Travel Agency ator

Taufik Abdullah, A.Md. Par., S.E.

Definition

The United conference on international travel and tourism (Rome, 1963)

Tourism
The sum of phenomena and relationships arising from the travel and stay of non-resident to and in various destinations, insofar as they do not lead to permanent residence and are not connected with any earning activity.

Tourist

Temporary visitors staying at least 24 hours in the country visited. Temporary visitors staying less than 24 hours in the country visited (including travelers on cruises).

Excursionist

CONDITIONS FOR THE EXISTENCE OF TOURISM

PEOPLE There must be people willing to travel and wanting to visit places. Various reasons : Scenery, climate, familiar interests, history. TIME These people must have spare time (weekend, holidays or vacation) enabling them to leave their residence. MONEY They must also have money to spend on pleasure and recreation. TRANSPORTATION People may reach the place of their choice, there must be a way to get tourist object/destination. LEGISLATION To develop the flow of tourists between different countries, administrative restrictions must be held to a minimum. too much red tape at the borders tends to discourage would be tourists. ACCOMMODATION POSSIBILITIES Once on the spot, the tourist will demand that his/her basic needs be satisfied : Food and shelter.

IMPORTANT UNDERLYING FORCES WHICH HAVE A SIGNIFICANT IMPACT ON TOURISM

Early retirement

The growth of government security programs

A reduction in values placed on material ownership Decline in physical labor ---- attention to health program such as camping, cycling, hiking and the like A shorter work week Greater affluence ---- increasing of income/purchasing power Greater mobility of the population Growth of employee benefits Smaller families

Improved transportation and relative decrease in cost

Increase in longevity ---- live longer with greater vigor Growth of multi-national companies Rapid communications Higher education

THE ROLE OF TRAVEL AGENCY AND THE LIKE IN TOURISTS FLOW

Generating countries Holland Germany France Canada USA Japan, etc. TRAVEL DOCUMENT Receiving countries Switzerland Malaysia Indonesia USA Egypt, etc.

HOTELS AND OTHER ACCOMMODATIONS TOURIST OBJECT RESTAURANT

TOURISTS

THE SOCIAL EVOLUTION OF TOURISM WAS CHARACTERIZED BY

Higher salaries Longer vacations Holidays and free time almost totally paid by the employer A leveling out of social classes

Travel Agent Pertama di Dunia

Thomas Cook dianggap sebagai orang pertama menemukan profesi travel agent. Dilahirkan tanggal 22 November 1818. di Derby Shire (Inggris). Tanggal 5 Juli 1841, Tour yang paling bersejarah yang pernah diselenggarakannya yaitu A Round Trip Excursion antara kota Leicester dan Lougborough dengan biaya 1 shilling per orang. Dengan Pengikut sebanyak kurang lebih 500 orang Tahun 1851, ia menyelenggarakan tour ke London dengan pengikut sebanyak 150.000 orang untuk menyaksikan World Exposition Tahun 1855 , ia membawa orang-orang Inggris ke Eropa untuk menyaksikan Paris Exhibition di Perancis (Cooks Tour of Europe) Kantor Cooks Travel Agent dibuka tahun 1868 di London John Mason Cook, anak Thomas Cook, mulai membantu pada tahun 1865 dalam menyelenggarakan tour ke Eropa dan Amerika

Usaha Perjalanan
Keputusan Dirjen Pariwisata Kep.16/U/II/1988 Usaha Perjalanan adalah usaha yang bersifat komersial yang mengatur, menyediakan, dan menyelenggarakan pelayanan bagi seseorang atau sekelompok orang untuk melakukan perjalanan dengan tujuan utama untuk berwisata Peraturan Pemerintah RI No. 67 Tahun 1996 tentang Penyelenggaraan Kepariwisataan menyatakan bahwa usaha perjalanan tersebut terdiri atas dua jenis usaha pariwisata yaitu: Biro Perjalanan Wisata (BPW) Agen Perjalanan Wisata (APW)

Travel agency

Travel agency is the enterprise who brings together the suppliers of travel services with the buyers, and who offers buyers sound travel counseling on destinations, routing, transportation, accommodations, sightseeing, and other elements of travel. Surat Keputusan Direktur Jenderal Pariwisata No. Kep. 16/U/II/88 Tgl 25 Februari 1988 Agen perjalanan adalah badan usaha yang menyelenggarakan usaha perjalanan yang bertindak sebagai perantara di dalam menjual dan atau mengurus jasa untuk melakukan perjalanan.

