➢ Analysis o competitors pricing strategy

➢ ‘Assessment o the composition o the product line

➢ Analysis o external actors like political instability, events and other problems

➢ Image o the destinations

It is clear that pricing a tour package involves a complex process. A company has to add

an adequate margin o proit to enable the company to expand and diversiy its product line.



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However, it has become imperative to recommend that a new tour company should ix its

proit margin between 5 to 20 per cent o total tour cost. he existing tour company should

not ix its proit margin higher than 20 percent o total tour cost.

Summary

he cost management o a travel company acts a crucial bridge between strategy

and operational eiciency that can channel the working o the entire organization towards

the uniied aim o achieving competitive advantage. Every strategic choice that a travel

company makes includes costing a tours package and introducing o new products/ services

to new markets. It must be validated by its cost implications.

****



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Lesson 4.5 - Tour Pricing and Pricing Strategies

Learning Objectives


➢ know the meaning o tour pricing;

➢ understand dierent types o pricing to be applicable or package tour;

➢ be amiliar with the calculation o tour pricing;

➢ understand the meaning o pricing strategies; and

➢ ind dierent pricing strategies adopted by tour operators

Introduction

Pricing package tour is a inal decision that a tour operator takes ater thorough

review o competitor’s price as well as elements o services to be oered to customers.

Pricing is the process o giving level that plays a deciding actor or the sale o number o

tour packages in a particular time period. It is a type o strategy to reach the target market in

a record time. All tour operators have no choice but to adopt dierent pricing strategies to

reach out customers at various localities in market. At the same time, a package tour buyer

is very price sensitive and they are carried away with the amount o price that determines

the value o package tour and quality o services.

While comparing price o dierent package tours, an average buyer preers to buy

package tours rom branded tour operators having long track record o operating inbound/

outbound/domestic package tours. In this present, cut-throat competitive market, pricingstrategy is one ways o sustaining business and optimizing the return on investment. hus,

this lesson will explain about meaning o pricing, calculation o tour pricing and pricing

strategies in tour operation business.

Pricing- A Key Determinant of Package Tour Business

Pricing is one o the most important elements o the marketing mix. It is the only

mix to generate a turnover or the organization. he remaining 3Ps are the variable cost

or the organization. It costs to produce and design a product and it costs to distribute a

product. It also costs to promote it. Price must support these elements o the mix. Pricing is



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diicult and must relect supply and demand relationship. Pricing is a product too high or

too low. It means a loss o sales or the organization. Pricing should take into account the

ollowing actors:

➢ Fixed and variable costs.

➢ Competition

➢ Company objectives

➢ Proposed positioning strategies

➢ arget group and willingness to pay

Pricing for Package Holidays

Price is always a crucial actor in the survival o product in the market. As it is a

general practice, tour operators employ the method o marginal pricing. Ater studying the

market trends, tour operators add their margins and cost the package or ater calculating

their operational costs plus some proit or the company, tour operators tag the price on the

package. However, it is the complete choice o tour operators to have the option o choosing

either rom mark up or buying power. Let us discuss some o the basic elements o cost

actor in the package tour business.

Mark up: our operator generates proit as business entity and to keep the business

alive. It is required to handle as many clients as possible and by making sure that

each deal ensures suicient proit.

Buying capacity: Buying ability is used to ampliy the amount o proit on each sale

in order to reduce the price at which services are bought rom principal suppliers or

the package.

Net rate: It is the price which a supplier charges on prices or package tours to be

decided. While calculating the net rates add any amount o mark up and it can be

added beore inal rate that is meant or client.

Gross rate: Gross proit is the rate at which a supplier quotes or products/ services

delivered by them. It normally includes a percentage o the gross rate. his is a hidden

part that is usually known as commission.

Margin: he ollowing points are considered at the time o making margin.

➢ otal amount received by retail client➢ Retail agent’s commission on this sale



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➢ Amount passed to wholesaler

➢ Air seat to destinations

➢ Amount o inbound operators invoice wholesalers

Factors Influencing Pricings

➢ Seasonality

➢ Fluctuations in business between high and low seasons

➢ Operating costs includes general overheads

➢ Promotion and labour costs which can vary, depending on business peaks and

troughs.

➢ Competition

Pricing: A Key Constituent of Marketing Mix

Marketers use numerous tools to call orth the desired responses rom their target

markets. hese tools constitute a marketing mix. Marketing mix is the set o marketing

tools that the irm uses to pursue its marketing objectives in the target market. As shown in

Figure, McCarthy classiied these tools into our broad groups that he called the our Ps o

marketing: product, price, place and promotion.

The 4P components of Marketing



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hroughout most o history, prices were set by negotiation between buyers and

sellers. All or-proit organizations and many non-proit organizations set prices on their

goods or services. Whether the price is called rent (or an apartment), tuition (or education),

fare (or travel), or interest (or borrowed money), the concept is the same.

In the recent past, technology has transormed the entire business process. It takes

back to an era o negotiated pricing. he Inormation and Communication echnologies

(ICs), mobile, wireless, business networking and collaboration link people, product and

business together across the globe. his technological revolution particularly ICs has

brought buyers and sellers at one platorm. Websites like Expedia.com, ripAdviser.com,

Last minute ravel and MakeMyrip.com now allow buyers to buy products and see price

quickly and easily.

In the entire marketing mix, price is the one element that produces revenue and

the others produce costs. Price is also one o the most lexible elements. It can be changed

quickly, unlike product eatures and distribution channel. Although price competitions a

major problem acing companies, many do not handle pricing well. he most common

mistakes are as ollows:

➢ Pricing is too cost-oriented.

➢ Price is not revised in relation to market changes. ➢ Price is set independent o the rest o the marketing mix rather than as an intrinsic

element o market-positioning strategy.

➢ Price is not varied enough or dierent product items, market segments, and purchase

occasions.

Setting Tour Pricing

Price is a key element to support a product’s quality positioning. A irm must set aprice or the irst time when it develops a new package, introduces it into a new distribution

channel. A irm, in developing its pricing strategy, must decide where to position its product

on price and quality, there can be competition between price and quality. In Marketing Mix-

4Ps, price is the only element meant or generating revenue or company. In the process

o determining prices, a company ollows a six-step procedure. A tour company sets a

pricing structure or relecting various in geographical demand and costs, market-segment

requirements, purchase timing, requirement o products and other actors. Several price-

adaptation strategies or setting prices or product lines, optional eatures, captive products,

two-part items, by-products and product bundles.



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The customized tours can greatly benefit the clients in the following ways;

➢ Personal urge or visiting the places and enjoying the events and activities can be

possible to a great extent.

➢ It is aordable as the selection o destinations and elements o services are suggested

by the clients.

➢ Adequate time can be earmarked or certain places or example photography and

cultural program.

➢ Modiication o tours and services are mostly allowed.

➢ he services can be enlarged depending on the client’s ability to pay.

➢ With the quality o services, clients can be used as the promoter o the tours.

➢ Many customized ainity group packages can be organized.

Figure presents the steps or determining price or organised package tour.

In setting a product’s price, marketers follow a six-step procedure (See figure):

Product’s Price Steps Procedure)

Step 1:Selecting the Pricing Objective

A company can pursue any o ive major objectives through pricing: (a) Survival (b)

Maximum current proit (C) Maximum market share (d) Maximum market skimming and(e) Product-quality leadership.



213

Step- 2: Determining Demand

Each price leads to a dierent level o demand. It has a dierent impact on a company’s

marketing objectives. he relationship between alternative prices and the resulting current

demand is captured in a demand curve. Normally, demand and price are inversely related.he higher the price, the lower would be the demand. In the case o superior goods, the

demand curve sometimes slopes upward because some consumers take the higher price to

signiy a better product. Still, i the price is too high, the level o demand may all.

Step- 3: Estimating Costs

While demand sets a ceiling on the price the company can charge or its product,

costs set the loor. Every company should charge a price that covers its cost o producing,distributing, and selling the product and provides a air return or its eort and risk.

Step- 4: Analyzing Competitors’ Costs, Prices and Offers

he irm must take into account its costs, prices and possible price reactions o the

competitors. I the irm’s oer is similar to a major competitor’s oer, then the irm will

have to ix price neck to neck to the competitors or lose sales. Package tour price o homas

Cook India Ltd., Cox and Kings and SOC mostly adopt this pricing strategy. I the irm’s

oer is inerior, it may price more than the competitor’s price. I the irm’s oer is superior,

it can ix more than what the competitor oer. However, competitors may change their

prices in response at any time.

Step- 5: Selecting a Pricing Method

he three Cs consisting o the customers’ demand schedule, the cost unction and

competitors’ prices are the major considerations in setting price. Firstly, costs set a loor to

the price. Secondly, competitors’ prices and the price o substitutes provide an orientingpoint. hirdly, customers’ assessment o unique product eatures establishes the ceiling

price. hereore, companies must select a pricing method that includes one or more o

these considerations.

Step-6: Selecting the Final Price

he previous pricing methods determine the range rom which the company selects

its inal price. In selecting that price, the company must consider additional actors such

as psychological pricing, the inluence o other marketing-mix elements on price, company

pricing policies and the impact o price on other parties.



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Pricing Strategies

Every product has a price. he pricing strategies must be consistent with the company

pricing policies. o achieve this, many irms set up pricing unit to develop strategies and

take appropriate decisions. ourism and travel companies having Product Marketing eam(PM) or quoting the prices are reasonable to customers and proitable to the company.

Management o any company needs answers to the ollowing questions while ormulating

pricing strategies.

Question-1: How will the tour package distributors or channels (General sales Agents,

Principle Sales Agents, Franchise and Retails) eel about the pricing strategies?

Question-2: Will the sales personnel be willing to sell at that price?

Question-3: What will be the reaction o competitors in market?

Question-5: Will the government intervene and prevent this price rom being

charged?

Companies usually do not adopt a single price, but rather a pricing structure that

relects variations in geographical demand and costs, market-segment requirements,

purchase timing, order levels, delivery requency, and other actors. As a result o discounts,

allowances, and promotional support, a company rarely realizes the same proit rom each

unit o a product that it sells.

These are the following pricing strategies

➢ Geographical pricing

➢ Price discounts and allowances

➢ Promotional pricing

➢ Discriminatory pricing ➢ Product-mix pricing

➢ Penetration pricing

➢ Skimming pricing

➢ Competition pricing

➢ Psychological pricing

➢ Premium pricing

➢ Optional pricing



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Geographical Pricing

In geographical pricing, the company decides how to price its products to dierent

customers in dierent locations and countries. For example, should the tour operating

company working in inbound, outbound and domestic market segments decide the sameprice to customers irrespective o country o origin distant or dierent? Or set a lower price

to gain additional business?

Price Discounts and Allowances

Most companies adjust the list price and give discounts and allowances or early

payment, sales volumes and o-season buying, as shown in able.

Price Discounts and Allowances

Cash Discounts A cash discount is a price reduction to buyers who pay their

bills promptly

Quantity Discounts A quantity discount is a price reduction to those buyers who

buy large volumes.

Functional Discounts Functional discounts (also called trade discounts) are oered

by a Wholesaler to trade-channel members i they will perormcertain unctions, such as selling, and record keeping.

Seasonal Discounts A seasonal discount is a price reduction to buyers who buy

services out o season. Ski resort will oer seasonal discounts to

retailers in the spring and summer to encourage early ordering.

Hotels, motels, and airlines will oer seasonal discounts in slow

selling periods.

Allowances Allowances are extra payments designed to gain reseller

participation in special programs. Promotional allowances arepayments or price reductions to reward dealers or participating

in advertising and sales support programs.

Promotional Pricing

Companies go or promotional pricing techniques to stimulate early purchase.

However, smart marketers recognize that promotional-pricing strategies are oten a zero-

sum game. I they work, competitors copy them and lose their eectiveness. I they do not

work, they waste company money that could have been put into longer impact marketing



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tools, such as building up product quality and service or strengthening product image

through advertising. For example, SOC World Famous our, Outbound Division o

Kuoni India Private Limited cuts the price o selected Group Inclusive our (GI) packages

to attract customs. Similarly, Club -7 holidays oers special prices on Holiday packages

during special events. An airline company lowers the price o ticket and advertises it aspsychological pricing was ` 10,000. It is now ` 9,999.

Discriminatory Pricing

Companies oten adjust their basic price to accommodate dierences in customers,

products, locations and so on. Discriminatory pricing occurs when a company sells a

product or service at two or more prices. hey do not relect a proportional dierence in

costs.

Discriminatory pricing takes Several Forms

Customer-Segment Pricing

Dierent customer groups pay dierent prices or the same good or service. For

example, the amous tourism attraction ‘Kolkata Museum’ oten charges a lower admission

ee to students and senior citizens.

Product-Form Pricing

Dierent versions o the product are priced dierently, but not proportionately to

their respective costs.

Image Pricing

Some companies price the same product at two dierent levels based on image

dierences. For instance, pricing o aj and Ginger hotels dier much due to brand image,

whereas both belong to Indian Hotels (AA Group).

Location Pricing

he same product is priced dierently at dierent locations even though the costs

are the same. For example, theatres oten vary seat prices according to audience preerences

or dierent locations.



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Time Pricing

Prices are varied by season, day or hour. Public utilities use time pricing, varying

energy rates to commercial users by time o day and weekend versus weekday. A special

orm o time pricing is called as yield pricing. It is oten used by airlines to ill as many seatsas possible. Package holiday pricing during peak season in India and Movie ticket price in

evening show on weekend are some o the examples time pricing.

Product-Mix Pricing

Pricing strategy must be modiied when the product is part o a product mix. For

instance, tour package is mixed with hotel, transportation and attractions. In this case, tour

operator searches or a set o prices or maximizing proits on the total mix. Pricing a productline is diicult because the various products have demand and cost interrelationships. hey

are subject to dierent degrees o competition.

Penetration Pricing

he organization sets a low price to increase sales and market share.

Skimming pricing

he organization sets an initial high price and then slowly lowers the price to make

the product available to a wider market. he objective is to skim proits o the market layer

by layer.

Competition Pricing

It is a strategy to set a price in comparison with competitors.

Psychological Pricing

he sellers here consider the psychology o price and the positioning o price within

the market place.

Premium Pricing

he price is set high to relect the exclusiveness o the product.



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Optional Pricing

he organization sells optional extras along with the product to maximize its

turnover.

Summary

A tour operator reviews o competitor’s price as well as elements o services

thoroughly taking several actors into considerations. Pricing is the process o giving level

or the sale o tour packages in a particular time period. It is a type o strategy to reach the

target market in a record time. All tour operators have adopted dierent pricing strategies

to sustain the business in the market. Package tour buyers are price sensitive and decide

the value o package tour and quality o services. In the competitive market environment,pricing strategy can help tour operation win over the competitors’ product and maximize

the return on investment.

****



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Lesson 4.6 - Package Tours of Thomas Cook, SOTC, Cox & Kings and TCI

Learning Objectives


➢ Be amiliar with types o package tour designed by homas Cook, SOC, Cox &

Kings and CI;

➢ Understand business interests o these tour wholesalers in promoting package tours;

➢ Know dierent marketing strategies or promotion o package tours; and

➢ Be acquainted with methods o operating package tours

Introduction

Package tour is a generic tour operation business. he business o FI and GI

package tour has been diversiied to cater emerging markets. It is not only a proitable

business venture but also it is dependable and sustainable given the trends o travel in the

recent years. homas Cook is one o the oldest travel agents, wholesalers and consolidators

o airlines, hotels and cruise line business. At the same time, other competitors such as

SOC and Cox & Kings have also designed attractive packages or catering outbound and

domestic tourism markets in India. CI is merged into homas Cook and it is known or

its inbound tour operation business.

All these our leading travel companies have almost dominated travel market with

their appealing and value-added products. his lesson is intended to act as a resource or

those tourism and travel students who are ready to invest career, time and energy in tourismindustry and build packages or visitors to get them to market. his lesson moves beyond

the theoretical underpinning and give practical understanding about package tours o these

our travel companies.

