CU-BSC.TTM-SEM-III-Travel Agency Management and Tour Operations-Second Draft-converted

B.SC. TRAVEL AND TOURISM MANAGEMENT SEMESTER III TRAVEL AGENCY MANAGEMENT AND TOUR OPERATIONS BTT111

CHANDIGARH UNIVERSITY Institute of Distance and Online Learning Course Development Committee Prof. (Dr.) R.S.Bawa Pro Chancellor, Chandigarh University, Gharuan, Punjab Advisors Prof. (Dr.) Bharat Bhushan, Director – IGNOU Prof. (Dr.) Majulika Srivastava, Director – CIQA, IGNOU Programme Coordinators & Editing Team Master of Business Administration (MBA) Bachelor of Business Administration (BBA) Coordinator – Dr. Rupali Arora Coordinator – Dr. Simran Jewandah Master of Computer Applications (MCA) Bachelor of Computer Applications (BCA) Coordinator – Dr. Raju Kumar Coordinator – Dr. Manisha Malhotra Master of Commerce (M.Com.) Bachelor of Commerce (B.Com.) Coordinator – Dr. Aman Jindal Coordinator – Dr. Minakshi Garg Master of Arts (Psychology) Bachelor of Science (Travel &Tourism Management) Coordinator – Dr. Samerjeet Kaur Coordinator – Dr. Shikha Sharma Master of Arts (English) Bachelor of Arts (General) Coordinator – Dr. Ashita Chadha Coordinator – Ms. Neeraj Gohlan Academic and Administrative Management Prof. (Dr.) R. M. Bhagat Prof. (Dr.) S.S. Sehgal Executive Director – Sciences Registrar Prof. (Dr.) Manaswini Acharya Prof. (Dr.) Gurpreet Singh Executive Director – Liberal Arts Director – IDOL © No part of this publication should be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording and/or otherwise without the prior written permission of the authors and the publisher. SLM SPECIALLY PREPARED FOR CU IDOL STUDENTS Printed and Published by: TeamLease Edtech Limited www.teamleaseedtech.com CONTACT NO:- 01133002345 For: CHANDIGARH UNIVERSITY 2 Institute of Distance and Online Learning CU IDOL SELF LEARNING MATERIAL (SLM)

First Published in 2021 All rights reserved. No Part of this book may be reproduced or transmitted, in any form or by any means, without permission in writing from Chandigarh University. Any person who does any unauthorized act in relation to this book may be liable to criminal prosecution and civil claims for damages. This book is meant for educational and learning purpose. The authors of the book has/have taken all reasonable care to ensure that the contents of the book do not violate any existing copyright or other intellectual property rights of any person in any manner whatsoever. In the event the Authors has/ have been unable to track any source and if any copyright has been inadvertently infringed, please notify the publisher in writing for corrective action. 3 CU IDOL SELF LEARNING MATERIAL (SLM)

CONTENTS Unit 1: Travel Agency ...............................................................................................................5 Unit 2: Travel Agency Structure..............................................................................................31 Unit 3: Travel Agency & Tour Operations ..............................................................................50 Unit 4: Travel Agent ................................................................................................................62 Unit 5: Travel Agency .............................................................................................................74 Unit 6: Functions Of Travel Agency .......................................................................................94 Unit 7: Income Of Travel Agent............................................................................................114 Unit 8: Tour Operator -I.........................................................................................................134 Unit 9: Tour Operator -Ii........................................................................................................147 Unit 10: Tour Operator-Other Functions ...............................................................................171 Unit 11: Setting Up Of Tour Operatior Unit..........................................................................185 4 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT 1: TRAVEL AGENCY Structure 1.0 Learning Objectives 1.1 Introduction 1.2 History 1.3 History of Travel agency-first steamship agent 1.3.1 The first travel agency to organize a tour by train 1.3.2 The History of a Travel Agency – Individual Inclusive Travel 1.3.3 History of Travel Agency Business in India 1.3.4 Growth of Travel Agency: 1.3.5 Importance of travel agency 1.3.6 Travel agents today 1.4 Types of Travel Agency 1.4.1 Retail travel agency 1.4.2 Definitions of retail travel agency 1.4.3 Wholesale travel agency 1.5 Different between wholesale and tour operator 1.6 Summary 1.7 Keywords 1.8 Learning activity 1.9 Unit End Questions 1.10 References. 1.0 LEARNING OBJECTIVES After studying this unit students will be able to: • Describe the evolution of travel agency and tour operation business in India • Describe the changing functions of travel agency and tour operation during the post- independence period in India • Explain the pre- and post-liberalized period business scenario of travel agency and tour operation in India 5 CU IDOL SELF LEARNING MATERIAL (SLM)

• Analyse the issues and challenges of the travel agency and tour operation in the new century 1.1 INTRODUCTION In recent years, the travel agency industry has experienced rapid growth. This burgeoning industry offers a plethora of income and job prospects, as well as full travel solutions for today's travellers. Making such a study on the creation of a travel agency at various stages will enlighten learners to a great extent in terms of acquiring comprehensive ideas and information. As a result, understanding the origins of the travel agency industry around the world is important. We will look at the past of travel agencies and the early stages of the industry in this unit. We'll also go through the historic time, the period of invention, intra- and intercontinental travel, and the Second-Generation Thomas Cook Company, among other topics. Evolution: In today's competitive market, travel organisations are working to promote India's rich tourism heritage by creating coordinated package tours for inbound, outbound, and domestic tourists. In India, the development of modern travel agencies and tour operations is not as old as the thriving travel agency industry in Europe and North America. Since there was no such structured and coordinated type of travel-related services, overseas travel agents took advantage of India's vast potential for inbound tourism. It was Thomas Cook's first attempt to start a package tour to India during Queen Victoria's visit to Kolkata following the end of the Sepoy Mutiny in 1858. The tour's success had a major effect on India's safety and security. Following the improvement of sea route connectivity between India and Europe, a new avenue for clean, convenient, and affordable travel opened up. It was about rekindling ties between British officials' uprooted families in Europe and their Indian counterparts. As a result, the prevalence of travel brought Indians and Europeans together. Mr. Cook, with the help of the Peninsular and Oriental Steamship Company, took the first British group of tourists to India in 1878. The party arrived in Mumbai and took a train to Agra to see the Taj Mahal. The party visited Kashmir Valley on the last leg of their journey. 1.2 HISTORY Cox & Kings was the first travel agency in modern history when it opened its doors in 1758. Bernardo Abreu established the Abreu Agency in Porto in 1840, making it the world's first agency to open its services to the general public. In return for a commission, Thomas Cook, a Baptist preacher who argued that alcohol was to blame for social issues, reached an agreement with the Midland Railway in 1841 to arrange transportation of 500 supporters of his temperance movement from Leicester Campbell Street railway station to a rally in 6 CU IDOL SELF LEARNING MATERIAL (SLM)

Loughborough. Thomas Cook & Son, which later became The Thomas Cook Group, was founded by him. In 2019, it declared bankruptcy and was liquidated. Fig 1.1 History • Dean and Dawson was established in the United Kingdom in 1871, and Thomas Cook bought it in the 1950s. • The Polytechnic Touring Association was founded in the United Kingdom in 1886. • In 1887, Walter T. Brownell founded Brownell Travel, the first travel agency in the United States, and led a group of ten people on a European tour aboard the SS Devonia, which sailed from New York. • Travel agencies used to cater mostly to the middle and upper classes, but as commercial aviation developed, they became more popular. • K. P. Chen established the China Travel Service, the first travel agency in China, in 1923 after being handled badly by a British travel agency. • During World War II, the industry suffered greatly. However, the post-World War II economic growth of mass-market package tours culminated in a proliferation of working-class travel agencies. • Nippon Travel Agency was Japan's first travel agency, opening in 1905. • Intourist was established in 1929 as the Soviet Union's official state travel agency, with the aim of persuading outsiders to visit the country. • People from Western countries used travel agencies to travel behind the Iron Curtain during the Cold War. • Hello World Travel's forerunner became one of Australia's first travel companies in 1951. 7 CU IDOL SELF LEARNING MATERIAL (SLM)

• Henderson Travel Service, established in 1955, was the first black-owned travel company to carry large groups of black tourists to Africa. • In the early 1980s, American Airlines' Sabre division developed eAAsySabre, a direct-to-consumer booking tool for flights, hotels, and vehicles. • With the liberalisation of travel for South Koreans in 1989, Mode Tour became the country's first travel agency. • Hotel Reservations Network, the forerunner to Hotels.com, was created in 1991. Hotels did not pay much in fees at first. • Travel agencies moved online with the advent of the internet, resulting in disintermediation due to cost savings by eliminating layers from the package holiday distribution network. • Travelweb.com was the first online hotel directory when it opened in 1994. • In 1995, Internet Travel Network was the first company to sell an airline ticket over the internet. • In October 1996, Microsoft released Expedia.com, the first major online travel agency, with hundreds of millions of dollars in funding. • At the same time, cheap flights began as a listing service for consolidator flight offers. • Lastminute.com was founded in the United Kingdom in 1998. • European airlines started removing or reducing commissions in 1999, while Singapore Airlines did so in some Asian markets. In the United States, several airlines did the same in 2002, leading to an unsuccessful lawsuit alleging conspiracy among the airlines, which was decided on appeal in 2009. • The introduction of the iPhone and associated smartphone applications in 2007 resulted in a rise in online travel bookings. • Airbnb launched in 2008 as an online platform for spare rooms and apartments. Fig 1.2 8 CU IDOL SELF LEARNING MATERIAL (SLM)