Tour operator
Dennis L. Foster (2000) mengungkapkan pengertian biro Perjalanan perjalanan wisata sebagai sebuah perusahaan perjalanan yang menjual rancangan perjalan secara langsung kepada masyarakat dan menjual jasa angkutan (udara, darat dan laut), akomodasi , wisata pelayaran , paket wisata, dan produk-produk lain yang berhubungan dengan perjalanan tersebut. Tour operator (Wholesaler) adalah suatu perusahaan yang usaha kegiatannya merencanakan dan menyelenggarakan perjalanan orang-orang untuk tujuan pariwisata (tours) atas inisiatif dan resiko sendiri dengan tujuan mengambil keuntungan dari penyelenggaraan perjalanan tersebut.

The function of travel agency on the travel industry activities

PRIMARY SUPPLIERS Airline Cruise ship Bus line Hotels Restaurant Resorts, etc.

MIDDLEMEN Travel agency Wholesalers Retail tour operator

SECONDARY SUPPLIERS Musicians, Chauffeurs, Caterers, etc.

Traveler

The functional activities of a travel agency

1. Travel information and itineraries

Travel information is to be required by the people who wish to travel and this information relates : Travel itineraries is given by travel agency as an advice to people on the type of travel itineraries which they should select for their holiday or business travel. People seek travel agency for travel itineraries due to its capability as a travel expert and think about efficiency

The functional activities of a travel agency

2. Ticketing

Transport ticketing

Airline travel (schedule, charter/affinity charter) Ship line travel (passenger, cruise) Rail transport (domestic, international) Bus (coach) transport

Transfer service (intercity transfer, terminal transfer) Touring service

Other ticketing

Sport events Cultural performance Sight seeing, excursion, package tour (product of other travel agencies)

The functional activities of a travel agency

3. Accommodation

Hotel (other types of accommodation) reservation Restaurant booking Theater booking Special events reservation

The functional activities of a travel agency

4. Tours (leisure)

Sight-seeing and excursion

City sight-seeing tour Country side tour Combination between city sight-seeing and country side Intercity sight-seeing transfer

Inclusive tour charter (IT/ITC)

An aircraft charter that carries an inclusive tour. The tour to be provided in connection with charter transport.

The functional activities of a travel agency

4. Tours (leisure)

Package tour

Domestic tour Outbound tour Inbound tour Escorted tour Unescorted tour Group inclusive tour (GIT) Foreign inclusive tour (FIT) Special interest tour Out off the beaten track tour Incentive tour

The functional activities of a travel agency

5. Related travel services

Provide transport on transfer in and out

Terminal to terminal transfer Terminal to hotel V.V. Intercity transfer :

Hotel to hotel Hotel to terminal V.V. Terminal to terminal

Rent a car service (incl. Rent-a-car packages)

Drive-yourself (U-drive service) Chauffeur driven service

The functional activities of a travel agency

5. Related travel services

Money changer
A

travel agent should be appointed as an authorized agent from the travelers checks company, and earned agency-commission from it. A travel agent becomes an agent of a money changers company, and get the profit from the differences of the conversation rate.

The functional activities of a travel agency

5. Related travel services

Insurance
The loss of baggage and personal possession The damage and theft of baggage and personal possession The illness or injury The death Trip cancellation (an excellent way to safeguard clients from cancellation made by transportation companies, accommodation, etc.)

The functional activities of a travel agency

5. Related travel services

Cargo handling
The

overweight of passengers baggage

Accompanied

baggage Unaccompanied baggage

The

special delivery of souvenir cargo

The functional activities of a travel agency

5. Related travel services

Travel document handling

Passport

and exit permit requirements Visa/entry permit/tourist card permitting a traveler to enter, such as :
Visa

application service Visa extension service

Health

certificate and quarantine service

The functional activities of a travel agency

5. Related travel services

Convention services

The travel needs of convention participants :

Meeting and transfer in & out services Providing transport to the destination Providing tour/sight-seeing :

Pre conference tour Official conference tour Post conference tour

The overseas convention arrangements :

Convention registration Travel services related to the need of participants in the destination

The functional activities of a travel agency

5. Related travel services

Guiding and tour conducting Travel agency can provide specialized personnel to be used for making a tour, that is : - tour guide - tour conductor.

