Role of travel agents & tour operators

in hospitality industry

A
RESEARCH PROJECT
SUBMITTED FOR THE PARTIAL REQUIREMENT AND
FULFILMENT OF THE BHM & CT PROGRAM AT
UTTEAR PRADESH TECHNICAL UNIVERSITY

Supervised by:
PROF. Dr. NEERAJ GUPTA

Submitted by:
PANKAJ SAH

J. P. INSTITUTE OF HOTEL MAMNAGEMENT

& CATERING TECHNOLOGY, MAWANA ROAD, MEERUT

SESSION : 2014 -15

ROLE OF TRAVEL AGENTS & TOUR

OPERATORS IN HOSPITALITY INDUSTRY
A
ABSTRACT
SUBMITTED FOR THE DEGREE OF
BACHELOR
OF
HOTEL MANAGEMENT & CATERING TECHNOLOGY

Supervised by:
PROF. Dr. NEERAJ GUPTA

Submitted by:
PANKAJ SAH

J. P. INSTITUTE OF HOTEL MAMNAGEMENT

& CATERING TECHNOLOGY, MAWANA ROAD, MEERUT

SESSION : 2014-15

Dr. Neeraj Gupta

CERTIFICATE
This is to certify that Research Project entitled ROLE OF TRAVEL
AGENTS & TOUR OPERATORS IN HOSPITALITY INDUSTRY has been
completed by Pankaj Sah under my supervision. To the best of my
knowledge the present study is an original and genuine research work and
has not been submitted in parts or in full, for the award of any degree
anywhere.
I recommend the Research Project for the award of Bachelor
Degree in Hotel management & catering Technology

PANKAJ SAH

PREFACE
In the first chapter efforts has been made to understand the concept
of

TRAVEL

AGENTS

&

TOUR

OPERATORS

IN

HOSPITALITY

INDUSTRY. The Second chapter presents the research design of the

study. The Third chapter throws light on. Chapter fourth
presents... In chapter Fifth... The last
chapter summaries the conclusions of the present study and offer the
suggestions for the improvement of .
I express my heartfelt thanks to the officers and staff of ..not only
responding positively to my various queries, but also for providing me the
required resources material during my field survey.
I also express my sense of gratitude to Dr. Neeraj Gupta for
providing me the required statistical data and giving me his concrete and
constructive suggestions in completing my research work smoothly.
It is my privilege to thank Mr. Rohit Dayal, Director, and all the staff
member of J.P. IHM, Meerut to give their valuable guidance at every stage
during my research work
No amount of words can adequately express the debt, I owe to my
revered supervisor Dr. Neeraj Gupta, for his constant encouragement, able
guidance and thought provoking discussion during the course of the
present investigation.
My natural and spontaneous thanks to my respected

Dr. Neeraj

Gupta for his enlightening, thought provoking and pains taking guidance
and supervision at every stage of this research work.
PANKAJ SAH

CONTENTS
Page No.
PREFACE
Certificate
1. INTRODUCTION
1.1 Introduction to Tourism Industry
1.1.1 Concept of Tourism Industry
1.1.2 Components of Tourism Industry
1.1.3 Management of Tourism Industry
1.1.4 Type of Tourism Industry
1.1.5 Methods of Tourism Industry
1.2 Introduction to travel agents & tour operators
1.2.1
1.2.2
1.2.3
1.2.4
1.2.5
2.

RESEARCH DESIGN
2.1
2.2
2.3
2.4
2.5

3.

Concept of Travel Agents & Tour Operators

Components of Travel Agents & Tour Operators
Management of travel agents & tour Operators
Type of Travel Agents & Tour Operators
Further Prospectus

Need & Importance of Study

Scope of the Study
Objectives of the Study
Research Methodology
Limitations of the Study

Travel Agents & Tour Operators are beneficial for tourism

3.1
3.2
3.3
3.4
3.5
3.6

Personal Sale
The presentation sales call
Concept of tour operators growth & future prospect
Working pattern of Travel Agents
Working pattern of Tour Operators
Effects of Travel Agents & Tour Operators on Tourism Market

4.

5.

6.

Travel Agent in tourism industry

4.1 function of tourism industry
4.2

market for tourism industry

4.3

pattern for travel agent

4.4

preparations for purpose

Internal marketing & sales by travel agent & tour operators

5.1
5.2
5.3

Marketing and Sales by Travel Agents & Tour Operators

Pattern used by travel agents & tour operators
Organizing the Travel Agents & Tour Operators

5.4

The Role Of Genaral Manager In Internal Sales

5.5

Suggestive Selling

CONCLUSION AND SUGGESTIONS

6.1 Conclusion
6.2 Suggestions
6.3 References
6.4 Bibliography

Chapter- 1

(a)

Introduction to
tourism industry -

INTRODUCTION TO TOURISM INDUSTRY

The tourism sector is probably the only service sector that provides concrete and
quantified trading opportunities for all nations, regardless of their level of
development. However, it is also a sector where there is clearly an uneven
distribution of benefits, which is threatening the social, economic and
environmental sustainability of tourism in some developing countries. For many
developing countries tourism is one of fundamental pillars of their development
process because it is one of the dominant activities in the economy, while for
others, particularly by islands and some small economies, it is the only source of
foreign currency and employment, and therefore constitutes the platform for their
economic development.
Against this background, part I presents an overview of the most important trends
and features of international tourism and the most influential factors affecting the
performance, efficiency and sustainability of tourism transactions in developing
countries. Part II presents an overview and examples of the main issues affecting
the viability of tourism in developing countries, including (a) the impact of the
leakage effect which is adversely affecting them in taking advantage of
commercial opportunities; and (b) the anti-competitive practices affecting tourism
viability and performance in different segments of the tourism sector, as well as in
other sectors closely linked to travel and tourism. Part III presents some
reflections about the GATS 2000 negotiations as a possible turning point for
making effective the increasing participation of developing countries in
international tourism flows in a sustainable perspective. In this connection, some
comments are provided on the impact of the proposed Annex on Tourism on the
economic, social and environmental sustainability of tourism.

1.1.1 CONCEPT OF TOURISM INDUSTRY

I.

Salient trends and features of the performance of developing

countries in international tourism

1.

Trends and features of international tourism: some indicators

showing the sustainability of tourism in developing countries

(a)

Overall trends in international tourism

"International tourism highlights 2000" of the World Tourism Organization

(OMT/WTO) reports that during 1998 total tourism receipts, including those
generated by international fares, were the most important export revenue
worldwide. Export revenue that year amounted to an estimated US$ 532 billion,
surpassing all the other international trade categories (see figure 1). International
tourism totalled to US$ 441 billion and the international transport of passengers
US$ 91 billion, which corresponded to 7.9 and 1.3 per cent respectively of
worldwide exports of good and services. According to the OMT/WTO Tourism
Economic Report 1998, tourism is one the five top export categories and the
main source of foreign currency for at least 38 per cent of them.

(b) Tourism spenders

The worlds top tourism spender during 1998 was by far the European Union,
with an over US$ 160 billion. The most important spenders among its members
were Germany (2nd world ranking), US$ 46.9 billion; the United Kingdom (4th),
US$ 28.8 billion; France (5th), US$ 17.8 billion; Italy (6th), US$ 17.7; and
Netherlands (7th), US$ 11.0 billion. The other members expenses during the
same year ranged between US$ 8.8 and 1.8 billion. During the same year, the
United States (1st in world ranking by individual countries) spent US$ 56.1 billion;
Japan (3rd), 28.8 billion; Canada (8th) US$ 10.8 billion; China (9th), US$ 9.2
billion; Russian Federation (13th) US$ 8.3 billion; Switzerland (14th), US$ 7.1
billion; and Australia, US$ 5.4 billion. Also during the same year 45 countries
reported more that US$ 1 billion in international tourism expenditure
(c) International tourist arrivals
Preliminary figures for tourist arrivals for 1999 show that these arrivals totalled
664 million. The distribution and share are presented in figure 2.

(d)

Tourism trends and best-performing countries in developing regions

between 1997 and 1999

Africa. The African region showed a growth rate of 7.8 per cent in the number of
arrivals, nearly twice the world average. There is a high concentration of
international tourism arrivals in this region, bound for destinations in the north
and south of the continent. The best-performing countries in terms of the
increase in the number of arrivals included Morocco (18 per cent), India (11 per
cent) and Zambia (26 per cent), while the important tourism destinations of
Tunisia (3.4 per cent) and South Africa (6 per cent) continued to show steady
gains.
Americas. The rate of growth for the whole region 2.4 per cent was lower than
the world average, mainly owing to flat results for South American countries (-1
per cent) and Mexico (-2.9 per cent). Central America fared much better,
especially Guatemala (29 per cent) and El Salvador (21 per cent). Results in the
Caribbean were mixed, with Cuba (12 per cent) and the Dominican Republic (15
per cent) among the big winners and Puerto Rico (-11 per cent) among the
losers.
East Asia/Pacific. After two years of decreasing tourist arrivals, East Asia and
the Pacific bounced back strongly in 1999, attracting nearly 10 million more
tourists than the previous record, set in 1998. Growth was widespread, with
especially good results in Malaysia (43 per cent), Cambodia (29 per cent), Viet
Nam (17 per cent), Singapore (11 per cent), Thailand (10 per cent), Republic of
Korea (10 per cent), China (8 per cent) and Hong Kong, China (18 per cent).
Europe. Overall, tourism to Europe grew by 2.7 per cent in 1999, with results
mixed according to region. In this region some economies in transition were
affected by the Kosovo crisis and instability in the Russian market, which caused
problems for mature destinations in Central and Eastern Europe such as
Hungary (-14 per cent), Poland (-4.4 per cent) and the Czech Republic (-1.8 per
cent). However, emerging destinations managed to attract the interest of
travelers, for example, Estonia (15 per cent), Kyrgyzstan (17 per cent) and
Georgia (21 per cent), as well as Russian Federation (17 per cent) and Ukraine
(21 per cent).
Middle East. The Middle East is one of the world's smallest regions, receiving
nearly 18 million tourists in 1999, but it also had the fastest growth rate with

arrivals up by 16 per cent. Egypt, which represents a quarter of the regional total,
recorded a spectacular growth rate of almost 40 per cent and a record number of
tourist arrivals that far exceeds the totals achieved in its best year, 1997. Dubai,
Lebanon and the Syrian Arab Republic also fared well, with arrivals increasing by
14, 12 and 9 per cent respectively. The Libyan Arab Jamahiriya registered an
increase of 25 per cent.
South Asia. Tourism increased in most countries in this region, resulting in an
increase of 8.3 per cent over the previous years results. India registered an
increase of 5.2 per cent, while arrivals in the Islamic Republic of Iran rose by 16.5
per cent, in Sri Lanka by 14.4 per cent and in Maldives by 8.6 per cent.
(e) International tourism receipts
Preliminary results processed by the OMT/WTO indicate that during 1999
tourism receipts worldwide amounted to US$ 455 billion and a further US$ 93
billion. In 59 countries the receipts amounted over US$ 1 billion.
COMPONENTS OF TOURISM INDUSTRY
Some indicators about the sustainability of international tourism in
developing countries.
(a)

Importance and impact of export revenues from tourism for developing

countries

During the period 1995-1998, tourism revenues were one of the five leading
sources of export revenue for 69 developing countries. Among the latter, tourism
revenue was the main source of foreign currency in 28 countries, its share in
total exports ranging between 79 and 20 per cent; in 27 countries it accounted
for between 20 and 10 per cent; and in the 24 remaining countries it was around
10 per cent.
The contribution of export revenues to gross domestic product (GDP) was
equally important and accounted for between 82.29 per cent (in Maldives) and 30
per cent (in Samoa). In the second group the contribution of export revenues to
GDP is between 30 and 10 per cent and in the remaining countries under 10 per
cent. One aspect to be underlined is that although the contribution of tourism
revenues is important in all these countries, its contribution to GDP is declining
as the economies become more diversified. The best examples of this are
Mauritius, the Dominican Republic and Tunisia.
(b)

The particular `situation of LDCs

Although only 0.5 per cent of the worlds exports of services originate in the
LDCs, international services are an important part of the economies of those
countries. In 1998, services accounted for 20 per cent of the LDCs' total exports
of goods and services. However, in 13 of the 49 LDCs services export receipts
exceeded merchandise export receipts and in all but three of those the share of
tourism services exports in total foreign exchange earnings was more than twice
the share of merchandise exports.
The share of the LDCs in the worlds exports of international tourism services
was 0.6 per cent in 1988 (with 2.4 million international tourist arrivals) and 0.8 per
cent in 1998 (5.1 million). During the 1990s tourist flows to the LDCs increased
more rapidly than tourist flows to the rest of the world. This growth was
particularly strong in seven countries (Cambodia, Mali, Laos People's Democratic
Republic, Myanmar, Samoa, Uganda, United Republic of Tanzania), which
hosted over 1.2 million visitors in 1998, in comparison with 0.4 million in 1992.
During that period, tourism growth was much slower in several LDCs, while a
decrease was observed in a number of countries that suffered socio-political and
economic instability.
The growth of international tourism receipts in the LDCs was also quite rapid
during the 1990s: total receipts more than doubled between 1992 and 1998 (from
US$ 1 billion to 2.2 billion). There is a great degree of concentration in the
distribution of tourism receipts among the LDCs: five countries (Cambodia,
Maldives, Nepal, Uganda, United Republic of Tanzania) accounted for 51 per
cent of the total tourism receipts of the group in 1998. Particularly strong, over
the decade, was the growth in international tourists expenditure in Cambodia,
the United Republic of Tanzania, Myanmar, Bangladesh, Samoa, Uganda and
Haiti.
Tourism is the first source of foreign exchange earnings in the whole group of 49
LDCs, aside from the petroleum industry, which is concentrated in only three
LDCs (Angola, Yemen, Equatorial Guinea): the combined tourism export receipts
of all LDCs in 1998 accounted for 16.2 per cent of the total non-oil export receipts
of the LDCs, thus exceeding the second and third largest non-oil export sectors
(cotton and textile products) by 39 per cent and 82 per cent, respectively.
c. Level of performance and sustainability of tourism in developing
countries
The proper functioning of the tourism economy is linked to that of many other
related economic activities, which accounts for the importance of its economic,
social and environmental sustainability. As a matter of fact, the extent to which

the business operations of international tourism, backward and forward are

linked with other sectors will determine the level of performance and profitability
of tourism, the extent of multiplier and spillover effects, and the retention of value
added, i.e. the leakage effect. The sectors producing goods and services are
linked backwards with tourism in catering for the needs of tourists and tourism
operators, e.g. agriculture and food-processing industries, and other
manufacturing industries providing furniture, construction materials and other
articles required by tourism establishments. Similarly, many other services, such
as transport, business services, financial services, professional services,
construction design and engineering, environmental services, security services
and government services, also ensure the efficient performance of tourism
operators. Some of these sectors are also crucial for the proper linkage of
tourism with foreign markets (forward linkages) because they constitute the
platforms for "taking off" and for keeping the national tourism providers fully
integrated with international tourism flows.
Many developing countries have found important to improve the linking of
tourism (forward and backward) with the other sectors of the economy as one of
the foundations of tourism development policies, so as to capitalize on the
benefits of the globalization and internationalization of markets. Successful
experiences of small economies and islands that have recently become
emerging tourism destinations, such as Mauritius, Maldives, the Dominican
Republic and other Caribbean islands, attest to the vital importance of the proper
linkage of tourism with the rest of the economy, in their capacity of retaining value
added, e.g., reducing leakages. Despite developing countries efforts to develop
the most suitable domestic policy environment, the economic sustainability of
tourism is being undermined by external factors beyond their control, notably the
predatory behaviour of integrated suppliers which enjoy a dominant position in
the originating markets of tourism flows.
II.