1.3 THE HISTORY OF A TRAVEL AGENCY – FIRST STEAMSHIP AGENT Robert Smart, a Bristol, England native, proclaimed himself the world's first steamship agent in the year 1822. Booking passengers on steamers to various ports in the Bristol Channel and Dublin, Ireland, was his first service. 1.3.1 The first travel agency to organize a tour by train Thomas Cook took a special train from Leicester to Loughborough in 1841. (England). The train ride was 12 miles long. Following the success of the first train tour, Thomas Cook organised a train that carried 570 passengers on a round trip on January 5th of the following year. The train journey costs one shilling per person. This is thought to be the first public train tour that has been promoted. In 1943, he arranged a trip from Leicester, England, to Derby, England, transporting 3000 schoolchildren. It was the biggest community tour of the year. Fig 1.3 Therefore, Cook was the first representative of a train travel agent. Since then, Thomas Cook’s idea has alarmed and his effort to organize a train tour spread across the world. Cook continued to provide a train tour and later expanded his concept to the United States and 9 CU IDOL SELF LEARNING MATERIAL (SLM)

around the world. Eventually, his company grew quickly. Due to his past efforts, until today the company continues to be one of the world’s largest travel providers. He is remembered as the world’s first organized travel agent but also the founder of the travel and tourism business as it is today. 1.3.2 The History of a Travel Agency – Individual Inclusive Travel In the history of travel agency, Thomas Bennett was the first person to specialize in individual inclusive travel. In fact, he was born in 1814 and lay down his last breath in 1898. He is from Oslo, Norway. To visit the British notables, Bennett often organized an individual tour in Norway. Gradually, he established the business as a “Trip Organizer” in 1850. The main aim of the business was to provide individuals tours. The tour includes travel plans, carriages, and a travelling kit. Apart from providing the individual tour, Bennett arranges in advance for the horses and hotel rooms for his customer 1.3.3 History of Travel Agency Business in India Travel agents were not only used to offer travel-related services, but they were often used to promote tourist destinations individually or in groups. International travel companies such as Thomas Cook, American Express, and Cox and King have made significant contributions to the expansion of the travel agency and tour operation industries. Those travel companies brought in a slew of novel concepts. Travel agencies in different countries adopted and implemented the creative business methods in the same way. Given the lack of demand for travel in both domestic and foreign countries during the pre-independence period, the travel trade in India was not considered a viable company. Apart from Thomas Cook's coordinated package tours, there were few Indian entrepreneurs who entered the industry. During the post-independence period, the Indian government took a number of steps to increase tourist traffic to the country. After 1950, it increased inbound tourist traffic to India. The first phase of the Post-Independence Period saw little development in the travel agency industry. Nonetheless, a number of measures have been implemented to increase India's share of international tourist arrivals and revenue receipts. The following diagram depicts the history of the Indian travel agency industry. 10 CU IDOL SELF LEARNING MATERIAL (SLM)

1.3.4 Growth of Travel Agency: Pre-Independence Period Unlike the history of travel agency business in Western Europe and North America, the evolution of modern travel agency and tour service business in India does not have a long history. Inbound tours in India were previously operated by overseas travel agencies such as Cox & Kings and Thomas Cook. In small towns, there was no formal and well-organized travel agency to accommodate international tourists. Thomas Cook and Cox and Kings used to organise 17 world tours and special interest tours for members of the royal family. Package tours to India were frequently organised for British officials, their families, and relatives. They used to go to Agra and Kashmir. Thomas Cook arranged Queen Victoria's visit to Kolkata following the Sepoy Mutiny in 1858. The threat of safety and protection was eliminated from the minds of British citizens during Queen Victoria's visit to India. Travel between India and Europe was made simple, clean, comfortable, and affordable thanks to the connectivity provided by the sea route. In 1878, the Peninsular and Oriental Steamship Company transported a party of British visitors to India. The party arrived in Mumbai before taking a train to Agra to see the Taj Mahal. Finally, the party travelled to Kashmir. Thomas Cook founded the Thomas Cook and Sons International (Ltd) at Mumbai and Kolkata for the inbound operation in 1880, when he conducted this particular tour in India. In 1887, the Eastern Princess Department was created to cater to the travel needs of members of the Indian royal family. The British, French, and other European nations visited the Taj Mahal, Jammu & Kashmir, Shimla, Goa, Ajanta & Ellora, and other hill stations and beach resorts, according to reports. A large number of young Indians went to England to further their education and prepare for civil service exams. Simultaneously, Indian political leaders flew to England to take part in a series of round-table discussions. Thomas Cook began booking train tickets, lodging reservations, and arranging for small cars, mini coaches, horse carts, and animal-driven carts to transport visitors from train stations to guest houses, followed by a sightseeing tour. Thomas Cook, as a leader in running tours in India, faced numerous challenges while conducting the tours. • Lack of adequate roads, bridges, train stations, lodging, money exchangers, and public restrooms • a lack of qualified tour conductors, guides, escorts, and interpreters • a lack of trained staff in guest houses and other eating establishments 11 CU IDOL SELF LEARNING MATERIAL (SLM)

• a lack of qualified tour conductors, guides, escorts, and interpreters In comparison to Europe, India's railway system was severely underdeveloped in terms of integrating with travel agents and tour operators to promote inbound and domestic package tours. The problem has yet to be completely discussed. In a similar situation, airlines had a small involvement in working with travel agents, and there was a lack of airline communication with India. Since airlines were still run within the domestic sky, countries were hesitant to connect airline services outside their borders for two reasons: political unrest and low engine capacity for long-haul flights. While conducting tours in India, Thomas Cook made the following observations. • Travel agents lacked skilled and trained personnel to manage; • they lacked access to technology; and • Travel agents lacked skilled and trained personnel to manage; • Travel agents' business diversification options were small, and • they did not regard advertising, sales promotion, or publicity as methods of growing business volume. The First Indian Travel Agents The first travel agencies in Mumbai were Jeena & Co., Lee & Muirhead India Pvt. Ltd, and Jamnadas & Co. Ltd, which offered inbound and outbound tours. With the support of Jeena and Co., Thomas Cook and American Express used to run the inbound tour. With the establishment of Jeena & Company in 1920 to cater to domestic travel needs, Mr. J. N Katgara became India's first travel agent. Mr. Katgara took advantage of Mumbai's business opportunities and started a freight and courier business. Following that, he focused on ticketing, hotel reservations, package tours, and transportation arrangements, among other things. During the post-independence era, there were numerous changes in the travel industry. Post-Independence Period Some activities during the post-independence period provided opportunities for travel agents to broaden their services. Sir John Sargent's report from 1945 on the creation of modes of transportation from the nearest railway station, residential accommodation, travel brochures and guidebooks, provision of approved guides, and other events is one such example. In 1949, the Tourist Traffic Branch was established to work with travel agencies and tour operators in India and abroad to promote domestic and international tourism. 12 CU IDOL SELF LEARNING MATERIAL (SLM)

The branch also formed coordination for the organisation of 19 tourism conferences as well as coordination with railways. The Central Government's initiatives for tourism promotion included the establishment of tourist bureaus in states, the construction of tourist centres, and the training of guides. Overseas and Regional Tourism Offices Two overseas tourism offices, in London and New York, as well as Regional Tourism Offices in Delhi, Mumbai, Kolkata, and Chennai, have been created. These offices were in charge of coordinating and controlling different aspects of the travel industry. Later, 18 overseas tourism promotion offices were aggressive in promoting India's tourism attractions. In promotional brochures, foreign tour operators included India's selected tourism destinations such as Agra, Kashmir, Ajanta and Ellora, Varanasi, and others. Simultaneously, India's overseas tourism promotional offices maintained constant contact with international tour operators to encourage them to engage in India's familiarisation tour programme. The familiarisation tour to many tourist attractions was hosted by Air India. The printing of brochures with colourful images by the Union Ministry of Tourism was a significant step toward improving the image of India among international tourists. Creation of TAAI In 1951 The Travel Agents Association of India (TAAI) was established in 1951 by a group of twelve leading travel agents. The primary goal was to • protect the interests of those working in the sector, • encourage orderly growth and development, and • protect the rights of the general public. TAAI is India's largest travel association and is widely regarded as the voice of the country's travel and tourism industry. There are over 1800 members who are Involved, Allied, or Associate. IATA-accredited travel agencies, tour operators, transportation companies, airlines and general sales agencies, hotels and tour operators, and educational and training institutions are among the participants. Merger in Indian Travel Agency Business For Indian tourists, Jeena and Company arranged group tours in India and abroad. In 1950, it received the first party of international tourists. However, since its inception in 1961, the 13 CU IDOL SELF LEARNING MATERIAL (SLM)