The advantages of being travel agent

Involves much traveling all over the world Given VIP treatment wherever you go (large discounts on travel components costs) Enjoy the interest in geography, history, literature, art, culture, etc. Has a chance to brush up the study of foreign languages Collects bonus as addition in salary

The disadvantages of being travel agent

Has a lot of hard works, such as :

Natty-gritty Detailed work to do Able to travel much of the time Complex office works
An error might came the reservation not in order A mistake of only a few minutes might came to miss a connection

The must exacting business :

Requires careful checking and double checking for taking care of accurately and properly Has to wit stand adverse situation caused by circumstances

Kegiatan Biro Perjalanan Umum

Keputusan Menteri Perhubungan No. PM 9/PW 104/Phb-77

Menyusun dan menjual paket wisata luar negeri kepada umum atau atas permintaan Menyelenggarakan dan menjual pelayanan wisata (cruise) Menyusun dan menjual paket wisata dalam negeri kepada umum atau atas permintaan Menyelenggarakan pemandu wisata ( guiding and tour conducting Menyediakan fasilitas sewa mobil untuk wisatawan Menjual karcis (ticket) sarana angkutan dan lain-lain Mengadakan pemnesanan sarana wisata Mengurus dokumen-dokumen perjalanan sesuai dengan peraturan-peraturan yang berlaku.

Kegiatan Agen Perjalanan

Keputusan Menteri Perhubungan No. PM 9/PW 104/Phb-77

Menjual karcis (ticket) sarana angkutan dan lain-lain Mengadakan pemnesanan sarana wisata Mengurus dokumen-dokumen perjalanan sesuai dengan peraturan-peraturan yang berlaku.

CONTOH BAGAN STRUKTUR ORGANISASI BIRO PERJALANAN UMUM

RAPAT UMUM PEMEGANG SAHAM DEWAN KOMISARIS

PIMPINAN

BAGIAN WISATA

BAGIAN PERJALANAN

BAGIAN PEMASARAN

BAG.ADM. & KEUANGAN

SEKSI WISATA KE DLM NEGERI

SEKSI TICKET

SEKSI LITBANG

SEKSI KEUANGAN

UR. WIS. UMUM KE DLM NEGERI UR. WIS. KHUSUS KE DLM NEGERI UR. WIS. INSENTIF KE DLM NEGERI SEKSI WISATA KE LUAR NEGERI

UR. TICKET ANGKUTAN UDARA UR. TICKET ANGKUTAN LAUT UR. TICKET ANGKUTAN DARAT UR. TICKET LAINNYA SEKSI AKOMODASI

UR. LITBANG PRODUK WISATA URA. LITBANG PASARAN WISATA SEKSI PERENCANAAN & PRODUKSI

URUSAN ANGGARAN URUSAN KASIR

SEKSI AKUNTANSI

URUSAN PERENCANAAN URUSAN PRODUKSI

URUSAN AKUNTANSI UMUM UR. ANALISA LAPORAN KEUANGAN SEKSI UMUM & PERSONALIA

UR. WIS. UMUM KE LUAR NEGERI UR. WIS. KHUSUS KE LUAR NEGERI UR. WIS. INSENTIF KE LUAR NEGERI
SEKSI WISATA DI DLM NEGERI

URUSAN HOTEL SEKSI PROMOSI DAN PENJUALAN URUSAN AKOMODASI LAINNYA

URUSAN PERSONALIA

SEKSI DOK. PERJA & PERIZ. KEIMIG.