Key issues with special impact on the social, economic and

environmental sustainability of tourism

This part presents an overview and illustration of the main issues affecting the
viability of tourism in developing countries, including (a) the leakage effect
produced by their structural vulnerabilities and their difficulties in taking
advantage of commercial opportunities; and (b) anti-competitive practices
affecting tourism viability and performance in different segments of the tourism
sector, as well as those in other sectors closely linked to travel and tourism.

1. Leakages from tourism in developing countries

As a modality of international commerce, tourism involves not only inflows of
foreign financial resources but also outflows, referred to herein as "leakages".
When they exceed specific levels, these outflows can significantly neutralize the
positive financial effect of international tourism. Leakage is the process whereby
part of the foreign exchange earnings generated by tourism, rather than being
retained by tourist-receiving countries, is either retained by tourist-generating
countries or repatriated to them in the form of profits, income and royalty
remittances, repayment of foreign loans, and imports of equipment, materials,
capital and consumer goods to cater for the needs of international tourist and
overseas promotional expenditures.
Leakages can be divided into three categories: internal leakage or the "importcoefficient of tourism activities; external leakage or pre-leakage, depending on
the commercialization mode of the tourism package and the choice of airline; and
invisible leakage or foreign exchange costs associated with resource damage or
deterioration.
Internal leakages can be measured by establishing satellite accounts within
national accounting and survey procedures to detail all tourism-related economic
activities. It is a normal effect present in both developed and developing
countries. In principle, import-related leakages are highest where the local
economies are weakest owing to sparse factor endowment or inadequate quality
of goods and services. The average leakage for most developing countries today
is between 40 and 50 percent of gross tourism earnings for small economies and
between 10 and 20 percent for most advanced and diversified developing
countries. Importantly for LDCs, tourism import-related leakages are often inferior
to other economic activity leakages, including manufacturing and, in some cases,
agriculture, thus confirming tourism as a choice sector of development for which
they possess comparative advantages in many areas.
A first step in reducing internal leakage is to identify what levels are appropriate
given the economic structure of a country and then to ensure that effective
leakage remains near this objective range while strategies to build up the local
supply capacity are put in place. Although restrictive trade policies can reduce
the size of the market, it is important to note that import openness tends to
facilitate the leakage effect unless the economy has already in place a structure
capable of reacting to the competitive stimulus of imports, which is usually not
the case in LDCs.
External leakage or pre-leakage is much more difficult to measure and relates to
the proportion of the total value added of tourism of services actually captured by

the servicing country. To the extent that developing countries have limited access
to commercialization channels in their target markets, they can only offer base
prices to intermediaries that capture the mark-up on those services. Observed
differences between paid and received prices for developing country tourism
services (lodging, food, entertainment, etc.) suggest external leakage or preleakage levels of up to 75 percent. In some cases, base prices do not allow for
the economic sustainability of projects, and normally do not contemplate
replacement costs associated with resource depletion. This leads to problems of
infrastructure and environmental sustainability, which tend to be overlooked in
view of the short-term importance of crucial foreign exchange inflows.
As a flow variable, leakage levels do not have a static effect. They vary in time
depending on:
(a)

The stage or cycle point of the tourism industry. For example, a

nascent tourism industry tends to require large amounts of one-time
imports, whereas loan grace periods may allow for a decrease in
leakage during the first few years of operation. During a maturity
phase leakage may increase as large sums are invested in
marketing, rehabilitation of facilities and upgrading of products
provided, etc.

(b)

The evolution of the economy to provide new services and products

resulting from demand from the tourism sector. The import of
products and services initially not available should trigger enough
entrepreneurial response to enable these to be provided locally, thus
allowing for a lessening of leakage. It is therefore a main objective of
leakage limitation to provide and promote these links between
domestic industry and tourism. For example, in the Dominican
Republic leakages diminished between 1990 and 1995 as local
industry became increasingly interested in servicing the tourism
market. The largest companies have now created subsidiaries
specifically for this purpose.

Another factor to be evaluated in identifying appropriate leakage levels is the

type of tourism being promoted. High-income tourism, because it requires the
provision of very high quality and high priced goods, may actually result in
increased leakage in some cases despite of the higher income it may generate.
Mass tourism could have higher potential for leakage than ecological or
adventure tourism because the latter value and consume local resources as part
of the tourism experience. However, low-leakage tourism can also equate to lowincome tourism, resulting in lower total income and therefore limiting the
possibilities for expansion and development by other sectors of the receiving

countrys economy. In order to correctly evaluate the return on investments it is

necessary to carry out a cost-of-opportunity study that will establish a leakage
break-even point as a function of the countrys economic capacity to serve
different types of tourism and choose the type most suitable for a project or
country.
Leakage effects on tourism net income levels are nonetheless offset by
increased value added or volume. As an example of the positive outlook for
LDCs, value added in tourism, measured as tourism income per tourist arrival
(Yt/At) has grown by over 100 percent in 21 (almost half) of the LDCs surveyed
between 1998 and 1992 (see table 1).
Interestingly, growth in income per tourist appears to bear no clear relationship to
the level of or growth in arrivals (see graph 1). This suggests that growth in
income per tourist is not a function of volume, and has therefore grown basically
because of a favourable quality/price ratio. This also confirms the enormous
diversity of situations present in LDCs and their tourism industries; but, in
general, as value added grows, the potential for leakage lessens.

Table 1
Trends in Tourist Arrivals and Income per Tourist for LDC's 1992/1998.
Growth
Income Income
in
Tourist Tourist Tourism Tourism
per
per
Growth income
Arrivals Arrivals Income Income
Tourist Tourist in tourist
per
(000)
(000)
(Um)
(USm)
(000)
(000) arrivals tourist
At
At
Yt
Yt
Yt/At
Yt/At
1998/19 1998/199
1992
1998
1992
1998
1992
1998
92*
2*
Burundi
86
15
4
2
0.05
0.13
-83%
187%
Comores
19
27
8
26
0.42
0.96
42%
129%
Tanzanie
202
447
120
431
0.59
0.96
121%
62%
Kiribati
4
5
1
2
0.25
0.40
25%
60%
Haiti
90
150
38
96
0.42
0.64
67%
52%
Maldives
236
403
113
292
0.48
0.72
71%
51%
Afganistan
6
4
1
1
a/ 0.17
0.25
-33%
50%
Sao Tome
Principe
3
2
2
2
a/ 0.67
1.00
-33%
50%
Lesotho
155
115
19
20
0.12
0.17
-26%
42%
Ouganda
92
238
38
135 b/ 0.41
0.57
159%
37%
Samoa
38
71
17
43
0.45
0.61
87%
35%
Yemen
72
81
47
69
0.65
0.85
13%
30%

Bhutan
Ethiopie
Cambodia
Mali
Burkina
Faso
Tchad
Djibouti
Gambie
Cap Vert
Benin
Salomn
Islands
Nepal
Vanuatu
Madagasc
ar
Niger
Zambia
Central
African
Republic
Malawi
Sudan
Rep. Dem.
Laos
Myanmar
Rep. Dem.
Congo
Togo
Guinea

3
83
88
38

5
121
220
85

3
23
50
11

6
40
143
28

1.00
0.28
0.57
0.29

1.20
0.33
0.65
0.33

67%
46%
150%
124%

20%
19%
14%
14%

92
17
28
64
19
130

140
8
19
87
52
152

24
21
6
27
7
32

39
10
4
33
17
33

0.26
1.24
0.21
0.42
0.37
0.25

0.28
1.25
0.21
0.38
0.33
0.22

52%
-53%
-32%
36%
174%
17%

7%
1%
-2%
-10%
-11%
-12%

12
334
43

16
435
51

6
110
56

7
124
52

0.50
0.33
1.30

0.44
0.29
1.02

33%
30%
19%

-13%
-13%
-22%

54
13
159

133
18
382

39
17
51

74
18
90

0.72
1.31
0.32

0.56
1.00
0.24

146%
38%
140%

-23%
-24%
-27%

7
150
17

20
215
34

3
8
5

6
8
6

0.43
0.05
0.29

0.30
0.04
0.18

186%
43%
100%

-30%
-30%
-40%

30
27

260
194

18
16

68
35

0.60
0.59

0.26
0.18

767%
619%

-56%
-70%

22
49
33

32
96
99

7
39
11

2
15
6

0.32
0.80
0.33

0.06
0.16
0.06

45%
96%
200%

-80%
-80%
-82%

However, for varying reasons, including differing lengths of stay, very few
countries have achieved income-per-tourist levels of above US$ 1000. The
growth (calculated as the simple growth rate for 1998/1992) of the middle-income
tourism category of has been higher not only for arrivals (a factor of 2 versus
1.75) but also for combined income per tourist category (a factor of 4.9 versus 2),
as can be seen in table 2. This indicates that the primary competitive segment for
LDCs, as well as the segment where most opportunities for growth in value
added exist, tends to be in this category of pricing.

Table 2
Number of countries with high-and middle-income tourism, 1988-1998
Number of
countries with:

Year
1988
1992
1998
growth
%
factor 98/92

Income per
tourist
>USD1000
4
4
7
1.75

Combined
income, US$ Combined
(millions) arrivals (000)
62
58
97
162
118
2.6

2.0

Income per
Combined
tourist > USD income, US$ Combined
500
(millions) arrivals (000)
8
152
382
14
438
16
1478
1888

1988
1992
1998
growth% factor
98/92
2
9.7
4.9
Source: Calculations based on World Tourism Organization statistics.
Tourism policy should therefore be based on the premise that although leakage
is an intrinsic element of international tourism, and increased value added will
also benefit the economy, leakage-containment measures have multiplicative
effects that will allow developing countries to maximize the financial benefits to
be derived from an expansion of tourism. A study on Indonesia showed that the
tourism multiplier (1.59) was the highest of all categories, including final demand,
and exhibited strong links to the agricultural sector, on which it had no direct
effect at all.
To the extent that leakages lead to a definition of economic opportunities it can
be useful as a strategic blueprint for further economic development. Domestic
policies in developing countries against leakages from international tourism
should include (i) the provision of incentives to reinvest profits and potential cash
transfers that otherwise would be invested abroad; (ii) the enhancement of the
capacity of tourist destinations for intensifying the production of goods and
services required by the tourism sector; (iii) the provision of incentives to
domestic investors to expand their participation in tourism and iv) the
enforcement of domestic competition policy against anti-competitive practices by
tour operators.

As regards external leakages, most issues address points of discussion under

the GATS Annex on tourism in the WTO, such as (i) local and international
competition policy, particularly with regard to market access issues and best
business practices in relation to regulations on contractual practices; and (ii)
ecological and economic sustainability and the valuation and use of non-tradable
resources.
As such, a policy to reduce leakages and thus to improve the chances for a more
viable tourism sector, should be based on the premise that leakages can be
managed and need to be reduced from its present levels, where combined
visible internal and external leakage can easily reach 75 percent of the market
value of paid services. Management of leakages, should allow countries to profit
as best as they can from the market expansion and competitive factor that
tourism demand represents for local industry and the local economic structure in
all fairness to least developed and developing countries, without engaging in
anti-competitive practices that contradict other WTO principles, and reduce the
contribution of tourism to sound economic development.

1.1.3. MANAGEMENT OF TOURISM INDUSTRY

High competition among the hotels, need the competent team of Sales and
Marketing to promote the product among the competitors.

Main Responsibilities
- Responsible for building the image of the organization among the customers
- Responsible for putting up a effective sales and marketing plan
- Responsible for carrying out market research product development campaign
etc.
- Responsible for finding new segment in market
- Responsible for bringing business and helping out finance department to
achieve the set
targets

ORGANIZING CHART OF THE SALES AND MARKETING

DEPARTMENT

Director Sales & Marketing

Sales Manger

Assistant Sales Manager

Manager

Sales Executives

Marketing Manager

Assistant Marketing

Marketing executives

Whats Marketing?
Marketing is the study and management of the exchange process. It involves the
things that the property will do to select a target market and stimulate or alter that

market demand for the property services. It consist with research, action ,
strategies advertising, publicity, & sales and promotion.
Whats Sales?
Sales consists of direct efforts to sell the property by personal sales, calls,
telecommunication & mailings

THE MARKETING MIX

The term Marketing mix is used to indicate the variable factors which can satisfy
specific consumer needs. It is mix of 4ps such as product, price, promotion, and
place

Managements Role in Marketing & Sales

Role of Director Marketing
- Responsible for carrying out a marketing plan through out the year
- Conducting sales promotion plan with the help of Director sales
- Responsible for identifying new segmentation of the market
- Responsible for identifying new opportunities
- Responsible for redirecting& modifying strategies that are not working well
- Other managerial function

Role of Director Sales

- Responsible for applying marketing strategies and directing the sales staff
- Responsible for putting up sales plan through out the year
- Responsible for Guiding the sales team accordingly
- Responsible for identifying new opportunities

The Challenge of Hospitality Marketing and Sales by Travel Agents & Tour
Operators
Hospitality sales differ greatly from consumer goods sales in that the hospitality
sales person is selling something that has both tangible and intangible products.
- Intangibility
- Perishability
- Inconsistency

Inseparability

1.1.4. TYPES OF TOURISM INDUSTRY

All types of tourism in India have registered phenomenal growth in the last
decade ever since the Indian government decided to boost revenues from the
tourism sector by projecting India as the ultimate tourist spot.
The reason why India has been doing well in all types of tourism in India is that
India has always been known for its hospitality, uniqueness, and charm
attributes that have been attracting foreign travelers to India in hordes. The
Indian government, in order to boost tourism of various kinds in India, has set up
the Ministry of Tourism and Culture. This ministry recently launched a campaign
called Incredible India! in order to encourage different types of tourism in India.
The result was that in 2004, foreign tourists spent around US 15.4 billion during
their trips to India. Being a country with tremendous diversity, India has a lot to
offer in terms of tourism and related activities. The diversity that India is famous
for, ensures that there is something to do for all tourists in India, no matter what
their interests.
Adventure tourism
As a kind of tourism in India, adventure tourism has recently grown in India. This
involves exploration of remote areas and exotic locales and engaging in various
activities. For adventure tourism in India, tourists prefer to go for trekking to
places like Ladakh, Sikkim, and Himalaya. Himachal Pradesh and Jammu and
Kashmir are popular for the skiing facilities they offer. Whitewater rafting is also
catching on in India and tourists flock to places such as Uttranchal, Assam, and
Arunachal Pradesh for this adrenalin-packed activity.
Wildlife tourism
India has a rich forest cover which has some beautiful and exotic species of
wildlife some of which that are even endangered and very rare. This has
boosted wildlife tourism in India. The places where a foreign tourist can go for
wildlife tourism in India are the Sariska Wildlife Sanctuary, Keoladeo Ghana
National Park, and Corbett National Park.[22]