Understanding Package Tours

When a tourist plans and books a trip to a destination or leisure and recreation

purpose, they buy an experience comprising a wide range o products and services. Apackage, rom a tourism perspective, is the linking o a number o individual products/



220

services into a single experience, typically or a single price. A package is a saleable item,

with a set price or a set period o time. here is a broad range o products and services that

can be linked in a package.

Key Components of Package Tour

➢ Attractions (Built attraction – museum, art gallery, theme park etc and Natural

attraction – wateralls, scenic vistas etc).

➢ Accommodation

➢ Food & beverage

➢ ransportation

➢ Guided tour

➢ Entertainment – theatre perormance, stage show& concert

➢ Event/estival

➢ Shopping

➢ Activity – hiking, kayaking, skiing & snowmobiling

➢ Local culture

Packaging for Group Inclusive Tour (GIT) Vs Free Individual Tour (FIT)

Both the markets o GI and FI have dierent types o need and characteristics or

tour packaging. o cater the need o GI and FI markets, there is a signiicant demand and

growth potential or packages that oer a range o experiences to tourists.

Business Interests of Tour

Packages oer many advantages to tour operators to stay in the business despite

market volatility and other challenges. Packages should be the only one part o company’sproduct oering. Advantages o packaging rom the visitors and company’s perspectives

vary with the type o design and deliver o package tour operator.

➢ A package provides one-stop shopping, oten at one, all-inclusive price.

➢ A package costs ewer prices than when the customer assembles the same product

into an experience themselves.

➢ ourists irst look or a destination or areas to visit. hey are typically based on

a region or area with a variety o attractions and services. When a destination is



221

identiied, more detailed planning is carried out to streamline the design and

operation o package tour. Some perceive many things about the entire trip ahead

o time and some ater the tour. With a detailed and ully planned itinerary, one can

maximise the experience. Others use packages as only part o a larger experience.

Growing FIT Market

here is increased demand or packages as part o an independent travel experience

with this growth.

Creating Competitive Advantage through Packaging

By creating a new experience through packaging, tour operator companies can createa competitive advantage by oering a combination that is not oered by others. Packages

are successul at maintaining the revenue streams without capital investment.

➢ our packaging encourages repeat business.

➢ It makes the experience ‘new ‘by simply adding a new eature or theme, a tour package

is seen as ‘new’ and provides new experience to visitors.

➢ In many packages, tour operator joins orces with other tourism suppliers in dierent

businesses to serve a dierent clientele like hotels, airlines and ood and beverage.Any marketing and advertising company, partnership with other suppliers within

the package may leverage its marketing resources or stronger market reach.

➢ Package creates partnership opportunities with tourism suppliers.

Designing an organised Inclusive Package Tour

here are a number o basic steps one must go through to make your package tour,

which are outlined below and detailed in able.

Steps in Designing Organised Package Tours

Step Key Actions Purposes

1. Analysing Marketing

Opportunities

o deine target markets and the type o

experience tourists look or.

2. Deine Reason or packaging o ensure that package is related to objectives

3. Deine our PackageComponents

o identiy what is in the package, to determinei partners



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4. Identiy Packaging Partners o develop the complete package.

5. Create and Nurture Package

Partnership

o establish a sound working relationship with

package partners.

6. Develop Detailed Itinerary o understand each step, no matter how small.

7. Pricing our Package o ensure the competition while reaching proit

goals.

8. Give Name our Package o create a presence and sales tool

9. Develop Operational Plan or

Package

o ensure that sta must understand the

implications on operations and sales.

10. Communicate Operational

Plan Package our

o make sure al sta members must understand

and contributes to the package.

11. Distribution and Market oPackage

o conduct sell and distributenetwork or packagetour in eicient manner.

12. Evaluation o provide with sound tools to evaluate eorts –

should you continue or exit?

13. Reine Package o respond to input received and to improve or

next package oering.

Methods of Operating Package Tours

here are many questions about how a package really works – between the partners

o the package, or company’s own operation (internal operations plan) and between the

visitors and the tourism suppliers. By completing an operation plan, one can be better

prepared or the ‘unexpected’ because time is taken to anticipate all contingencies. Figure

presents methods o operating package tours.

Tour Package

Operating Package Tours



223

It is important or tour operator to make sure that all the rontline sta members who

interact with visitors when they inquire, book and arrive understand the complete package.

Sta members can contribute signiicantly to the design and delivery o a package. hese

are the ollowing points that must be taken into consideration while operating packages.

➢ Sell the package yoursel

➢ Sell in co-operation with package partners

➢ Sell through third party (e.g. DMOs/DMCs)

➢ ravel trade partnership:-

our Operator

our Wholesaler

Local ravel Agents Outbound Operators

Member-based organizations

Package Tours of Thomas Cook

homas Cook (India) Ltd. is the leading integrated travel and travel related inancial

services company in the country oering a broad spectrum o services. hese services

include Foreign Exchange, Corporate ravel, Leisure ravel and Insurance. he Companylaunched its Indian operations in 1881 and is celebrating its 132 years o world-class service

in India. homas Cook (India) operates in the dierent areas o business with various

products. Table illustrates homas Cook business and product oering.

homas Cook Business and Product Oering

Thomas Cook Business Thomas Cook Products

➢ Leisure ravel

➢ MICE

➢ Corporate ravel Management

➢ Foreign Exchange

➢ Insurance

➢ Holidays in India

➢ International Flights

➢ International Holidays

➢ Cruise Holidays

➢ Domestic Flights

➢ Domestic Hotels


➢ International Hotels

➢ ravel Insurance

➢ Visa and Passport



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Figure exhibits the ollowing beneits o operating as ully Integrated Foreign

exchange and travel platorm homas Cook.

Description o our Package ‘Exotic Kashmir’ (06 Nights/ 7 Days) Promoted by

homas Cook India

Highlights of the Tour

➢ Return Airare on Economy Class

➢ Inclusive o all ‘must see’ sightseeing

➢ Accommodation at quality hotels

➢ Inclusive o breakast & dinner

➢ Stay 1 night in deluxe houseboat at Srinagar

➢ Stay 1 night in Gulmarg

➢ Enjoy a Gondola ride to Khilanmarg

➢ Stay 2 nights in Pahalgam

➢ Visit Awantipura ruins o 1100 yrs old temple o Lord Vishnu

➢ Visit to Chandanwari & Betab Valley in Pahalgam

➢ Stay 2 nights in hotel at Srinagar

➢ Shikara ride on Dal Lake once during the stay

➢ Visit Shankracharya emple

➢ Visit to the amous Mughal Gardens - Nishat Bagh and Shalimar Bagh

➢ Excursion to Sonamarg



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Tour Price includes

➢ Return Airare in economy class rom Mumbai / Delhi

➢ Accommodation on twin sharing basis in hotels mentioned or similar

➢ Daily Breakast and Dinner at all places

➢ ransers and sightseeing by AC vehicle on sharing basis as per the itinerary

➢ Visit to Chandanwari and Betab Valley in Pahalgam will be by local non AC vehicles

➢ Entry ees to Gondola (ropeway) up to 1st level at Gulmarg

➢ Shikara ride on Dal Lake once during the stay on sharing basis

The Price does not include

➢ Additional / personal use o vehicle

➢ Any personal expenses, room service and special orders, mineral waters, alcoholic

and non alcoholic beverages, porterage, tips, phone calls, laundry etc

➢ Any extra excursions or sightseeing apart rom the above speciied itinerary

➢ Camera ees, guide charges

➢ Any incidental and other expenses which are not speciied in the inclusions

➢ Govt service tax – 3.09 % applicable on total billing

Important Things to Note

➢ It is mandatory to carry photo ID card while on tour. PAN card is not a valid ID card.

➢ he vehicle used or transers is not at disposal.

➢ his is an indicative itinerary and subject to change depending upon circumstances.

Drivers / local representatives areconsultedor next day’s sightseeing schedule /

transers timings.

➢ At Sonamarg, Gulmarg and Pahalgam the vehicles are allowed only up to the

common parking lot. hereater one has to walk or hire ponies/ local vehicles or

local conveyance on direct payment basis

➢ our-programme is subject to change depending upon circumstances

➢ Please note that only post paid mobile number works in Kashmir



226

SOTC

SOC is Kuoni India’s key outbound travel brand. It is India’s leading outbound tour

operator, acquired by Kuoni ravels. It is the world’s leading premium our Operator in the

year 1996.

It is also a leader in all travel segments namely Escorted ours, Free Individual ravel

and Domestic Holidays. SOC Corporate ours is the leader in Incentive, rade Fair and

Sportours. SOC’s vast array o holiday services is taking holidaying to an entirely new

level. able illustrates ive dierent areas o package tour business o SOC. able presents

the various SOC holidays

Escorted Group Tours

SOC Escorted Group ours pioneered the designing and marketing o escorted

tours to cosmopolitan travellers’ in India. Its tours have escorted lakhs o travellers across

the globe or more than 50 years to various destinations including Europe, Australia,

New Zealand, USA, Arica, Mauritius, South Asia, and the Southeast Asia. Being a 100

per cent subsidiary o Kuoni ravel Holding, Switzerland, it is one o the world’s largest

travel companies. SOC leverages the advantage o the buying power and travel services

to provide customers value-or-money packages. SOC endeavors to bring alive the dream

holiday. It ensures sae, sure and secure travel with the experienced tour operators. Budget

tours designed by SOC provide value or money to travellers without compromising on

sightseeing and basic holiday needs.

Customized Holidays

SOC oers customised and tailor-made holidays around the world. On these

customised holidays, tourist travel only with their companion at your own pace. One can

go or holiday at a range o destinations, ly the airline o their own choice and stay at hotels

o their own choice.



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Holidays of India

SOC Holidays o India satisy or amilies, youth, students and honeymooners as

well as groups or individual travellers or a holiday in India. SOC Holidays o India have

a range o holiday options covering every requirement. It oers an opportunity to visit andexplore important places o India. It also oers a wide range o customised holidays or

giving individual travellers the complete reedom and lexibility to deine their preerences

or the destination, length o stay and pace o travel.

Corporate Tours

SOC is a specialist in MICE ours. SOC Corporate ours provide customised

solutions or various MICE related travel needs. It assists corporate traveller at everystage o planning, including pre-tour amiliarization visits, booking o air seats, arranging

accommodation at the inest hotels, gala dinners, collateral preparation, technical back up,

meal arrangements and event management. It ensures the highest quality o service or

incentive programs, conerence and meetings across the globe.

Trade Fair Tours

SOC rade Fair ours cater exclusively to the needs and requirements o the business

travellers visiting or exhibiting in International trade airs. Increase in the number o Indian

participants and visitors to various International exhibitions to compete at a global level

conirm huge potential or Group Outbound ravel. In the past ew years, it has successully

organised delegations to various International trade airs. SOC rade Fair ours have

given a new dimension to the trade air visitors by providing value-added services such as

conirmed accommodation during the air period, Indian meals and option to pay in easy

monthly instalments, actory visits at extremely attractive and competitive prices.

Cox and Kings India Limited

Cox & Kings is the longest established travel company in the world. Its distinguished

history began in 1758 when it was appointed as general agents to the regiment o Foot

Guards in India under the command o Lord Ligonier. It has over 12 ully owned oices in

India across key cities such as New Delhi, Chennai, Bangalore, Kolkata, Ahmedabad, Kochi,

Hyderabad, Pune, Goa, Nagpur and Jaipur. he worldwide oices are located in UK, USA,

Japan, Russia, Singapore and Dubai. It has associate oices in Germany, Italy, Spain, South

Arica, Sweden and Australia.



228

The principal services offered by the company are:

➢ Destination Management

➢ Incentive & Conerence Solutions

➢ Domestic Holidays

➢ NRI

➢ rade Fairs

➢ Outbound ourism

➢ Business ravel


➢ Insurance

Cox and Kings Types of Holidays

➢ Duniya Dekho - Group ours

➢ FlexiHol- Individual ours

➢ Bharat Deko - India ours

➢ Luxury Escapades

➢ Instant Holidays ➢ Rail Europe Holidays

➢ Romantic Getaways

Duniya Dekho: Escorted International Group Tour Packages

Duniya Dekho is escorted group tours designed or likeminded Indian passengers,

with Indian meals and Indian our Managers. he itineraries are careully planned or

coach tours with a mix o essential sightseeing and activities. he hotels used are normallyirst-class hotels ranging in the three- star to our-star categories. It also provides optional

excursions or tourists to choose to enhance their experience.

FlexiHol-Individual Tours

Escorted tours are quite ast paced. It can also be customized. his package tour

relects individual schedules, tastes and budget.



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Bharat Deko - India Tours

Bharat Deko tours in India are designed or group travelers with buet meals and

our Managers. he itineraries are careully planned with the sightseeing and activities.

It includes irst-class hotels ranging in the three-star categories. It also provides optionalexcursions to maximize their experiences. It can be upgraded to our-star and ive-star

hotels. he tour brochure relects individual schedules, tastes and budget.

Travel Corporation of India (TCI)

It is India’s leading Destination Management Company with 100 per cent subsidiary

venture o homas Cook India Limited. It has a stainless record o operating inbound

business in India, Sri Lanka, Nepal & Mauritius or over 50 years. It has been securing thestatus o the Best Inbound our Operator. CI has oices at 12 cities in India and seven

marketing oices overseas at New York, London, Frankurt, Madrid, Barcelona, okyo and

Kathmandu. able presents various package tours being oered by CI.

TCI Travel Packages

India’s Lost Frontiers Pilgrimage ours Adventure ours

Luxury Hotels Special Interest ours Re-live India

Luxury rains Saari ours Cruises

Honeymoon ours Ayurveda and Spa Luxury rains

Description of TCI ‘Footsteps of Buddha’ Tour Package

DAY-1

Arrive Delhi and meet the representative at arrival hall and transer to hotel. Inthe aternoon proceed on a tour o the capital city. he important places include the Red

Fort, the historical Chandni Chowk along with Raj Ghat and Shanti Vana, the Rashtrapati

Bhawan, the India Gate,the Laxminarayan emple, Qutab Minar and the lotus-shaped

Baha’i emple.

DAY-2

Morning drive to Jaipur and Arrive Jaipur and check- in at hotel. Jaipur is otherwise

called as Pick City. It has uphold its glory since Maharaja Sawai Jai Singh II had it built in

1727.



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DAY-3

Excursion to Amber Fort with the unique experience o traveling on elephant back

to and rom the top o the hill. Aternoon sightseeing tour o Jaipur including, City Palace,

Central Museum with its large collection o woodwork and Jantar Mantar

DAY-4

Morning drive or ive hours to the City o aj, Agra en-route visiting the deserted

town o Fatehpur Sikri. Check-in at hotel. Later proceed or the city sightseeing tour visiting

he aj Mahal.

DAY-5 ranser to airport to board light or Varanasi. Arrive Varanasi and transer to hotel

visiting Sarnath en-route, an important Buddhist pilgrimage point.

DAY-6

Enjoy a boat ride on river Ganges. here are about hundred ghats in the city. Also

visit he Vishwanath emple and he Bharat Mata emple houses.

DAY-7

Morning drive to Bodhgaya.Arrive Bodhgaya and check- in at hotel. Visit the sacred

place or Buddhists as it has a Peepul tree under which Gautama the Buddha attained

enlightenment some 2500 years back.

DAY-8

Morning sightseeing tour o Bodhgaya visiting Mahabodhi emple along with

Bodhgaya Archaeological Museum.

DAY-9

Morning drive to Patna. Arrive Patna and check-in at hotel. he places include

visiting Har Mandir Sahib, Golghar and Patna Museum.



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DAY-10

Morning drive to Kushinagar.Arrive Kushinagar and check – in at hotel. he places

include the visit o the Rambhar Stupa and the visit o the Mahaparinirvana temple, which

houses the recumbent igure o Lord Buddha.

DAY-11

Morning drive to Balrampur.Arrive Balrampur and check – in at hotel.