URUSAN PROMOSI DAN IKLAN

URUSAN RUMAH TANGGA

URUSAN PENJUALAN
UR. WIS. UMUM DI DLM NEGERI URUSAN PASPOR DAN EXIT PERMIT

UR. WIS. KHUSUS DI DALAM NEGERI UR. WIS. INSENTIF DI DALAM NEGERI SEKSI PELAYARAN WISATA

URUSAN VISA DAN KARANTINA UR. KEWARGANEG. & PERIZ. KERJA SEKSI PAKET

UR. PELAYARAN WIS. KE DLM NEGERI URUSAN WISATA TIRTA

UR. PAKET WISATA UMUM UR. PAKET WISATA KHUSUS

BAGAN STRUKTUR ORGANISASI AGEN PERJALANAN YANG MEMILIKI CABANG

RAPAT UMUM PEMEGANG SAHAM

DEWAN KOMISARIS

PIMPINAN

BAGIAN PERJALANAN BAGIAN PEMASARAN

CABANG

BAGIAN WISATA BAGIAN ADM. DAN KEUANGAN

Potential profits of a travel agency

PROFIT = INCOME - EXPENDITURE

Income
Commission or mark-up on tickets and tours Other commissions such as from hotel reservations, travel insurance, car rental, etc. Investment profits, such as bank interest, revaluating of fixed assets, etc.

Expenditure
Personnel expenses Sales and promotion expenses Administrative expenses

Mix ratio
Mix ratio is the ratio percentage of total income (gross profit or total commission & add-on profit) to total gross sales. Total income (gross profit) Mix ratio = -------------------------------- X 100 % Total gross sales Incidentally, 8 % to 8.5 % mix is about average for the industry, though some agencies may run lower if they concentrate on heavy volume of commercial business, while others may operate at 10 % or better if they enjoy high revenue sales. It follows that the larger the mix the greater the income.

Competition on travel agency business

Other travel agencies

The competition is a healthy competition if all the agencies operate on an ethical basis.

Suppliers
Suppliers like airlines, steamship, rail and coach companies, tour operators, sight-seeing firms, hotels, car rental firms solicit and accept business directly from the public.

Organizers and tour directors

Many travel agents oppose local group organizers with the result that the organizer goes directly to a supplier and the revenue is lost to the agency.

Competition on travel agency business

Non-profit organizations These competition may come from :

A club Labor union School organizer Social organizer, etc.

Other competition There are many other non-industry organizations and people competing with travel agents. Such as employees annual leave handled by employer.

Risk of failure on Travel Agency business

Under capitalization Failure to thoroughly investigate an agency prior to purchasing Deficiency in knowledge of travel agency operation Deficiency in knowledge of travel industry in general Unrealistic evaluation of market potential Inefficient manager and/or staff Inexperienced manager and/or staff Too much competition or poor location Poor business climate

Risk of failure on Travel Agency business

Lack of professionalism Failure to have an agency evaluated and investigated by an expert prior to purchasing Failure to listen to, or to heed the advice of the manager. Absentee ownership (loss of control) Inadequate record keeping Excessive extension of credit, thereby seriously restricting the cash flow An egotistical attitude Inability of the owner to properly handle, or motivate staff

The benefits of consider retaining a consultant

Will help eliminate costly errors Will reduce business risk Can advice on a variety of important functions

Location Lease Layout Accounting Filing and efficiency system Advertising and promotional campaigns Budgeting Developing a training program, etc.

The benefits of consider retaining a consultant

Can stop the attitude of Ill do it my way The slightest evidence of a problem can be solved at the time of arising, before it gets out of control His/her practical experience which is gained through exposure to a variety of situations and problems.

Start a new travel agency or buy an existing agency

To start a new travel agency

Has to find and decision a good location Less of capital Has to secure suppliers appointment Has to hire and train personnel Should has a good existing By a very thorough investigation Already operating Has a functioning staff

To buy an existing travel agency

Considerations on buying an agency

Is there an agency for sale within the price range in the general area desired to locate ? Is it for sale at a reasonable and realistic price ? Can it arrange a moderate down payment with attractive payout time ? Does it have a consistent record of steady sales, growth, and earnings ? Does it measure up to the criteria standardized for a good existing travel agency ?

The advantages of buying a travel agency

Already is at an approved location, staff, and principles Immediate earnings commission (if already has clients) Buyer can get benefit from the owner :
Expertise

of the business The community

Possible to buy an agency at a low or bargain price.

The disadvantages of buying a travel agency

Pay too much, because the inaccurate evaluation of the worth of agency The agency may be in default If the owner leaves immediately after the closing of the sale much of the business may diminish The location may be poor The owner may have had a bad reputation May be loss of important commercial account, departure of key staff.

Guidance on pricing a travel agency

To effort arriving at an equitable or realistic price Should be aware of that evaluating a service business is always more complicated than pricing a manufacturer or retailer (service business is intangible and unknown, manufacturer has a realistic assets and inventories) The previous history and prevailing condition records should be utilized as an adding or subtracting consideration Consider factors that could influence on pricing.