Medical tourism
Tourists from all over the world have been thronging India to avail themselves of
cost-effective but superior quality healthcare in terms of surgical procedures and
general medical attention. There are several medical institutes in the country that
cater to foreign patients and impart top-quality healthcare at a fraction of what it
would have cost in developed nations such as USA and UK. It is expected that
medical tourism in India will hold a value around US$ 2 billion by 2012. The city
of Chennai attracts around 45% of medical tourists from foreign countries.
Pilgrimage tourism
India is famous for its temples and that is the reason that among the different
kinds of tourism in India, pilgrimage tourism is increasing most rapidly. The
various places for tourists to visit in India for pilgrimage are Vaishno Devi, Golden
temple, Char Dham, and Mathura Vrindavan.
Eco tourism
Among the types of tourism in India, ecotourism have grown recently. Ecotourism
entails the sustainable preservation of a naturally endowed area or region. This is
becoming more and more significant for the ecological development of all regions
that have tourist value. For ecotourism in India, tourists can go to places such as
Kaziranga National Park, Gir National Park, and Kanha National Park.
Cultural tourism
India is known for its rich cultural heritage and an element of mysticism, which is
why tourists come to India to experience it for themselves. The various fairs and
festivals that tourists can visit in India are the Pushkar fair, Taj Mahotsav, and
Suraj Kund mela.
The types of tourism in India have grown and this has boosted the Indian
economy. That it continues to grow efforts must be taken by the Indian
government, so that the tourism sector can contribute more substantially to the
nations GDP.
Different types of tourism in India are as follows:

Adventure Tourism India

Cultural Tourism India

Ecotourism India

Heritage Tourism India

1.1.5. METHODS OF TOURISM INDUSTRY

It is generally accepted that climate is an important part of the regions
tourism resource base, but its role in determining the suitability of a region for
tourism is often assumed to be self evident and therefore to require no
elaboration. Relatively little is known, other than in very general terms, about the
effects of climate on tourism or the role it plays. And even less is known about
the economic impact or significance of climate on commercial prospects for
tourism. The whole area involving which climate related-criteria people use to
make decisions about tourism and recreation choices is largely unresearched,
but highly relevant to a variety of applications. Thus far, much of the research
specifically on climate reported in the journal literature has been superficial in
that relationships between climate and tourism are assumed rather than
observed and seldom objectively tested. Moreover, the research is largely devoid
of any clearly structured conceptual framework or frameworks that embrace
important theory, paradigms, processes and interactions. These theoretical
frameworks are important because they provide a basis for data generation,
hypothesis testing and further theory generation. Without this, it is difficult to
develop a coherent set of research methods; and perhaps more importantly,
develop models that constitute a bridge between the observational and
theoretical levels that can assist is building a coherent knowledge base for
understanding, explanation and prediction. This paper reviews the work so far on
climate and tourism with a view to identifying what concepts and theoretical
frameworks may already exist and looks to ways these may be drawn together in
future research.
Tourism economics is partly based on established principles from the
economics discipline, but it also incorporates elements from sociology,
psychology, organization theory and ecology. It has over the years turned into an
appealing multi-disciplinary oriented approach to the understanding of the
impacts of leisure time in a modern society, including cultural heritage,
sustainable quality of life, and industrial organization of the hospitality industry.
The increasing dynamics in the tourist industry and its worldwide effects will
continue to attract the attention of both the research and the policy sector in the
years to come. Rather than speculating on non-observed facts, there is a clear
need for evidence-based research in order to map out the complex dynamics of
the tourist industry. The present volume comprises novel studies mainly of a
quantitative-analytical nature on the supply, demand and contextual aspects of
modern tourism. It contains a sound mix of theory, methodology, policy and case
studies on various tourism issues in different parts of the world.

1.2 INTRODUCTION OF TRAVEL AGENTS & TOUR OPERATORS

A tour operator typically combines tour and travel components to create a
holiday. They prepare itinerary. The most common example of a tour operator's
product would be a flight on a charter airline plus a transfer from the airport to a
hotel and the services of a local representative, all for one price. Niche tour
operators may specialize in destinations, e.g. Italy, activities and experiences,
e.g. skiing, or a combination thereof. The original raison deter of tour operating
was the difficulty of making arrangements in far-flung places, with problems of
language, currency and communication. The advent of the internet has led to a
rapid increase in self-packaging of holidays. However, tour operators still have
their competence in arranging tours for those who do not have time to do DIY
holidays, and specialize in large group events and meetings such as conferences
or seminars. Also, tour operators still exercise contracting power with suppliers
(airlines, hotels, other land arrangements, cruises, etc.) and influence over other
entities (tourism boards and other government authorities) in order to create
packages and special departures for destinations otherwise difficult and
expensive to visit.
The three major tour operator associations in the U.S. are the National
Tour Association (NTA), the United States Tour Operators Association (USTOA),
and the American Bus Association (ABA). In Europe, it is the European Tour
Operators Association (ETOA), and in the UK, it is the Association of British
Travel Agents (ABTA) and the Association of Independent Tour Operators
(AITO). The primary association for receptive North American inbound tour
operators is the Receptive Services Association of America (RSAA).

33

1.2.1. Marketing and Sales by Travel Agents &

Tour Operators Division
Marketing and Sales by Travel Agents & Tour Operators division can be varied
with the size, type, and budget of the hotel to hotel. Small hotel only have one
person who is handling all the sales activities related to the hotel business. But
large hotel have organized sales and marketing division with no of key
personnel.
Duties of key positions
Marketing research coordinator
Responsible for
-

Finding out current market trends

Marketing and Sales by Travel Agents & Tour Operators strategies

General consumer trend

Fining out new market trends

Conducting any other research activity which will affect to the business

Director of Advertising and Public Relation

Responsible for
-

coordinate all promotional material

establishing good public image to the company

selecting advertising media for the property

Director of Revenue Management

Responsible for
- price structure based on the date,season,day of the week competitive
situation and the potential of the group

Telemarketing Director
Responsible for
- supervise and manage the telephone sales staff
Director of convention services
Responsible for
- overseeing the servicing of the group business once it has been sold
- handling bookings related to the convention halls
- close coordination with food and beverage department
Director of sales
Responsible for
- putting up the sales plan for the hotel
- coordinating with top management
- administrating a sales support system
- training the sales staff
- setting sales targets
- evaluating sales progress
- evaluating sales procedures

1.2.2. Organizing the Travel Agents & Tour Operators

It can be organized in a variety of ways, based on a number of factors,

The propertys goals and objectives
The budget for Marketing and Sales by Travel Agents & Tour Operators
Available outside assistance (travel agents, chain referral, reservation)
The total market potential and the no of people needed to take advantage to
take
That potential
Recruiting and hiring effective sales person

Common characteristic of an effective sales person

- professionalism
- Ability to communicate
- Intelligence
- Ability to analyze
- Motivation
- Efficiency
- Persistence
- Empathy
- Curiosity

Training a sales person

Each sales person should have a firm foundation in the following key areas
Property knowledge- General description about the property, the no of and type
of guest rooms, room rates, no of conventions hall, lay out of the hotel.
Office procedure should know about the office routine works .Booking
policies, sales quotas, sales office hours, function and guest room control books,
sales forms and reports
Performance standard Expected service from the sales persons
Salesmanship- How efficiency in sales activities

Training Techniques
1 simulated sales calls
Giving to train new sales person can make a sales presentation and be critiqued
by other staff member
2 Double calling
Sales person accompanied by the director of sales or a senior person.
3 Market segmentation drills
Educating about the current serving market segments
4 Case study exercises
Making sales strategy plans for other organization which are not own by the
same company
5 In basket drill
Training about the documentation skills
Managing sales people
It is a duty of director sales to implement a proper tracing system to manage his
staff

Evaluating salespeople
Can evaluate by studying
- No of sales calls made
- No of room nights booked and revenue generated
- No of proposal sent out
- No of follow ups on the file
- Percentage of rooms nights booked during high need time
- No of inspections conducted and business generated
Developing the Marketing and Sales by Travel Agents & Tour Operators
Office
Communication system
It is understood fact that the department should have proper communication link
within the department as well as the the other areas. a sales marketing office
relies on various methods to communicate ideas and information, including
holding meetings, keeping sales records, and establishing filing system.

Sales records and forms

Sample sales call report
It is kind of form to be filled when making a sales call

Sample booking form

It is a kind of document which filled during the booking is taken

Sample lost business report

This formed to used to fill either business cancelled or changed

Sample function book reservation sheet

This sheet help to avoid double booking of particular selling place once it is sold

The guest room control book

It used to monitor the no of guest rooms committed to groups. The book should
indicate no of rooms allotted to each group. The guest room control book is used
to monitor the no of guest rooms committed to groups. It indicate whether
allotment is confirm or tentative at any given time.

FILING SYSTEM
There are several types of filing methods that may be used for storing client data
and other sales information. These methods fall into three general categories.
1 Alphabetical filling
2 Key word alphabetical filling
3 Numerical
The Master card file
Master cards are instrumental in establishing data banks of information on the
needs of clients. Each master card contains a summary of everything needed for
an effective sales effort, the organization name ,the names and titles of key
executives ,address ,phone numbers month or months in which group meets, the
size of the group, the group decision maker and other potential data that can
help to obtain and keep that accounts business.

The Account file

It is standard size folder holding information needed for serving a client basic
business needs. The account file usually kept in a standard file folder and
contains all of the groups information , including sales call reports, tentative and
confirm booking information, function sheet of past business, and
correspondence generated related to the booking. Information is placed in the file
chronological order. Account file folder to be color corded according to various
groups.

Sample manual trace file

The trace file also known as a tickler file ,bring up file , or follow up file is an
effective aid for following up an account reminder card or note is filled in the trace
file by month and date. The system is used as a reminder of correspondence,
telephone calls or contacts that must be handled on particular day.
THE AUTOMATED MARKETING AND SALES OFFICE
Sales and marketing office generates an incredible of paper work, to avoid that
most of the offices are computerized.
Benefit of automation
- Less paper work
- Can provide quick and efficiency services to customer
- Easy access to sales information
- Facilitate personalized mailing
- Cost effective
Additional Application of Automation
- Database marketing
Data base marketing assist the Marketing and Sales by Travel Agents & Tour
Operators department to organize, analyze information about the individual guest
and groups. It helps to use information from routine source like guest folios
registration cards, customer survey the group histories of meetings to build
relation ships and market the propertys services effectively.
- Home based and virtual offices
Virtual office
Because of the advance technology sales people can function their activity in any
area by using laptop computer and cellular phones.
Home based office
Sales staffs are free to do their work even staying their home. It saves initial cost
of opening sales offices

- Can generate lists, reports, and analysis application

It helps to generate quick report in various areas
- Yield and revenue management
It helps to calculate the yield and accumulated revenue for the past finance year.

EVALUATING THE MARKETING AND SALES BY TRAVEL AGENTS

& TOUR OPERATORS OFFICE
It is responsibility of director sales and marketing to evaluate his or her staff on
regular basis to identify their performance and abilities towards the selling
techniques.

1.2.3 PATTERN USED BY TRAVEL AGENTS & TOUR OPERATORS

STEP 01

Conducting a Marketing Audit

The foundation of any marketing plan is the marketing audit. Marketing audit is
the research steps in the planning process, and is some time referred to as
gathering marketing intelligence.
- property analysis
It is a written unbiased self- appraisal used to assess the strength and weakness
of your property. Under that following factors will be considered
*Revenue and non revenue producing area
* Reputation
* Location
* Building exteriors
* Landscaping
Sample Property Analysis Form
Competition Analysis
An evaluation of a businesss competition to identify opportunities and unique
selling points. It is a part of marketing audit. The objectives of a competition
analysis are to discover the objectives of a competition analysis are to discover
- profitable guest groups are being served by competitors that are not being at
your property
- Some competitive benefits or advantage your property enjoys that cannot be
matched by major competitors
- Weakness in the marketing strategies of the competition on which your
property can capitalize
Ex: competitive rate analysis
Market Place Analysis
Researches the propertys current position in the market place and reveals
potential opportunities to promote the property
It evaluates the environmental opportunities and problems that can affect the
business and forces affecting a business, such as changes in life styles societal
values, economic conditions, and Technology.

STEP 02

Selecting Profitable Target Markets

Here we have to consider the difference market segmentation in an around us.

Market segmentation: Dividing the market in to groups of consumers with
similar needs, wants, backgrounds, incomes, buying habits, and so on
Exhibit 06 The market place analysis

STEP03

Positioning the property

Positioning: A marketing term used to describe the process of shaping how

consumers perceive the products and services offered by a particular hotel or
restaurant in relation to similar products and services offered by competitors (the
process of designing a propertys market position is known as positioning)
Positioning is not simply advertising. A property s is composed of the hospitality
it offers and the managers and marketers ability to create unique selling points
based on the property location internal or external features personnel. Without
positioning it is impossible to determine what the property has to offer, where the
property is going and how it will get there etc.

STEP 04

Establishing Objectives and Action Plan

Once the market audit is completed, the target market segments identified and
the positioning established, the next step in the marketing plan is to establish
specific marketing objectives. This is one of the most difficult steps in the
planning process because it involves establishing goals for each market
segment.
Marketing objectives should be simple should be set for each market segment,
revenue centre and revenue producing service like outsource laundry facilities.
Marketing objective should be
- In writing
- Understandable
- Realistic and challenging
- Specific and measurable

STEP 05

Monitoring and Evaluating the Market Plan

Marketing efforts should be measured carefully; the easier it will be future

marketing activities and programs. The marketing plan should be review
periodically so that corrective action can be taken through out the planning cycle.