DAY-12

Morning drive to Lumbini.Arrive Lumbini and check – in at hotel. Lumbini is the placewhere Buddha was born 2500 years ago.

DAY-13

In time transer to airport to board light or Kathmandu. Arrive Kathmandu and

transer to hotel. Surrounded by green hills and mountains with snow capped peaks against

its northern and eastern background the Valley is indeed beautiul.

DAY-14

Morning visit Hanuman Dhoka, the name o the old royal palace has been derived

rom the statue o Hanuman (the monkey god o Hindu mythology) Also visit the hilltop

Stupa o Swayambhunath, considered 2,000 years old.

DAY-15

Leaving Kathmandu with a representative to airport to help board light or onward

destination.

Inclusions of Package Tour

➢ Accommodation in all the hotels on single/twin/triple sharing basis, as per the list

above.

➢ Breakast on all days.

➢ All prevailing taxes like Luxury tax in all hotels and Expenditure tax wherever

applicable.



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➢ All transers to or rom hotels, city tours, excursions, drives by air-conditioned

transport.

➢ Services o an English speaking local guide.

➢ Interstate road tax, toll tax, driver’s allowance, parking etc.

➢ Exclusions:

➢ Any lunch, dinner, snacks, mineral water etc. unless mentioned in the itinerary.

➢ Entrance ee to any monuments or camera ee.

➢ Any airare or airport tax

➢ ips, gratuities.

➢ Portage, laundry, telephone calls, table drinks or any other expenses o person

Tourism Marketing and Promotion Strategies for Package Tour

Promotion a key method to spread the word about tour packages to customers,

stakeholders and the general public. Once a tour operator identiies their target market,

they gain good idea o the best way to reach them. It uses a mix o advertising, personal

selling, sales promotion and public relations to promote tour packages.

Advertising

Advertising is a orm o communication designed to persuade potential customers

to choose tour packages over competitors. Success o advertising depends upon how tour

operators making their package know to visitors. It should be a planned, consistently with

the activities that can keep the name o package in the mind o the consumer. hese are the

ollowing key strategies adopted or package advertising.

➢ Make a tour package most amiliar to visitors

➢ Create goodwill and build a avorable image o company.➢ Attract customers to ind out more about tour package.

Personal Selling

Selling is the exchange o goods or services or an agreed sum o money. Following

situation can be understood or personal selling:

➢ Identiying need and want o tour packages in market which aord to pay by visitors.➢ Creating contact with visitors by phone, email or in writing etc.



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➢ Making presentation and demonstration about the tour package in order to convince

potential visitors or a holiday.

Sales Promotion

Sales promotion includes short-term incentives or activities that encourage the

purchase or sale o a package. It should target toward inal buyers (consumer promotions),

business customers (business promotions), retailers and wholesalers (trade promotions)

and members o the sales orce (sales orce promotions). Some sales promotion activities

or tour package are as ollows:

➢ Point o purchase display material like poster, banners, broachers etc.

➢ Competitions, coupons and games

➢ Loyalty reward programs

➢ Seminars and workshops about the packages

➢ Conerence presentations

➢ rade show displays like SAE, KM, WM and IB etc

➢ elemarketing and direct mail campaigns

➢ Newsletters

➢ Event sponsorship ➢ Capability endorsement

➢ Reward incentives linked to purchases or sales

➢ Reseller sta incentives

➢ Commissions

Public Relations

he Public Relations Institute o Australia (PRIA) deines Public Relations (PR) as

‘the deliberate, planned and sustained eort to establish and maintain mutual understand-

ing between an organization (or individual) and its (or their) publics. ypical PR tools

include:

➢ Media releases: news creation and distribution

➢ Special events: such as news conerences, grand openings and product launches

➢ Speeches and presentations

➢ Educational programs



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➢ Annual reports, brochures, newsletters, magazines and Audio-Video(AV)

presentations

➢ Community activities and sponsorships

Summary

Holidays provide an essential opportunity to reresh ourselves and escape our

demanding schedules. hereore, holidays need to be designed and delivered careully to

provide delight to tourists or pleasant memories. In the light o this, it is crucial or package

tour operator to design and deliver unorgettable tour with maximum sightseeing, good

hotels and ood all in one inclusive package.


1. Deine package tour and dierentiate between the package tours developed by

tour intermediaries and other agencies in tourism supply chain.

2. Explain dierent types o package tours with relevant illustrations.

3. Explain the packages with programming or special interests.

4. Explain meaning and unctions o target market packages.

5. Discuss about the Convention/ Meeting Packages.

6. Explain the concept o dynamic packaging.

7. What is package tour? Explain the need or the various components in the

package tour.

8. What is the costing the package tour? Explain dierent types o cost.

9. What is breakeven points in package tour and how a Package Pricing Worksheet

is developed?

10. Present the actors inluencing the costing o package tour.

11. Explain various activities o Fixed vs. Variable costs in the package tour costing.

12. Present various components o costs and how are the dierent rom each other?

13. What is tour cost sheet? Present the types o inormation is given in the cost

sheet.

14. What are the dierent types o travel arrangements? Describe each o them.



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15. What are the dierent types o accommodation services that are mostly included

in the package tour?

16. Present ive important places o interest rom each region o India.

17. Why is pricing known as a key determinant o package tour business? Explainwith examples.

18. Explain the basic dimensions o pricing the tour package.

19. Explain the actors inluencing the pricing strategy in tour operation business.

20. Highlight the most common mistakes in ormulating the pricing o package tour.

21. Explain the steps in setting the pricing strategy in the overseas travel market.

22. Explain dierent types o pricing strategies in tour operation market.

23. How homas Cook and Cox and Kings have created Competitive Advantage

through their innovative Packaging? Present with illustrations.

24. Explain each step in designing an organised inclusive package tour.

25. Explain the methods o operating package tours.

26. Present the important package tours o homas Cook and how is homas Cook

is beneited rom operating the Integrated Foreign exchange and travel platorm.

27. Which are the principal services oered by Cox and Kings? Name the popular

packages promoted by Cox and Kings.

28. Which the principal services oered by SOC and Name the popular packages

promoted by SOC.

29. Highlight the tour packages o ravel Corporation o India and how are they are

dierent rom other competitors?

CASE STUDY

Zero Commission and Diversification of Revenue generation

raditionally, travel agents used to depend largely on the ticket sales or the bulk o

share o total revenue. With airlines selling tickets directly to travellers through multiple

e-ticketing platorms, travel agents do not have any choice and they are out rom their

dominant business haven. his direct sales method is a global trend resulting rom the

need or airlines to maximize revenues or minimize loss while keeping costs down. As such



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majority o airlines are acing the challenge o breakeven and other issues leading to the

closure o the companies. For example, Kingisher airlines shut down the services abruptly

in 2011 due to the heavy losses. International and domestic airlines used to oer 8 and 5

per cent commission on a ticket sold to travel agents respectively. However, it was gradually

reduced to one percent and it is now zero percent due to overheads cost. It is observed thatseveral airline sites even oer reduced costs and extra incentives or customers ordering

tickets online.

Zero percent commission and ticket booking through website is one o the 47

recommendations o Pro. Dholakia Committee Report on the cost cutting in Air India. he

Ministry o Civil Aviation has accepted all these recommendations. he Zero Commission

policy on ticket sales adopted by almost all airlines has orced the travel agencies to switch

over to the new streams o revenue along with new services.

o reduce their reliance on airline commission payments, travel agencies are

resorting to the ollowing strategic options to sustain and survive in the business.

➢ Streamlining operations and controlling sta costs whilst ensuring the customer

eels as little impact as possible

➢ Expanding or moving into the leisure business where commissions on non-air

products remain high (cruise & hotel)

➢ Specializing in geographic areas or becoming niche players or speciic leisure

products (e.g. destination weddings, student travel, group travel & cruises only)

➢ Establishing a service ee driven business model

Diversiication is a orm o growth strategy. Growth strategies involve a signiicant

increase in perormance objectives (usually sales or market share) beyond past levels o

perormance. Diversiication strategies are used to expand irms’ operations by adding

markets, products, services or stages o production to the existing business. Many

organizations pursue one or more types o growth strategies.

➢ Coee shops

➢ SMS marketing

➢ MICE

➢ Foreign exchange:

➢ Courier service➢ Film icket booking.



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ravel agencies are now adopting the E-business revenue models, Digital Content

Revenue Model, Advertising-Supported Revenue Model and Fee-or-ransaction Revenue

Model.

Questions

1. What triggered the airlines to stop paying usual commissions when travel agents still

play dominant role in the airline markets?

2. What are the diversiied sources o revenue or travel agents now?

3. What are the business strategies o travel agents to overcome this zero commission

challenge?

****



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239

UNIT - V

Unit Structure

Lesson 5.1 - Roles and Responsibilities o ravel rade Associations

Lesson 5.2 - Roles and Functions UFAA

Lesson 5.3 - Roles and Functions o PAA

Lesson 5.4 - Roles and Functions o ASA

Lesson 5.5 - Roles and Functions o AAI AND IAO

Lesson 5.6 - Roles and Functions o AAOI, ADOI, IAAI, FIYO and AFI

Lesson 5.1 - Roles and Responsibilities of Travel Trade Associations

Learning Objectives


➢ Understand the need or association in travel agency business

➢ Explain various roles o travel trade associations

➢ Understand dierent duties and responsibilities o national, regional and international

travel associations

➢ Realize the presence o national and international bodies in solving many key

problems

Introduction

he business o travel agency has undergone signiicant changes in the recent

years. It has become a huge global business that largely contributes to the international

trade. As such, tourist arrivals to a destination or a country are largely determined by the

initiatives o tour operators through their organized package tours. our operation business

is governed by government policies and programmes. his business involves handling or

oreign tourists, receipt o oreign currency, processing o travel documents and operating

in protected areas, including restricted travel areas.



240

hus, there is a need or travel trade associations to represent the interests and issues

to the government or any international tourism or allied bodies. It is a complex business

and tour operators shall have to give something back to community or destinations. Smile

on aces o local community and cleanliness at tourism destinations can change the mindset

o tour operators. For example, Cox & Kings is maintaining the cleanliness o a mountainin Switzerland. IAO, New Delhi has been doing several programmes on plantation, carbon

trading and reduction, rehabilitation and relie activities. his lesson will explain about

roles and responsibilities o travel trade associations.

An industry trade group is also known as a trade association or sector association.

hese are the organizations ounded and unded by business enterprises to be united to

ight or the common cause and interest.

An industry trade association participates in public relations activities such as

advertising, education, political donations, lobbying and publishing. However, its main

ocus is collaboration between companies and standardization o business. Associations

also get involved in organizing conerences, networking or charitable events or conducting

training programmes or distributing reading materials or creation o human resources.

rade associations are ormed to represent the interests o trade partners operating

in particular industry sectors and to make sure that the voice is heard positively by the

government or suppliers. rade associations are non-proit making organizations. he

complex organization o tourism perorms the role o catalyst or planning, development

and promotion o tourism destinations. hus, all these unctions must be carried out with

a high degree o cooperative interaction between the public and private sectors at all levels

o destination hierarchy.

In addition to a geographic classiication, tourism organizations can also be classiied

by ownership, such as government, quasi-government, or private; by unction or type o

activity, such as regulators, suppliers, marketers, developers, consultants, researchers,

educators, publishers, proessional associations, trade organizations, and consumer

organizations; by industry, such as transportation (air, bus, rail, auto, cruise), travel agents,

tour wholesalers, lodging, attractions, and recreation; and by proit or non proit.

Regulatory Bodies

Regulatory bodies exist to make sure that all travel and tourism operators serve the

travelling public saety airly and eiciently. hey are ound at dierent levels:



241

Global Level

ICAO (International Civil Aviation Organization) and IAO (International Air

ransport Organization regulate international air transport services.

National

he Indian government is responsible or legislation concerning the health and saety

at tourist attractions and airport security. IAO, AAI and FHRAI work or the promotion

o travel tourism and hospitality trade.

Local

he local authorities carry out a great deal o work on matters such as restaurantsand other ood premises, trading standards and inspections o hotels.

Need for Organizations

➢ Organizations are ormed

➢ to manage the uture expansion o tourism business as it has been expanding.

➢ to ensure the best business practices or sustainable tourism development.

➢ o increase investments in tourism sectors

➢ o get government and public support or some o the sensitive tourism projects

➢ o unite the trade partners under one common platorm

Tourism organizations are needed for the following reasons:

➢ Government and Private Organizations are necessary or the promotion o tourism.

➢ Organizations can coordinate with the various sectors o tourism industry.

➢ It can ensure to work together as a team and get maximum proit.

➢ It gets value or money leading to customer delight or accessibility, adequate acilities

and saety at the destination.

➢ Organizations help them in conducting business as many o the services are

interdependent on each other,

➢ Many o the vendors/operators are small scale operators and need an association to

deend and protect their rights.

➢ As the tourist market is ragmented, organizations help them in reaching potential

customers.



242

ourism organizations may be classiied

➢ Geographically;

➢ By ownership;

➢ By unction;

➢ By industry; and

➢ By motive

Tourism organizations may be

➢ International;

➢ National; ➢ Regional; and

➢ Developmental

For example, the UNWO is a highly inluential organization representing the

public and private sectors in tourism industry.his international organization has been

working or the promotion o global tourism since it was established in 1975 in Madrid,

Spain. hese organizations provide both moral and unctional leadership that coordinates

and strengthens the visibility and eectiveness o tourism organizations that provide public-sector governance and private-sector unctionality.

his apex body has the ability to inluence national and international development

policy. It is the only international institution existing solely to promote the spread o the

tourism industry across the globe. Its role can be understood in a number o ways. It is a

campaigning organization or the tourism industry and it is a donor or tourism development

projects. It is the primary source o research and statistics on global tourism business.

The UNWTO

➢ Serves as a global orum.

➢ ransers tourism know-how and technological support.

➢ Computes and produces statistics and market research.

➢ Develops tourism human resources.

➢ Works to acilitate travel and tourism.

➢ Promotes sustainable development practices.

➢ Creates and supports the special projects.



243

For example, the World ravel and ourism Council (WC) has been promoting

tourism research since it was established in 1992 in London. he WC

➢ Works with governments to make tourism a strategic economic development and

employment priority.

➢ Moves toward open and competitive markets.

➢ Pursues sustainable development.

➢ Eliminates barriers to growth in the industry.

➢ ravel and ourism Research Association (RA)

➢ Facilitates access to numerous sources o inormation to support research eorts.

➢ Educates members in research, marketing and planning skills through publications,

conerences and networking. ➢ Encourages proessional development and recognizes research and marketing

excellence through its awards program.

➢ Creates opportunities to interact with peers throughout the industry.

➢ Fosters development o travel and tourism research and related curricula in institutes

o higher education.

➢ Promotes the development and application o proessional research in the travel and

tourism industry.

International Developmental Organizations have been working directly and

indirectly or the promotion o tourism. They are as follows;

➢ World Bank

➢ United Nations Development Program

➢ Asian Development Bank

➢ FONAUR (Mexico)

➢ EMBRAUR (Brazil)

Regional International Organizations have been working or the development o

tourism in a particular geographical region that has many similarities in culture, topography,

history and society. hey are as ollows;

➢ Organization or Economic Cooperation and Development

➢ Paciic Asia ravel Association (PAA)



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National Organizations have also been working or the development o tourism in a

country. hey are ollows;

➢ Oice o ravel and ourism Industries (OI)

➢ ravel Industry Association o America (IA)

➢ Canadian ourism Commission

State Organizations have also been working or the promotion o tourism in a state.

hey are ollows;

➢ Orissa ravel Agents Associations

➢ Convention and Visitor Bureaus (CVBs)

he Not-or-proit organizations represent a city or urban area in the solicitation and

servicing o all types o travelers to that city or area, whether o travelers to that city or area

whether they visit or business, pleasure, or both. For example, International Association o

Convention and Visitor Bureaus (IACVB)

Functions of India Tourism Offices

➢ Collection, compilation and dissemination o tourist inormation in India and abroad,

and attending to enquiries o international tourists, tour operators and members o

the travel industry such as airlines, steamship companies and hotels.