Company and two other Indian travel agencies have been combined under the name Travel Corporation of India Ltd. (TCI). At the same time, Thomas Cook and Sons and The American Express Company treated the majority of international visitors. Student International Travel Agents (SITA), Thomas Cook India Ltd., American Express, Cox and King, Ind Travel, Travel House, and Stic Travels all joined the travel agency and tour service market in India about the same time. Thomas Cook India (Ltd.) was founded in 1978 under the Companies Act 1956, in accordance with the Foreign Exchange Regulation Act (FERA) 1973, as a result of a change in foreign exchange laws. In 1952, India hosted the Asian Games, which brought a large amount of inbound traffic to the country. Between 1951 and 1961, the majority of travel companies dealt with airline tickets and inbound operations. Some travel agencies established branch offices and headquarters in Delhi, Agra, and Jaipur, which are known as India's Golden Triangle. Travel companies, in particular, were relying on the circuit's ticketing industry and inbound tours. Travel agencies used to struggle with a lack of vehicles for sightseeing tours. Travel agents had no choice but to extend the time it took to confirm hotel reservations, transportation, train tickets, guide services, and other ground arrangements. In India today, there are over a thousand travel agencies and tour operators. The Jha Committee's report on the Ad-hoc Committee on Tourism, which was submitted in 1963, proposed that the public sector play a role in tourism promotion. In 1965, the India Tourism Transport Undertaking was created. In 1966, it merged with two other government-owned tourism public-sector undertakings to form India Tourism Development Corporation (ITDC). ITDC took several measures to ensure that luxury transportation was available at key locations. The ITDC hotel properties arose in response to the demand of international visitors for international standard rooms, services, and amenities comparable to those found in international star hotels. Furthermore, the Overseas Tourist Promotion Offices promoted India extensively to tour operators and travel agents in Europe in 1968 and the United States in 1971. The Department of Tourism, on the other hand, co-sponsored and coordinated the overseas tourism promotion, with Air India's active participation and support. The number of tourists arriving increased from 17, 000 in 1950 to 188,820 in 1968. There has been a steady rise in the number of tourists visiting India since 1965, with international tourists arriving at 13.29,950 in 1990. Post Liberalized Period The Ministry of Tourism's plan was to make tourism a national priority and improve India's attractiveness as a tourist destination. It also took steps to improve and broaden product growth, build world-class infrastructure, and implement successful marketing strategies and 14 CU IDOL SELF LEARNING MATERIAL (SLM)

plans. As a result, both of these advances aided the growth of travel agents and tour operators. Changing Roles of Travel Agency Business Travel agents used to be the travel intermediaries who made travel, stay, and movement arrangements for which they were paid a base and override fee. Pay-for-performance and override commissions are two common ways for large travel agencies to make a profit that is sustainable. Travel agencies have concentrated on travel insurance, hotel bookings, and foreign exchange in addition to ticketing. Package tours also remained the main source of revenue, with tour operators focusing more on selling vacation packages. In India, the travel industry is divided into leisure and business travel for inbound and domestic travel, as well as employment/migrant travel. India’s Outbound and Inbound Growth The outbound market is booming as a result of low foreign airfares, rising customer disposable incomes, and a growing desire to fly abroad. In India, the GIT and reward travel markets are expanding. As outsourcing cities like Bangalore and Hyderabad attract more business travellers, India expects over 10 million international tourists. New Delhi and Mumbai's busiest airports have been modernised to handle more flights and passengers. These are the problems that travel agents must prepare for. • Ticket sales profits are decreasing, • making it more difficult to retain profitability. • Consumers in the middle and upper classes have more bargaining power. Role of TAAI AND IATO The Travel Agents Association of India (TAAI) brings about changes in the travel industry in the region. TAAI has been focusing on providing the highest level of service, establishing confidence and reputation in the marketplace, and using technological expertise. The Indian Association of Tour Operators (IATO) was established in New Delhi in 1982. It has more than 4000 participating, associated, and affiliate members. It keeps in touch with other tourism organisations in the United States, Nepal, and Indonesia. Travel agents and tour operators in India often complain about clogged and creaking airports, ageing air traffic control systems, and a persistent hotel shortage, all of which are compounded by sluggish and inefficient bureaucracy. 1.3.5 Importance of travel agency Travel agency plays an important role in the travel sector business. Some most important features and importance of the travel agency business are following as:- An important link between the clients and principal suppliers. 15 CU IDOL SELF LEARNING MATERIAL (SLM)

• Image-Builder. • Ensures rapid travel services. • Provider of authentic and reliable travel information. • A social a continuous process. • Establishes a good relationship with clients and vendors. • These are the most important features of the Travel Agency Business 1.3.6 Travel agents today This is how well travel agents and the companies with which they operate are doing now. Despite the fact that a new do-it-yourself travel app is released every other day, they know that their services are still in demand. So, what is a travel agent's unique selling proposition? Is it all about eliminating the unavoidable human error that comes with do-it-yourself reservations? Personal service has always been a point of differentiation for travel agencies. They work with you, the traveller, to design a trip that is specific to your desires and needs. To bring this kit to you, they use their current personal relationships with suppliers such as hotels and airlines. “If [travellers] book themselves,” says Anne Scully of McCabe World Travel, “they're just a credit card number.” She says, \"I make it a point to know the general manager of the hotel where they may be staying.\" “I normally contact the General Manager the night before a client arrives to see if they can be updated. If they book with a good agent, they will be recognised when they arrive.” Booking a room through a website like Airbnb, on the other hand, can be a more personalised experience. Travellers communicate directly with the room's owner, who always lives in the same house as them and serves as a host throughout their stay. This brings up a whole new set of possible problems and limitations, but the personal service remains. 1.4 TYPES OF TRAVEL AGENCY Travel agencies are basically categorized into two types-: • Retail Travel Agency • Wholesale Travel Agency. 16 CU IDOL SELF LEARNING MATERIAL (SLM)

1.4.1 Retail travel agency A retail travel agency sells tourist’s products directly to the public on the behalf of the products suppliers and in return get commissions. Some package tour is sold in two ways i.e., on a commission basis and mark up the price. When a travel agency sells a tour on the marked-up price it means that first, it markup the cost of the tour and then sell it at a higher rate. The markup price is the difference between retail price and wholesale cost fares and rates, make reservations, arrange travel tickets and accommodation, arrange travel insurance, foreign currency, documents and accept payments.’ The main source of revenue for a retail travel agency is the commission received from the vendors. However, the rate of commission differs from organization to organization and from travel component. 1.4.2 Definitions of retail travel agency A retail travel agency, according to the Airlines Reporting Corporation (ARC), is “a company that quotes fares, prices, makes reservations, arranges travel tickets and accommodations, arranges travel insurance, foreign currency, records, and accepts payments.” “Retail travel agency industry consists of activities involved in selling tourism products/services directly to visitors and performs regular functions such as issuing air tickets, making lodging and transportation reservations, offering specialist services, and receiving and making payments,” according to SARC (1967). The commissions earned from vendors are the primary source of revenue for the travel agency. However, the commission rate varies from one company to the next, and from one travel portion to the next. The fee accounts for approximately 95% of a travel agency's income, with the remaining 5% coming from advisory services and other sources. 1.4.3 Wholesale travel agency These companies specialise in arranging package tours that are sold to customers/tourists via a retail travel agency's network or directly to potential customers (if wholesale travel agency has a retail division). A wholesale travel agency buys tourist products in bulk and puts together tour packages. A wholesale travel agency can purchase travel components in bulk from a vendor and resell them to other travel businesses. Box vacations are put together by wholesale travel agencies and sold to clients by retail travel agencies. A traditional package tour involves air fares, lodging, and possibly other facilities such as entertainment, sightseeing, and sports activities, among others. These packages are known as \"package tours.\" While most of these tours provide escort services, a few are offered to people who choose to travel separately. 17 CU IDOL SELF LEARNING MATERIAL (SLM)