If action plans are effective and objectives are realized within establish budget
limits, corrective action need not be a part of the process. But it is painful fact that
some strategies do not work .If hotel sales goals are not being met the problem
can often be traced to one or more of the following reasons
- Lack of responsibility
- Lack of communication
- Lack of time
- Lack of authority
- Lack of appeal
- Lack of control
- Lack of realistic goals

1.2.4. PROBLEMS
2. Anti-competitive practices affecting tourism sustainability
The competition issue and the treatment of anti-competitive behaviour are at the
core of the problems of efficiency, viability and sustainability of tourism in
developing countries. The latter's ability to deal with those two aspects and to
counter their effects is a crucial matter. Firstly, this is because anti-competitive
behaviour occurs largely in developed countries, as a result of the fierce
competition among a few integrated dominant players with a high market share
in their own market and in all segments of tourism industry supply, notably tour
operators, travel agencies, hotels etc. Secondly, the pattern of globalization,
which is the driving force of many of the developments in the supply of the
tourism and air transport, also mostly originates and is controlled in the two
leading developed economies, namely the European Union and the United
States. Consequently, what often appears to be a normal commercial relationship
in a developing country may actually be the result of a network of anticompetitive practices arising from a globalized and highly integrated tourism
trading environment, dominated by a few suppliers in the originating tourism
markets. Moreover, other non-behaviour-related industry issues, such as the
inadequacy or absence of a domestic competition legal framework in developing
countries, and the lack of multilateral disciplines and mechanisms within the
GATS framework, also affect the ability of developing countries to deal with or
prevent anti-competitive practices in their tourism sectors.
Why and how do anti-competitive practices threaten the viability of
sustainable tourism in developing countries?
The economic and social viability of tourism in developing countries depends on
sustainable growth perspectives, in terms not only of absolute values, but also of
their capacity for retaining more value added in their economies, i.e. smaller
leakages, an even distribution of benefits in commercial operations, elimination
of all barriers to tourism, particularly to commercial presence, and the movement
of tourism suppliers in both origin and destination markets, and the effective
implementation of provisions enumerated in Articles IV and XIX of GATS. The
foundations for sustainable tourism are already in place in most developing
countries as a result of the autonomous liberalization of the tourism sector itself
and the progressive liberalization of many other services sectors. However, for
those countries highly dependent on tourism revenue, the benefits of the
liberalization of tourism are being threatened by the predatory practices of a few
dominant tourism suppliers in the world tourism market. The evolution of the
GATS disciplines, and the consistency of future commitments of developed
countries with the economic, social and environmental sustainability of tourism in

developing countries in the GATS 2000 negotiations, should mark a turning point
favouring more profitable tourism for all WTO members, particularly the most
vulnerable small developing countries.
The predatory practices and anti-competitive behaviour in international tourism
have two main effects on the economic sustainability of the tourism of developing
countries: unbalanced trade benefits, and the deepening of the leakage effect.
Their combined impact minimize the positive impacts of spillover and multiplier
effects inherent to tourism, and undermine the financial capacity of enterprises
and the ability of countries to earmark necessary resources to maintain and
upgrade basic infrastructure and quality standards in order to satisfy in an
adequate way competitive conditions and international demand. Moreover, in
most vulnerable and small developing economies, particularly LDCs, the
foundations of tourism are threatened by unbalanced results in their business
operations, which are in turn threatening the social, economic and environmental
sustainability of tourism.
There is much documented evidence about the negative impact of anticompetitive behaviour of developed countries' dominant tourism suppliers on
their own markets and overseas. Unfair practices, which confront developing
countries' suppliers in their business operations with dominant suppliers in
tourism-originating countries, are of a different nature and occur in different
segments of tourism and related activities. One of the salient features that
become evident in commercial relations is the uneven distribution of benefits,
due to the dominant position and market power of integrated suppliers in their
own markets and worldwide. These suppliers have absolute advantages,
because of their control of inbound and outbound operations in their countries
and overseas, which allow them to keep consumers dependent on the offer of
the products and services they supply, at the expenses of imposing onerous
commercial conditions on suppliers in different tourism destinations. The huge
supply capacity of dominant players in all segments of tourism, including
transporters, CRS/GDS, tour operators, travel agencies and hotels, allows them
to prepare holiday packages and retail them through their own business
networks, as well as to impose prices and conditions on suppliers in tourism
destinations.
How do the business operations of tour operators and travel agencies in
the originating markets of tourism affect the sustainability of developing
countries' tourism?
Tourism suppliers from developing countries e.g. hotels, inbound operators and
land transport companies participate in international tourism mainly through the
transactions of tour operators and travel agencies from developed countries in

the developed countries' originating markets. As wholesalers of tourism products

and services they assemble the holiday package by negotiating with destinations
and operators in third countries. They view the tour package as an attractive
option with many advantages for them: (a) it ensures flows of tourists; (b) it
reduces the international marketing costs of the destination; and (c) it increase
the volume flow of package travellers, which is likely to increase investment by
foreign construction companies, major tour operators and airline companies that
wish to make the tourism product more attractive to consumers. However,
tourism suppliers from tourism destinations in developing countries have very
often underlined their weak bargaining position in business transactions,
particularly with dominant suppliers of the most important originating tourism
market from developed countries.
(a)

International competition among tour operators and travel agencies

Tour operators in originating countries manage business operations through (a) a

subsidiary of a vertically integrated firm with a number of related travel interests;
(b) an entirely independent firm that specializes in putting holiday packages
together and selling them; (c) a subsidiary of an airline; and (d) an operator
directly linked to a travel agent. The tour operator of each major market is
dominated by a small number of national firms with a relatively large market
share, which compete fiercely with each other. For instance, four firms with a
share of over 60 per cent dominate the United Kingdom market. This results in
the larger operators having a dominant position with a very little competition,
because the layer of the next competitor is too small. Consequently, the travel
agencies (the retailers of tourism packages) in destination markets are almost
entirely dependent on their linkages with the dominant tour operators. Also,
consumers become captive in their choices of tourist package offered by
dominant suppliers. The effect of this supremacy of integrated tourism suppliers
in their own markets is mirrored in their dominant position in commercial relations
with tourism suppliers in destination developing countries.
The benefits and costs of package tours to service suppliers in developing
countries depend to a large extent on the nature and terms of the contracts
between them and the tour operators from the tourism-originating countries.
Accordingly, the bargaining powers of suppliers from developing countries are a
central issue affecting the tourism sustainability of developing countries. Some
examples of how the common practices in contractual arrangements affect the
sustainability of tourism in developing countries are presented below.
Use of monopsonistic power over local tourism suppliers in developing countries

The contract between a tour operator from an originating country and the
suppliers in the destination country involves a block reservation for a future
period at a negotiated price and specifies the terms of risk sharing in the event
that not all the packages are sold. The tour operator normally has the greater
bargaining power during the contract negotiations; if it considers that the
negotiating partners offer is not attractive enough, it can choose another hotel in
the same area or even another region of the same country. Tour operators thus
often exercise a monopsonistic power over local tourism suppliers, such as local
hotels, since for the latter the servicing of the package tour is a vital means of
securing their occupancy rates.
The asymmetry of bargaining power is clearly revealed in the content of the
contract. Often contracts last for one year or more, and the risk inherent in a
long-term contract for a tour operator (e.g. uncertainty of future demands for the
package) is reduced by negotiating various conditions favourable to the tour
operator. A contract frequently contains the following provisions: a substantial
discount is provided on rooms after the departure of the clients; no deposit is
required for the booking; payment may be made long after the departure of the
customers; and the tour operator retains the right to return unfilled rooms
(release-back clause) shortly before the arrival date, without any need to pay
compensation.
Anti-competitive practices resulting from vertical integration
Vertical integration among tour operators and travel agencies, which is currently
proceeding at a notable pace in Europe, threatens to reduce the actual number
of tour operators in the market. As a result, a great deal of market power is being
transferred to the intermediaries that direct consumers to specific destinations.
The consequences of this should be a major concern to developing countries'
tourism destinations. The increase in the degree of concentration in the travel
market in favour of mega-operators puts developing countries' suppliers and the
other competitors in local markets at a clear disadvantage. It also opens the door
to unfair practices, which directly affect tourist destinations. An example of this is
the travel agent's racking policy, which refers to the decision about which
brochures to put on display. This has a crucial impact on the tourism destinations
of developing countries, because for them the travel agent's display rack is
almost an essential facility, and denial of access to it can severely restrict
consumer exposure.
The threat of "deracking" (i.e. removing brochures from the shelves) is used by
integrated suppliers in attempt to negotiate larger commissions, by pressuring
tour operators not to supply independent travel agencies on better terms or by
pushing their own holidays through in-house incentive schemes. The lasting

impact of this practice is more restrictive in originating countries where tour

operators are the main distribution channels, such as in Europe, where more
than 60 per cent of tour packages are sold by integrated suppliers. Conversely,
in the United States the possibility of "deracking" is lower because about 70 per
cent of travel agencies are independent, GDS/CRS are more important as
distribution channels, and the Internet is becoming a primary source of
information for consumers about tourism destinations.
(b) International competition among hotels.
The international hotels sector is characterized by a considerable diversity in the
modalities of services provision, and by a high concentration of a very small
number of large hotel groups, including hotel consortia, integrated hotel chains
and tourism lodging (second homes). Their scope and focus are very often
limited, either by a focus on home markets, notably through the hospitality
franchising systems, or by a concentration on business travel and destinations.
One important aspect to be noted is that the intensive use of the accommodation
infrastructure, particularly hotels receiving international tourists regardless of the
hotel's size, requires the continuous allocation of financial resources to maintain
and upgrade the quality of accommodation to meet the standards of international
demand.
In most developing country destinations huge investments have been made in
the hospitality and accommodation sector either through investment of domestic
resources or attracting foreign investors by increase of different modalities,
including management contracts and franchising brand names
As in all the other segments of tourism-related activities, the importance of
competition issues stems from a mix of practices through the distribution
mechanisms. Anti-competitive behaviour in those mechanisms is thus most likely
to have a significant effect on the ability of destinations, and of their hotel sectors,
to compete effectively and to gain a fair share of the rewards of attracting tourists
and travellers.
The sustainability of this sector in developing countries' tourism destinations
depends on the occupancy rates (affected by seasonality) and the level of profits,
which are highly influenced by the results of commercial transactions between
hoteliers and tour operators from tourism-originating countries. In this connection,
it has to be underlined that the accommodation sector is the one most affected
by the dominant power of mega-operators, whose stringent demands in terms of
quality standards are not duly compensated for with fair commercial
remuneration. Another, wider impact of this predatory behaviour in the tourism
economy of receiving countries is the deepening of the leakage effect and the

undermining of positive inherent multipliers effects of tourism. Depending on the

magnitude of these unfair compensations from dominant tour operators, some
tourism destinations in developing countries might be subsidizing tourists from
originating countries.

Table 3
Options for investment in hotels for developing countries: Costs and
benefits
Types of investment

Benefits

Costs

Total ownership
100 per cent ownership of
equity by a foreign
subsidiary for an unlimited
time

No financial risk to the

host country

Large outflow of
income from
tourism (leakage)
Difficult to reflect
government policy
on tourism
development

Joint venture
Partial ownership of equity
by foreign capital for an
unlimited time

Access to extra capital

Access to international
marketing
networks
Lower social/political
cost of FDI
Reduced income
leakage

Requirement for a
certain base capital
Risk-sharing
Possibly unfavourable
contracts due to
limited bargaining
power

Franchising
The right to do business in
a prescribed manner under
an existing brand name is
sold to a local firm

Transfer of managerial
and marketing skills
Assured standard of
quality
Brand image

Management risk is
with the host countrys
firms

Management contracts
The business is controlled
and managed by a foreign
firm, without ownership by
the latter

Possible transfer of
knowledge, skills and
technology (e.g.
GDS) through a
cooperation
agreement

No control over
finance, management
and planning

Hotel consortia
Independent hotels pool
resources in order to
compete with integrated

Joint national and

international publicity
campaign

Small-size hotels may

not be considered
attractive to a
consortium
Initial lack of brand

and franchised chains

Full national ownership
Domestic investment
without foreign links

reputation

Reduced international
leakage
Independence in
adoption of corporate
strategies

Lack of international
reputation
Higher marketing costs

(c) Computerized reservation systems (CRS)/global distribution systems

(GDS)
The development of international tourism relies on the effective
commercialization of tourism products to consumers at tourism-originating
countries. World information and distribution networks play a decisive role in the
international tourism sector since they bring the buyers and producers of tourism
products into contact. CRS, GDS and the Internet are the backbone of world
information networks, which provide the infrastructures and networking facilities
for airlines, tour operators, travel agencies and other tourism operators to
process and obtain information, make reservations and market tourism products.
CRS have been developed by large air carriers since the 1970s to process flight
reservations. They later evolved and expanded to offer further services related to
air transport, such as the storage of information on a worldwide basis, the
issuance of tickets, marketing (by displaying information on fares, discounts and
conditions attached to them) or the sale of products and services. Moreover,
they cover not only services provided by airlines, but also land services supplied
to tourists, such as package tours, hotels and vehicle rentals. With this enlarged
range of services, they became known as global distribution systems. GDS have
significantly improved the efficiency of travel agents business operations and
their use is growing rapidly. They have become the main marketing and trading
tool of international tourism, as well as a major source of income for the carriers
which own them. Through strategic alliances and other forms of cooperation or
mergers in the most important markets, these systems minimize their costs and
reduce the need for a direct commercial presence. A single GDS terminal
provides immediate access to all services companies which have opted to
market their products through this network.
The companies (air carriers or independent commercial companies) that control
CRS and GDS either partly or entirely sell access to the system to tourism
operators worldwide. There are many obstacles to and measures governing GDS
networks. These include (a) unfair rights of access, (b) restrictions on display, (c)

costs of services influenced by monopolistic practices, (d) neutrality and

regulations, and (e) the technology gap among users.
Access problems. Despite their major contribution to the development of
tourism, GDS are frequently considered a barrier to market entry, mainly because
they are controlled by the major carriers and because of the unfavourable access
conditions for competitors. While some East Asian developing countries have
participated in the establishment of a major GDS (Abacus, complemented by the
strategic alliance with Worldspan), other developing countries have not been able
to do likewise, leaving their carriers and other service suppliers without
privileged access to any GDS. Additionally, countries not yet seen as attractive
tourist destinations, or whose hospitality sector is underdeveloped (particularly in
Africa and South Asia), tend to be poorly represented, if at all, on GDS.
Therefore, access to information on their tourism products is limited, thus making
it difficult for them to sell their tourism services. These difficulties have meant that
many smaller carriers, especially some from developing countries, have been
obliged to continue using the traditional SITA CRS, which leaves them at a
competitive disadvantage compared with those what are represented in the
major GDS. On the other hand, in many developing countries, particularly in
Africa, GDS are present as a result of joint ventures with local partners (e.g. the
national carrier) but operate within a de facto monopoly. This leads to excessive
user fees and hinders their potential for developing tourism.
Display. The GDS allows a travel agent to view a wide range of information,
which sometimes requires several pages on a terminal screen. In most cases,
however, travel agencies only consult the information on the first page (screen);
the order in which screens are displayed is thus a crucial determinant in the
users selection of products. The display may discriminate against smaller
carriers which do not own a major CRS, since controllers own flights may be
better displayed on the screens than those of their competitors (this is known as
display bias). There may also be discrimination in favour of their suppliers of
land services.
Cost. The cost of having services presented GDS may be prohibitively high for
SMEs, leaving them with no access to this marketing tool. Even though all
service providers have to pay a fee for having their services displayed in the
systems, the costs of participation for the owners of GDS are fully or partly
covered by the profits generated by the systems. The cost of hardware and user
fees may prevent small users from using GDS; this puts some service suppliers
(particularly SMEs) from developing countries at a disadvantage compared with
their larger national or international competitors.

Neutrality and regulations. In order to prevent CRS from being used as an anticompetitive tool (e.g. by charging excessive fees for reservations made for nonowner companies) and to ensure their neutrality (e.g. by prohibiting display bias),
the United States, Canada and the European Union have issued regulations in
recent years on GDS operations related to air services, while the International
Civil Aviation Authority (ICAO) adopted a code of conduct for CRS in 1991.
However, the regulations and code have not been sufficient to resolve completely
the anti-competitive bias of the systems, and particularly to address the specific
problems of carriers from developing countries. The ICAO code (the only
multilateral one) is non-binding and therefore there are no mechanisms to ensure
its enforceability. The relevant domestic regulations are binding, but only within
the territories of the countries concerned. The European Union regulations apply
to CRS from countries which have similar legislation to ensure neutrality. On the
other hand, although CRS have been included among the soft air services
rights included in GATS, the commitments do not deal with their anti-competitive
potential.
Technology gap. Installing and maintaining a system poses a greater problem
to travel agents in developing countries, owing to deficiencies in the infrastructure
necessary for such an information network, and the shortage of professionals to
manage, operate and maintain the system. This not only represents a technical
hindrance to the use of modern technology, but also increases the associated
costs, thereby putting travel agents in developing countries at a disadvantage
compared with their counterparts in developed countries.
Electronic commerce. The expansion of the use of the Internet and other forms
of electronic communication opens up significant opportunities for developing
countries to develop their tourism and air transport sectors. Their service
suppliers can reach consumers around the world directly, offering both package
tours and individual air and land services. They thereby cut out the costs of
intermediaries (e.g. agency fees) and transaction costs and avoid the need for a
direct commercial presence and its associated costs. Nevertheless, electronic
marketing and trading have their own costs in terms of human and physical
capital requirements. In countries where these requirements are in relatively
short supply, the cost of electronic marketing and trading can be reduced if
individual suppliers pool their resources. This could be coordinated, for instance,
by national tourist authorities. Moreover, modern technologies are likely to be
increasingly used as institutional promotion tools. If there is a minimal critical
mass of information infrastructure in a given country, the new technologies can
offer substantial cost savings.