➢ Cooperation with international travel and tourist organizations at government and

non-government levels.

➢ Development o tourist acilities o interest to international tourists.

➢ Publicity at home and abroad with the object o creating an overall awareness o the

importance o tourism.

➢ Simpliication o rontier ormalities in respect o international tourists. Regulation

o activities o the various segments o the travel trade such as hotels, youth hostels,

travel agents, wildlie, guides etc. catering to tourist needs.

Regional Tourism Organization

Regional ourism Organizations are independent, industry-led and not-or-proit

organizations. hey play an important role in supporting competitive and sustainabletourism regions. Each organization provides regional leadership and coordination and



245

works with industry partners to grow tourism through activities like strategic planning,

research, product development, training, investment attraction and marketing. In the

tourism industry, there are various trade shows where products are unveiled, contracts

negotiated, sales being discussed and deals being sealed.

Most travel and tourism industry proessionals recognize that trade associations and

organizations can provide valuable contacts, networking opportunities and inormation.

ourism is multi-acet industry that aects nearly all sectors o international, national and

regional travel and tourism at global level. here are several international, national and

travel and tourism promotion organization such as WC, WO, PAA, ASA, IAA, and

ICAO. Apart rom these promotion organizations, there are several trade organizations

which speciically deal with travel agency and tour operation business at regional, national

and global level.

For example, American Society o ravel Agents (ASA)is the world’s largest

association o travel proessionals. It is very active in lobbying, education and networking.

It hosts the ravel Retailing and Destination Expo or RADESHOW.

For example, Global Business ravel Association (GBA) is the world’s premier

business travel and meetings organization. Collectively, GBA’s 5,000-plus members

manage over $340 billion o global business travel and meetings expenditures annually. It

provides its network o 21,000 business and government travel and meetings managers, as

well as travel service providers, with networking events, news, education & proessional

development, research and advocacy.

For example, he International Gay & Lesbian ravel Association, ounded in 1983,

is the world’s leading global travel network dedicated to connecting and educating LGB

travelers and the businessesin 80+ countries. the IGLA community customize the travel

experience and share it with others through planning tools, trip ideas, events and travel

deals rom LGB tourism-related businesses.

For example, ABA is the premiere trade association or travel agents, tour operators

and travel service providers who work with clients rom or traveling to the nation that

invented tourism.

For example, Association o National ourist Oices and Representatives (ANOR)

is a London-based association o the tourism oices o some 60 dierent nations. Its website

contains contact inormation, including telephone numbers, or each member’s tourismoice as well as useul links and inormation concerning tourism opportunities.



246

For example, Cruise Lines International Association (CLIA) is the largest cruise

industry trade organization in North America. Representing the interests o member cruise

lines, 100 Executive Partners and more than 14,000 travel agencies, CLIA participates in the

regulatory and policy development process aecting the cruise industry.

For example, Adventure ravel rade Association (AA) is an international

association o travel agents, tour operators, destination managers, service providers and

other travel proessionals dedicated to creating sustainable adventure tourism opportunities

or the hiking, biking, climbing, jumping, and exploring set o travelers

The United Nations World Tourism Organization (UNWTO)

he UNWO is the United Nations organization entrusted with promotingsustainable tourism. It oers sophisticated business analysis and trend prediction tools, as

well as a orum or lobbying to inluence international tour and travel policy. he UNWO

members include 155 countries, and over 400 Ailiate Members representing the private

sector, educational institutions, tourism associations and local tourism authorities.

The European Association for Tourism and Leisure Education (ATLAS)

Founded in 2004, ALAS is an association o educational institutions, research

groups and individuals studying tourism and leisure travel. Operating through regional

subsidiaries in Europe, Arica, the Asian-Paciic region and the Americas, it conducts

research and presents seminars on a wide variety o subjects including backpacking tourism,

cultural tourism, gastronomy tourism, religious tourism and pilgrimage, spa and wellness

tourism and volunteer tourism.

World Food Travel Association (WFTA)

he World Food ravel Association (WFA) promotes ood, drink & culinarycultures through travel. he central hub connects key industry segments and partners with

business to business (B2B) and business to consumer (B2C) relationships. It acilitates ood

and beverage discovery world-wide, including the creation, production and marketing o

products rom arm to ork. It accomplishes the work o destination marketing organizations,

industry trade associations, the media, universities and consumer ood communities.

he name has been changed to International Culinary ourism Association in 2012

to meet the needs o changing industry. Over the years, the Association has identiied strong

industry needs in ood tourism education and research; ood tourism product development;

and ood tourism promotion.



247

Travel and Tourism Research Association (TTRA)

Founded in 1970, the ravel and ourism Research Association (RA) is a non-

proit association with the purpose to enhance the quality, value, eectiveness and use o

research in travel marketing, planning and development. It creates business opportunitiesor our members and provides a unique multi-sector industry network.

It represents a variety o segments rom the greater international travel and tourism

community, including educators, practitioners, research providers/consultants and users o

research. It strives to support the global community o practitioners, educators and users o

research engaged in transorming, sharing and applying tourism research knowledge and

practice worldwide.

National Tour Association (NTA)

he NA describes itsel as the leading association or proessionals serving travelers

to, rom and within North America. he members include more than 1500 tour operators

oering over 600 destinations in 40 countries.

World Travel and Tourism Council (WTTC)

he WC is a global authority on the economic and social contribution o travel

and tourism. Its members include industry leaders representing one hundred o the world’s

oremost travel and tourism companies.

The Tourism Society

he ourism Society is a UK-based society o tourism industry proessionals ocused

on issues concerning career development, education and networking.

International Air Transport Association (IATA)

he International Air ransport Association (IAA) is an international industry

trade group o airlines headquartered in Montreal, Quebec, Canada. he executive oice is

located at the Geneva Airport in Switzerland. he mission is to represent, lead, and serve

the airline industry. It represents more than 240 airlines comprising 84 per cent o scheduled

international air traic.



248

IAA has its activities across 150 countries connected through 101 oices around

the globe. It was ormed on 19 April 1945, in Havana, Cuba. It is the successor to the

International Air raic Association, ounded in he Hague in 1919.he world’s irst

international scheduled services was started in the same year.Initially, IAA had 57 members

rom 31 nations, mostly in Europe and North America. oday, it has about 243 members (aso April 2012) rom more than 126 countries around the world.

Most o the major international tourism industry associations have developed

guidelines and statements about the prevention o child sex tourism. hese guidelines are

there to help their members develop national level action plans and policies.

International tourism industry guidelines and declarations

➢ FIYO Federation o International Youth ravel Organizations

➢ Resolution by FIYO to Combat Child Sex ourism

➢ IAA International Air ransport Association

➢ Final Resolution Condemning Commercial Sexual Exploitation o Children

➢ IFO International Federation o our Operators

➢ Code o Conduct against the Sexual Exploitation o Children

➢ IFWO International Federation o Women’s ravel Organizations

➢ Resolution against Sex ourism

➢ IH&RA International Hotel & Restaurant Association

➢ Statement against Sexual Exploitation o Children

➢ IUF/UIA/IUL International Union o Food, Agriculture, Hotel, Restaurant,

Catering, obacco and Allied Workers’ Associations

➢ Resolution on Prostitution ourism

➢ PAA Paciic Asia ravel Association

➢ Paciic Asia ravel Association Memorandum o Understanding and Declaration in

Support o ECPA

➢ UFAA Universal Federation o ravel Agents Associations

➢ Child and ravel Agents’ Charter

➢ WO World ourism Organization

➢ ask Force and Global Code o Ethics



249

Summary

ravel agency and tour operation business has witnessed several ups and downs in

the last one century. It is a major global trade determining global gross domestic products

and revenue low. It is now a billion-plus global international tourist arrivals and majorityo them travel with the help o proessional tour operators. At the same time, tour operators

are governed by government policies and programmes. he business involves the processing

o travel documents and operating in protected areas including restricted travel areas. hus,

travel trade associations can help in the promotion o responsible as well as sustainable

tourism worldwide.

****



250

Lesson 5.2 - Roles and Functions UFTAA

Learning Objectives


➢ Understand the basic purposes o establishment o UFAA

➢ Explain roles o UFAA in integrating travel agents worldwide

➢ Describe various unctions o UFAA

➢ Know the uture activities o UFAA

Introduction

ravel agency business has become lucrative in making return on investment. In

the present scenario, travel agents are extremely ambitious in expanding the operation o

business to dierent parts o world. Many travel agents have opened overseas oices to

manage business activities. When a travel agent desires to move its operation to oreign

countries, it is essentially important to be a part o worldwide bodies to get its interests

protected and represent the problems to those bodies.

It is an honour and privilege to be a part o international travel associations to

expand relationships with travel agents as well as allied members directly. here can be one-

to-one interactions and agreement between the agents in annual conventions or any other

meetings. housands o travel agents are being beneited rom various roles and unctions

o UFAA. It is an international travel agent association working or the cause o travelagency business or the last ive decades. his lesson will explain roles and unctions o

UFAA along with objectives or which it has been established.

United Federation of Travel Agents Associations (UFTAA)

he United Federation o ravel Agents Associations (UFAA) was given birth with

the merger o two large world organizations: FIAV (Federazione Italiano Agenti di Viaggio)

and UOAA (Universal Organization o ravel agents Association) on November 22nd,1966 in Rome, Italy. It was established to bring together travel agencies and tour-operators



251

into one International Federation. he General Secretariat o UFAA was set up in the

Principality o Monaco in 1989..

he UFAA started its operation as a Conederation on January 1st, 2003. It is a

non-proit Conederation o international scope, representing Regional Federations withsome 114 national Association and additional ailiate members in a total o 122 countries

due to its global nature. It has many duties and responsibilities or the members o the

associations

he UFAA seeks to encourage travel among people o all nations and to support

the reedom o travel throughout the world. It is a proicient lobbying body and opposes

legislation directly harmul to travel and ree movement. It tries to reduce or abolish technical

obstacle to travel by uniying travel agencies and tour-operators into one internationalederation carrying the voice and deending the right o travel industry proessional.

It is the highest and largest world body representing the travel agency. It eiciently

represents ravel Agents and our Operators views on both Inbound and Outbound travel.

hrough continuous dialogue and consultation with other international organizations such

as the International Air ransport Association (IAA), the International Hotel and Restaurant

Association (IH&RA), the International Union o Railways (IUR), the International Road

Union (IRU) and the International Chamber o Commerce (ICC) and others, the UFAA

has become a common platorm or resolving many disputed issues between the business

enterprises.

he UFAA works closely with other world bodies such as UNESCO, WHO,

UNWO, PAA, etc. or a sustainable and responsible tourism. It has consultative status

with the UN/NGO/ECOSOC. It is an ailiate member o the UNWO and its Business

Council (WOBC) also.

It has more than 33,000 travel agent members through its National Associations

membership and about 300,000 proessional travel agent sta members. he UFAA

members and ailiates are already approved Club members and they simply need to

register the UFAA Club registrations to wire up all its travel agent members worldwide or

better communication. It develops business opportunities among members and creates an

international social networking to bring UFAA to the oreront o the travel industry. he

UFAA, through this scheme, has become more eective in carrying out its responsibilities

and activities.



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Mission

he UFAA’s mission is to be an international orum where matters aecting the

world travel industry are addressed. It represents and deends the interests o incoming

and outgoing tour operators, travel and tourism agencies beore the governmental bodies,suppliers and other entities o international scope. It also aims at strengthening its members’

image and enhances the world travel and tourism industry and a sustainable tourism.

he UFAA provides a platorm or the discussions and dialogues on the issues

inluencing the travel industry and to advocate the cause o the tour operators by representing

them in the world orum.

o comply with its mission, the Conederation develops the ollowing unctions:

➢ o unite and consolidate the Federations o ravel Agents’ National Associations and

to globally enhance the interests o their members.

➢ o work towards the adoption o measures that will ease travel or the travellers and

to oer services to its member ederations.

➢ o stand or the travel agents activities beore various world-wide bodies,

governmental authorities and suppliers.

➢ o assists in solving conlicts resulting rom commercial relations or which

harmonious settlement cannot be reached ;

Objectives

➢ o strengthen o the world travel and tourism industry and a sustainable tourism.

➢ o be a research and inormation centre or the support o the Federations’ members

to works and to oer inormation or technological development

➢ o organize theWorld Congress o ravel Agents and other meetings necessary to the

exchange and transmission o knowledge.

➢ o be an international orum or the world travel business encompassing incoming

and outgoing tour operators, travel and tourism agencies, suppliers and other entities

o international scope.

➢ o act as the negotiating body with the various branches o tourism and travel

industry on behal o its members and also in the interest o the public.

➢ o ensure or all travel agents, through their national associations the maximum



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degree o cohesion and understanding, prestige and public recognition, advancement

o the member’s interest and protection rom legislation and legal points o view.

➢ o oer to its members all the necessary proessional and technical advice and

assistance in matters their trade.

he UFAA calls or

➢ making appropriate travel arrangement and reservation

➢ calculating and quote appropriate air ares

➢ completing international travel document in accordance with the applicable IAA

rules and procedure.

➢ answering customers’ queries, quote rates and supplement, explain conditions andbook tour products.

➢ Acquire the necessary skills and knowledge to ensure that ront-line contact with the

customers in outstanding.

One o the UFAA’s main duties is to be an international orum or the world’s travel

industry and to promote the development o the travel industry on a global scale. his is

accomplished by taking into consideration the opinions o travel associations rom around

the world. It organizes meetings and conerences to ease the exchange o inormation aboutthe travel industry.

Representation

he UFAA represents travel agencies beore other global organizations, national

governments and suppliers and to provide the proper resources to ight or the interests o

its members and the industry as a whole.

Consumers/Flying Public

he UFAA also takes on the duty o working toward improving the travel industry

or consumers, or the lying public at large. By working with global travel agencies, the

UFAA hopes to implement protocols and measures to ease travel or consumers.

Technological Development

he UFAA works with other corporations and organizations to help urther

technological development to help the travel industry. his technology ranges rom



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sustainable tourism to increasing saety or international travelers. he UFAA not only

represents the global travel industry, but it also tracks and stores a variety o inormation

and statistics. It acts as an inormation center or all travel-related statistics.

Conflict Resolution

he UFAA, as the global voice o the travel industry, helps solve conlicts in the

travel industry wherever they may arise. With negotiation services, the organization can

reach settlements when all other avenues o conlict resolution so that they can come to a

resolution with minimal eect on the travel industry.

Membership

he UFAA membership is made up o National ravel Agent Association rom

every country in the world. At present, it has over 35000 ravel Agencies. he National

ravel Agents Associations are ull-time members o UFAA. ravel agencies, hotels, tourist

oices and other stakeholders o the travel and tourism industry can be its members. here

are number o legal ormalities to complete beore becoming a part o UFAA. Besides

the ull time members the Secretary General o UFAA, one may register individually by

complying with the ollowing criteria:

➢ A member o a National Association which has membership o UFAA.

➢ A member o a National Association in a country which does not have UFAA

membership.

➢ Located in a country where there is no national association.

➢ Any individual irm, company or other legal entities such as airlines, hotels or car-

rentals operators where activities are aligned to those o travel agents, may obtain

registration on the same terms laid down or registered agents.

he UFAA has divided the whole world into eleven regions as ollows

1) LatinAmerica

2) Caribbean

3) Europe 1

4) Europe 2

5) Central and Western Arica

6) Eastern and Southern Arica



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7) Middle East and Northern Arica

8) South Asia

9) Asia or Paciic

10) ASEAN

11) Mediterranean Sea.

UFTAA Organization Structure

➢ he organizational structure o UFAA consists o the General Assembly and Board

o Directors

➢ he Executive Committee is responsible or handling day-to-day activities and also

urgent matters. ➢ he Board o Directors, consisting o directors elected rom candidates proposed by

national members associations handles the routine business o the Federation.