Factors that should be taken into consideration on pricing a travel agency

Asset value : the cost of the asset new, the depreciated value,
the replacement, or fair market value. exploited.

The potential : to discern the potential which is right to be The good will (consists of intangible factors) : Eagerness and desire The business climate The evaluating factors
good reputation, convenient location, steady and repeat clientele, competent and efficient staff, attractive offices, high mix, and other factors related

The factors on evaluating the price of a travel agency

Positive factors

Substantial vacation business Long established Consistently good sales High mix Good commercial volume Favorable lease Good location Attractive dcor Quality of furniture and equipment Stable management and staff All conference appointments Good cash flow Owner will remain during transition

The factors on evaluating the price of a travel agency

Negative or minus factors

High turnover staff Too much commissioned sales people An excess of : charter business, student business, ethnic business, fraternal business, group business. Poor cash flow Slow paying commercial accounts High rent Recently established Owner will depart after closing

Establishing a new travel agency

1. Factors to be considered in choosing location

Offers the best potential for growth and profit Type of business Location of travel agency competition and supplier Cater to the carriage trade in a large community Type of sales service Plenty of free parking A ground floor location or an adequate elevator services (for a multi storied building) Good traffic pattern

Easily accessible to the clients Exposed to as many people

The history of the site

Establishing a new travel agency

2. Physical lay out decor

Has a good portion ratio between sales activities area and administrative activities area (depends on the type of its business activities) The reception area is a polite receptionist who may double as the telephone operator General sales counselors should be located near the entrance Separation based on departmentalization activities should be existed clearly Has a folder (brochure) rack display in the reception area Take the advantages on window display possibilities Has a uniform office furniture such as desks, chairs and filing cabinets The flow of the clients should be act in accordance with the office procedure Besides the lay out of counter sales should be considered too the placement of the manager office, accounting office, tour/travel administrative operation office, a supply and mailing office, storage and file space.

The decor of travel agency office should possessed an impression of the client with consideration as hereunder

The decor is to be set in accordance of travel services Has a colorful and glamour impression To perform an attractive, exciting and efficient-looking office Utilizing brochure, poster, air models, etc. as a decor aids material Supplemented by colorful maps (tourist or airlines map)

Furniture, fixtures, and equipment

Bookcases Chairs Copy machine Desks Dictating equipment Filing cabinets Lamps Literature racks Safes and vaults

Shelving Storage cabinets Tables Ticket imprinter (order from ATC) Typewriters Waste paper basket Computer sets with link system Telephone and facsimile Miscellaneous, accessories, etc

Estimated of start-up cost

Fixtures and equipment Advertising and other opening promotional expenses Conference, filing and application fees Decorating and remodeling Incorporation and other organizational expenses Insurance, bond, etc. Legal and other professional fees Printing (letterheads, envelopes, etc.)

Travel agency supplies and forms

Accounting and other office supplies

Subscription to tariffs, manuals, trade journals, etc. Telephone, facsimile, and internet installation Outside signs Other expenses Sub total Add 10 % contingency Total estimated start-up expenses

Annual operating and expense budget

Salary of owner Salary of manager All other salaries and wages Advertising and promotions Conference fees Depreciation Dues and subscription Entertainment Insurance premium, bond Legal and accounting Miscellaneous expenses

Postage

Rent and utilities

Stationery and supplies Taxes Telephone and telegraph Travel expenses Other Sub total Ten percent contingency Total annual operating expenses

Check list for opening a travel agency

Contact conferences for information and applications Order catalogs from travel agency printers Consult with your attorney to decide form of legal structure Complete the worksheet in this book Decide on a name for the agency Locate suitable office space Read lease carefully. Attorney to review before signing Form the corporation Open a bank account Arrange for design of logo Order all letterheads, envelops, business cards, etc. Set up the accounting system Order all supplies from travel agency printers

Order all furniture, office machines and other equipment

Other subscriptions to tariffs, manual, and trade journals

Plan opening promotion, advertising and mail campaign Order installation of telephone, facsimile and internet Hire manager to conform with conference regulations Obtain ATC bond and take out insurance policies as needed Establish contact with tour operators and other suppliers Carefully review and complete conference applications

File for appointments

Setting travel agency office

Considerations
Cost and benefit analysis The needs of the staff The dictates of business efficiency

Travel agency management consists of :

Corporate management office

Building Personnel equipment Merchandising Office work : records, figures and computation, retention of products, internal and external communication

Operation management office

Travel agency form

The function of travel agency form To register the transaction To transfer the information To present the data for controlling To reduce administration error To formulate the end product

Classification of travel agency office form

Internal form
Inter office memo Inter office order Sales department report, etc.