(d) Air transport

Air access in international tourism depends on the availability and conditions of
air transport connecting tourist-generating countries and destination countries
(i.e. prices, frequencies, travel time, etc.). Air transport is a major factor
underpinning international tourism in the vast majority of developing countries,
but its importance for tourism varies considerably from one region to another. It
is the means of transport used by the majority of tourists arriving in developing
countries. Air transport developed as a result of the increase in demand for
tourism-related travel, becoming in turn the driving force behind the development
of the tourism industry. In 1998, passengers were responsible for about 75 per
cent of air traffic volume and for of the total operating revenues of airlines. It is
estimated that up to 40 per cent of air passenger travel is for business purposes
(as opposed to leisure or personal travel) and that business travellers account for
up to half of airlines income. Like tourism, the world air transport industry has
expanded at twice the rate of world output growth, and is expected to continue to
do so in the next twenty years.
The main recent developments affecting air transport and the industry structure
are the increased international ownership of airlines and their growing
concentration, worldwide moves to liberalize and deregulate the sector, the
privatization of airlines and the formation of strategic alliances among firms. The
main benefits of the latter are the cost reductions and efficiency gains that can be
achieved by rationalizing the joint use of resources (such as check-in facilities
and ground personnel), creating synergies and providing network value (i.e. the
wider coverage of points serviced by the carrier and its partners) without the
need to physically expand operations. The large global alliances aim at world
coverage by pooling the networks of their members. The main drawback in
doing this is that the alliances can restrict competition and thus negate some of
these benefits, particularly if they collectively achieve a dominant position on
given routes.
III.

How the GATS 2000 Negotiations should mark a turning point to

make effective the increasing participation of developing countries in
international tourism flows in a sustainable perspective.

How negotiations could support the sustainability of tourism operations

The GATS 2000 negotiations mandated by the Final Act of the Uruguay Round
provide developing countries with a unique opportunity to counterbalance the
asymmetries imbedded in the outcome of the Uruguay Round services
negotiations. In this perspective, it is the right time to take advantage of these
negotiations to prepare and put forward negotiating proposals on how to make
effective use of the provisions of Art IV and XIX, aimed at increasing participation
of developing countries in trade in services and the expansion of their services
exports including through the strengthening of their domestic services and its
efficiency and competitiveness. The two-way process involves not only the
refinement of offers, but also the preparation of requests from trading partners as
one of the key ways to obtain substantive benefits as result of the GATS 2000
negotiations. Moreover, an active participation of developing countries in the
GATS rule-making process is a contribution to building of an improved
multilateral framework which would take into consideration existing asymmetries
and the need for a predictable markets access for exporters of services from
developing countries.
The viability of tourism, i.e. its economic, social, cultural and environmental
sustainability, is at the heart of domestic policies and development concerns of
developing countries. Accordingly, in the course of the present negotiations on
trade in services, there is a need for similar focus on strengthening future
substantive commitments on tourism by GATS members as was the case in
other sector such as telecommunications and financial services. In this
perspective the proposal for the Annex on Trade in Tourism Services
(WT/GC/W/372), may contribute to providing a pro-competitive framework as a
complementary tool which would ensure:
(a) An adequate coverage and consistency of commitments in all tourism
activities as defined by the Satellite Tourism Account. This aspect is of
paramount importance in view of specific characteristics and diversity of
transactions linked to trade in tourism services, notably the heavy reliance
of tourism on air transport and travel distribution systems.
(b) The prevention of predatory behaviour and anti-competitive practices by
dominant integrated suppliers in the originating markets. This refers to
disciplines to prevent anti-competitive conduct including from air transport
and travel distribution systems, and to safeguard trade in tourism services
from competitive exclusions, abuse of dominant and misleading or
discriminatory use of information.

(c) The effective access and use of information on a non-discriminatory basis.

It should include provisions on access to ensuring non-discrimination,
transparent, reasonable and objective criteria; compliance with Art. IV of
GATS and the truthfulness of the information on tourism distributed by
governments (travel warning) and through GDS; the unbundling of travel
distribution systems as a measure to counter vertical integration and
conflicts of interest in travel agencies and the interconnection of CRS,
through the portability of reservation numbers. Submitting GDS operations
to effective multilateral disciplines and dispute-settlement mechanisms
would have a substantial effect on trade and anti-competitive practices.
(d) The implementation of an adequate framework for sustainable
development of tourism. Provisions on cooperation for the sustainable
development of tourism are needed in recognition of the role of tourism in
economic development; its need for infrastructure and development
assistance; equitable trading conditions for economic sustainability; the
relevance of enforcing internationally-recognized environmental and quality
standards; the need for cooperation at all levels; and the importance of
providing information on technologies required for competitive provision,
regulation and sustainable development of tourism and all relatedactivities.
(e) To preserve the environmental sustainability of tourism and the cultural
heritage. Guiding principles for national policies and trade commitments to
preserve the ecological systems, the biodiversity, cultural patrimony and
traditions.
2.

Issues for consideration by developing countries in negotiating

specific commitments in tourism

The liberalization under the GATS 2000 will be determined on one hand, by the
level of removal of barriers in the revised horizontal commitments (which affect
all sectors) and on the other, the lifting of conditions and limitations applied to
each sector at sector-specific level and in the four modes of supply. Accordingly
the consistency between the two types of commitment is an important issue to be
addressed by developing countries, seeking to obtain commercially meaningful
commitments at specific sectoral level.

a)Improvement of horizontal commitment

In preparation of their positions in services negotiations, developing countries
must assess to what extent the horizontal commitments of developed countries

impede the liberalization of tourism and travel and related services. The major
limitation in the horizontal commitments is in the lack of significant trading
opportunities in mode 4, i.e. temporary movement of natural persons, since
practically no commitments in this mode were made in specific services sectors.
The temporary presence of natural persons in all services sectors is undermined
by the recurrence at the horizontal level to the economic needs tests, nationality
and/or residence requirement and cumbersome administrative and visa
procedures to be met by foreign nationals as services providers. The existing
horizontal commitments by developed countries mainly refer to limitations for the
establishment of the commercial presence (mode 3) by foreign providers to carry
out the commercial operations.
b)

Specific tourism sector commitments

Majority of tourism originating countries are developed countries, which have

undertaking commitment to liberalize fully or partially the supply of services in
different tourism sub-sectors and modes of supply. Still, the impact of
commitments in commercial presence in term of market value is nullified by
restrictions to the commercial presence of foreign tour operators, travel agencies,
restaurants and hotels, which are not listed there. Also, the movement of natural
persons engaged in the tourism supply of different services is precluded by
limited horizontal commitments and the lack of specific sectoral commitments.
For instance in many Members States of the EU the commercial presence of
foreign tour operators from the third countries is precluded or allowed only in
association with already established national firms therein. Similarly, foreigners
are precluded from undertaking of the business operations in the restaurant subsector even for those specializing in typical national food from other countries. In
addition, the level of restrictions on commercial presence is aggravated by the
possibility of recourse to the economic needs test, cumbersome and
discriminatory licensing requirements that foreign suppliers of tourism services
must meet.

c)

Temporary presence of natural persons as consumers and providers of

services

It should be underlined that although the existing commitments on market access

on consumption abroad have no limitations in the case of majority of the GATS
commitments, including in the top originating countries; in real terms the freedom
of movement for consumption abroad is restricted by the level of binding in other
modes of supply, in particular the commercial presence of foreign suppliers in the
tourism originating markets. The movement of consumers in most of the top

originating markets of tourism is captive, because the existing level of binding of

commercial presence consolidates the absolute advantage of the dominant
mega-tour operators and other national suppliers including the travel agencies,
since the exclusive right of selling directly to travellers of holiday packages in
their own markets has been consolidated in the existing commitments on
commercial presence. Moreover, under such commercial conditions, the
consumers choices are limited by the offers of holiday package by dominant tour
operators, but not only them, also by the opportunities for suppliers from
destination countries to reach consumer in the originating markets directly. In
addition, the consumers choices in these markets are restricted by unfair
practices in the management of information systems and the racking policies by
travel agencies, which are usually integrated with mega-tour operators.
To improve horizontal commitments on mode 4, developed countries should
remove the application of the economic needs test with respect to the movement
of professionals supplying tourism services. Not all the professions and
occupations are equally important to the movement of persons in the context of
trade in tourism services. For example, the possibility to have the waiver from the
application economic needs test should be provided to individual tourism
services suppliers involved in catering, maintenance services or in such areas
where cultural affinities and close contacts with tourists may contribute to the
quality of the services provided. To the extent that the remaining occupations
would remain subject to the application of economic needs tests, efforts should
be made to reduce the scope for arbitrary and discriminatory practices, provide
greater transparency and introduce more neutral economic criteria. The issue of
transparency in respect of the application of the GATS commitments is crucial as
a tool in promoting trade in tourism services. In that respect, commitments in
mode 4 are closely linked to the implementation of the relevant immigration
regulations, policies and procedures in a clear and transparent manner.

Publishing of the legislation and implementing regulations which significantly

affect ability of the foreign nationals or permanent residents move across borders
to supply services is a general obligation, since this is the way to limit the room
for discretionary and procedural rules. The lack of transparency, clarity in the
existence, implementation and application of policy guidelines affecting
application for and consideration of temporary work permits, residency
requirements of visas impede market access, effectively violating key GATS
provision.

1.2.5 FURTHER PROSPECTUS

Being a very wide field, the scope of employment in tourism sector is very bright
and the potential is still largely untapped. Career opportunities exist both in the
public and private sector. In the public sector, there are opportunities in the
Directorates and Departments of Tourism of the center and the state as Officers,
information assistants, Tourist guides etc. Another good prospectus for qualified
tourism professionals are in the private sector with travel agencies, tour
operators, airlines, hotels, transport and cargo companies etc. The opening up of
the skies to private airlines and their emerging tie-ups with foreign airlines has
removed bottlenecks in the transport and communication network resulting in
easy flow of domestic and foreign tourists in the country. Since this is a new area
of employment, not many qualified and experienced people are available and the
promotion prospectus are also very bright and rapid. After a few years of
experience, One can also start their own business by handling all travel
requirements of a client and gradually building up business, taking on additional
employees.
Career Options
Tourism Department :
In the Tourism Department there are jobs as Reservation & counter staff, Sales
and marketing staff, Tour Planners and Tour guides. Officers in the Directorate
and Departments of Tourism are recruited from among the candidates who have
done civil service, drawn from the Civil/administrative services of the State and
Central governments. They are involved in the planning and promotion of tourism
activities. A degree in travel and tourism is required for operational jobs in
government organisations. Information assistants at the office of the Tourism
departments are selected through competitive examinations held by the Staff
Selection Commission. The eligibility is graduation with knowledge of Indian
history, art and architecture, besides proficiency in English. These vacancies are
advertised through the employment news. Information Assistants give out
information regarding tourist spots and services available and help to plan the
itinerary of the tourists. The Ministry of Tourism recognises three types of guides,
regional, state and local. A regional guide gets a two year renewable license from
the Ministry of Tourism endorsed for life by the Archeological Survey of India.
Guides give detailed information on the various monuments and artifacts and
about the countries traditions and heritage.

Airlines:
Working in an airline, whether on the ground staff or in flight is an exciting option
for many people these days. In the airlines, one can work as Traffic Assistance,
Reservation and Counter Staff, Airhostess and flight pursers, Sales and
Marketing staff and customer services. A course in travel and tourism or a
qualification on Hotel management helps to get in. The jobs in airlines though
challenging are glamorous and afford the possibility of traveling to exciting
destinations. Free tickets for the family offered by some airlines are an added
advantage. Domestic and international Airlines such as Air India, Indian airlines,
Jet airways, Air Sahara, Aeroflot, British Airways, Cathay Pacific, Emirates,
Singapore Airlines etc offer employment opportunities with attractive salaries and
numerous benefits.
Tour Operators:
Tour operators organise conducted tours to the various tourist spots and manage
the travel and stay of the tourists. There are many companies operating tours for
the domestic as well as the international tourist. Some may be for the usual
destinations like hill stations but others are for unusual activities like river rafting,
hang gliding, rock climbing and camping. Tour operators need people for selling
the concept and then to accompany the groups to the destinations. For foreign
groups, the agencies prefer girls, who are friendly and helpful. For domestic
groups, males are preferred. Again, the qualities required are a pleasing and
outgoing personality, knowledge of the activities and often participating in them
with the tourists. A person hoping to work with a tour operator must be able to
travel with the groups and know people at the destinations to make the tours
pleasant for the client. Though one may do a course of tourist guide for this
purpose, people with a knowledge of the activities can easily join as tour
operators. The jobs could be seasonal in some cases.
Travel Agencies :
Travel agents assess the needs of tourists and businessmen and help them
make the best possible travel arrangements from the many travel options
available. Many resorts, travel groups use travel agents to promote their tour
packages to travelers. They deal with almost everything connected with travel
including the shortest route to the destination, travel mode, the important
documents that will be required (visa, passport, vaccination certificates etc.),
suitable places to stay, current exchange rates, tourist attractions to visit, climate
and they will plan the trip keeping in mind the clients' preferences, budgets and
special needs. In travel agencies there are openings for reservation and counter
staff, Sales and Marketing staff, Tour escorts and tour operators, cargo and
courier agencies etc.

A short tem course or a diploma in travel and ticketing of 3-6 months duration will
help gain entry into an agency. Several large travel agencies also offer short-term
training programmes, and tend to absorb most of the candidates. Some agencies
take in fresh graduates and train them on the job. Most travel agencies demands
persons have a pleasing personality and the ability to deal with customers.
Hotels :
The hotel Industry is basically a service industry providing food and
accommodation to the Visitors. It is one which requires a large amount of
manpower, with a wide variety of skills. In India alone, about 1, 80,000 vacancies
are expected to be filled within the next decade. An hotel offers career
opportunities in its various departments such as Operations, Front office, House
keeping, Food and Beverages, Accounting, Engineering/ Maintenance, Sales,
Public relations and Security etc. One can enter this field through direct entry in
some departments or through hotel management institutes. There are many
institutes that offer hotel management courses. Many hotels also offer overseas
training opportunities, which allow young people to gain promotions rapidly.
Transport :
Besides airlines, Travel facilities include rail services, coach operators, car hire
companies. etc. Whatever that takes Tourists from one place to another - by air,
road, railway, sea etc. comes under Travel and tourism. Tourist use almost all
these travel facilities.

RESEARCH
DESIGN

2. RESEARCH DESIGN
A descriptive research design was used in conducting the research study
in order to get cemented tour operators perceptions on the India : A World of
Wonders tourism brand. Investigations were carried out with major tour operating
companies in India . We used questionnaires in obtaining information from the
tour operators. All questionnaires were written in English. The study population
comprised of 100 respondents drawn from the tour operating organisations.
2.1. NEED & IMPORTANCE OF STUDY

They should improve their Ideas, packages Itineraries an attractive offers

according as per customer demand to grow their image in the tourism
market

They should improve their staff member, they have to improve way of
talking (How to introduce their self & companies profile to new customer)

They should improve their infrastructure for meetings in their own office

They should publish there itineraries new packages on internet to get more
business from new customers

They should improve their advertisement style and try to publish their
products in market in a new style

They should modify there website, their packages on website information

regarding tourism time to time with new innovative ideas

They should move to travel consultant to travel agent it will make lil more
profit to their company

2.2. SCOPE OF THE STUDY

When I was working there as a trainee in HOSPITALITY, there was a
limitation for us that we cant able to meet all the customers (existing and new)
from Delhi & NCR only, and we have to complete our project within a period of
six weeks from 0900 hrs to 1830 hrs. We had limited area there for practically
research and completing our project.