Now comes the issue of how a wholesale travel agency makes money. Since a wholesaler may agree to purchase a large number of seats from a specific airline or reserve a large number of rooms at a particular hotel or resort, wholesalers typically receive volume discounts from the principal suppliers. In practise, a Tour Operator is a wholesaler who offers package vacations/tours. However, there is a distinction between a wholesaler and a tour operator from a professional standpoint. A Consolidator is a wholesaler who sells tourists' goods individually rather than as part of a package tour. Typically, these are focused on specific product components such as air fares, lodging, conferences, and conventions. Wholesale travel agencies put together package vacations and market them to clients through retail travel agencies. A traditional package tour involves airfare, hotel accommodations, and sometimes other amenities such as entertainment, sightseeing, and sports activities. Since most of these tours provide the services of escorts, they are referred to as \"kit tours,\" but a few are offered to individuals who wish to fly. 1.5 DIFFERENCE BETWEEN WHOLESALE TRAVEL AGENCIES AND TOUR OPERATORS The wholesale travel agencies may offer or operate the package tours or may specialize in developing tours for inbound as well as outbound travellers. They are often referred to as tour operators, but these two essentially different: • Wholesale travel agency does not sell directly to the public, while tour operators do sell directly to clients. • A wholesale travel agency usually combines, assembles and contacts for existing travel services to formulate a new travel product she has his own one or more components of travel product i.e., ‘inclusive tours.’ • Wholesale travel agencies are less inclined than tour operators to perform ground services i.e. handling agency or ground operators. • A wholesale travel agency may deal with one component of travel product while a tour operator offers a variety of tour programmes. The size of the business is large in the case of tour operators in comparison to a wholesale travel agency. Travel Agency means the office of travel agent or organisation set up for the purpose operating business. Business of travel goods and services are gathered and coordinated for the smooth conduct of travel agency business. Travel agent may be an individual organisation or corporation which is commonly known as a travel agency. Travel agency is one of the most important organizations in the tourism private sector which plays a significant and crucial role in the entire process of developing and promoting tourism in the country or at a destination. It is a travel agency which packages and 18 CU IDOL SELF LEARNING MATERIAL (SLM)

processes all the attractions, accesses, amenities and ancillary services of a country and present them to tourists. That’s why travel agency is known as ‘image builder ‘of a country. A prospective travel agency is one which makes arrangements of travel tickets (air, rail, road, and sea); travel documents (passports, visa and other documents required to travel); accommodation, entertainment, and other travel-related services from principle suppliers. It may also secure travel insurance, foreign currency for traveling people. The first Travel Agency of the world was established by Thomas Cook in 1845 in England. The use of the term travel trade dates back from the early years of the 19th century, but this should not obscure the fact that what we today describe as travel trade (travel agency and tour operation business) was taking place much earlier in history. Fig 1.4 A Thomas Cook travel agency in the United Kingdom, which ceased operating in 2019. Throughout history, there was travel middleman who helped the merchants traveling for trade and others who traveled for religious purposes. In 1841 a fortunate day comes in the history of travel trade when Thomas Cook, as secretary of South Midland Temperance Association, organized a trip by a train for 570 members for his association to the distance of 22 miles. He bought railway tickets in bulk to sell them to people. The experiment was successful, and everybody was exultant. Mr. Cook had done his job on a no-profit basis. But incidentally, it gave him a new idea and turned it into a tour business. Four years later in 1845, he set up a ‘World’s First Travel Agency ‘to organize excursions. Due to this innovative approach, Mr. Thomas Cook is known as the Father of Travel Agency 19 CU IDOL SELF LEARNING MATERIAL (SLM)

Business. He co-ordinated railway and steamship excursions throughout England, Scotland and Europe. However, the railways only gave him a 5% commission which was not enough to meet his overheads, so he decided to diversify this business into tour operation. In 1855 Mr. Cook started operating package tours. He conducted the world’s first international tour from England to Paris. Wholesale travel agencies are less inclined than tour operators to perform ground services i.e. handling agency or ground operators. A wholesale travel agency may deal with one component of travel product while a tour operator offers a variety of tour programmes. The size of the business is large in the case of tour operators in comparison to a wholesale travel agency. Features and Importance of the Travel Agency Travel agency plays an important role in the travel sector business. Some most important features and importance of the travel agency business are following as:- An important link between the clients and principal suppliers. • Image-Builder. • Ensures rapid travel services. • Provider of authentic and reliable travel information. • A social a continuous process. • Establishes a good relationship with clients and vendors. These are the most important features of the Travel Agency Business. Functions and Services of Travel Agency Functions of Travel Agency A Travel Agency has performed numerous functions in today’s world. Therefore, to understand the functions of a travel agency, it will be wise if we first understand who is a travel agency. who is a travel agency? , the roles of the travel agency and what are the functions of the travel agency? • travel agencies provide travel-related information 20 • travel agencies organize travel plan • travel agency act as a link with travel suppliers • tour costing • ticketing CU IDOL SELF LEARNING MATERIAL (SLM)

• settlement of accounts • travel agency organized business tour • travel agency handles reservation Today, Travel Agencies have been recognized as a vital component of travel and tourism and have become an integral part of the travel and tourism industry at globally. They account for more than 90% of international and 70% of domestic tourist traffic Further, more than 60% of all travel agency revenues are derived from business travel. Most travel agencies sell both commercial and leisure travel but there are many travel agencies that only specialized in one sector or the other. The operation of each travel agency is based on the scope of its activities and organizational size. Here we discuss the functions of a large-scale travel agency that performs all types of activities such as Retail travel agency, wholesaling and tour operations, etc. The types of travel agency : • Retail Travel Agency • Wholesale Travel Agency • Full-Service Agency • Commercial Agency • Implant Agency • Special Interest Travel Agency • Online Travel Agents (OTA) The contribution of the travel agency in tourism industry Who is a travel agency? A travel agency is a middleman acting on behalf of the client. One of the main functions of the travel agency is to make an arrangement with suppliers of travel. The suppliers can be airlines, hotels, railways, etc. Thus, the travel agents sell the service products to the client and get commissioned from the suppliers of travel. A travel agency can be an individual, business or company. They operate as intermediaries in selling and promoting various travel-related services. For example, accommodation, airlines, railways, road transport, cruises, etc. They earn a commission from selling services to their customers. The travel agent serves as intermediaries between the service suppliers and customers. They sell the product to the customers. Sometimes the travel agent market supplier’s goods and 21 CU IDOL SELF LEARNING MATERIAL (SLM)

services such as various types of hotels, transportation, operators, airlines, railways, cruise operators, etc. Thus, the travel agent plays a significant role in developing and promoting travel sales. They placed all the components of the tourism goods together and sell them to visitors. The roles of the travel agency: The roles of the travel agency are vital in the travel industry. They help to promote and developed travel sales. The travel agency put together different services of tourism products and sell them to the clients. The travel agent also acts as a broker between the client and the suppliers. They bring together the buyers and sellers of tourism services. The service providers include hotels, car rentals, tour companies, etc. Therefore, the travel agent must be aware of the flight schedule, flight route, currency, tourists’ places, etc. They are like a retail store that serves all the travel requirements of the client. Thus the travel agent has not only served the client but also gives business to various service providers. In short, they are travel specialists who save the client time and money. What are the functions of the travel agency? Since the travel agent is a middleman between the client and the services suppliers, they play major functions in the development of the tourism industry. The travel agency performs several tasks such as providing information about travel. This job is one most significant and fundamental tasks. The travel agency must know the tourist’s destinations, distance from the airports/railways station, etc. He should also know the different categories of hotels and the services provided by them. The staff should be good in the local language, English and foreign languages when they deal with foreign countries. The functions of the travel agency are: Travel agency provide travel-related information: To provide travel information is one of the basic functions of the travel agent. The agent should have details knowledge of tourist places, flight schedule, hotel discount, and must be aware of the services provided by the suppliers. Therefore, travel agents must have knowledge of travel-related information. The staff working in the travel agent should be polite and fluent in various languages. If the agent is dealing with a foreign client they should be able to speak a foreign language, with local clients they should be able to communicate with the local language, vice versa. 22 CU IDOL SELF LEARNING MATERIAL (SLM)

Travel agency organize travel plan After the travel agent receives the travel preferences from the client, the next function of the agent is to prepare the travel plan. Therefore, the travel agent should collect the date of travel, duration, places to visit, hotels, mode of transport, etc. After taking all the required travel details, the agent should prepare the travel as per the requirement of the client. A travel plan is a sequential program that defines the starting points, places, hotels, food, mode of transport and other appropriate travel information. Travel agency act as a link with travel suppliers The travel agent maintains a close link with the travel suppliers. The travel suppliers include airlines, railways, hotels, and other related travel suppliers. Thus, the agent contacts the suppliers before selling the services to the client; they negotiate for the best price on behalf of the clients. Once the negotiation is done, the travel agent sells the service to the client on behalf of the service providers. The agent received the commissioned from the suppliers; the commission percent usually ranges from 5 to 20 percent. Tour costing After the travel plan is prepared and the negotiation with the suppliers for the price is done, the next work of travel agent is to do tour costing. However, tour costing differs from the services opted by travellers. The price of the tour is charged based on per person. Ticketing It is one of the most common functions of travel agents. The travel agency has two sub- department for ticketing. One for domestic ticketing and global ticketing. The staff at the ticketing department should be aware of the scheduled flights of various airlines. Therefore, the ticketing staff should know the airfare, special fares, airline codes, airline class, cancellation procedure, and other ticketing-related services. In addition, the staff must have up-to-date details of the airlines and should know the computer reservation system (CSR). Staff should also be familiar with different global distribution systems such as Amadeus, Galileo, and sabre. Settlement of accounts The settlement is made with the tourism suppliers for the services they have bought on behalf of the client. The travel agent staff working in the accounting department must be familiar with currency, exchange regulations, etc. 23 CU IDOL SELF LEARNING MATERIAL (SLM)