➢ Members are represented in the general assembly; regional ederations, ederated

national associations, and non-ederated associations constitute the body o the

general assembly.

There are two types of General Assembly:

➢ Annual General Assembly (AGA).

➢ Extraordinary general assembly (EGA).

Annual General Assembly

he Annual General Assembly is the policymaking body. he Assembly decides

on the general policy o the ederation and makes recommendations on any matter within

its competence. he AGA is conducted every year beore 30 April to discuss agendaslike approval o report and budget, discharge o directors, appointment and ixation o

remuneration o auditors, policy ormulation and passing resolutions on any matters it

considers it, election, discharge o board members and shiting the registered oice.

Extraordinary General Assembly

he EGA is called or transacting some urgent or special business which cannot

be postponed till the next ASA. he agenda or such a meeting includes change in statues,dissolution o the UFAA and merge with other bodies.



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he Chairman o the UFAA presides over these assemblies. he mandatory

minimum number required or any general assembly to become valid is at least one-

third voting members. For dissolution or merge, a minimum o two-third members are

required to amend a statue and a minimum o one-third o the voting members need to be

present. However, the meeting on a subsequent notice can become valid irrespective o theattendance o the number o participants. he Board consists o one representative rom

each ederation and one elected representative o all non-ederated national associations.

Each director has a deputy to work in his absence.

he general assembly elects the directors or a period o two years. It is mandatory

or directors, the CEO, Secretaries general o ederations and conederation employees or

experts to attend the board meetings. he presence o at least hal o the number o total

directors can provide the quorum or holding the board meetings. Normally, the chairmano UFAA chairs all the Board Meetings.

he Board is responsible or the implementation, approval o the drat budget,

management o public relations and general unctioning, approval o the drat budget,

management o public relations and general unctioning o the UFAA. he Board meets

a minimum o our times in a year. Either the Chairman or more than hal o the directors

may call or the meeting.

General Secretariat

he General Secretariat is responsible or the implementation o policies and

resolutions passed by the Board and Assembly. he CEO and the other sta members

constitute the general secretariat.

Consultative Bodies

here are three consultative bodies o the UFAA viz. World Congresses, Secretary’s

General Meetings, and Working Groups and Committees. he Secretary Generals o

ederations and national associations meet twice in a year during the world congress and

the ASA.

he World Congress o ravel Agents (WCA) is organized once every year and

the members o UFAA, suppliers o travel and tourism and related services, national,

international, and regional authorities and other invited guests attend this congress. he

working groups and committees are created by the Board o the UFAA or special purposesrom time to time.



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Social Responsibility Activity

he UFAA is an organization with an international purpose. It has no right to

interere in national concerns other than through its National Associations.

Protect Children Campaign Partner

o combat the prostitution o children related to sex tourism and to protect the child

victims pledge to the Members and Ailiates o UFAA, signatories o the present Charter

are

➢ Supporting the measures taken by governments to counter the sexual exploitation o

children.

➢ Inorming their oreign colleagues o the penalties imposed on tourists committing

acts and the involvement o the use o children or the purposes o sexual gratiication.

➢ Pledging the Members and Ailiates o UFAA, signatories o the present Charter to

exercise the utmost vigilance with regard to such activities o their customers

➢ Becoming mindul o the importance o their roles in protecting the environment,

people, countries and regions to which they send tourists. acting according to the

dictates o their conscience and in accordance with the legislation o the countriesconcerned.

➢ Giving assistance to the various organizations, campaigns and charitable associations

concerned with the welare o child victims o sex tourism.

➢ Pledging to stop the promotion o tours or travel related to sexual exploitation o

children.

he UFAA is dedicated to Education and raining and it maintains the UFAA

Educational Academy. It has an active partnership with the IAA/UFAA raining

programme. It includes a our level educational programme. he courses also include

Marketing and Management education.

he raining Programme is available through a number o means including Distance

learning and Classroom teaching at 220 authorized training centers on the world. As many

as 200,000 students have qualiied the IAA-UFAA raining Programme.

he UFAA is working closely with major insurance companies to provide Liability

Insurance to its member’s agencies and operators and to protect travel agents rom any



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actions brought against them or accidents to third parties. It may occur on the travel agents

property or or injury during their travel or in their accommodation during perormance

o their proessional activities.

he UFAA has initiated the Proessional ravel Agents Card Programme in co-operation with IAA and National Associations. he card is accepted worldwide as identity

or discounted travel, accommodation and travel services or ravel Agents.

he UFAA enjoys consultant status with the United Nations and it is an ailiate

member o the UNWO. It works with the International Civil Aviation Organization

(ICAO) on several activities.

Industry Standards

he Board o Directors regulates the work low in UFAA with experienced and

knowledgeable proessionals at the top most positions. Further, to speciy its main objectives,

UFAA accommodates several charters and codes as UFAA/IH&RA Code o Practice,

UFAA Environmental Codes o Conduct, Child and ravel Agent’s Charter and so on.

Summary

ravel agency business is becoming more popular due to the active participation

o proessional bodies. Each travel agent wishes to become the member o UFAA or

its own beneits as well as beneits o others. It is essentially or the travel agents having

business activities in the overseas markets. It is an honour to be a part o international travel

associations through which network can be established. housands o travel agents have

registered with the UFAA. his largest travel association worldwide has been working

or the last ity years or protecting the interest o global travel agents and their peripheral

activities.

****



259

Lesson 5.3 - Roles and Functions of PATA

Learning Objectives


➢ Understand the basic objectives o creation o PAA

➢ Know various roles o PAA in promoting tourism

➢ Be amiliar with unctions o PAA

➢ Know activities o PAA in the uture

Introduction

ravel agents and tour operators get associated with apex tourism bodies or

recognition, brand-building and enhancement o value o products. At the same

time, customers have high preerence to purchase services rom travel intermediaries

ater evaluating their associations with national and international travel and tourism

organizations. When a tour operator or travel agent becomes active or allied member o

Paciic Asia ravel Association (PAA), it uses PAA’s logo; participates in conventions,

meetings, symposia, etc; uses most valuable data pertaining to tourist arrivals and receipts;

and uses reading materials and instructions. Any crises like epidemic, terrorist threats,

pollutions, exploitations, etc can easily be resolved jointly. his lesson will present you the

roles and unctions o PAA.

PATA (Pacific Asia Travel Association)

he PAA was established in the period 1951with 44 Founder Members. he Founder

Lorrain hurston, a leading newspaper publisher in Honolulu, had an idea toorganizea

travel rom the Occident to the Paciic area on a regular basisso as to ensure maximum

beneit rom the existing opportunities.

PAA’s irst conerence was held in January 1952 in Honolulu and its headquarters

were established in San Francisco, USA in 1953. PAA has its own Director or Europe

based in London. It works to promote traic rom the European markets into the Paciicregion. PAA’s irst Asian oice was opened in Manila, Philippines in 1976.



260

By the early 1950s those who had an interest in the region were acing a tremendous

range o opportunities. However, the Paciic Area ravel Conerence o 1952 began to lay

the essential oundation or the boom o travel in the Paciic region.

Mission

he theme o “Proud Past and Promising Future” determines the major objectives o

PAA. In PAA, the prime mission is to emphasize on sustainable growth, to enhance the

value and to increase quality rom all quarters o the travel industry. PAA’s mission is to

enhance the growth, value and quality o Paciic Asia travel and tourism or the beneit o

its membership.

Objectives

➢ o develop, promote and acilitate travel to and within the Paciic area and South

East Asian region.

➢ o operate in the United States market as the world’s biggest travel market and

providing the meeting point or the people involved in all aspects o the travel trade

rom a large number o countries.

➢ o ocus attention on travel opportunities in member countries and to build upgreater awareness and speciic contacts among the travel trade in countries.

➢ o work together to develop an ever-increasing low o pleasure travel

➢ o provide leadership to the collective eorts o all the members.

➢ o inluence the direction the industry through its unique membership structure

o public-sector tourism organizations; air, land and sea carriers; and organizations

engaged in the production, distribution, inancing, consulting, educating and other

technical aspects o the travel industry.

➢ o provide latest inormation and practical experience in the ield o tourism.

➢ o provide greatest scope to its members to share their ideas and exchange views

about promotion o tourism in their respective regions.

➢ o conduct various conerences, workshops, travel research, marketing and training,

publications o handbooks and magazines.



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Functions of PATA

During the irst our months o each year, PAA sponsors and organizes a conerence

o its members with the objectives o reviewing the progress, exchanging ideas and planning

or uture programmes. hese are the ollowing important unctions o PAA.

Marketing

A long-range marketing programme coordinates all the promotional unctions o

PAA or a maximum impact in the consumer market and also among sales agents. An

extensive advertising programme schedule is carried in leading national magazines o

North America with a view to increasing interest in the Paciic region as a major travel area.

he association prepares and distributes a wide selection o selling aids and sales promotionmaterials to travel agents and tour operators throughout the world.

A strong trade advertising programme is directed towards travel agents in order

to merchandise PAA’s consumer advertising and sales promotion eorts. Weekly news

releases, special eature stories and photographs are provided to the various newspapers,

magazines and radio and television networks by the Association’s Paciic News Service.

Members may use the Association’s materials, including photographs, or their own publicity

purposes.

Public Relations

It is considered as the important promotional technique o PAA. It introduces

PAA to the common people in regards with tourist sites in Paciic regions

Research and Development

he Association’s research programme is designed to provide it with the marketing

inormation needed to ormulate its own marketing programme as well as to provide its

members with inormation which will assist them in designing their own programmes.

he Association organizes research seminars, research presentations and technical

assistance programmes or its members. Another important acet o the research programme

includes the collection, analysis and dissemination o Paciic travel statistics and an eort

designed to constantly improve and standardize the tourism statistics o the Paciic region.



262

Financing

It provides inance approval o tourist projects, grant leaves to members, etc.

Publication

Promotion occupies a major portion o PAA’s total eort. he PAA publication,

Paciic ravel News is relied upon by the wholesale and retail travel agents as an important

source o authoritative material on the Paciic.PAA has produced the Paciic Area Destina-

tion Handbook which compiles in a single volume all the data. PAA also publishes its Hotel

Directory and ravel Guide listing the hotels, resorts and travel services in the Paciic area.

Membership

he members o PAA vary in industry, service and specialization. he range is

wide as PAA members include public-sector tourism organizations, carriers rom all three

domain- land, air and sea and even the organizations and bodies engaged in the production,

distribution, inancing, consulting, educating and other technical aspects o the travel

industry like ravel agents, our operators, Individual Hotel Property and many more. All

the members abide by the excellent services to travellers across region.

PATA has the following nine categories of membership:

(i) Active Government;

(ii) Associate Government;

(iii) Active Carrier

(iv) Associate Carrier;

(v) Active Industry;

(vi) Allied member;

(vii) Ailiated Allied,

(viii) Associate

(ix) Sustaining.

Active Government Members

Active Government Members mainly consist o the primary oicial organization

designated by the government o any nation, territory, or political division, wholly or partly

in the Paciic area.



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Associate Government Members

Associate Government Members are composed o any organization charged with

the responsibility o the domestic or overseas promotion o tourism as designated by the

government o any nation, territory, or political division either situated within or outsidethe Paciic area, but not being the primary oicial organization designated or the overseas

promotion o travel, or not meeting other criteria as might be required or Active government

membership.

Active Carrier Members

Active Carrier Members comprise any government recognized, registered or

certiied, air or steamship line operating vehicles having individual passenger capacity inexcess o twelve passengers. It should provide regular scheduled common carrier passenger

service to and within the Paciic area.

Associate Carrier Members

Associate Carrier Members consist o any government recognized passenger carrier

operation vehicles each having a passenger capacity o twelve or ewer passengers and

providing regular scheduled common carriage passenger service o having a passenger

capacity in excess o twelve passengers but not providing passenger service on the regular

common carriage basis as prescribed or Active carrier members.

Active Industry Members

Active Industry Members involve hotel organizations having management authority

as distinguished orms like sales, advertising or reservations direction, over one or more

hotels with a total o one thousand or more guest rooms in one or more Paciic areas, tour

operator organizations excluding air or ship transportation.

Allied Members

Allied Members are composed o hotel representatives, travel agencies, tour operators

and irms serving as General Agents or representing various segments o the Paciic travel

industry.



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Affiliated Allied Members

Ailiated Allied Members consist o branch oices o an allied member travel agency

or tour operator.

Associate Members

Associate Members include individual operating organizations and irms or instance

communication, media, media representatives, advertising, public relations and research

agencies having deinite interest in Paciic travel.

Sustaining Members

Sustaining Members consist o those organizations, irms or individuals, whose

commercial or cultural interests, in the judgments o the Board o Directors.

Administration

PAA authority is vested in the Active government, carrier and industry members.

he organizations qualiying or Active government or Active carrier membership have the

right to membership. hey entail no sponsorship and are requested merely to provide the

Board o Directors with certain pertinent inormation.

Membership in all other categories is at the judgment o the Board o Directors,

and requires not only that the organization comply with certain guidelines or eligibility.

he certain categories o PAA members must sponsor the new applicant and vouch or its

stability and proessionalism.

The Association is further divided into three divisions.

he Asia Division with its oice located in Singapore. It coordinates and looks ater

Japan, Republic o Korea, Republic o China (aiwan), Hong Kong, Macau, the Philippines,

Indonesia, Singapore, Malaysia, hailand, India, Nepal, Bangladesh, Pakistan and Sri Lanka.

his division having main oice in New South Wales, Australia controls Australia,

New Zealand, the Islands o the South Paciic and Micronesia.

Americas/Europe Division with central oice is located at San Francisco havingthe command o North and South America and Western Europe. he ocal activities are



265

primarily promotional and include varied member activities. his Lesson support PAA

ravel Marts, international trade show participation, travel trade education, advertising,

PAA merchandising and other revenue-generating programmes.

Programmes Provided By PATA

➢ PAA aims to develop a sustainable uture or the travel industry and to assist members

with proessional development in a numbers o ields. It provides it members with an

array o programmes and events created to promote the related region as he preerred

international destination.

➢ he PAA rade Mart ocuses on marketing opportunities by matching the buyers

and sellers o the region’s tourism products.

➢ PAA has grown to encompass the changing market place and it now incorporates

intraregional tourism within the PAA geographic boundaries.

➢ PAA’s special-interest marketing seminars and marts are held regularly to help

members target new business opportunities and learn the successul techniques or

development he PAA Annual conerence draws together the top decision makers

in the region.

➢ PAA also keeps its members up-to-date on relevant industry trends via the strategic

inormation centre. It provides members with timely research and market intelligence

or business planning, product development and marketing.

➢ PAA’s oice o Environment and culture and the PAA Foundation co-ordinates

programmes to preserve the region’s environmental, heritage and cultural resources.

hrough targeted marketing and promotional programmes, business networking

opportunities and support and resources services. PAA provides a proessional and

personal growth.

➢ PAA has long been an advocate o balancing growth with conservation measures.

Secretariat

he PAA Secretariat coordinates PAA’s Policies Plans, Administration And

Finances, Memberships And Lessons, Communications and Planning or PAA’s Annual

Conerence.



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PATA - Pacific Asia Indigenous Tourism Conference 2014

PAA has accepted the New Zealand Maori ourism’s exceptional bid to host the

second Paciic Asia Indigenous ourism Conerence (PAIC) and PAA Board Meetings in

Rotorua, New Zealand rom April 4-9, 2014.

PATA Lessons

In the year 1960, the Lesson concept implemented with PAA among travel

organizations. he primary purpose o a Lesson is to conduct continuing education

programmes to keep PAA members abreast o the changes in Paciic travel. he Lessons

also carry out considerable promotional work andorganize social events or the members.

Speciic objectives o the Lessons are as ollows

➢ o obtain opinions o members o the Lessons on any PAA requirement or objective.

➢ o organize representatives o PAA members at regular intervals to develop a closer

working relationship and a better understanding o travel matters as such that relate

to the Paciic area.