2.3. OBJECTIVES OF THE STUDY

To study the Concept of tour operators growth & future prospect
To know the Working pattern of Travel Agent
To know the Working pattern of Tour Operators
To understand the Effects of Travel Agents & Tour Operators on Tourism Market

2.4. RESEARCH METHODOLOGY

Stratified random sampling technique was used to select the sample for
the following reasons: to ensure that the sample will not have by any chance
undue proportion one section within the tour operating business. The population
worked in different departments therefore had to be divided into strata according
to operations and then the sample was picked randomly from each type of
operation. Since the population included the whole of India we took the ITA
database of all tour operators.
2.5. LIMITATIONS OF THE STUDY
The first limitation deals with the representation of the research. In the
study, samples were drawn only major tourist areas in India . If a diversified
sample were drawn from different parts of India , then it would be more
representative and more reflective of the tour operators perceptions.
A total of 55 out of 100 respondents were analyzed across the identified
stakeholder category as well and there were a number of findings that could be
seen to be repeated and replicated among respondents of different operations.
As discussed, the operations categories were devised as a means of identifying
those most engaged with tourism branding in India . There was however a great
deal of blurring across operations categories. It should be emphasized that
because of the individuality of the tour operators in many cases it was not
possible to see findings replicated in terms of perceptions on India s tourism
brand.

Travel Agents
& Tour Operators
are beneficial for
tourism

3 TRAVEL AGENTS & TOUR OPERATORS ARE BENEFICIAL FOR TOURISM

3.1. PRESONAL SALES
Introduction
The personal sales call is often the most effective means of customer contact,
especially when directed at volume movers of the leisure, business and meetings
market. A personal sales call is used to build rapport with clients or potential
clients and sell them the propertys product and services.
Type of personal sales call
1 cold calls or prospect calls which can either be made in person or by
telephone, are usually made within a small geographic area with a minimum
amount of time spent on each call.
2 public relation calls This call made for existing customer to enhance the
relation ship.
3 Presentation calls This call are made to individuals committees or groups to
explain how your property can meet their needs and to ask for their business.
4 Inside calls These calls are made to walk-ins inquiry about the property or to
group buyers, such as tour operators and meeting planners.

Prospecting
Prospecting is the life blood of sales because prospecting identifies the
individuals or groups that may become the propertys client base in the future. At
a minimum, each sales person should be making 10 to 15 calls per week on new
prospects.
Sources of prospecting
- Referral program of past and present clients
- Account penetration
- Local organization and companies
- Community contacts
- Front desk personnel
- Other property employees
- The property competitors
- Other sources
- The national level
- Networking
- The internet

Qualifying prospects
Qualify and quantify are two of the most important steps in the solicitation of any
account. Unfortunately, not every prospect qualifies as a potential client, in many
hotels 80 percent of business is generated by 20 percent of their accounts.
Prepare for the presentation sales call
Once the prospect has been called on and has expressed an interest in the
property, a presentation sales call can be made. Although you should approach
each presentation sales call with confidence, you should realize that not all
presentation lead to sale. You should have well prepared presentation. It results
1 increased credibility
2 increased confidence
3 increased probability of reaching the decision maker
Pre presentation planning
To be effective pre presentation planning should include property research,
competitor research, and client research.
Property research includes the developing a property fact book including
various information related to the hotel. Such as
- General property description
- Guest rooms
- Restaurants and lounges
- Meeting and banquet facilities
- Audiovisual equipment
- Transportation
- Recreation facilities
- Out side services
- Vendors
Competition research includes the the gathering various information related to
the competitors strengths, weaknesses, and their customer base.
Client research includes the study about client, annual reports, internet sites,
business directories, articles, trade journals etc...
The sales kit
Before making a sales call you should prepare a well organized and professional
sales kit. Only the information pertinent to the clients particular needs should be
included, too much information results in clutter and appears unprofessional.

Projecting a professional image

You are the official representative of the property and your appearance, attitude,
and approach to clients can mean the difference between new business and a
negative response. Remember, you never get a second chance to make good
first impression.
First and foremost, never smoke; chew gum, or drinking during a sales call.
Other factors in projecting a professional image include nonverbal
communication, voice quality, listning skills, and negotiation skills
Nonverbal communication
- Appearance
- The handshake
- Territorial space
- Public space
- Social space
- Personal space
- Intimate space
- Body language
Voice quality
The sales presentation must be clear and understandable to be effective. The
human voice is a persuasive instrument when used properly, and it is vitally
important that you learn to use your voice as a selling tool.
Listening skill
At the other end of the spectrum, you must know when to stop talking. You need
to show genuine interest in your clients need, and listening is and important part
of building a rapport.
Negotiating skill
Listening plays a key role in yet another important sales skill, negotiating.
Negotiation involves two or more parties coming together to reach an agreement
for their mutual benefit.

3.2. The presentation sales call

The objective of a presentation sales call is to book business for the property
.once you have prepared yourself for a presentation sales call it is time to make
an appointment with the client and follow the five steps that will help ensure
success.
1 opening the sales calls
2 Getting client involvement
3 Presenting your property
4 Overcoming objections
5 closing and following up
1. Opening the sales call
All sales call begins with an opening. The opening should put the customer at
ease establish rapport and build the prospects confidence and trust in you it
divides in to following stages
- Introduction
Giving introduction about the presenter
- Purpose statement
Stating purpose of the visit
- Benefit statement
Reasoning out why he /they should listen to him and benefits what they can
gain
- Bridge statement
This will indicate the body of sales presentation
2. Getting a client involvement
Second stage in the sales call focus on determining the clients specific needs
and involving the clients by asking questions questioning always precedes any
sales presentation. This is is a fundamental rule. Questioning and presenting are
separate steps.

3. Presenting your property

You should have prepared, rehearsed sales presentation that addresses the
needs of each of the major market segments the property has targeted. For
example a general sales presentation for meeting planners that relates specially
to the needs of that segment. There are three skills required for a successful
presentation; they are
- Organization
- Effective speaking
- Visual aids

Closing the presentation

When you have conclude the presentation, a transition phrase, which may be
simple as do you have any questions can lead to the next step of the sales call
overcoming any objections expected by the client.
4. Over coming the objections
Step four of the sales call deals with those times when the client has objections
to your sales presentation. Objection can occur at any time, and there is no
reason to panic when an objection is raised. Some objections are a clients way
of asking fro more information and some may offer an opportunity to close the
sale. Normally the objection fall in two three main categories
1. Price or rate
2. Product or service
3. Lack of interest
4. Closing and following up
Closing up
Many sales people enjoy presenting their products, but hesitate when it
comes to closing. Closing is not difficult, however, when you understand some
fundamental principles involved. There two basic types of closes. Test close
and major close. Test close try draw a reaction from the client. A major close
is a question or statement that asked for sales.
Following up
It is necessary to follow up all the sales call was made. If a sale was not
made, follow up can consist of a brief thank you letter. The letter should be
accompanied by additional material not given to the client at the time of
presentation and any materials specifically requested by the client.
Improving sales productivity
Sales is a highly competitive field, and you should constantly monitor your
performance in no of areas. In order to measures your productivity, you must
first have a written list of goals, goals keep you on track and allow you to
gauge your success the basis for goals should always be the hotels
marketing plan, and success should be evaluated in terms of achieving the
optimum customer mix set by the property.

Time management
Good time management is leads to successful sales career. It is important to
have track record for time utilization for each task. Your workday should be
planned. Non selling task should be eliminated during during prime selling
time, and emphasis given to work items with deadlines. In order to use time
most effectively, time spent on routine work should be minimized. By using a
hotel director a sales person can utilize his time effectively

Key account manager

A typical sales person at properties of all sizes handles 300 to 400 accounts.
Landing new accounts does not mean that you must service an ever
increasing number of clients. New accounts with high potential will replace
those with the lowest potential for business, so that the total no of accounts
you service will remain relatively stable as you continually increase the quality
of the accounts being followed.

3.3. Concept of Tour Operators Growth & Future Prospect

With general public access to the Internet, many airlines and other travel
companies began to sell directly to passengers. As a consequence, airlines no
longer needed to pay the commissions to travel agents on each ticket sold. Since
1997, travel agencies have gradually been disintermediated, by the reduction in
costs caused by removing layers from the package holiday distribution network.
However, travel agents remain dominant in some areas such as cruise vacations
where they represent 77% of bookings and 73% of packaged travel. In 2009, the
market size for travel agencies experienced a sharp decline, dropping from $17
billion the previous year to $14.5 billion.
In response, travel agencies have developed an internet presence of their own
by creating travel websites, with detailed information and online booking
capabilities. Travel agencies also use the services of the major computer
reservations systems companies, also known as Global Distribution Systems
(GDS), including: Amadeus CRS, Galileo CRS, SABRE, and Worldspan, which is
a subsidiary of Travelport, allowing them to book and sell airline tickets, car
rentals, hotels, and other travel related services. Some online travel websites
allow visitors to compare hotel and flight rates with multiple companies for free;
they often allow visitors to sort the travel packages by amenities, price, and
proximity to a city or landmark.
Travel agents have applied dynamic packaging tools to provide fully bonded (full
financial protection) travel at prices equal to or lower than a member of the public
can book online. As such, the agencies' financial assets are protected in addition
to professional travel agency advice.
All travel sites that sell hotels online work together with GDS, suppliers, and
hotels directly to search for room inventory. Once the travel site sells a hotel, the
site will try to get a confirmation for this hotel. Once confirmed or not, the
customer is contacted with the result. This means that booking a hotel on a travel
website will not necessarily result in an instant confirmation. Only some hotels on
a travel website can be confirmed instantly (which is normally marked as such on
each site). As different travel websites work with different suppliers, each site has
different hotels that it can confirm instantly. Some examples of such online travel
websites that sell hotel rooms are Expedia, Orbitz,Priceline and WorldHotel-Link.
The comparison sites, such as Kayak.com, SideStep, JetRadar, and TripAdvisor,
search the resellers sites all at once to save time searching. None of these sites
actually sells hotel rooms.
Often tour operators have hotel contracts, allotments, and free sell agreements
which allow for the immediate confirmation of hotel rooms for vacation bookings.

Mainline service providers are those that actually produce the direct service, like
various hotels chains or airlines that have a website for online bookings.
Portals serve as a consolidator of various airlines and hotels on the internet.
They work on a commission from these hotels and airlines. Often, they provide
cheaper rates than the mainline service providers, as these sites get bulk deals
from the service providers.
A meta search engine, on the other hand, simply culls data from the internet on
real time rates for various search queries and diverts traffic to the mainline
service providers for an online booking. These websites usually do not have their
own booking engine.

3.4. Working Pattern of Travel Agents

Travel agents assess individual's and business people's needs to help them
make the best possible travel arrangements. An agent may specialize by type of
travel, such as leisure or business, or destination, such as Europe or Africa.
Travel agents also promote travel packages on behalf of cruise lines, resorts and
specialty travel groups.
Employment Facts - Travel Agents:
Travel agents held about 105,300 jobs in 2008. About 76% of all travel agents
worked for travel arrangement and reservation services and about 60% worked
for travel agencies. Approximately 17% were self-employed.
On a typical day a travel agent will:
give advice on destinations;
make arrangements for transportation, hotel accommodations, car rentals,
tours, and recreation;
advise on weather conditions, restaurants, tourist attractions, and
recreation;
provide information on customs regulations, required papers (passports,
visas, and certificates of vaccination), and currency exchange rates to
international travelers;
consult published and computer-based sources for information on
departure and arrival times, fares, and hotel ratings and accommodations;
visit hotels, resorts, and restaurants to evaluate comfort, cleanliness, and
quality of food and service;

3.5. Working Pattern of Tour Operators

Tour operators are responsible for organising and preparing holiday tours. They
follow trends in the popularity or destinations and packages, and adjust company
plans accordingly.
Responsibilities of the job vary according to the time of year and size of
employer, but generally include:
deciding how many holidays to sell each season and the resorts/countries
to use
visiting resorts to ascertain accommodation quality and suitability
liaising with coach operators, airlines, hoteliers and resort reps
agreeing service levels, contracts and costs
confirming customer names with airlines/hotels
collecting, evaluating and responding (as appropriate) to customer
feedback
using market research information to guide decisions
producing brochures and internet-based information
providing pricing information
marketing holidays to clients via travel agents, websites, brochures and
television advertising
handling bookings, invoicing and issuing of tickets
predicting profits or number of bookings
Typical employers of tour operators
Private touring companies
Small specialist organisers
Major international tour operators
Bespoke tour designers
Cruise lines

Vacancies are advertised online, in newspapers and trade publications including

Overseas Jobs, The Travel Trade Gazette and Travel Weekly as well as their
online equivalents. Networking and speculative applications are advisable, for
which the Travel Trades Gazette Directory may be helpful. A few larger
companies operate graduate training schemes. Paid summer vacation jobs may
be available with some employers.
Qualifications and training required
Graduates with degrees in leisure, travel, tourism, management, marketing, IT,
business, languages or hotel and catering management may have an advantage.
Relevant professional or vocational qualifications, such as NVQs and HNDs, may
also be beneficial. Pre-entry experience gained working with the general public
or within the hotel, tourism or travel trades (particularly overseas) are
advantageous.
Key skills for tour operators
A demonstrable interest in travel
Knowledge of key holiday destinations
Foreign language skills
Excellent interpersonal skills
Communication skills
Customer service skills
Organisational skills
IT skills
Commercial awareness
Good time management skills