External form
Service order Travel voucher Reservation form Receipt Invoice, etc.

Utilizing form

The important reason of utilizing form

The possibility for repetition The possibility for getting uniformity To be utilized as work instruction The possibility to be implemented for mechanic process

The advantages of utilizing form

To reduce the cost To present the information need To store the perfect and correct information and able to give the information quickly To become an effective control aid (internal and external)

Consideration factors in designing form

Functional considerations

The aim (objective) of the form The information to be filled in The complete identification The logical items in accordance with the flow of steps The utilizing of space The number of copy to be needed Types of printing (letters, inks, duplicating) Types of paper Size of form Cost of printing

Physical considerations

Consideration points in financing proposal

A total description of the proposed venture, including a projection of estimated sales, income, operating expenses and net earnings. Include as many statistics, about the area, buying power, median incomes, and any other commercial information concerns with travel agency business. An estimate of your start-up expenses, including cost of furniture, office equipment and other necessities. List of references which are familiar with the business.

The sources of capital for buying or existing travel agency

Own capital Equity capital Venture capital Bank loans :

Short term loans Long term loans

TRAVEL RETAILING
The role of travel agents

Did similar to that of most other retailers in that an agent does not purchase travel for resale to the customers. Therefore the travel agent does not carry stock of travel products. The two implications for the business of travel distribution :

The cost of setting up in business is comparatively small compared to other retailing business. No obligation to dispose of products that has to be purchased and therefore has less brand loyalty towards a particular product or company than do other retailers.

To provide a convenient location for the purchase of travel. At these locations they act as booking agents or as a source of information and advice on travel services.

Travel agency operation

The essence of travel agency operation on retailing business will be expected to cope with all the activities associated with the booking of travel, which will include :

Advising potential travelers on resorts, carriers, travel companies and travel facilities worldwide. Making reservations for all travel requirements Planning itineraries of all kinds travel needs Accurately computing airline and other fares Issuing travel tickets and vouchers Corresponding by phone call and letter with travel principals and customers Maintaining accurate files on reservations Maintaining and displaying stocks of travel brochures Interceding with principals in the event of customer complaints.

The Negative and Positive view of travel agent

The negative view of travel agent

The remuneration in getting commission on sales A questionable on providers of information (particularly in the area of long-haul travel) Travel agency work still has of a glamour image for young people (lack of basic knowledge on travel agency business) A questionable on the grounds of its impartiality Displaying promotional in their shops not to play an active role on promotion.
Increasing the sales of principals Agency commission able to compensate the expense in setting up sales offices and direct marketing cost.

The positive view of travel agent

Monthly profit and loss account in travel agency

Sales
Less cost of sales

Gross profit Expenditure :

Administration Rent Light and cleaning Insurance Postage, telephone, and facsimile Printing and stationary Advertising and promotion Salaries and wages Bed debt Subscriptions Bank charges/interest on loans

Net profit before tax = gross profit total expenditure

The only means of improving profitability is to increase efficiency by : Achieving higher turnover at the same cost Achieving similar turnover at reduced cost

Total Net profit before tax

The impact of computer on travel retailing

Computer operation can be in isolation or to link with the reservation system of travel principals. Can change the atmosphere of travel retailing. Existing modern means of communication. Travel agency operation will become more efficient. Travel agency will need to become more knowledgeable in marketing and sales skill.

In travel agency operation, computer can manage the handling of :

The requires system of registering availability of transport and accommodation at short notice. Making immediate reservation. Amendments and cancellations on such facilities with a correct manner. Quoting complex fares and conditions of travel. Rapidly processing documents such as tickets, invoices, vouchers and itineraries. Providing accounting and management information.

The future of travel agencies as retailer could be affected by :

The wide net links of using computers not only links between agency and principals. The automated selling by suppliers. Inability of travel agencies to meet increasing costs. Decisions of supplier not to use travel agencies as mediator. Deregulation of the environment.