➢ o converse to appropriate government and oicial organizations such matters

approved by PAA, and to obtain action there on as and when required.

➢ o attain uniormity and combined action by members in pursuing national and

local policies within the ramework o PAA.

➢ o provide a orum toenable the individual Lesson members to conduct their various

assigned responsibilities or selling travel, and providing services to visitors to the

Paciic in a more eective manner.

Categories of PATA Lessons

here are two types o Lesson viz., (i) Area Lessons and (ii) Promotional Lesson.

Area Lessons

Area Lessons were conceived as o the 8th Annual PAA Conerence (1959) by a

number o Allied and Associate Members. It is a means o keeping PAA members and their

representatives in the Paciic better inormed on happenings throughout the Paciic travel

industry and on Association activities.



268

Some o these Lesson activities include programmes involving matters o acilitation,

sta training, improving visitor plants and services and promotions aimed at developing

regional tourist traic and other marketing activities.

Promotional Lessons

Promotional Lessons were authorized by the 9th Annual PAA Conerence (1960)

as a means o urthering the promotion o visitors orm priority market areas to Paciic

destinations.

Activities o these Lessons are all designed to increase the sale o travel to the

Paciic area. It includes regular meetings o the PAA membership/travel trade with

programmes on various Paciic destinations. It provides up-to-date inormation on variousnew developments, acilities, services, tours, educational seminars or travel trade, sales

personnel and cooperation with PAA in the overall marketing programme, promotions

and other PAA activities.

Industry Standards

he norms are applicable to the Code o Ethics and Conduct, Members, PAA

Executive Board, the Oicers, the Committees, voting, various lessons o PAA, Finance.

he members o PAA have to respect the terms mentioned in the Member Code o Ethics

and Conduct. Based on the perormance o the members and lessons, PAA honours

the respective organization with awards.his code o ethics helps in smooth running o

association and helps in resolving conlicts situation between travellers and its members.

Summary

ravel agents and tour operators get associated withnational, regional and

international tourism bodies or recognition.hese agencies get market credibility through

the membership. Customers do have preerence to purchase services rom those travel

intermediaries which must have associations with Paciic Asia ravel Association (PAA).

here are many merits. One o the merits is that it uses PAA’s logo on the letter head and

other publicity materials. he member participates in conventions, meetings, symposia and

uses diverse data ranging rom tourist arrivals and receipts; and uses reading materials and

instructions. Any crises like epidemic, terrorist threats, pollutions to child exploitations. It

is a great privilege and honour to be the member o PAA.

****



269

Lesson 5.4 - Roles and Functions of ASTA

Learning Objectives


➢ Understand the basic objectives o creation o ASA

➢ Know various roles o ASA in promoting tourism

➢ Be amiliar with unctions o ASA

➢ Know activities o ASA in the uture

Introduction

our operators and travel agents consider it as an honour and privilege to be the

part o American Society o ravel Agents (ASA). ASA is an oldest and largest travel

agent association in the USA working or protection o interests o travel agents. It has

integrated thousands o travel agents rom within USA and other parts o world since it was

established. our operators and travel agents get membership o ASA or two important

reasons: participate in annual convention o ASA and gather useul inormation rom ASA.

Ater becoming a member o ASA, a tour operator targeting to sell inbound packages to

customers in USA directly or through retail travel agents can be easier. Most o customers

in USA preer to book holiday packages through ASA recognized travel agent or tour

operators. For example, many leading inbound tour operators in India are the members o

ASA. his lesson will ocus on roles and unctions o ASA along with its uture activities

or travel trade in the world.

ASTA (American Society of Travel Agents)

he American Society o ravel Agents was established on April 20, 1931 as the

American Steamship and ourist Agents Association. It is a US trade organization with its

headquarters in New York. In 1931, as many as 60 travel agents joined an association to

encourage and to protect the mutual interests o its members. It maintains a digniied code

o ethics to ight unair competition and give conidence to the public’s desire to travel andpromote the use o ASA members.



270

In 1946, the International Air ransport Association (IAA) slashed agent

commissions to 5 percent rom 7.5 percent. For example, ASA opposed the decisions o

IAA. It was renamed as the American Society o ravel Agents. It is world’s largest and

one o the most prominent travel trade associations o spreading across 140 countries with

25000 members worldwide. he members include travel agents and the companies sellingtours, cruises, hotels, car rentals, etc. It is the leading advocate or travel agents, the travel

industry and the traveling public.

ASA ormed several institutions to beneit its members. ASA Marketing Services,

Inc. (AMSI) was established as a subsidiary o ASA. It was designed to help ASA member

agents get high-quality products and services at discounted prices. he ASA Political

Action Committee (ASAPAC) was ormed to lead the ight or agents’ interests in the

political arena.

In January 2007, ASA re-launched its brand and unveiled a new membership

structure and enhanced member beneits encompassing every aspect o the travel experience

with a new logo and its new mission.

➢ o acilitate the business o selling travel through eective representation, shared

knowledge and the enhancement o proessionalism.

➢ o enhance its member communications and provide members tools to launch orimprove their own advertising and public relations campaigns.

➢ o oer a variety o online and home-study courses or its members to use in

urthering their expertise.

➢ o incorporate environmentally conscious practices into their businesses it unveiling

o its Green Member program, led the travel agency industry.

➢ o maintain its position as an industry leader, constantly examining the complicated

business relationships that keep the industry moving orward and sharing thatknowledge or the beneit o all its members.

➢ o seek a retail travel marketplace that is proitable, growing and a rewarding place

to work, invest and do business or its members.

Objectives of ASTA

➢ o promote the interest o the travel agencies.

➢ o educate and training the members.



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➢ o protect the traveling public against raud acilities.

➢ o organize travel seminars, conerences and conventions.

➢ o saeguarding o legal representation.

➢ o publish material relating to travel industry.

Activities of ASTA

➢ Organizing requent conerences or travel matters including airlines, steamships,

companies, travel agents etc.

➢ Discussion with airlines on are structures and travel destinations.

➢ Assistance to all agencies across the country in travel oriented matters.

➢ Assistance to all level o Govt. department in upgrading standards o services too

travelers.

ASTA Global Convention

It is the annual gatherings to oer a very important platorm or the organisation to

build the uture.he annual ASA convention is a celebration o the travel proessionals,

but it is also a catalyst designed to move business orward.

It means that a crucial goal was to give the access and theeducation needed that simply cannot ind anywhere else.

he ASA Global Convention unites members and travel

industry proessionals to create a conerence or the most

inluential buyers in the industry.

For example, only at the ASA Global Convention

could be the member experience irst-hand an interactive

discussion with a panel o airline executives.ASA’sresponsibility is to assist the member to attract and retain

business. he ASA Global Convention included education

sessions, discussion panels and a sold-out trade show.

As the principal advocate or travel agents, the travel industry and the travelling

public, ASA and its members represent 80 per cent o all travel sold by travel agencies

in the United States. he ASA Global Convention is promoting innovative education,

captivating luminaries and diverse networking opportunities.ASA continues to promote

travel around the globe and to remind the travelling public o the value o proessional



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services provided by travel agents and tour operators. he ASA Global Convention oers

its members access to a powerul and inspirational collection o unrivalled speakers, high

quality travel industry content and peer-to-peer networking opportunities.

Code of Ethics

ravelers depend on travel agencies and others ailiated with ASA to guide them

honestly and competently. All ASA members pledge to conduct their business activities in

a manner that promotes the ideal o integrity in travel and agree to act in accordance with

the applicable sections o the ollowing Principles o the ASA Code o Ethics. Complaints

arising under this Code should be iled in writing with the ASA Consumer Aairs

Department.

Classifications of Membership

ASA has the ollowing categories o membership: ravel Agency Member (also

known as Core Member), ravel Agency Employee Member, Independent Member, Non-

Ailiated Member, Premium Agency Member, Premium Agency Employee Member,

International ravel Agency Company Member, International ravel Associate Member,

Allied Company Member, Allied Associate Member, ravel School Member, and Honorary

Member.

Active Members

hey must be located in the USA, Puerto Rico, the US Virgin Islands, Guam,

Northern Mariana or American Samoa. hey must operate with the intention o making

a proit rom the travel agency business and conduct the majority o their business in an

agency/principal relationship with suppliers.

hey must not be owned or controlled by a major supplier. hey must also be

accredited by the ARC, or ARP, or endorsed by IAAN or hold Errors and Omissions

insurance o at least US$1 million.

International Members

hey must be IAA appointees not located in the USA. It should be operated with

the intention o making a proit rom the travel agency business.



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Individual Members

hey must be ull-time employees o a retail travel agency either: (i) accredited by

ARC; or (ii) accredited by ARP; or (iii) endorsed by IAAN; or (iv) be an active member o

the NA. hey should not be agency owners.

Allied Members

hey are engaged in providing products, services or inormation, sold or used by

agencies.

Travel School Members

hey educate and train individuals or a career in the travel industry. It includes

airlines, steamships, companies, railways, car rental, irms, hotels, resorts, Government

tourist oices and other organization directly or indirectly engaged with the travel industry.

Associate Members

hey are individuals employed by any organization in those categories. Associate

independent members are independent outside sales representatives or one or more active

member irms. here are also senior members who have retired and Honorary members

who can be any individual who has made a signiicant contribution to the travel industry

worldwide to become a honorary members.

Apart rom the above, ASA has requirements or membership concerning inance,

turnover and obedience to a code o ethics. ASA oers many beneits to its members and

the traveling public. he majority o ASA’s members are travel agencies. However, travel

suppliers, such as airlines, hotels, car rental irms, cruise lines, and tour operators join

ASA. ASA have membership categories or students, travel schools, retail travel sellers,

and others. ASA is the organization or anyone related to the travel industry.

Responsibilities of Members

➢ Members will be actual and accurate when providing inormation about their

services and the services o any irm they represent. hey will not use deceptive

practices.

➢ Members will provide in writing, upon written request, complete details about the

cost, restrictions, and other terms and conditions, o any travel service sold, including



274

cancellation and service ee policies. Full details o the time, place, duration, and

nature o any sales or promotional presentation the consumer will be required to

attend in connection with his/her travel arrangements shall be disclosed in writing

beore any payment is accepted.

➢ Members will promptly respond substantively to their clients’ complaints.

➢ Members will remit any undisputed unds under their control within the speciied

time limit. Reasons or delay in providing unds will be given to the claimant promptly.

➢ Members will cooperate with any inquiry conducted by ASA to resolve any dispute

involving consumers.

➢ Members will treat every client transaction conidentially and not disclose any

inormation without permission o the client, unless required by law.

➢ Members will not alsely represent a person’s ailiation with their irm.

➢ Members will not allow any preerred relationship with a supplier to interere with

the interests o their clients.

➢ Members shall not have been convicted o a violation o any ederal, state and local laws

and regulations aecting consumers consent judgments, judicial or administrative

decrees, or orders, and assurances o voluntary compliance and similar agreements

with ederal or state authorities shall be deemed convictions or purposes o theseprovisions.

ASTA Conferences

ASA conerences are held annually. he program includes workshops, seminars,

business, discussions, meetings, and social events. ASA also publish a monthly magazine,

ASA ravel News.

ASTA Governance

Each year ASA conducts national elections and lesson elections. ASA’s governance

structure calls or a Board o Directors that consists o nine national directors elected at-

large or two-year, staggered terms, three lesson presidents, the chair o the International

Lesson Presidents Council (ICPC), two Corporate Advisory Council (CAC) members and

one NACA member director. ASA’s President and Chie Executive Oicer is a non-voting

board member.



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he policies o the Society are established by a National Board o Directors. he

Board o Directors has sixteen members as ollows: Nine Directors At-Large; hree Directors

selected by the Lesson Presidents’ Council; the chair o the International Lesson Presidents’

Council; One NACA Member Director and wo Directors selected by the ASA Corporate

Advisory Committee and ratiied by the Board. he Chie Executive Oicer is a Directorex oicio.

he Board o Directors has an Executive Committee, elected by all Board members

rom the Nine Directors At-large, consisting o the ollowing corporate oicers (also called

National Oicers): President& Chairman; Vice President/Secretary; reasurer; and Chie

Executive Oicer as an ex oicio, non-voting member.

In addition, the Board annually elects to the Executive Committee a CAC memberrom among the CAC-member Directors. he CAC- member o the Executive Committee

has a vote in all Executive Committee actions. Volunteer participation in the various

committees, councils and boards support the Society’s many programs, policies and research.

Elections are held annually staggering the positions up or election. Oicers are elected by

the voting members and serve a maximum o two terms o two years each.

ASTA Lessons

he ASA has 58 lessons including 28 in USA and Canada and remaining 30

lessons are in dierent countries. hese are managed by the elected oicers and executive

committees. he president and chairman o the board are elected by the active members

or two years. he day-to-day activities are administered by an executive vice-president

assisted by the proessional sta.

Lessons in USA

Arizona Carolinas Central Atlantic

Central & North Florida Delaware Valley Great Lakes

Hawaii Long Island Mid America

Midwest Missouri Valley Northern Caliornia

New England New Jersey New York City

Orange County Paciic NW Puerto Rico/Virgin Islands

Rocky Mountain Southern Caliornia South Florida

San Diego South East South WestUpper Midwest



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ASTA’s India Lesson

he ASA India lesson is an extension o ASA International. Once a company gets the

membership, it automatically alls under the ambit o the respective country lesson. he

ASA India lesson is the second largest lesson o ASA, with over 188 members worldwidenext to the US. he Indian lesson o ASA, in addition to ulilling the central objectives,

has aimed at some local accomplishments. hese are as ollows:

➢ o increase the membership in the country.

➢ o persuade international members to join the ASA India Lessons or the beneits

o attending road shows, seminars destination expos, and conerences.

➢ o help, educate, and assist its Indian members in knowing and making marketingstrategies or the US travel market.

➢ o promote India amongst the travel agents in the US about its potential in the

dierent segments o the market.

➢ o work in close relationship with government tourism authorities.

➢ o circulate and disseminate inormation through organization o seminars,

symposiums, and circulating newsletters.

➢ o inorm its members in India about changes in the US political, economic, and

market scenario rom time to time.

➢ o organize FAM trips or ASA international agents India.

➢ o conduct seminars, symposiums, workshops, and meeting amongst its local

members to share views and inormation.

ASTA Subsidiaries

AMSI licensees provide discounted products and services used by our travel agent

and supplier members in their day-to-day operations. All AMSI® licensed vendors must

meet rigorous standards or quality and perormance and pricing to ASA members must



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be at a discount comparable to or better than the best discount the vendor has available in

the marketplace.

NACA is the travel industry’s irst and leading association or independent travel

agents, cruise oriented agents, home-based travel agents and outside sales travel agents. Itwas established in 1986 as the original association with a mission to represent the interests

o independent and home based travel entrepreneurs. Host travel agencies and Suppliers

who support this growing sector o the distribution channel are also members o NACA.

NACA continues its objective to promote the proessionalism and recognition o

this productive group o travel agents. he Association has recently expanded its role to

ocus on the development and training o it members, to enhance and secure their success

in retail travel sales.

he American Society o ravel Agents (ASA) is the largest travel trade association

in North America. ASA maintains a Standards o Ethics Code or proessional business

practices in the travel industry.

In more than 140 countries and territories, and its 25,000 plus members include

travel agents and the companies whose products they sell such as tours, cruises, hotels, car

rentals, steamship lines, bus lines, resorts, government tourist oices, and other related

interests.

ASA has been a leading advocate or travel agents, the travel industry, and the

traveling public. It seeks to enhance the proessionalism and proitability o member agents

through eective representation in industry and government aairs, education and training,

and by identiying and meeting the needs o the traveling public. ASA conducts much o

its agent training at its seven travel schools, known as the School at Sea.

ASA helps proessionals in maximizing the revenue and minimizing time, eorts,

and cost o operations. he ASA agents become members o an International Buyers Club

(IBC) ree o cost. he club helps agents increase their business by establishing contacts

with suppliers across the world. Overseas suppliers provide destination knowledge to the

agents or better itineraries preparation.