Travel agency organized business tour One of the major works of travel agencies which are in demand is handling business tour. Business travellers might be travel to a place for certain reasons for their work. For example, attending a business meeting, conferences, selling products. Thus, the travel agent must know the requirements of the business travellers and the reason for the travels. The main function of a travel agent for a business tour is to arrange the venues for meetings, exhibitions, hotels, sightseeing, and other related services to business. Travel agency handles reservation After getting all the travel details and confirmation from the client, the next work is to book airline seats, hotels, transport, etc. for the client. Therefore, while booking the seat the travel agent must be familiar with the codes of airlines and hotels. After the initial payment is made and booking is confirmed, the tickets, travel plan, travel vouchers should be handed over to the client. Therefore, due to the various functions of travel agencies, it eases travel. People travel for various reasons. Thus, the reasons and motivations for travel differ from every traveller. The types of travel agency Retail Travel Agency: They sell various travel-related services directly to their customers. They act on behalf of the main service provider/suppliers. Such as hotels, airlines, cruises, railways, coach operators, etc. They receive a commission from the service and may add mark-up in return. Thus, the travel agency earns its income from both the suppliers and the mark-up. Wholesale Travel Agency: They plan, organize, and sell package tours through a travel agency or directly to the customers. Some travel agencies are both retail and wholesale. For e.g., Thomas Cook. They purchase the product from the main providers and sell them directly to the retail travel agency or customers. Therefore, the wholesale travel agency act as a middle man between the main providers and the retail distributors. Full-Service Agency They organize and manage all kinds of recreation tours, free individual travel (FITs), group individual travel (GITs), corporate travel. 24 CU IDOL SELF LEARNING MATERIAL (SLM)

They organize this kind of tour for inbound and domestic travellers. This type of travel agency operates on various work, such as the recreation, inbound, outbound, trade fair, accounts and so on. Commercial Agency They handle corporate travel needs. So, such agencies are found in business hubs and only serve business travel. Therefore, walk-in or individual travel are not served by these agencies. The qualified staff look at the airline, hotel, vehicle, paperwork, etc. Implant Agency It is a branch office of a full-fledged travel agency. They work on the premises of a corporate office. It handles all the travel needs of the corporate office. Special Interest Travel Agency They are specialized in establishing special interest groups’ tour programs. Such as adventure, wildlife, religion, etc. Online Travel Agents (OTA) They are the latest trend for travel agents. For e.g., makemytrip.com is known as online travel agents (OTAs) or e-retailers. Therefore, these web portals enable consumers to obtain data and make the booking online. The contribution of the travel agency in tourism industry After the travel agency came into the picture in the industry, there is a growth in the sale of airline seats. Most of the travellers booked airline tickets through a travel agency. Therefore, we can see there is a 58% increase in airlines travels in the year 2018 as compared to 2000. Thus, a travel agent serves as a link between the principal travel suppliers and the client. Therefore, the travel agent negotiates for the best price with the travel suppliers on behalf of the client. The travel agent put together all the tourism services such as hotels, transport, etc. and sell it to the client. They collect the travel preferences of the client and make bookings accordingly. 1.6 SUMMARY • Thomas Bennett established the business as a “Trip Organizer” in 1850 25 CU IDOL SELF LEARNING MATERIAL (SLM)

• A travel agency receives appx. 95% of their revenue from the commission, and the remaining 5% from consultancy services and others. • They also leverage their existing personal relationships with suppliers, like hotels and airlines, to deliver this package to us. • Booking a room through a platform like Airbnb can be an even more personalised experience. 1.7 KEYWORDS • ARC—Airline reporting corporation • Trip organizer- who was the first tour operator. • Ota- Online Travel Agents • CSR-computer reservation system. 1.8 LEARNING ACTIVITY 1. Prepare a report on travel in Maharaja Express a train run with Approval of Tourism ministry ___________________________________________________________________________ ____________________________________________________________________ 1.9 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. Explain retail travel agency? 2. Describe wholesale travel agency? 3. Differentiate between wholesale and tour operators? 4. What is Ticketing? 5. Write short notes on: (a) Tour Packaging and Costing (b) Reservation (c) Travel Insurance (d) Currency Services 6. What is Retail Travel Agency? 7. Write about Thomas Bennett shortly 8. Describe the Travel agency Importance. 9. Describe different definition views of Retail Travel Agency. 26 CU IDOL SELF LEARNING MATERIAL (SLM)

10. What are the functions of the travel agency? Long Questions 1. Describe the history of travel agency? 2. what are the types of travel agency? Describe them in detail. 3. Write notes on the contribution of the travel agency in tourism industry. 4. Write five lines on the growth and development of the travel agency in the pre- Independence period. 5. Write five lines on the major issues of travel agency business in the pre- Independence period. B. Multiple choice questions: 1. ------- formed the first travel agency in china. a. dongle b. k.p.chen c. huangsuang d. None of these 2. In 1878, ______brought the first British Group of tourists to India by taking support of the Peninsular and Oriental Steamship Company. a. Mr. Cook b. dongle c. k.p.chen d. huangsuang 3. In, ________Nippon Travel Agency became the first travel agency in Japan. a. 1905 b. 1906 c. 1907 d. 1908 4. ------- price is the difference between retail and wholesale cost. 27 CU IDOL SELF LEARNING MATERIAL (SLM)

a. cash b. markdown c. markup. d. None of these 5. In 2007, the launch of________________ increased travel bookings made online. a. iPhone apps b. Desktop apps c. Airbnb d. Lastminute.com 6. In the first public train tour how many passengers were carried out? a. 560 b. 570 c. 490 d. 890 7. Who was the first person to specialize in individual inclusive travel? a. Thomas cook b. Thomas Bennett c. K.P.Chen d. Dawson 8. __________________ agency does not sell directly to the public a. Wholesale travel b. Retail Travel c. Tour operators d. business travel 9. Travel agency is also known as ___________of a country. 28 a. image builder b. image shadow c. image tree CU IDOL SELF LEARNING MATERIAL (SLM)

d. image 10. GIT stands for a. Group Individual Travel b. Great Individua Travel c. Group initiative Travel d. Group Inclusive Travel 11. ___________Travel agency is specialized in establishing adventure and wildlife. a. Commercial b. Implant c. Special Interest d. Wholesale 12. ___________Travel agency act as a middleman between the main providers and the retail distributors. a. Wholesale b. Commercial c. Implant d. Special Interest 13. Who was the founder of inclusive tour a. Thomas cook b. Dennis c. Wright brothers d. None of these 14. ------------ tourism involves people travel within the country 29 a. domestic tourism b. international tourism CU IDOL SELF LEARNING MATERIAL (SLM)

c. inbound tourism d. outbound tourism Answer 1- b, 2-a, 3-a,4-c,5-a,6-b,7-b,8-a, 9-a,10-a,11-c, 12-a,13-a,14-a 1.10 REFERENCES Reference Books • Travel Agency and Tour Operation, Concepts and Principles – J.M.S. Negi. • Travel Agency Management - Mohinder Chand. • Professional Travel Agency Management – Chunk, James, Dexter &Boberg • The Business of Travel Agency Operations and Management– D.L. Foster 30 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT 2: TRAVEL AGENCY STRUCTURE Structure 2.0 Learning Objective 2.1 Introduction 2.2 Present status of travel agency 2.2.1 Stages and timescales in the development of holidays 2.2.2 Indian Tourism's Current Situation: 2.3 Organisational structure 2.3.1 Organization structure of travel agency 2.3.2 Organisation structure of large /standard travel agency 2.3.3 Organisation structure of small-scale agency 2.3.4 Advantages and disadvantages of functional organizational structure adopted from draft (2003: 104) and are presented in more detail below: 2.4 Summary 2.5 Keywords 2.6 Learning Activity 2.7 Unit End questions 2.8 References 2.0 LEARNING OBJECTIVES After studying this unit, students will be able to • Explain the current status in travel agency • Identify the concept of organisational structure • Define the working of Travel Agency • Analyse the concept of Travel Agencies structure • Recognise the Topic of Travel agency. 2.1 INTRODUCTION A travel agency may be part of a chain of stores or a standalone operation. Larger agencies' work is often split into various sections, such as counter service, business travel, and foreign exchange. In smaller businesses, each employee would be responsible for certain aspects of the agency's operations. Some organisations have set limits on what they can do. 31 CU IDOL SELF LEARNING MATERIAL (SLM)