3.6. Effects of Travel Agents & Tour Operators on Tourism Market

Global scenario
Travel and tourism is one of the fastest-growing industries and a leader in many
countries. It is expected to have generated around 9.4% of world GDP and 8.2%
of total employment in 2009. The contribution of the industry to the global
economy remains high despite a 4.38% decline in 2009. During the year, travel
and tourism investment too declined by more than 12%.
International tourist arrivals rose from 682 million in 2001 to 920 million in 2008.
The global travel and tourism industry experienced a downturn in 2009 due to the
global economic and financial meltdown. The industry was affected by low
business volumes and consumer confidence, given the uncertainty about factors
such as availability of credit, exchange rates, employment, and the H1N1 virus.
Consequently, tourist arrivals fell 4% worldwide in 2009. Nevertheless, tourist
arrivals increased 2% in the last quarter of 2009, led by recovery in the Asia
Pacific and the Middle East.
The industry is expected to improve in 2010, as most of the leading economies
are exiting the recession since end-2009. However, it is expected to be gradual
as corporations, households and governments slowly recover. Given the
improvement in global economic conditions, the UNWTO forecasts a 3-4%
increase in international tourist arrivals during 2010. Asia is expected to continue
showing the strongest rebound, while Europe and Americas are likely to recover
at a more moderate pace.
The expected rebound in tourism materialised in the first four months of 2010.
This is reflected in the 7% increase in international tourist arrivals during
January-April 2010. Tourist arrivals grew at a faster pace of 8% in emerging
markets, while advanced economies reported a 5% increase.
In 2009, following the trend in tourist arrivals, international tourism receipts also
recorded a decline. It is estimated to have declined by 5.7% to US$ 852 bn. The
decline in earnings is sharper than in arrivals, as during periods of slowdown,
tourists tend to stay closer to home and prefer to travel for a shorter duration of
time.
The travel and tourism industry can be divided into inbound and outbound
tourism; inbound refers to countries attracting the largest number of tourists and
outbound refers to countries from where the largest number of tourists originate.
World inbound tourism
International tourist arrivals were 880 million in 2009. The European region
continues to attract the largest number of tourists, accounting for around 52% of
total traffic in 2009. The Asia Pacific and Americas follow with shares of 21% and
16% respectively. France, USA and Spain were the top three tourist destinations

in 2009; China and Italy rank fourth and fifth respectively in terms of tourist
arrivals.
International tourist receipts were down 5.7% in 2009. Europe continues to draw
the highest amount of total receipts, accounting for 49%; the Asia Pacific and
Americas formed around 24% and 19% respectively. USA, Spain and France
were the top three earners during 2009 in that order; Italy and China ranked
fourth and fifth respectively.
Germany, USA and the UK are the leaders in terms of international tourism
spending. During 2009, China overtook France to become the fourth-largest
tourism spender.
Some trends in consumer spending intensified during the global slowdown.
These include late booking, preference for short haul trips compared with long
haul ones (travelling closer and for shorter periods of time), and demanding
value for money. These changes in consumer preferences would require
changes in business models of players in the industry.
Air transport, which plays a significant role in the global travel and tourism
industry for both business and leisure travel, was also adversely affected during
2009.
Indian travel and tourism industry
Indian tourism offers most diverse products globally. The countrys rich history,
cultural heritage, beauty, diversity of religion and medicine fascinate budget and
luxury travelers. Tourism in India has registered significant growth over the years.
This has been led by growth in both leisure and business tourism. Rising
incomes, increasing affordability, growing aspirations, increasing globalisation,
and a growing airline industry along with improvement in travel-related
infrastructure have supported industry growth. Tourism holds immense potential
for the Indian economy. It can provide impetus to other industries through
backward and forward linkages and can contribute significantly to GDP.
Indias travel and tourism industry is expected to generate revenue of Rs. 1,970
bn (US$ 42 bn) in 2010, according to the World Travel & Tourism Council
(WTTC). This would be around 3.1% of total GDP. However, since travel and
tourism touches all sectors of the economy, its real impact is greater and the
travel and tourism economy directly and indirectly accounts for ` 5,533 bn (US$
118 bn), equivalent to 8.6% of total GDP.
Personal travel and tourism is the most significant contributor, accounting for
55% of the total market, while business travel forms only 9%. Capital investment
is also significant with a share of 24%. Hotels, air transport, surface transport,
basic infrastructure, and facilitation systems environment are some of the related
sectors.

The share of the Indian travel and tourism industry globally is very less. However
the industry holds immense potential. In fact, India has been ranked among the
leaders by the WTTC for long-term (10-year) growth prospects. Further, a
globally renowned travel magazine, Conde Nast Traveler, ranked India among
the top 10 tourist destinations of the world. JBIC has also ranked India as the fifth
most attractive investment destination. India is probably the only country that
offers various categories of tourism with its geographical diversity and rich
cultural heritage.
Structure of the tourism industry

Tourism comprises activities of people travelling to and staying in places outside

their usual environment for not more than one consecutive year for leisure,
business and social, recreational, and knowledge seeking purposes.
The tourism industry is primarily service and people oriented; it is made up of
businesses and organisations belonging to various other industries and sectors.
It is an interplay among these businesses and organisations/persons which offer
travel experience to tourists. The tourism industry comprises hospitality (related
to accommodation and dining), travel (transportation services through different
modes), and various other businesses which offer services and products to
tourists. The components of the tourism industry are shown in Exhibit 1.1.
Most of the players in the tourism industry are SMEs. The unorganised sector
dominates the industry in India. Hotels, airline companies, and tour operators
form the organised sector.
Specialist travel service providers assist tourists with travel arrangements. These
providers include travel agencies who are involved in retailing of travel products
directly to the tourists (individuals or groups). They provide information on
different travel destinations and advise customers on travel plans. They also sell
associated products such as insurance, car hire, and currency exchange.
Business travel agencies specialise in making travel and accommodation
arrangements for business travelers and promoting conference trades. The tour
operators provide packages for individuals while the principals provide basic
travel and tourism related services.
Tour operators offer holiday packages which comprise travel (road, rail, sea, air
as well as to and from the destination airport, car hire, excursions, etc) and
accommodation (hotels, guesthouses, apartments, etc) services.
Transport service providers could be airlines, cruise lines, car rentals, and rail
companies. A tourists choice of transport would depend on the travel budget,
destination, time, purpose of the tour, and convenience to the point of
destination. Accommodation could be hotels and motels, apartments, camps,
guest houses, lodge, bed and breakfast establishments, house boats, resorts,
cabins, and hostels. In addition, tourists also require catering facilities, which a

variety of outlets for food and refreshments offer. These include hotels, local
restaurants, roadside joints, cafeterias, and retail outlets serving food and
beverages.
Another major component of the travel and tourism industry is attractions such
as theme parks and natural attractions including scenic locations, cultural and
educational attractions, monuments, events, and medical, social or professional
causes.
The tourist information and guidance providers include a number of service
providers such as those offering insurance, recreational, communication, and
banking services; government agencies; tour guides; industry associations;
packaging agents; ticketing agents; and holiday sellers.
Tourism is not only a growth engine but also an employment generator.
According to the Economic Survey 2011-12, the sector has the capacity
to create large scale employment both direct and indirect, for diverse sections in
society, from the most specialized to unskilled workforce. It provides 6-7 per cent
of the worlds total jobs directly and millions more indirectly through the multiplier
effect as per the UNs World Tourism Organization (UNWTO)
1. The importance of tourism as a creator of job opportunities can be
understood from the fact that in India every one million invested in tourism
creates 47.5 jobs directly and around 85-90 jobs indirectly. In comparison,
agriculture creates only 44.6 jobs and manufacturing a mere 12.6 jobs.
Moreover tourism is the third largest foreign exchange earner after gems
and jewellery and readymade garments
2. Foreign Tourist Arrivals (FTAs) During 2011 FTAs in India were 6.31
million with a growth of 9.2% over 2010. FTAs during 2012 were 6.65
(provisional) million with a growth of 5.4%, as compared to the FTAs of
6.31 million during 2011.Foreign Exchange Earnings (FEE) from
Tourism Tourism is an important sector of Indian economy and
contributes substantially in the countrys Foreign Exchange Earnings.
FEEs from tourism, in rupee terms, during 2011 was Rs.77,591 crore
(provisional), with a growth of 19.6%, as compared to the FEEs of
Rs.64,889 crore (provisional) during 2010. During 2012, the Foreign
Exchange Earnings (FEEs) from tourism registered a growth of 21.8%
from Rs.77,591 to Rs. 94,487 crore (provisional) when compared to
FEEs during 2011. A statement giving FTAs in India and FEEs from
tourism fro the years 2000 to 2012 is given below:

Business gain with the Help of Travel Agents & Tour

Operators
(All in Crore)

Key
Brands/Segments

Taj (5-star
Deluxe),
Vivanta by
Taj (upper
upscale),
The
Gateway
(upscale),
Ginger
(economy)

The
Oberoi (5star
Deluxe),
Trident
(5-star),
Maidens
(4-star)

The Leela
(5-star
deluxe)

The Orchid (5star), VITS (4star). Lotus

(resorts),Gadh
(heritage)

Royal Orchid
(5-star),
Regenta (4star), Royal
Orchid
Central (4star), Royal
Orchid Suites
(4-star longstay), Central
Blue (3-star),
Ramada
(economy)
and Royal
Orchid
Resorts
(leisure)

Year 2010 Total

Revenue
By Travel Agents
By Tour Operators
Others
Year 2011 Total
Revenue
By Travel Agents
By Tour Operators
Others
Year 2012 Total
Revenue (Q1)
By Travel Agents
By Tour Operators
Others
Year 2012 Total
Revenue (Q2)
By Travel Agents
By Tour Operators
Others
No. of Hotels

2516.5

1038.3

449.2

107.8

120.4

1051.1
1149.2
316.2
2891.7

424.1
502.1
112.1
1288.0

191.7
198.5
59.0
525.8

42.2
43.2
22.3
127.7

39.6
58.7
22.1
152.1

786.6
1312.6
792.5
521.5

472.7
504.1
311.2
313.8

193.3
295.3
37.2
178.4

46.9
59.5
21.3
34.7

50.9
53.3
47.9
43.5

235.8
252.3
33.4
357.6

173.3
93.1
47.4
237.2

96.9
58.3
23.2
127.9

13.9
12.6
8.2
29.8

14.6
17.6
11.3

114.3
180.2
63.1
112

25.4
167.3
44.5
24

39.7
58.4
29.8
7

7.3
16.4
6.1
16

9.3
17.7
8.8
20

Room Inventory

13606
(Dec 2011)

3721
(Mar 2011)

1869
(Dec 2011)

1149
(Dec 2011)

1,724
(Feb 2012)

35.8

Foreign Tourist Arrivals and Foreign Exchange Earnings

During the years 2000-2012
Year

Foreign Tourist Percentag Foreign

Percentag
Arrivals (in e
Exchange e
nos.)
Earnings Change
Change
in Over
Over
Crore
Previous
Previous
Year

Year

Foreign
Exchange
Earnings
(Million
US$)

Percentage
Change
Over
Previous
Year

2000

26,49,378

6.7

15,626,

20.6

3,460

15.0

2001

25,37,282

-4.2

15,083

-3.5

3,198

(-)7.6

2002

23,84,364

-6.0

15,064

-0.1

3,103

3.0

2003

27,26,214

14.3

20,729,

37.6

4,463

43.8

2004

34,57,477

26.8

27,944

34.8

6,170

38.2

2005

39,18,610

13.3

33,123,

18.5

7,493

21.4

2006

44,47,167

13.5

39,025

17.8

8,634

15.2

2007

50,81,504

14.3

44,360

13.7

10,729

24.3

2008

52,82,603

4.0

51,294

15.6

11,832

10.3

2009

51,67,699

-2.2

53,700*

4.7

11,136*

2010

57,75,692

11.8

64,889#

20.8

14,193#

27.5

2011

63,09,222

9.2

77,591#

19.6

16,564#

16.7

2012

66,48,318

5.4

94,487#

21.8

17,737#

(-)5.9

7.1

# Advance Estimates *Revised Estimates

Source: Ministry of Tourism, Annual Report 2012-13
Domestic tourism
The domestic tourist visits during the year 2011 are estimated to be 851
million, showing a growth of 13.8% over 20103.
2.

ROLE OF THE GOVERNMENT

The role of the Government in tourism development has been redefined

from that of a regulator to that of a catalyst. Apart from marketing and
promotion, the focus of tourism development plans is now on integrated

development of enabling infrastructure through effective partnership with

various stakeholders.
Tourism development in India has passed through many phases. The
development of tourist facilities was taken up in a planned manner in 1956
coinciding with the Second Five Year Plan. The approach has evolved from
isolated planning of single unit facilities in the Second and Third Five Year
Plans. The Sixth Plan marked the beginning of a new era when tourism began
to be considered a major instrument for social integration and economic
development.
However, it was only after the 80s that tourism activity gained momentum.
A National Policy on Tourism was announced in 1982.In 1992, a National Action
Plan was prepared and in 1996 the National Strategy for Promotion of Tourism
was drafted. In 1997, a draft New Tourism Policy in tune with the economic
policies of the Government and the trends in tourism development was
published for public debate. The draft policy is now under revision. The
proposed policy recognizes the roles of Central and State Governments, Public
Sector Undertakings and the Private Sector in the development of tourism. The
need for involvement of Panchayati Raj institutions, local bodies, nongovernmental organizations and the local youth in the creation of tourism
facilities has also been recognized4.
As per the working strategy for the 12th Five Year Plan, the Ministry of
Tourism has adopted a pro-poor tourism approach which could contribute
significantly to poverty reduction. More than half of Tourism Ministrys Plan
budget is channelized for funding the development of destinations, circuits,
mega projects as also for rural tourism infrastructure projects (see Annexure-I).
The Ministry also ensured that 10% and 2.5% of its total Annual Plan (2012-13)
outlay went to the tourism projects in the North-Eastern region and the tribal
areas respectively5.
The other major development that took place were the setting up of the
India Tourism Development Corporation in 1966 to promote India as a tourist
destination and the Tourism Finance Corporation in 1989 to finance tourism
projects. Altogether, 21 Government-run Hotel Management and Catering
Technology Institutes and 14 Food Craft Institutes were also established for
imparting specialized training in hoteliering and catering.

Internal Marketing
And
Sales By
Travel Agents
&
Tour Operators

4. INTERNAL MARKETING AND SALES BY TRAVEL AGENTS & TOUR

OPERATORS
4.1. INTRODUCTION
A concept that sees employees as customer who must be sold on the
property they work for and convinced of their importance to its successes.
What is an internal sale?
Specific sales activities engaged in by various employees of a property in
conjunction with a program of internal merchandising to promote additional
sales and guest satisfaction. Management can encourage these vital relation
ships in three ways.
1 .provide an environment for guest employee relation.
2. Instill pride (recognizing the value of employee and their positions)
3. Provide training that encourages employees to become more helpful.

4.2.

THE ROLE OF GENARAL MANAGER IN INTERNAL SALES

The attitude of the general manager will greatly influence the success of an
internal sales program. If the GM is not customer and sales oriented, it is
unlikely that the staff will be highly motivated. A general manager can develop
a sales oriented staff by,
- hiring sales oriented employees
- training employees in sales techniques
- motivating employees to sell
The role of employees in internal sales
Many employees make guest contacts while the guests are in the hotel. here
the employees are encourage to make good rapport with the customer to get
their repeat business. it is especially important to build guest loyalty to avoid
losing even a small part of your current guest base to competitors.
Relationship selling
Relationship selling can be defined as building guest locality by creating
enhancing and maintaining a good relationship with guest. There several
ways for properties to learn more about their guests so they can build
relationship with them. One common method used is the use of guest profiles.
Other way is getting information through staff.
Employee training
Employee training should be included a number of areas that will enable
employees to assist guest and build rapport. These areas include

knowing the property

Employees are encouraged to study the property fact book in order to get
a good knowledge about the property.

knowing the community

It important to aware the area surrounding hotel and places of interest in
the area. Employee can promote such things to their customers.

Interacting with guest

Positive interaction with guest is crucial to making a good impression and
generating repeat business. Whenever possible called guest by their
names.

Learning sales skills.

Sales skills help employees to make the most of sales opportunities in their
particular areas of guest contact.

Upgrading
Reservation is an effective way to increase revenues, but very few front desks
or reservations staffs are trained to use upgrading techniques .upgrading can
be accomplished without pressuring a guest by using one of three methods.
-

Top down method

Guests are encouraged to reserve middle or high rate rooms.

Rate category alternative methods

If the guest cant afford high rates, Guests are encouraged to select middle
rates range of rooms

Bottom up
If the guest cant afford high rates and middle rates Guest are encouraged
to buy low rates rooms

4.3. SUGGESTIVE SELLING

It is a process of influencing guests purchase decision through the use of
sales phrases. The entire employee can practice these techniques to increase
the sales volume.
Ex; food server can suggest a cocktail before the dinner.