ASA continues its eorts to support travel agents and to ight or the traveling

public in the legal and legislative arenas. ASA endorsed legislation to protect passenger

rights and end airline pre-emption are currently pending in Congress.



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Summary

our operators and travel agents worldwide take it a privilege to be the part o

American Society o ravel Agents (ASA). ASA is an oldest and largest travel agent

association in the USA or providing opportunities to the members to participate in AnnualConvention o ASA and make use o inormation. Customers in USA preer to book holiday

packages through ASA recognized travel agent or tour operators. Most o the inbound

tour operators in India are the members o ASA.

****



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Lesson 5.5 - Roles and Functions of TAAI AND IATO

Learning Objectives


➢ Understand the primary purposes or setting up AAI & IAO

➢ Know dierent roles o these two national associations in promoting tourism

➢ Describe various unctions o AAI & IAO in travel business

➢ Be aware o uture activities o AAI & IAO

Introduction

Representing the issues pertaining to travel agency and tour operation business is

one o the roles o ravel Agent Association o India (AAI) and Indian Association o our

Operators (IAO). Apart rom doing the duty o presenting the problems to government

and other agencies, these two national bodies become the part o policy making and provide

suggestions and recommendations with regard to the promotion o tourism. he Ministry

o ourism, Government o India also involves these two apex national organizations while

ormulating planning and programming or tourism development. AAI and IAO have

been working or the ravel Agents and inbound tour operators respectively. AAI is the

oldest association as compared to IAO. he Ministry o ourism, Civil Aviation, Finance,

Home Aairs and External Aairs seek the representations rom these two bodies as and

when the need arises to take decisions. his lesson will present you the roles and unctions

o AAI and IAO along with objectives, organizations structure and uture activities.

Travel Agents Association of India (TAAI)

he ravel Agents Association o India (AAI) was

ormed towards the end o the year 1951 by a group o twelve

leading travel agents. hey created an Association to regulate

the travel industry in India along the organized lines and in

accordance with sound business principles.



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AAI is the Nodal Association o India and it is a proessional body with the principles

to coordinate ethical practices to regulate travel and tourism industry. he association is

a non-political, non-commercial and non-proit making organization. AAI has earned

the reputation as the voice o the ravel and ourism industry in India by their dedicated,

dynamic and proessional service.

he primary purpose is to protect the interests o those engaged in the industry, to

promote its orderly growth and development and to saeguard the travelling public rom

exploitation by unscrupulous and unreliable operators. It assures the rights and satisaction

quotient o the travelers. It is recognized as the main representative body o the travel and

tourism industry.

he Association’s membership has swelled steadily rom the original 12 toapproximately 2500 members consisting o Active, Associate, Allied, Government and

Non-Resident.

Objectives

➢ o maintain high ethical standards within the travel trade and to work in the interest

o the travelling public

➢ o cater the needs o the travelers and tourists rom within India and overseas ➢ o improve the standard o service and proessionalism in tourism industry

➢ o promote mutual co-operation among the dierent segments o the travel and

tourism industry among AAI members

Activities of TAAI

➢ Promoting, maintaining and stimulating the growth o travel and tourism in the

industry.

➢ Drawing the attention o the controlling and regulatory authorities and discussing

with them the problems o the industry and working or the survival and betterment

o its members.

➢ Fostering exchange o ideas, interaction o thoughts and experiences

➢ Fostering alliance among its members

➢ Educating the members to meet the challenges o tomorrow through conventionsand seminars.



281

➢ Maintaining close contact with world bodies and representing matters aecting the

travel and tourism industry o the country.

➢ Gathering useul inormation on travel and tourism and disseminating the same to

its members or their guidance.

➢ Developing better understanding among the dierent segments o the travel industry

and bringing them into its old by oering membership under dierent categories.

Membership

he membership o AAI is multiaceted with Active, Allied and Associate members

comprising IAA accredited ravel Agencies, Airlines and General Sales Agencies, Hotels

and our operators.

he membership criteria or each category diers as the Active members (travel

agent) need to be an IAA Agent; whereas the Inbound our Operators must be recognized

by the Department o ourism, Government o India. In ulil ling its mission and supporting

traditional values as well as embracing changes.

Region/Lessons

(a) Andhra Pradesh Lesson;

(b) Chandigarh Lesson;

(c) Goa Lesson

(d) Gujarat Lesson;

(e) J & K Lesson.

() Karnataka Lesson;

(g) Kerala Lesson;

(h) MP & CG Lesson;

(i) Nagpur Lesson;

(j) Pune Lesson;

(k) Punjab Lesson;

(l) Rajasthan Lesson;

(m) Saurashtra Kutch Lesson,

(n) South Gujarat Lesson;

(o) South amil Nadu Lesson



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Code of Ethics

ravel agents and their increased scale o activities must respect the air dealing and

ethical practices. AAI members admit and acknowledge the Code o Ethics. It represents

proessional and ethical activities.

Relations with the Public

he AAI members should respect the dignity and integrity o the ravel agents

proession. hey should inorm or alleged unethical or unlawul practice. hey should

keep abreast with updated travel inormation. It should give clients eective, accurate and

proessional travel advice, in keeping with the main objective o the Association. he AAI

member shall use available advertising materials to acquaint the public with the advantageso dealing with a AAI member. he AAI member shall display the AAI insignia on

entrance doors or display windows, and on all oicial stationery.

Carriers and Other Principals

he members should ollow the best traditions o marketing ethics and air dealing

by presenting all carriers, hotels and other agencies which they represent in a air and

impartial manner to prospective clients.

Fellow Members and Other Travel Agents

he AAI members shall not degrade the business dealing o another member and

shall not volunteer any negative opinions. he matter should be settled by mutual discussions,

ailing which it should be brought to the notice o the AAI Managing Committee or

settlement.

Industry Standards

AAI has signed several MOUs with various ravel Agents Associations in

neighboring countries and around the globe.AAI endeavors to build in its constituents,

and others it deals with, a commitment to:

➢ Apply superior technical skills to the jobs on hand.

➢ Deliver the highest quality o service.

➢ Act responsibly within sound inancial parameters.

➢ Build trust and credibility in the marketplace



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The Indian Association of Tour Operators (IATO)

Indian Association o our Operators (IAO) was

established on 13th January1982 with just seven members. It is a

national apex body representing inbound tour operators. IAOhas now over 4000 members consisting o travel agents, hotels,

airlines, government tourism departments or development

corporations, educational institutions, transport operators and

both national and international tour operators.

IAO has been in the orum or the tourism industry or addressing crucial industry

issues at various levels. During the 1982 convention, IAO’s demand or the tourism

industry’s recognition as exporters was inally accepted by the Government in 2002.

IAO has close connections and constant interace with other tourism associations in US,

Nepal and Indonesia, where USOA, NAO and ASA are its member bodies. IAO is

increasing its international networking with proessional bodies or better acilitation to the

International traveler visiting not only India but the entire region.

IAO interacts closely with the Government on all critical issues aecting the

tourism industry in India. It acts as the common medium between the decision makers

and the industry, and presents the complete perspective to both sides, synergizing their

common agenda o ourism acilitation. It interacts closely with all Government Ministriesor Departments, Chambers o Commerce and Industry, Diplomatic Missions etc. All IAO

members observe the highest standards o proessional ethics and oer personalized service

to their clients.

Mission

➢ o spread goodwill and maintain harmony in promoting, encouraging and assisting

the tourism sector with a long term goal o rendering an unbiased service to all the

visitors.➢ o work as a medium to acilitate the mutual understanding among the tour operators

➢ o assures the travelers an honest service

➢ o undertakevarious welare activities or beneits o the members and the travelers

Aims and objectives

➢ o maintain high ethical standards in the industry

➢ o take all steps or promoting, encouraging and assisting in the development o

tourism throughout the country



284

➢ o take initiatives to secure the welare o the ourism rade in all respects

➢ o correspond with various oreign and local associations and corporations,

companies and concerns

➢ o promote measures in the interests o the travel trade and nominate members.

➢ o deend the interest o the members o this Association rom the malpractices o

oreign tour operators

➢ o provide equal opportunities or all visitors to enjoy the ourism & ravel acilities

without distinction o race, colour, creed or nationality.

➢ o organize overseas promotional tours jointly with various airlines and Govt. o

India ourist oice abroad and other similar organizations

➢ o support seminars, group discussions, course o studies, cultural meetings

➢ o aid students by scholarship to pursue higher education, study and research

➢ o produce regular reports about the achievements o the members o the Association

➢ o print and publish inormation material or the beneit o its members

Membership

(a) he membership shall be open to organizations o good proessional reputation and

standing who have been connected with tourism and / or travel industry or at least

one year.

(b) he applications or membership must be made on the prescribed orm and must

be proposed and seconded by two members o the association, o which one must

be an active member and both the proposer and seconded should not be members

o the executive Committee.

(c) he applications or membership shall be considered by the Executive Committee

in a duly convened meeting and approved by a majority o two third o the memberspresent.

Categories of the Membership

he membership o the association shall be composed o

a) Active Members

(b) Associate Members

(c) Allied Members(d) Honorary Members.



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Executive Committee

IAO’s aairs are managed by an Executive Committee, elected by the Active

Members every two years. he Committee is entrusted with the Management o the aairs

o the Association. It is headed by the President with a team o six oice bearers and nineexecutive members. he Executive Committee meets every month to discuss current

tourism industry and membership issues. IAO networks through its State Level Lessons at

the local level where all local issues are handled at the appropriate level.

he decision o the Executive committee is inal in all cases. he Executive Committee

shall comprise o members o the Association constituted as provided by these rules. he

minimum members o the Executive Committee shall be iteen and maximum shall be

seventeen.

Action Committees

IAO has twelve Action Committees, each ocused on a specialized area headed by

a convenor assisted by his committee members.

a) Adventure ourism Development Committee

b) Civil Aviation, Press & PR Committee,

c) Domestic ourism Development Committee

d) Grievances Committee,

e) Guides Coordination Committee.

) Host Committee

g) Hotel Relations Development Committee.

h) IAO News Committee

i) Legal Aairs, Insurance & Consumer Committee,

j) Privilege Card Development Committee

k) Railways Co-ordination & Dev. Committee,

l) Surace ransportation Development Committee

m) Website Development Committee.

Social Activities

IAO has supported all major national causes, contributed by relie emergency operationsin national crisis and calamities. During the recent years IAO Members contributed



287

generously or the National Deense Fund and also organized Blood Donation camps during

the Kargil conlict, carried out relie work in the Cyclone aected areas in Orissa, set up

emergency relie supplies or the victims o Gujarat Earthquake, besides adopting a village and

providing them the necessary relie and rehabilitation inrastructure. IAO has contributed

whole heartedly to the Prime Minister’s Relie und, also to help the Government in theireorts during the national Crisis. IAO has also been actively involved in development o

proessional human resources in the tourism industry, by providing on the job training to

the students rom dierent tourism institutes and organizing special need based courses or

training in the Industry.

Summary

Representing the issues pertaining to travel agency and tour operation business isone o the roles o ravel Agent Association o India (AAI) and Indian Association o our

Operators (IAO). Apart rom doing the duty o presenting the problems to government

and other agencies, these two national bodies become the part o policy making and provide

suggestions and recommendations with regard to the promotion o tourism. he Ministry

o ourism, Government o India also involves these two apex national organizations while

ormulating planning and programming or tourism development.

****



288

Lesson 5.6 - Roles and Functions of ATAOI, ADTOI, IAAI, FIYTO and TAFI

Learning Objectives


➢ Understand the primary objectives o AAOI, ADOI, IAAI, FIYO & AFI

➢ Know dierent roles o these associations

➢ Explain unctions o these associations in protecting their own interests and helping

tourism industry grow

➢ Be aware o uture activities o these bodies

Introduction

ATOAI- Adventure Tour Operators´ Association of India

Adventure our Operators´ Association o India was established in 1994 with

handul o members. With an aim to create awareness about the immense potential or

adventure tourism in India and overseas to harness this potential in a sae, sensitive and

environment riendly manner. It is a national body comprising more than 150 members

across the country and abroad actively promoting, Adventure and Eco ourism in India.

he Ministry o ourism, Government o India recognized the AOAI members.

he Adventure our Operators Association o India was conceptualized by seven

dynamic ounder members rom the adventure travel trade, who envisioned AOAIto be strong support group that led to both group and individual proits by establishing

adventure as one o the main tourism attractions to India. As India is a natural paradise or

the adventure traveler, with her natural topography. On one hand o soaring mountains,

steep clis and on the other switly lowing currents, cascading rapids. In this lesson, you

would read about the objectives, unctions and activities o AAOI, ADOI, IAAI, FIYO

and AFI.



289

ATAOI

Mission

o assist the delivery o responsible and sustainable adventure travel experiences,ostering growth and partnerships amongst members.

All income o the Association shall be utilized towards the promotion o the aims

and objectives o AOAI. hey are committed to

a) Follow environmental practices.

b) Employment o the local community.

c) Social responsibility.

Vision

➢ o support the country to become the best and the largest adventure travel destination

in the world

➢ o assist the country to become twelve month tourism destination through adventure

travel

➢ o be inclusive and grow membership to 1000 responsible members

➢ o acilitate members operate in all the seven continents

Objectives

➢ o promote, encouraging and assisting in the development o Adventure ourism

throughout the country and to take initiative to secure the welare o the Adventure

ourism rade

➢ o conduct seminars, group discussions, cultural meetings, and other related things

to promote adventure tourism in India

➢ o coordinate with Department o ourism, Government Departments, Chambers

o Commerce, and other public bodies in India, or Committees or the beneits o

members

➢ o assist students by providing them scholarship to pursue higher education, study

and research in the ield o Development o Adventure ourism in India



290

➢ o encourage and promote interaction within the adventure tour operators organi-

zation and with other travel agents on all subjects involving their common beneits.

Core Values

(a) Exploration;

(b) Saety ;

(c) Challenge;

(d) Passion;

(e) Excellence;

() ransparency;

(g) Responsible ourism;(h) Knowledge;

(i) Innovation,

(J) Conservation;

(k) Inclusiveness;

(l) Sustainable Growth

Executive Committee

here are seven minimum numbers o the Executive,Active Member, Allied Member,

Associate Member, AOAI Secretariat, Committee Member and Honorary Member

Member

he activities o AOAI members include rekking, Mountaineering, Bike ours,

Sailing, Ballooning, Hand gliding and Heli-skiing and other Aero Sports, Skiing, Camel /

Jeep / Horse Saari, Wildlie Saari, Fishing, Scuba Diving Rating and other related watersports, ribal ours.

Categories of the Membership

he Executive Committee shall be entrusted with the management o the aairs

o the Association. he Executive Committee may at any time create dierent classes o

members any may provide or entrance ees and subscriptions and deine their respective

right and privileges. he Executive Committee shall in special cases have power to allowany person to become a Member o the AOAI.



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Association of Domestic Tour Operators of India (ADTOI)

he ADOI was created on 7 August 1996 with the idea o bringing around 400

domestic tour operators engaged in the promotion o Domestic ourism. It is a National

Body o Domestic our Operators. he association provides proessional services toconsumers together with accommodation, guides, railways, transporters and airlines.

Aims

➢ o achieve a level o Accreditation to instil conidence in the Buyers o ravel Services

➢ o bring all those agencies actively involved in the promotion o domestic tourism in

the country under one Organization

➢ o set up and maintain high ethical standards in the ourism Industry

➢ o encourage and promote the cultural exchanges and national integration and

environmental protection

➢ o organize, participate, manage, supervise or otherwise help in the promotion o

educational, technical and other seminars, exhibitions, expositions

➢ o encourage and publish the publication o reerence books, directories, periodicals,

statistics, journals and other types o publication and books o a scientiic or technicaland educational nature

➢ o manage or supervise the educational, technical training and vocational centre,

research institutes, and other institutions concerned with the distribution and

spreading o inormation

➢ o award scholarships and stipends, and other help to scholars engaged in the study

o tourism and its development and constitute Chairs and ellowships in India.