2.2 PRESENT STATUS OF TRAVEL AGENCY The tourism industry is one of the fastest growing sectors in the UK, and it has been one of the most important economic diversions for the development of various countries. According to current statistics, the tourism sector in the United Kingdom is growing at a rate of 4%, which is higher than other sectors. Several recent and emerging innovations and trends in the tourism industry include: • People's monthly disposable income is rising: In recent years, people have begun to earn more and spend more, expanding the reach and opportunities of various tourism-related industries. Tour operators in London usually use a variety of strategies to entice tourists to spend their vacations in London by visiting various beautiful locations. Both tour operators and the general public benefit from this scheme because they get more benefits from the tourists. • Ecommerce adoption: Various tour operators in London have spread their business across different geographical areas by implementing an ecommerce strategy. They can now draw tourists more easily using this technology by offering various information about packages, booking tickets, or finding different suitable packages online. The introduction of ecommerce technology has resulted in a significant increase in the number of domestic and international visitors visiting the United Kingdom. • Globalization's Effect: In recent years, the number of tourists has increased as a result of globalization. As a result of globalization, more visitors visit the United Kingdom for business or pleasure. According to current figures, the number of visitors has increased from 674 million to 797 million in the last five years, which will rise to 940 million in the next five years (Ap and Wong, 2011). • Demographic shift: Because of the shift in demographics, the tour and travel industries will provide more value to consumers. Different tour operators create tour packages in such a way that they can appeal to consumers from various demographics. • Conducting effective consumer and target customer research assists various tour operators in identifying the needs and expectations of target customers by enticing them with appealing packages tailored to their abilities. For example, they tailor tour packages to meet the needs of both high- and low-income individuals. 32 CU IDOL SELF LEARNING MATERIAL (SLM)

• Greater emphasis on customer satisfaction: According to Balogluand Mangaloglu (2011), putting more emphasis on customer satisfaction by knowing and fulfilling their needs, as well as offering services and charging prices based on them, makes them attract more customers. Focusing on customer satisfaction allows London tour operators to create tour packages that are tailored to the needs of their customers, resulting in great success. • Providing more personalized vacation packages: Recently, tour operators have begun to provide more customized vacation packages to consumers, assisting them in selecting their preferred tour packages based on their preferences for location and budget. • Effective marketing: Tourism marketing has become increasingly important in recent years, as it raises awareness of tourism in London and educates people about the services provided by tour operators. • Government and other organizations’ roles in tourism: The government supports the tourism industry because it boosts the economy of the country. Several trade organizations, such as the Federation of Tour Operators, the Travel Association, UK inbound, and the UK Civil Aviation Authority, have a significant influence on tourism in London. 2.2.1 Stages and timescales in the development of holidays It is critical to have an accurate emphasis on the target customers when designing a successful tour package. Air tours must assess their tour package by involving location study, research-related tasks, identifying consumer needs, and negotiating with service providers in order to create an appealing tour package (Batsakis al.2014). It will take one year to create a tour from London to France. The following are some of the most important planning activities: • Thorough analysis of the destinations: In this case, the destination is Paris, France, which must be examined in terms of cost-related variables, landscapes, well-known locations, restaurants, and various places. Air tours can take nearly three and a half months to analyze this aspect. • Research: This entails identifying the various facilities that are accessible to tourists in that location. Study is one of the planning tasks because it is impossible to sell anything to 33 CU IDOL SELF LEARNING MATERIAL (SLM)

consumers without it, and these research activities take about two months for Air tours to complete. • Negotiation: Since a tour package requires the participation of various services, it is necessary to negotiate with various service providers such as transportation, lodging, guides, and food. This agreement could take up to three months. • Tour development: After completing all of the preceding activities, it is necessary to develop the tour, which entails the design of various facilities that the tour operators wish to provide to their customers. Air tours must convey the proposal to consumers after designing all of the facilities through various promotional activities such as advertising. • Financial and pricing plan evaluation: Before selling the tour package to consumers, it is important to assess the total costing of the tour as well as the currency prices of the tour so that profitability can be measured in advance. Market-oriented tour pricing and cost-oriented tour pricing are the two forms of pricing strategies that must be pursued. • Administrative staff: It's important to find the right administrative staff to ensure that all office tasks are completed successfully. • Tour package marketing: After designing the tour package, it's crucial to market it by determining the right segment of target customers. • Tour operators' brochures: Since brochures are a significant marketing tool, Air Tours must create an efficient brochure that includes information about the sites visited, the company name, and the destinations they serve. • Post-tour management: After the conclusion of a customer's tour, the tour management organization must collect input on the service provided in order to improve the agency's services. 34 CU IDOL SELF LEARNING MATERIAL (SLM)

2.2.2 Indian Tourism's Current Situation: Indian tourism has been described as a significant engine of economic development. India's travel and tourism industry, according to the World Travel and Tourism Council (WTTC), is booming. In 2006, the (T&T) industry contributed 2.1 percent of GDP (INR 713.8 billion or US$16.3 billion). The Ministry of Tourism took several steps in the first half of the Annual Plan cycle of 2006-2007 in the areas of infrastructure development and positioning Indian tourism as a major engine for economic growth. These include a focus on bringing existing and new destinations up to world-class standards, improving connectivity to important destinations, and each state/UT identifying 10-15 new destinations/circuits for development to world-class standards with all necessary infrastructure components. The Internet, the fastest-growing distribution medium, generates annual bookings of more than US $35 billion in the United States alone. In 2005, the Internet accounted for 25% of all hospitality sales worldwide, and this figure is projected to rise to between 27 and 29 percent in 2006. 2.3 ORGANISATION STRUCTURE OF STANDARD TRAVEL AGENCY Travel agency depends on type of client and Volume of business. As per the business segment they divided into the department. And as per the size of business they developed organization structure. 2.3.1 Organization structure of travel agency Basic travel agency organizational structure shown in figure 2.1. We can divide into two parts: • Organization structure of large-Scale travel agency /standard Travel agency • Organization structure of Small-scale Travel agency. 35 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure: 2.1 2.3.2 Organisation structure of large /standard travel agency For improved coordination through divisions, a broad travel agency or tour activity unit operates within a hierarchical organisation structure. In a structured structure, responsibility and authority are assigned to each department, allowing them to make decisions at their own level and share them with all members. A formal structure generates better results, clarifies decisions, and eliminates uncertainty. There will be no accountability of departments to higher authorities if there is no such formal organisation. Travel trade has developed over time, from a small company in the nineteenth century to a massive industry after the global economy was liberalised in the last quarter of the twentieth century. Without a professional culture and a well-knit and feasible organisational structure, it is impossible to operate a travel company. Many large travel agencies have established organisational frameworks that allow for long- term departmental integration and efficient communication. Many travel companies have restructured in order to outperform their rivals in terms of customer service and operations management. A large travel agency establishes a comprehensive hierarchical organisational framework to accomplish strategy, planning, and budgets, cooperative agreements with vendors, preparation of information systems, reports, creative and cost-effective strategies, consistent quality standards, payment options, and travel budget management. In today's dynamic market environment, skilled and trained personnel with authority delegations are being integrated into company strategy and culture. 36 CU IDOL SELF LEARNING MATERIAL (SLM)

TCI, for example, restructured its organisational chart after being integrated into Thomas Cook in order to redefine transparency. This would only be possible if all new management techniques are implemented. Since this is a service industry, recognised travel agencies and tour operators in India follow government guidelines for successful management of their businesses. As a result, it necessitates a very broad organisational structure to function and consolidate in a short period of time. Executives at major travel agencies like Cox and Kings have the authority to assign work to department heads. A well-designed organisational framework allows the travel agency and tour operation company to enhance quality services and transparency across functional and operational areas. Kuoni India, for example, employs 3200 people through its various offices. The Kuoni Travel Group's organisational structure includes members, the board of directors, and the managing director, as well as general managers, finance controllers, and chief executives. Delegation of Authority in a Hierarchical Structure As shown in Figure 2.2 the top managerial and operational heads of the company are normally the CEO and MD, followed by the Chief Operating Officers (COOs), the Chief Financial Officer (CFO), the Chief Human Resource Officer, and the Chief Information Officer (CIO). Outbound, destination management, business travel, and visa services will be handled by the COOs. Recruitment, selection, performance evaluation, training and development, and promotion are all managed by the chief-HR. The division head is reported to by executives in different capacities through agencies, both directly and indirectly. Large-scale travel agencies have their own trained workers and skilled dominated in the world's major cities. Managers of each department were created by both types of travel agencies. In most cases, a public limited company or a multinational corporation (MNC) is responsible for delivering the enteric product and service bundle to tourists. Over time, a large travel agency can evolve into a tourism service provider. In that case, it can purchase hotels, motels, resorts, cruise ships, and other businesses. After that, it functions as a producer – cum – distributor. 37 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure: 2.2 Organisational structure of large travel/tour company 2.3.3 Organisation structure of small-scale agency A small level travel agency can have tie-up with other small size of tourism service supplier. Whereas a large-scale Travel agency tie up with large or all service supplier according to the business because of large size of business. Organization Structure of Small Scale of a Small Travel Agency. It is a private limited company in most of the case. A small travel agency can become a large travel agency with the passage of time. Mid-level specialists are responsible for the selection of workers to accomplish the task and providing it with the necessary resources and information, carry out control functions, as they are responsible for the timely completion of the tasks, and monitor the results in order to identify deviations from the planned indicators. For example, the head of the sales department plans the activities of sales managers, sets a work schedule for them, indicators of future sales, evaluates the results of their previous work, carries out current and final control, provides training and information support. Mid-level specialists need to know all the specifics of tourism activities, be good organizers, have the skills to work with staff. At the lowest level of management, managers perform not only managerial, but also executive functions. They are engaged in the implementation of weekly and daily tasks, work directly with the executive staff of the organization and are responsible for bringing specific tasks to the immediate performers. For example, an advertising manager searches for contractors for the production and placement of advertisements, sets specific tasks for them, concludes agreements with them, monitors their activities, 15 and is responsible for the quality of the 38 CU IDOL SELF LEARNING MATERIAL (SLM)