4.4. EMPLOYEE INCENTIVE PROGRAMME

Employee incentive programs can be an effective means of motivating
employees to sell and of tracking sales results. Here the employees are
rewarded in various ways for their extra selling efforts. When developing
incentive programs management should realized that while incentives in the
form of cash, merchandise, or trips are often used to motivate employees.
4.5. INTERNAL MERCHANDISING
Internal merchandising is the use of guest room services directories,
Restaurant tent cards, Elevator posters, Bulletin boards and other promotional
items to promote the propertys facilities and services.

CONCLUSION
AND
SUGGESTIONS

5.
CONCLUSION AND SUGGESTIONS
5.1 Conclusion
India has unique opportunities for tourism development. Findings from the
study indicate that it is ideal for the country to be seen as A World of Wonders.
The country has a rich biodiversity concentrated in its national parks, heritage
sites and prime tourist destinations. Despite this potential, India is somewhat not
yet a tourism hotspot. Product development remains unevenly drawn across rural
and urban lines. Ambiguous perceptions from visitors as reported by tour
operators need to be redressed to promote India s tourism brand. Because of
immense economic changes, value for money of India s tourism, and profound
policy reforms India cannot be spared for the emerging discipline of destination
branding and marketing. Despite economic recession in the past decade, the
country has potential for achieving the appropriate balance of marketing and
management, balancing the expectations and interests of visitors and residents.
This study contributes to the field of destination (re)branding. By focusing on tour
operators perceptions, the study provides a new perspective on destination
brand development. The study also seeks to alter the role attributed to tour
operators in the overall destination brand development process so that they can
be seen as important stakeholders. Though not definitive, the findings of the
study suggest that long-term success and strength of a destination brand is
contingent on whether the brands promise (coverage) and value is effectively
and consistently confirmed between visitors and tour operating organisations.
Somewhat overlooked in terms of the brand building process, tour operators
have to be regarded highly in brand development efforts championed by the
DMO. Finally, this study points to the need for a large scale study encompassing
tourism stakeholders perceptions on India s tourism brand for a coordinated
brand building process.

5.2 Suggestions
First things first:
Please do not misunderstand. In developing a few ideas about improving the
current state of rural Irish tourist industry I have no intention to criticize the
people working within it. Whether owner or employee they do a good job. The
Irish are great hosts, polite, ever friendly. Their service represents excellent
value money.
I am not talking of Dublin's tourist industry, either. Thats another kettle of fish.
I am just talking about the compartmentalized tourist trade in rural western
Ireland, maybe in some other Irish country-side areas as well.
As for me, I have been strongly involved in regional marketing and public funding
of tourism in Germany for 22 years, semi-retirement now allows me a marvellous
four-weeks-stay in West Donegal. I relax, take some exercise, enjoy the scenery,

the people, the pubs. At the same time I cannot ignore the impact of recession,
pondering what can be done about it.
Talking to a lot of people about that, some proposals arose which may not be
new, even might have been published already. Nevertheless I have been
asked to write them down. So I did, from the viewpoint of a German who loves
Ireland very much, without being love-blind either.

1. Remain small and genuine

When travelling through rural Ireland 30 years ago you came across left and right
derelict old farm cottages all over. Most of them seem to have vanished now.
Currently you are encountering empty new buildings and decayed not too old
homes in many villages. They are the remains of the real estate boom and too
much money wasted on the wrong place. As money had been cheap and loans
easy to take erecting eight (holiday) homes for one million and selling them for
two, seemed to be a great deal. Now you can be happy to get 0.5 million for it, if
all, and that kind of business has ruined thousands of families and nearly a whole
country.
Now, as Ireland seems to get slowly out of recession, it seems to be the proper
time for a fundamental change in tourism policy. Forget the shiny big deals. Small
is beautiful. Dont believe letting a dozen cottages to tourists will give you fast a
nice living. Take three of them, keep them fine, market them professionally, hire
out them in a proper familiar way, develop other sources of income the same
time and you will have a decent life.
Rural tourism in western Ireland cannot be in direct competition to the favoured
holiday locations abroad. It has to be an alternative offer for people who like the
genuine thing, who want to explore, who want individual treatment, who want to
boast about their place in India at home. There are many of them all over the
world who have the modest means and all opportunity to enjoy holidays in India.
Now, just give them the motive to travel to your place!
Ireland can and should never be a destination for mass tourism; its the individual
tourism which can bring modest profit to your country. Do not imitate, stay as
unique as you are. Just to say it pictorially: There is no need to glance at other
peoples plate there is good enough on your own. Just be proud of it, and use it
wisely.

2. Find your target group

Ireland has no communication problem. The Irish - being quite sociable, talkative
and quick thinking - have developed astonishing skills using the internet,
meanwhile the most important medium for tourist marketing communication.
Branding is no problem either. The Irish have shown due respect to the originals
all along. But they never have been a tribe of merchants. So its the product
development part of marketing which has to be regarded more.
But first of all you have to fix your targets. You may have to get your seven B&B
rooms rented 150 nights a year for a fair annual income, as a family restaurant
owner you need a turnover of 150.000 Euro per year to cover your costs and
keep your family, and so on. Second: You have to admit the dire fact that the very
ones who will help you achieving your object (your potential guests) are not an
amorphous mass. They are assembled from very different groups with very
diverse attributes. People who belong to the same group have sufficient things in
common. If they can be considered as eventual guests they cluster a target
group.
Its all about eventual target groups. You have to find out their needs, interests,
bad habits. Then you look at your plate. What do you see there does it suit
your target group generally? If not, go on to the next group. If yes, think about it.
What can I do to make the goodies on your platter even more attractive before I
am going to start advertising? Thats the art of product development as part of
professional marketing.
Let me give you an example about your eventual target group in Germany. There
are 80 million Germans. Half cannot afford travelling abroad. Another quarter has
lost its mobility for travelling, is too old, too young, too sick, whatever. From the
remaining 20 million Germans there will be 15 million which love to stay all day
on beach or pool needing at least 35 degrees to be happy. They wont eat from
your Irish platter in any case.
There are five million Germans left about as many as Irish live in India. Among
them there will be young people in search for adventure of all kinds, students and
professors, doctors, engineers and independent entrepreneurs and about half a
million of teachers in retirement. So, now you are close. The rich ones will
marginally come; Ireland is not posh, thank God. Some others may be
prejudiced; some will suffer from aviophobia and shrink from the two-daysjourney here by car and ferry. But anyway, there are enough Germans left who
would like to come to Ireland, who have some English and interest in culture and

scenery and dont mind some drops of rain as long there is a surplus of dry days
and even a sunny day, occasionally. They just have to be motivated.
Look at their lives. Getting older,
their children are grown up. After
long years of hard work and
never ending family duties they
are ripe to give themselves a
treat. They long for leisure, are
open-minded for some choice
animation as well. They have a
bit of money to spend and do not
depend on school holidays any
more. They might be retired, their
doctors urge them to get some
physical exercise to stay in shape and feel fine. They like to eat and drink, many
of them drink every night.
Thats your target group in Germany and in a couple of other European
countries, too - big enough to fill your beds for years. Rural Ireland basically
provides everything this well-educated, middle-aged and elderly people need maybe with the exception of an ambitious cultural event or two. But then there is
Dublin, and local arts and artisans and the famous local publicans music night all
the same. They will settle for it, and will come back.
By the way: Gaining the favour of this target group helps you to cope with one of
the most serious problems of Irish tourism its seasonality. Many of its members
avoid peak season, instead prefer spring and autumn or special time slots like
the week between Christmas and New Year. (The Danish tourist industry is
dominated by the renting of holiday cottages. They are rented only weekly, at a
very flexible price. This particular week is the most expensive one to book
despite the fact Denmark having more or less the same weather condition as
Ireland in wintertime.) Comfortable rooms, pubs, even most outdoor activities are
not sun-bound. If you not already practise seasonal pricing and seasonal offers
you should think about it.

3. Shape your offers systematically

True - you offer nice and affordable accommodation, you have cars and bikes to
rent. Irish food and air is good and healthy, the scenery great and people
amiable. But nowadays thats not enough. What about the needs and habits of
your target groups, which have a wide choice of destinations?
Regarding the above-mentioned, not-too-small mid-European target market
your touristic offers are much too sparse. Nordic Walking has become a very
popular sport in Germany among elder people. Irish roads and paths are quite
convenient for it. How many Nordic Walking sticks do you keep for your guests
right now? Irish hills and shores yearn for hiking and climbing. How many of you
provide maps, and gear and practical advice? There are some fine bike shops all
over the country, but there is no electric bike to rent north of Mayo. You expect 67
years old teachers in retirement to explore the hilly roads of Ireland by bicycle?
Yes, they will! Give them the little help of 250 watts, and they will love it and
come back next year.
What about the evenings? Do you offer a little shuttle service to the pub or the
next villages music night? (You may even charge for this additional service.
Guests who are going to spent thirty euro per person for entrance and drink,
dont mind the additional three for safe transport there and back.) What about
little fridges in your guest rooms, to be filled with drinks by you or your guests? WiFi with no charge is a must, some home channels via satellite gain you sympathy.
Good service makes you irresistible, and ever pays back.
I suggest you improve your service and offers on a systematic basis. Think about
it, do a bit of online research, talk it over with other people. I am sure there will be
more, even better ideas. But take care, as there is a German saying: "The bait
has to be liked by the fish, not by the fisherman". Its the needs, the habits and
the needs of your target group, which are to shape your touristic offers, not
yours.

4. Understand your work as part of the product

As hard you try, all you can offer is only part of an all-engrossing tourism product.
The product may be defined as (Alive-and-well) Holidays in north-western
Ireland. There is the setting of scenery, people, way of life, weather conditions.
This cannot be or should not be changed. Then there are the variables: local
facilities, accommodation, activity offers, quality of service, marketing
communication. The sum of all determines the products appeal for certain target
groups. So you know: your success depends on the good work of others as well.
The conclusion to be drawn is clear enough: You have to co-operate, work hand
in hand with each other. Instead of trying to do it all on your own you should be in
search for partnerships. In this partnership each partner puts in the particular part
of the product he knows best. There are ways to connect the offers while keeping
your right of self-determination completely.
For example: You want your accommodation guests to command all the outdoor
equipment they need for an alive-and-well Holiday - the next sports and/or bike
shop being 23 kilometres away. So what? Start a partnership with that shop.
They lend out all you need to you, for a fair price. You do not have to learn much
about bike-repairing and insurance, you dont bother about the best source of
supply. They take care of merchandise purchase; they have the technical
knowledge and offer professional service. You lend out their equipment to your
guests, to a price which covers all your costs, incl. your own for maintaining the
service. (Dont expect making much money with this service, but then, you have
no risk either.) Your guests get all the equipment they need and are happy with it.
That will pay back. You even use this service for your marketing communication.
People can book bikes and walking sticks and else in advance, find it ready
arriving at your place. A real nice selling point!
Not a bad deal for the sports/bike shop either. On one hand you must offer your
accommodation partners better prices than you can charge while direct hiring. Of
course the further equipment to lend has to be bought first, too. On the other
hand your raising demand will lead to better purchase conditions at your
suppliers. And then: Dont think you just switch from direct lending to lending via
partners. Part of turnover will be additional, a part you can enlarge easily. There
will be only the basics at the accommodation. But this basic offer is a bridge to
your shop you just have to use it. Take the bikes. Part of your accommodation
partners deal with his guests can be a weekly check-up with no costs at your
shop. Fancy bikes need a bit of maintenance now and then anyway. So your
partners guests come to your shop. You adjust the saddle, tight up an occasional

screw. Best chance to sell bike accessories, caps and gloves, maps, literature,
souvenirs and so on. Thats nice additional turnover.
There are chances for co-operation all over. What about hostels with self-catering
accommodation? Why not give the next super-market and small-town butcher,
the sport shop and the publican next village the chance to advertise themselves?
Just in a modest way, in the entrance hall or the common rooms information
board, beside the bus timetable and opening hours. The money isnt big, the
main idea is networking, and giving your guest useful information. Networking is
small business enhancement program, but do not get alliances with partners you
dont now. You are a quality provider of tourist offers; the other has to be too.
Otherwise you will spoil your own branding.

5. What public administration can do

Of course there are large investments in infrastructure already done by
Government. Dublin Airport lost its charm but gained considerable improvements
for passengers. The Irish road system has been improved last 15 years
considerably, as much in quantity as in quality. Public transport is sparse; still
used only by people with no car on hand and not, as it should be, as an
attractive alternative to the motorised individual transport. The LUAS tram in
Dublin is a well-considered exception that proves the rule.
A couple of public funded fancy spas here and there, the sponsoring of high-level
music festivals in the west coastline counties, and an efficient and long lasting
international promotion campaign of the destination of Ireland with this kind of
government activities the Irish tourist trade could do fine. To be realistic: These
things are nice to have but never to get.
With its limited resources the Irish government should act unspectacularly but
effectively. Proper local authorities always need more funds for public facilities.
These are small but important things like keeping the hiking trails in good shape,
providing sheltered viewing points, promoting local crafts and musicians,
enhanced maintenance of public greens and more benches for tired hikers and
bikers at the trail and the village crossroad as well.
There is one exception: Regional tourism marketing is a common task, which has
to be financed and improved equally from both private and public sources. But
that work will be done after you have revised and improved your tourism product,
to provide a sound basis from which to work.

5.3 References
[1] Ndlovu, J. Branding as a strategic tool to reposition a destination: a survey of
key tourism stakeholders in India . Unpublished PhD Thesis. University of
Pretoria, 2009.
[2] Mirimi, K., Utete, B., Mapingure, C., Mumbengegwi, P and Kabote, F.
Appropriateness of branding as a tourism resuscitation tool for India , American
Journal of Tourism Management, 2 (2), 2013, 47-54.
[3] Muleya, D. Tourism tumbles in India . (Online) Available from
http://allafrica.com/stories/200211220434.html. 2002, [Accessed: 23-10-2013].
[4] Ndlovu, J., Nyakunu, E and Heath, E.T. Branding a destination in a political
crisis: Re-learning, re-thinking and realigning strategies, NJLC, 3 (2), 2009,
December.
[5] Dolnicar, S. and Huybers, T. Different Tourists - Different Perceptions of
Different Cities Consequences for Destination Image Measurement and Strategic
Destination Marketing In J. A.. Mazanec and K. Wber (Eds.), Analysing
International City Tourism, Vienna / New York: Springer, 2010, 127-146.
[6] Anholt, S. Competitive identity: the new brand management for nations, cities
and regions (New York, NY: Palgrave MacMillan, 2007).
[7] Hosany, S., Ekinci, Y., and Uysal, M. Destination image and destination
personality: An application of branding theories to tourism places. Journal of
Business Research, 59 (5), 2006, 638-642.
[8] Ndlovu, J and Heath, E.T. Re-branding of India to enhance sustainable
tourism development: Panacea or Villain. School of Social Sciences, University
of KwaZulu-Natal, Howard Campus, Durban, South Africa, 2013.
[9] Nworah, U. Critical Perspectives On The Heart Of Africa Image Project, 2006.
[10] Bjrk, P. Brand Recovery: A Quick Fix Model for Brand Structure Collapse,
Journal of Travel and Tourism Marketing, 29(6), 2012, 520-531.
5.4 BIBLIOGRAPHY
Sah, P. (2014). Project Report on Travel Agents & Tour operators are beneficial for
Tourism Industry. (P. Sah, Ed.) Meerut, Uttar Pradesh, INDIA: JPIHMCT.