➢ o prepare, draw up public plans, surveys, schemes and reports concerning the status

o the domestic tourism industry

➢ o prepare and publish periodicals or reports relating to the activities o the society

➢ o establish channels o communication and liaison with the Department o ourism,

Government o India, State, and other public and private bodies and take all necessary

steps to promote and develop domestic tourism in India

➢ o establish strong relations between tour operators, travel agents and other persons

and organizations in the tourism industry in India



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➢ o oster an energetic atmosphere in the domestic tourism industry

➢ o ormulate a uniorm code o conduct to govern the procedures o booking,

conirmation, payment, reund, cancellation, no-shows, changes, in commissions

and discounts, and other matters

➢ o ailiate with other societies or associations o tour operators in India and abroad

➢ o amalgamate with any society or association, institution, company or other body,

having similar objects

➢ o purchase, acquire or to take over the properties, assets, liabilities among similar

bodies

Role and Functions

➢ o work in coordination with Ministry o ourism and other related ministries in their

keen eorts to develop essential pre-requisites or Domestic ourism Development

in areas o improvement o acilities.

➢ o set up accessible channels o communication and work in unity with the D o,

Govt. o India, State and other public and private bodies towards promotion o

domestic tourism in India.

➢ o build trustworthy bonds between tour operators, travel agents and other persons

and organizations in the industry to establish healthy atmosphere in domestic

tourism industry.

➢ o ormulate the homogeneous code o conduct within industry in order to regulate

proper unctioning o all procedures related to tourism.

➢ o take initiative or the protection o environment, cultural exchange and national

integration in the territory o India.

➢ o raise awareness among travellers regarding eco-riendliness and promote the

cause o clean environment.

➢ o acquire a level o Accreditation to instil conidence in the buyers o travel

services. Other than this, ADOI also aims to bring together all agencies involved in

promotion o domestic tourism.

➢ o guarantee the saety and security or travellers

➢ o upgrading and updating the inormation or distribution.



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Membership

Domestic tourism strengthens national integration and provides socio-economic

development in the country. he members are actively involved in the promotion o tourism

by promoting various tourist destinations in the country. ADOI has 92 tourism industryrepresentatives as its member.

As per the membership criteria o ADOI, industries/organizations who are involved

in ollowing activities can become member o ADOI:

a ) Regional ourist Corporation; b)ravel Portals; c)Hotels & Resortsd) Railways & Airlines;

e)ourism Institutes; )ourism Expo Companies.

he membership o the society shall be composed o:

➢ Active members

➢ Allied Members

➢ Honorary Members

IATA Agents Association of India (IAAI)

IAA Agents Association o India was ounded in 2000 under the guidance o Mr

Biji Eapen along with 35 agents across the country. IAAI aims to saeguard the interests o

smaller agents and or the betterment o travel raternity.

When IAA decided to demand minimum Bank Guarantee o ` 20 Lakhs rom

ravel agents which threatened the existence o smaller IAA accredited agents in India.he

decision o IAA – BSP India was challenged beore the Kerala Courts and was subsequentlyreerred or arbitration to ravel Agency Commissioner, Area 3 based in New Zealand, who

categorically ound the minimum guarantee scheme unair and directed IAA India, not to

proceed with Minimum Bank Guarantee scheme. he history was written as it was the irst

eather in IAAI’s success story or cause o travel agents.

IAAI has become a dedicated rade Association o IAA Accredited Passenger Sales

ravel Agents with a membership o 958 as on December 2012. It represents one-third o

the total travel industry in India. IAAI’s presence across India is through its duly elected

state committees with the equal representation o the members at the National Management



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Committee or smooth operations. Elections to National and State Committees are held

every 2 years as per our constitution.

IAAI has duly elected State Committees in major states o India, viz in Kerala, amil

Nadu, Andhra Pradesh, Andaman & Nicobar Islands, West Bengal, Uttar Pradesh, Delhiand Maharashtra. IAAI has ad hoc Committee Chairmen in Rajasthan, Assam, Karnataka,

Gujarat, Madhya Pradesh, Punjab and Orissa and the State Committees.

Now IAAI has also opened its membership to Non-IAA ravel agents, our

Operators, State ourism Boards in India and National ourism Boards o various countries,

Hotels, GDS companies and other stake holders o travel and tourism industry, thus making

IAAI a true and comprehensive representation o the travel and tourism industry in India.

IAAI is a member o UFAA (United Federation o ravel Agents’ Associations),

FICCI(Federation o Indian Chambers o Commerce and Industry) and ICA(Indian Council

o Arbitration).

Mission

o protect and promote the interests o small and medium sized ravel Agents in

India

Objectives

➢ o aim at the development o the travel & tourism industry in India by constantly

improving the standard o service and proessionalism in the industry so as to cater

to the needs o the travelers rom within India and overseas.

➢ o set and regulate standard and practices to be maintained by members so as to

establish highest ethical and disciplinary standards.

➢ o saeguard the interests o the traveling public and maintain high ethical standards

within the travel trade and provide training to the members and improve their overall

competence level.

➢ With a view o establishing that the membership o the association is a guarantee o

competence and integrity in the travel and tourism ield, acquaint the public with the

services which members are able to provide.

➢ o promote mutual co-operation among members by contributing to the soundprogress and growth o the travel and tourism industry as a whole and also assist in



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the settlement o disputes and diiculties arising amongst members or in connection

with the travel and tourism trade.

➢ o eort closely with the airlines, other ailiated bodies and relevant government

bodies to promote travel and tourism.

➢ o represent the travel agents trade beore oicial bodies o Government, Airline

bodies and other appropriate orums. And act as negotiating body or members and

to make recommendations to the relevant governmental bodies to promote travel

and tourism.

➢ o gather useul inormation on travel/tourism and disseminate them to members

or their guidance.

➢ Membership:

Any persons with the aims and objects o the Society can hold the membership o

Society. hey shall have to abide by the Rules and Regulations o the Society.

Classification of Members

he members o the Society shall be classiied into the ollowing categories:

a. Active Members.

b. Associate Members.

c. Ailiated Member

Active Member

Applicant must be an IAA Agent or a minimum period o one year with their

registered oice in the same location and should not be GSA or PSA o any Airlines and

shall not have interests in the ownership / management / proit o such GSA/PSA. An active

member is an IAA approved individual, irm or company having an established place o

business in India.

Federation of International Youth Travel Organizations

he Federation o International Youth ravel Organizations was established in 1950.

It is an open, world-wide, non-political and non-sectarian travel trade association. hey

have more than 350 members rom 60 countries all over the world. Its goal is to advocate the



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special identity o young travelers, and their right to lexible, aordable travel and travel-

related services.

he FIYO is the world’s only membership association and trade orum or youth

travel proessionals. It is one o the largest and most inluential organization in the youthtravel industry worldwide. FIYO collaborates with leading national, oicial and private

tourism organization. It is aimed to enabling its members and the industry’s continued growth

by providing Business and rade Networking Opportunities, Marketing Opportunities,

Developing and Distributing Key Industry Intelligence, Advocacy or Shaping legislation.

Objective

➢ o contribute to the personal and proessional growth o Youth travellers and youngpeople.

➢ o generate positive impact on global community by ostering international

understanding, education, cultural exchange and responsible international travel.

➢ o respond to the challenges o changing market and industry orces and the growing

demand or youth travel.

➢ o promote the development o youth travel organisations in countries where they do

not exist and to help strengthen such organisations in countries where developmentis limited.

➢ o build a representative and diverse membership and to strengthen the voice o

those promoting youth travel.

➢ o engage in advocacy to acilitate the movement o young travellers, cultural

exchange participants.

FIYTO Standards

FIYO sets and maintain the standards in the youth travel trade. Membership o

FIYO is a mark o credibility and respectability, as only reputable and inancially sound

companies are admitted.

Categories of Membership

Language travel; Au pair agencies; Accommodation; our operators; Adventure

travel; ransportation; Homestay providers; Educational travel; Activity holidays; National



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tourism authorities; Student travel bureaux; Youth hostel associations; heme parks and

restaurants; echnology/communications; ravel insurance; ravel publishers.

Codes of Conduct

FIYO promote ethical proessional behaviour between operators and high quality

standards or young travelers. All types o organizations active in the ield o youth travel

are encouraged to join: non-proit and or-proit; public and private; suppliers and buyers.

FIYTO Associations

FIYO has two subsidiary ailiated associations consisting o ALO (Association

o Language ravel Organizations (or language schools and agencies) and International AuPair Association (IAPA)/ It was established in 1994 to monitor and improve all aspects o au

pair programmes.he FIYO and the International Student ravel Conederation (ISC)

wereormed ater World War II to inspire young people through international travel and to

help remove cultural barriers. FIYO is co-host to WYSC, the World Youth and Student

ravel Conerence.

It is the world’s premier travel trade air or operators in the youth and student

travel market. he conerence is co-hosted by ISC, the International Student ravel

Conederation. WYSE ravel Conederation was ormed in 2006 when FIYO and ISC

merged to create a stronger united body to represent the global youth travel industry. he

Global Youth ravel Awards ormally recognize outstanding perormers in several ields o

international youth travel and reward WYSE ravel Conederation members who contribute

so much to industry and community.

Mission

o contribute to the personal and proessional growth o students and young people

and positively impact our global community by ostering international understanding,

responsible international travel, cultural exchange and education.

Travel Agents Federation of India (TAFI)

ravel Agents Federation o India (AFI) is ounded in the year 1986.It is a

proessionally managed trade organization that tends to regulate the Indian travel businesskeeping close coordination with the set o strong business ethics and code o conduct.



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AFI is a non-political, non-commercial and not-or-proit body. It ocuses on

certain essential elements in the industry and has a set o objective to supplement it.AFI’s

membership has increased rom 8 to over 1400 rom the dierent dimensions o travel

industry. AFI itsel is a member o two o the most reputed trade organizations- UFAA

(United Federation o ravel Agents Associations) and WAAA (World ravel AgentsAssociations Alliance).

Aims and Objectives

➢ o protect the interests o the travelling public and maintains high ethical standards

within the travel trade through better communications and awareness about

regulations.

➢ o saeguard the travelling public rom exploitation by unscrupulous and unreliable

so-called ravel Agents.

➢ o promote such schemes that beneits the members o AFI as well as provide

mutually beneicial alternatives to the airline industry or better growth o travel.

➢ o deend the interests o those engaged in the industry, to promote its orderly

growth and development.

➢ o spread greater awareness and updated inormation on travel to eiciently cater to

the needs o the travellers rom within India and overseas.

➢ o ensure compliance o Rules, Regulations and Guidelines sent by the Consulates,

Government Authorities, Airlines etc.

➢ o augment the development o the travel industry in India by consistent improvement

in the standard o service and proessionalism.

➢ o encourage mutual cooperation among members o AFI and thereby ensure

healthy growth o the ravel Industry.

➢ o stand or the travel agents trade beore oicial bodies o Government, Airline

bodies and other appropriate orums.

➢ o saeguard the interest o the ravel Agents vis-a-viz service providers such as

airlines.

Membership

he Membership is open to all persons who agree with the aims and objects o

ederation. AFI has got eight speciic categories or the members under which membership



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is available or IAA Accredited ravel Agents and our Operators, Branch Oices o IAA

ravel Agents and our Operators, Airlines, Hotels, Car Coach Rental, Cruise Lines, ravel

Service Intermediaries and so on.

Members o the Federation shall be classiied into the ollowing categories with orwithout voting rights in the manner prescribed by these rules and regulations.

(a) Chartered Members;

(b) Active Members;

(c) Allied Members;

(d) Associate Members;

(e) Ailiate Members;

() Overseas Allied Members,

(g) Government Representatives;

(h) Honorary Members.

Lesson Office Bearers

(a) Andhra Pradesh;

(b) Eastern India;(c) Gujarat;

(d) Karnataka.

(e) Kerala;

() Northern India;

(g) Pune;

(h) amil Nadu;

(i) Western India

World Travel Agents Associations Alliance (WTAAA)

AFI is a member o World ravel Agents Associations Alliance. he WAAA

also provides a orum or consideration o common strategic visions, synergies in the

management o issues and common advocacy on issues where there is unity o interest.

he WAAA is a not-or-proit entity incorporated in Belgium which is a global

alliance o travel agent associations. he countries include rom Europe, USA, Canada,

Australia, New Zealand, South Arica and India.



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13. Present the objectives o ASA and are the practically possible to implement?

14. Explain dierent types o membership o ASA.

15. Explain the ASA’s Organization Structure and unctions?

16. What are the activities o ASA and is the ASA’s Global Convention?17. Present the responsibilities o members.

18. Highlight the objectives and activities o ASA’s India Lesson

19. Highlight the objectives and unctions o AAI.

20. Classiy the various memberships in AAI.

21. Highlight the objectives and unctions o IAO.

22. Classiy the various memberships in IAO.

23. What are the objectives and activities o AAOI?

24. What are the objectives and activities o ADOI?

25. What are the objectives and activities o IAAI?

26. What are the objectives and activities o FIYO?

27. What are the objectives and activities o AFI?

CASE STUDY

UFTAA and Training and Development

ravel industry is a key employer o tourism industry and it employs qualiied and

trained personnel or handling varied jobs. As such travel industry is acing the acute

shortage o employable personnel. One o the challenges beore the global travel industry

is to ensure the supply o quality human resources. ravel agencies and tour operators used

to recruit the people without training and provided them on-the-job training to handle the

booking or operations o travel business. he job requirements have undergone changes

with the change in the structure o travel business today. One o the important contributions

o UFAA, being a global representative o travel agency, customized the courseware or

the proessionals or novice to be attracted towards the course and career. It has become

extremely successul ever since the IAA-UFAA courses have been launched. It has catered

the needs o supply o human resources across the countries with the distance and regular

mode o the programmes.

UFAA is a world body representing the travel agencies and tourism industry. It

eectively represents travel agents’ and tour operators’ views on both inbound and outbound



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travel by continuous dialogue and consultation with other international organizations. It

seeks to encourage travel among people o all nations and to support the reedom o travel

throughout the world.

UFAA is dedicated to Education and raining activities with the help o itsdedicated Educational Academy. It has an active partnership with the IAA/UFAA raining

Programme. It includes a our-level educational programme. he new courses also include

Marketing and Management education. he IAA/UFAA programme is jointly oered

and it is the most complete travel and tourism training programme designed proessional

to build career in the travel and tourism industry or upgrade proessional competence. he

qualiications oered are recognized under the terms o the IAA Resolutions applicable to

IAA’s accreditation o travel agents.

he IAA/UFAA International ravel Agents raining Program was launched

in 1972 to meet the growing demands or well trained sta in ravel Industry. It is now

available almost all over the world. he IAA/UFAA Diploma has become a hallmark in

the travel industry. It is known or its quality standards in training. It has gained worldwide

recognition and acceptance as a high quality training programmes with exhaustive and

need-based modules.

he IAA/UFAA International Cargo Agents raining Program was launched in

1977 to meet the growing demands or trained sta in cargo agencies. he IAA/FIAA

International Cargo Agents Diploma has gained worldwide industry recognition as a quality

qualiication.

he IAA/UFAA and the IAA/FIAA programmes are basically designed or

promoting sel study courses. At the same time, it is also oered as regular courses by

Authorized raining Centers across the world. wo type o courses namely Foundation &

Consultant courses are conducted by IAA/UFA.

he IAA/UFAA’s raining and Development Institute trains more than 35,000

aviation proessionals. More than 200 courses are developed around IAA’s areas o expertise

and commitment to promoting industry standards worldwide. hese are the acilities o the

IAA/UFAA.

➢ 12 State-o-the-Art training centers with over 200 IAA Instructors

➢ raining delivered in the classroom, on-site and via distance learning

➢ Worldwide locations through IAA Global raining Partners

➢ Instruction in English, French, Spanish and Mandarin.