advertising product. In small travel agencies sometimes, there is no lower level of management due to the small number of staff. Figure: 2.3 2.3.4 Advantages and disadvantages of functional organizational structure adopted from draft (2003: 104) and are presented in more detail below: Its greatest benefit is logic and authenticity, which instils confidence in a work flow. - Department heads' technical specialisation • Many opportunities for collaboration • Elimination of repetition in the execution of administrative tasks Disadvantages: • Just a smidgeon of attention paid to the company's overall objectives • Over-specialization and limited concentration of key workers • Less cooperation between roles • Profits are solely the responsibility of senior management • Adapts to changes in the world slowly. 39 CU IDOL SELF LEARNING MATERIAL (SLM)

The matrix structure is based on the concept of performer double subordination. This happens when the line staff's structure is supplemented by another structure. Employees are split into teams to work on a single project on such tasks. Employees report on the job process to their line manager and project manager. After the project is completed, employees return to their previous jobs. The matrix organisational structure is often used in construction (e.g., bridge construction), aeronautics and aerospace (e.g., in the design and manufacture of weather satellites), marketing (e.g., in the preparation and execution of a new product promotional campaign), information technology development, and consulting firms where different professionals collaborate on various projects. Economic of Scales: This definition is very popular in business, and it will be more applicable in the tour and travel agency industry. The number of productions and sales would be higher, resulting in higher profits. With the aid of integration, the cost of production can be greatly reduced. For example, a tour operator can handle the airline or hotel's marketing, distribution, and customer service, or the two companies can work together on marketing. Elimination of Middlemen: Integration allows the tour operator to connect directly with the primary service provider. Business Consolidation: Integration will help raise market share while also assisting in market dominance. Mergers and acquisitions will help travel agencies and tour operators gain greater leverage over the availability of package tours on the market, giving them more bargaining power. Kuoni's market share of outbound company has improved as a result of its acquisition of SITA World Travel India Ltd. At the same time, tour operators will gain some negotiating leverage when it comes to booking hotel rooms and airline seats. Horizontal Integration entails the merger or acquisition of two tour operators, two travel agents, two hotels, and two airlines to create a viable product. This collaboration allows the players to sell complimentary goods while also reducing unfair competition. Vertical integration is a form of integration in which an airline and a hotel or a tour operator and an airline or a hotel collaborate for mutual benefit. To increase the amount of business and achieve a competitive advantage over other rivals, large multinational airlines and hotel companies have purchased travel agencies in key destinations. Without a doubt, the travel agency and tour operation industries are facing fierce competition as a result of the increasing number of small players joining the package tour industry. Linkages for Effective Service Distribution: A tour operator is a participant in a competitive travel distribution chain that allows for long-term buying and selling of package tours. The vertical integration creates a long-term partnership with a variety of direct and indirect service providers to visitors. The major suppliers are brought together by tour operators in a single network. 40 CU IDOL SELF LEARNING MATERIAL (SLM)

Transport operators, airlines and charter flights, cruise line firms, railways and car rental companies, hotels and event planners are among the main suppliers. They are chosen based on factors such as their venue, life, service quality, physical facilities, credit availability, and so on. Tour operators finalise agreements with these service providers on the terms under which visitors will be served at their destinations. When tour operators are ready to sell a package tour, they tend to do so through structured networks, and in some cases, clients purchase directly from them. Tour operators plan to sell package tours by opening new branches in major cities and appointing many retail travel agents in smaller towns. The distribution network in depth Companies that offer cruises: Due to the preference of new-age visitors for adventure, the cruise travel market is increasing in scale. The cost of a cruise package has dropped dramatically. Cruise lines have created packages to cater to the needs of customers in the lower, middle, and upper segments. Large numbers of seats are blocked and booked by tour operators. They operate on contract and sometimes receive special discounts as well as complimentary cruise travel. For bulk sales of cruise packages, cruise operators enlist the assistance of tour operators and travel agents in the travel trade distribution network. Opulence Coach Operators: In the tour operation industry distribution network, a coach operator is a primary service provider. Coach operators are chosen by tour wholesalers based on affordable prices and the efficiency of their transportation and services. During the months of May and June, coach operators send out quotes for relocation, sightseeing, and excursion trips to tour operators and wholesalers. Elevated bucket seats, white window glass, a microphone, an air conditioning system, and a refrigerator are required on any tourist coach. Punctuality, protection, versatility, and adaptability are used to assess service quality. Accommodation Providers: Accommodation operators manage both traditional and non- traditional lodging. Tourists may have a variety of options for lodging based on their budget, amenities, venue, and comfort. It increases the value of a package trip. Room, restaurant, and cocktail facilities, as well as duty-free shopping, doctors on call, a beauty salon, and a fitness centre, help guests feel at ease. Event Management Companies: To deal with MICE behaviours, a tour operator may be an event management business. Creative Tours and Travel, for example, is a specialist event management company. The roles of an Event Management Company include booking locations, food, conference packs, and post- and pre- conference sightseeing programmes. In a flat rate basis, tour operators negotiate with event management firms. Also management firms keep an inventory of important products for the execution of mega events on which tour operators collaborate. 29 Authorized Foreign Exchange Dealer: Tour operators deal with foreign currencies as part of the inbound package 41 CU IDOL SELF LEARNING MATERIAL (SLM)

tour sales. In the case of an outbound package tour, payment for hotel accommodation, transportation, guide services, and other services is often made in foreign currency. Dealing with foreign currency through approved foreign exchange agents or authorised money exchangers is an important part of travel trade linkage and integration. In order to travel abroad, clients must have a foreign currency endorsement in their passports, preferably in the form of a dollar, euro, or British pound. Company of Insurance: For tour operators, travel insurance is a critical component of their sector. The majority of package tours are covered by insurers, and insurance providers collaborate with tour operators. In the case of a cancellation, tour packages are insured with reimbursement to the tour operators or guests. Customers often tend to insure their hygiene and their luggage. Insurance firms pay fee to tour operators. Operators in Destination Management or Ground Handling: Ground handling operators offer ground logistics facilities for tour operators. It covers luxury car or bus services, tour guides and language interpreters, entrance fees, and arrivals reception, among other things. Ground operators operate under the leadership of tour wholesalers or tour vouchers and are based in major tourist destinations. The majority of ground services, on the other hand, are provided by adventure tour operators or special interest tour operators. Operators of tours. Technology: As airline networks and operations grew rapidly, there was a need to integrate airline ticket booking through technology. As a result, the Global Distribution System (GDS) has delivered booking, cancellation, and payment solutions to hundreds of airlines around the world. E-business is a term that creates direct contact between passengers in order to save time and set limits. For example, the airline industry in the United States makes e-tickets the default choice, with e-tickets accounting for more than 60% of domestic tickets. Customers can now print their tickets for free thanks to e-tickets. Mobile booking of a domestic air ticket provides passengers with an additional option for booking tickets in the domestic market. Insurance for Travel: Travel Medical Insurance is one of the functions of a tour operator that reimburses travellers for emergency medical costs incurred while travelling in a foreign country, as well as unforeseen crises (death, illness, airline strike, and travel company bankruptcy). For emergency surgery and extended hospital stays, the maximum coverage under this package is US$5 million. Trip Protection programmes, on the other hand, normally reimburse non- refundable travel expenses. The Trans-Canada Highways, which spans 7,820 kilometres across Canada, passes through Montreal, Winnipeg, Calgary, Vancouver, and Victoria. Germany, the Benelux nations, the 42 CU IDOL SELF LEARNING MATERIAL (SLM)