Tour operator
Most business calling themselves tour operators undertake a distinct function in the tourism industry; they purchase separate elements of transport, accommodation and other services and combine them into a package which they then sell directly or indirectly to consumers.
Carriers Accommodation Services Travel Agents Tour Operators Customers

Integrated services usually consists of :

Transport service (aircraft seats) Accommodation at the destination Transfer between hotel terminal or intercity Excursions or sight-seeing Car hire on the destination Entertainment or performances services.

Cost saving probability in order to increase profit

Chartering of entire aircraft instead of purchasing a block seats on a scheduled flight. Using time series charters, aircraft were leased over longer periods of time rather than for ad hoc journeys. Productivity achieved through high load factors - the number of seats on each aircraft actually sold as a percentage of total capacity. Maximize the utilization of the aircraft during its period of charter.

Other revenues to increase profit besides commission

The revenue as a result of the time lapse occurring between customers paying for their trip and the tour operators obligations to settle their accounts with their principles. The profits achieved through the sake of ancillary service, such as :

Duty free gods sold on board

The package insurance policies The sale of optional excursions Car hire at the destination

The revenue achieved by the imposition of cancellation charges. The profit gets through the judicious buying forward of foreign currency at times where exchange rates are favorable. The profit as result from direct selling instead through travel agent as mediator (avoiding payment of agency commission).

Tour pricing
Total tour components costs per person .

Add mark-up
Selling price Mark-up can be in the calculation of :

.
.

To cover marketing and administrative cost

To cover the agency commission

To cover the desired profit (gross) To cover marketing and administrative cost

Or

To cover the desired profit (gross)

On this matter, agency commission should be calculated separately.

In developing a pricing strategy for package tours, the tour operator must take into account a number of variables which has influences on pricing, such as : types of product, special reduction, a subsidized fare, high/low season price, etc.

Types of operator
Mass market operators. Sell large numbers of inclusive bay air and/or coach. Domestic operators. Those who assemble and sell inclusive tours to a destination within the country in which the tourist reside. Can operate as :
Domestic

tour for domestic people Incoming tour for foreign people

Types of operator

Specialist operators. May range from local travel agents organizing an ad hoc tour for thirty local passengers up to business offering long-distance inclusive tours to exclusive destination.Specialists may be subsidiaries of carries or accommodations, existing to provide a sales outlet for the organizations products. It is convenient to group into : Inclusive tours to particular destination Inclusive tours from specific generating areas Inclusive tours which is using a specific accommodation Inclusive tours which is using specific transport Inclusive tours offers a special interest people

The tour brochure

The brochure becomes the principle means of :

Informing people about the product Persuading people by purveying dreams to purchase it.

The production of the tour brochure represents a major proportion of a tour operators marketing budget. It is essential to see that this enormous expenditure achieves the intended results. The first task of a brochure is to attract the attention of the consumer. To gain attention, operators have developed a house style in which multi colors covers combine with an eye-catching symbol and house name across the top of the brochure to obtain maximum impact.

The brochure at least should contain the following information

The name of the firm responsible for the inclusive tour The means of transport used Full details of destination, itinerary and times of travel The duration of each tour Full description of the location and type of accommodation provided, including meals Whether services or representative are available abroad A clear indication of the price for each tour Exact details of special arrangements Full condition of booking and cancellation Details of any optional or compulsory insurance coverage Details of documentation required for travel to the destinations.

The tour reservation system

The design of the system will depend on : The manual system of reservation The computer system of reservation The selling system of product :
Direct selling Through retail travel agent Through a combination of these two system.

Note : All reservation system is to get a clear, accurate and fast confirmation.

Negotiation with principles

The airline. The negotiation was made in order to earn contract with spell out the conditions of :

The release of unsold The cancellation The settlement Rate or special contract fare Ensure the available capacity.

The hotels. Hotel negotiations to be distinguished into :

Small and specialist tour operator with a free sale agreement Long terms contract, for a big tour operator with a block of room system.

On the negotiations process with hotel industries, tour operator seek to get clear on :

Reservation and registration procedures Accommodation requirements for any representatives or couriers. Handling procedures and fees charged for port rage. Special facilities available or need Language spoken by hotel staff System of settlements and the contract rate System of payment for personal/guests account