1、Lesson Ten Travel Agency Management nTravel Agency and Suppliers nLiabilities of Travel Agency nConferences and AssociationsnCommissions and OverridesnTravel Agency Management n Future Trends Travel Agency and SuppliersnTravel agent is one of the most important members of the travel industry.nIt is
2、the person who brings together the suppliers of travel services with the buyers and offers them something.nA retail travel agent is a commissioned intermediary who serves as a sales outlet for:ncarriers,nhotels and resorts,nentertainment centers,ncar rental companies,nother suppliers,including missi
3、on vt.To place an order for.nTravel agent usually does not own the services he or she sells to travelers.The agent is paid a commission by suppliers for sales of airline tickets,hotel rooms,and so on.Liabilities of Travel Agency nIn general,a travel agency can avoid liability problems by performing
4、precisely the services contracted for with the client.nIt can be held responsible for and cannot be held responsible for a client.nThough an agent cannot be responsible for social conditions crime or riots,for instance the agent does have a responsibility to inform the client about known adverse fac
5、tors of the destinations.n travel agents and suppliers in order to avoid the danger of being sued by a client for problems created by an intermediary through insurance and use of disclaimers.nIt is important for them to review carefully all of the advertising and promotional materials they give to c
6、lients to make certain the wording in such material does not negate their disclaimers.nA travel agent can be fined or suspended for not assuming obligations imposed by the carriers.So the responsibility to the carriers is of particular importance.Conferences and Associations nthree major conferences
7、:nThe Airline Reporting Corporation(ARC),which replaced The Air Traffic Conference(ATC)due to deregulation;nThe International Airline Travel Agency Network(IATAN),composed of U.S.and foreign airlines with international routes;and nThe Cruise Lines International Association(CLIA),composed of major cr
8、uise lines operating throughout the world.nThe two most influential conferences regarding the manner in which a travel agency does business are ARC and IATAN.nCompetition in the travel agency business thus is very intense and may be expected to increase in the future.Although more agencies exist tod
9、ay,the number of bankruptcies has also reached record highs in recent years.nThree professional associations have been established to advance standards in the industry and to serve as spokespeople for the industry:nThe Institute of Certified Travel Agents(ICTA),nThe American Society of Travel Agents
10、(ASTA),nThe Association of Retail Travel Agents(ARTA).Commissions and Overrides nTravel agents receive commissions from suppliers and wholesalers.nA travel agency,for example,may receive a higher percentage commission from a cruise line than from a domestic airline.nRetail travel agents may also obt
11、ain override commissions from wholesalers and other suppliers such as airlines and hotels.n Wholesalers commonly offer a graduated rate schedule for overrides.This means that the percentage override offered to a travel agent increases as the number of bookings produced by the agent increases.nSuppli
12、ers also offer other forms of incentives to travel agents to entice them to sell their services.nTravel agencies are not high-profit businesses.Many small agencies,where the owner and the operator are the same person,may operate on only a slight profit or none at all.Travel Agency ManagementnManager
13、s of successful agencies must carefully watch all areas of the companys operations to generate a profit.nThis requires keeping overhead costs to a minimum,maintaining high productivity per employee,producing high-volume bookings,and maintaining higher average profit margins on the bookings.n Four ar
14、eas of special significance to travel agencies in terms of maximizing profits:1)Making Effective Use of Assistance by Suppliers.2)Selling Other Travel Services.3)Managing the Compensation Mix.4)Automation.Future Trends nIn summary,the travel agency business,which was once thought of as being a relat
15、ively simple one to enter,is becoming increasingly complicated.nIn future it could be affected by a number of trends or problems,including:1)Automated Selling by Suppliers 2)Inability of Travel Agents to Meet Increasing Costs 3)Decisions by Suppliers Not to Use Travel Agencies 4)Deregulation.Deregul
16、ation will lead to open competition,which,in turn,lead to various forms of airline price wars on domestic routes.nThe independent travel agency with no affiliation is fading away,replaced by mega-agencies and franchise agreements.It can survive by joining a cooperative marketing service or a consort
17、ium of agencies that is necessary to negotiate the override enjoyed by the franchised and mega-agency.One possible sales mix looks like this:Air Sales 60%Cruise Sales 15%Hotel Sales 10%Car Rental Sales 10%Other Sales 5%ntravel agencys biggest cost is labor,about 50 percent of sales.nA definite trend
18、 in travel agency operation has been the rapid growth of on-site reservations and ticketing locations.nTo be viable the agency must control credit and costs.nIn the future,the small independent travel agency is likely to be less of a factor in the travel industry,and many will probably join cooperat
19、ives or become a part of a consortium to be able to participate in overrides provided by travel suppliers.nTravel agency owners must review their market position from time to time and emphasize sales that produce the highest profit.Something travel agency offernsound travel counseling on destination
20、s,nrouting,ntransportation,naccommodations,nsightseeing,nother elements of travel.LiabilitynIt is in law an obligation of one party to another,usually to compensate financially.It is a fundamental aspect of tort law,although liability may also arise from duties entered into by special agreement,as i
21、n a contract or in the carrying out of a fiduciary duty.responsible nperforming every task agreed to with the client;nperforming every task in a manner consistent with industry-wide levels of performance;nlooking out for special known interests and requirements of a client.cannot be held responsible
22、 nweather;hotel operation;nfood or liquor;ncriminal or political activity at the destination;nbaggage;nmanagement practices of carriers,nrestaurants,carrier operation;ncar rentals(for instance,overbooking);nenjoyableness of the destination.DisclaimernIt is a legal statement which generally states th
23、at the person/group authoring the disclaimer is not responsible for any mishap in the event of using whatever object or information the disclaimer is attached to.ConferencenA meeting of representatives of a corporate body that constitutes its legislative or governing body.同业公会ARCs services nThey inc
24、lude:nTravel agency accreditation nTicket,and ticket number assignment,distribution and control nTravel transaction reporting and financial settlement nNew distribution technology development and support nOther related travel and industry services IATAN nIts mission is to promote professionalism,adm
25、inister meaningful and impartial business standards,and to provide cost-effective products,services and educational programs that benefit the travel industry.CLIA nIts purpose is to provide a forum where companies engaged in the marketing of the cruise and passenger liner industry in North America c
26、an meet and discuss matters of common interest and develop and agree on policies aimed at promoting the concept of shipboard holidays.Bankruptcy nIt is a legally declared inability or impairment of ability of an individual or organization to pay their creditors.nIt is initiated by the bankrupt indiv
27、idual or organization.ICTA nIt is an international,nonprofit organization that educates and certifies travel industry professionals at all career stages.ASTA nIt is the worlds largest association of travel professionals.nIts mission is to enhance the professionalism and profitability of member agent
28、s through effective representation in industry and government affairs,education and training,and by identifying and meeting the needs of the traveling public.OverridenA commission paid to managerial personnel on sales made by subordinates called also override commission.Overhead nAll costs of runnin
29、g a business other than wages paid to production workers or payments for raw material to be used in production.It includes the cost of renting or leasing a store in which business is transacted,the cost of heating a factory,and similar expenses.Consortium nIt refers to a temporary collorboration to
30、perform a certain task or to provide a specific service or product more efficiently.It is an association of two or more individuals,companies,universities,or governments(or any combination of these entities)with the objective of participating in a common activity or pooling their resources for achieving a common goal.