United Kingdom, France, Switzerland, and Italy are all linked by the European road network. The road system in Japan is well established. Modern roads connect the Mediterranean coast with Iraq and the Gulf area in the Middle East. The rise in car ownership, the growth of motorail, and an expanded network with quick access have all contributed to the road being the predominant mode of transportation. The Trans African Highways, the Trans Europe North and South Motorway, the Pan American Highway, and the Asian Highway are all common international highways. Motels and other scenic highway facilities are available along the major highways. The cruise ship industry has grown to become an important part of the travel agent and tour operator industries. People have shown an interest in travelling in a floating hotel in recent years. The demand for cruise ship travel is growing as retired and elderly people in Europe and America seek out new ways to spend their time. Regional Economic Development: People in East Asia now consume healthier food than people in South Asia and other developed economies, in addition to having a longer life expectancy. Emerging economies include Japan, Hong Kong, Singapore, and China. The growth rate of the Gross Domestic Factor, National Income, Purchasing Power, export and import are all economic factors. Those countries have a large GDP and per capita income. People have a lot of extra money to spend on vacations. Outbound travel in those countries, for example, is very high, and it contributes to regional tourism growth. Situations in Politics Political instability in some parts of the world is having an effect on foreign trade and commerce. More significantly, political unrest in the Far East and the Middle East has hampered the development of tourism in those regions, as well as in other areas of the world. As a result, intra-regional tourism is a by-product of political unrest in certain parts of the world. The problems can only be resolved through bilateral and multilateral trade relationships. Sales Tax Exemption Because of the low yields and uncertainty in the travel agency and tour operation market, governments are providing maximum tax relief to the players in the travel industry. Travel agents' responsibilities include the following: The following is what most travel agents do: 43 CU IDOL SELF LEARNING MATERIAL (SLM)

• Book reservations for travel, hotels, rental cars, and special events, such as tours and excursions • Determine customers' needs and preferences, such as schedules and costs • Plan and arrange tour packages, excursions, and day trips • Find fare and schedule information • Calculate total travel costs • Book reservations for travel, hotels, rental cars, and special events, such as tours and excursions • Make alternate booking plans if adjustments occur before or during the trip due to weather conditions, customs, or attractions Travel agents sift through mountains of data to find the right trip plans for their clients. In addition, travel agents are used by resorts and specialty groups to sell holiday packages to their customers. Travel agents can also visit destinations to gain first-hand experience before making recommendations to clients or co-workers. They can visit hotels, resorts, and restaurants to assess the establishment's comfort, cleanliness, and efficiency. However, they spend the majority of their time talking to customers, promoting trips, and calling airlines and hotels to book travel arrangements. To access travel details and make reservations with travel suppliers such as airlines or hotels, travel agents use a reservation system known as a Global Distribution System (GDS). To combat the issues that are stifling the growth of the travel trade industry, trade intermediaries have organised a number of associations at the local, regional, global, and international levels. It contains the following items: Traveling on a Budget: Travel agencies and tour operators are very creative when it comes to developing package tours in the post- liberalized period. People who want to fly can choose from a variety of choices and alternatives to have a memorable experience. Package tours provide a variety of travel and hospitality-related facilities that can be customised to meet the needs of the clients. The idea of 'Travel as a Bargain' benefits both travel trade intermediaries and clients. There is no rigidity in the expense of travel commodity negotiations. Clients have the option of choosing service components and opting out if the cost of travel services is too high. Client 44 CU IDOL SELF LEARNING MATERIAL (SLM)

negotiating power for travel products has signalled to tourism operators that they should focus on service quality travel products. The hotel industry is a significant component of the travel agency and tour service industries. The shortage of hotel rooms in India's metro cities and other major cities is affecting the package tour industry. However, due to the announcement of 100% Foreign Direct Investment (FDI), several new multinational hotel companies have built their prime properties in these locations, and the problems of international standard rooms have been partially solved. Toll Free Numbers: Tour operators have included Toll Free Numbers on their websites and tour brochures so that consumers can call and inquire about package tours without incurring any costs. These numbers have been programmed with an auto-reply feature so that people can call as many times as they want to get more details about package tours. 2.4 SUMMARY • For designing a good tour package, it is important to provide an effective focus on the target customers • A tour operator has to establish linkages with the principal suppliers like airlines, hotels, tourist transport operators, guides and escorts, etc. for the purpose of designing the package. • A small level travel agency can have tie-up with other small size of tourism service supplier. • After the completion of the tour of customers, the tour management agency must take feedback regarding the service offered to them so it can help the agency to make their services better. 2.5 KEY WORDS • Timescales- a typically defined amount of time spent commuting to and from work or from the entrance of a business establishment to the location of actual work (as in portal-to-portal travel or deadheading), for which compensation can be requested or charged. • Departmentalization- refers to the mechanism of categorising events. Division of labour results in the creation of specialists that need teamwork. This teamwork is encouraged by the organisation of specialists into divisions. • FDI- Foreign Direct Investment. • GDS- Global Distribution System 45 CU IDOL SELF LEARNING MATERIAL (SLM)

2.6 LEARNING ACTIVITY 1. Find about the present status of travel agency in Post-Covid scenario ___________________________________________________________________________ ____________________________________________________________________ 2.7 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. Write a short note on organisation in small scale agency 2. Write about the timescales in development of holidays 3.Why E-Commerce is adopted in present day tourism industry 4.What do you mean by Organisation structure of Travel Agency? 5.Write in detail about post Tour Management of business Long Questions 1. Elaborate about the advantages and disadvantages of the Functional Organisation in Travel agency 2. Explain about the organisation structure in a travel agency 3. Explain working structure of travel agency. 4. List out the Travel agents' responsibilities 5. write short notes on Regional Economic Development B. Multiple Choice Questions 1. A travel agency may either be one of a ----- of retail outlets or a ----- operation a. Chain & single b. Single & Chain c. Group & chain d. Chain & Group 2. Due to --------- number of visitors in tourism industry is increasing 46 a. Industrialization CU IDOL SELF LEARNING MATERIAL (SLM)

b. Globalization c. Covid d. Liberalization 3. Who is known as the father of Travel Agency business. a.Thomas Cook b.Lee and Muirhead c.Jeena & Co. d.Cox and Kings 4 Which Indian city is famous for the Dussehra festival? a. Mumbai b. Chennai c. Mysore d. New Delhi 1. Which is the longest train service in India a. Him Sagar Express b. Kerala Express c. Vivek Express d. Varanasi Chennai Express 2. The famous Meenakshi Temple is situated in a. Chidambaram b. Madurai c. Coimbatore d. Chennai 7. Akbar built the Buland Darwaza in the memory of a. His grandfather Baber b. Khwaja Moinuddin Chisti c. Victory of Gujarat d. Shaik Salim Chisti 8. Which of the following is top tourist destination in terms of international tourist arrivals 47 CU IDOL SELF LEARNING MATERIAL (SLM)

a. France b. USA c. Spain d. Switzerland 9. There are 5 beautiful temples built at Mount Abu in Rajasthan these temples known as a. Vishnu temples b. Bhairav temples c. Mahakala temples d. Dilwara temples 10. The administrative head of the ministry of tourism a. union minister of tourism b. chief minister of tourism c. tourism secretary d. None of these 11.Who is act as the director general of tourism a. tourism minister b. secretary of tourism c. chief minister d. None of these 12. ----------------- types of tourism refers to tourist flows between countries of the new region a. inbound tourism b. inter-regional tourism c. intra-regional tourism d. None of these Answer 1- a, 2-b, 3-a, 4-c, 5-c, 6-b,7-a,8-a,9-d,10-c, 11-b,12-c 48 CU IDOL SELF LEARNING MATERIAL (SLM)

2.8 REFERNCES Reference Books • Travel Agency and Tour Operation, Concepts and Principles – J.M.S. Negi. • Travel Agency Management - Mohinder Chand. • Professional Travel Agency Management – Chunk, James, Dexter &Boberg • The Business of Travel Agency Operations and Management– D.L. Foster 49 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT 3: TRAVEL AGENCY & TOUR OPERATIONS Structure 3.0 Learning objectives 3.1 Introduction 3.2 Difference between travel agency &tour operation business 3.3 Procedure for approval of travel agency in India 3.3.1 Approval / Recognition of Dot: 3.3.2 Rule for the travel agency: 3.3.3 Contents 3.3.4 Rules for Recognition of tour operator by DOT: 3.2.5 Application Form for Tour Operator Recognition or Approval 3.2.6 Application form for tour operators: 3.4 Summary 3.5 Keywords 3.6 Learning activity 3.7 Unit end Questions 3.8 References 3.0 LEARNING OBJECTIVES After studying this unit students will be able to • Identify the concept of Travel agency and tour operator. • Classify the different between travel agency and operator. • Analyse the process for approval • Explain the process of approval of travel agency • Apply the concept in his further studies. 3.1 INTRODUCTION A travel agency is a company that sells travel-related products and services to customers, especially packaged tours, on behalf of third-party travel suppliers including airlines, hotels, tour companies, and cruise liners. The tourism industry's axis is the travel agency. The travel agency is at the core of tourism activities. Tourism is the product of people moving from one location to another, which is facilitated by travel agencies. As a result, a travel agency is a 50 CU IDOL SELF LEARNING MATERIAL (SLM)