Functions of Travel Agencies and Tour Operations MODULE – 6A

Travel and Tour Operation

Bussiness

21

FUNCTIONS OF TRAVEL Notes

AGENCIES AND TOUR OPERA-

TIONS

Travel agents and tour operators play a major role in boosting tourism growth
across the globe. They are today accepted as crucial component of travel and
tourism industry. They contribute to revenue generation through travel trade
operations by bringing together clients and suppliers. According to an estimate,
they account for 70% of domestic and 90% of international tourists traffic
globally.

In this chapter we will discuss the major functions of travel agencies and tour
operators such as marketing and publicity, booking of tickets, itinerary preparation,
designing of tour packages, processing of travel documents, travel insurance,
travel research, conducting tours etc.

OBJECTIVES
After studying this lesson, you will be able to:
z explain the importance of Marketing and Publicity;
z explain the functioning of the following, Reservation of Tickets, Reservation
of Hotel Rooms, Reservation of Ground Services, Selling Cruise Package;
z conduct research, training and development of marketing of tourism;
z analyse the relevance of Corporate Social Responsibility;
z design Package Tours;
z conduct FIT, GIT and FAM Tours;

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 MODULE – 6A Functions of Travel Agencies and Tour Operations
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Bussiness z to provide Travel Information;
z coordinate with Public and Private Tour Organisations and
z appreciate the role of Disaster Preparedness

21.1 MARKETING AND PUBLICITY

Marketing and publicity of tourism products in general and tour packages and
Notes other services in specific is one of the major functions of travel agencies and
tour operators. They involve in promoting and marketing all types of travel
services such as tour packages, hotel services, air services, car rental services,
travel insurance etc. They use both print and electronic-media for marketing and
publicity of their products.
It is important to note that they play a vital role in marketing and publicity of
destinations, attractions and other components of destinations. While playing
hard in marketing their products, they also play the role of ambassadors of
destination image and brand building. Marketing and publicity can bring rather
unknown destinations on the tourist map. Now-a-days popular tourist spots are
getting overcrowded. So, people are moving to unexplored areas. This trend
can provide employment opportunities to the people in rural and remote areas.
Travel agencies and tour oeprators should be truthful in marketing and publicity.

21.2 RESERVATION OF TICKETS

Travel agencies and tour operators sell a variety of products but reservation of
tickets is still one of their sources of revenue. Reservation of airlines tickets,
railway tickets, shiplines and bus tickets can be done either at agency counters
or through reservation agencies available online these days. Due to stiff
competition amongst airlines and low cost carriers in India and globally to an
extent airlines are working on zero margin commission for travel agencies. In
the recent years slowly the scenario is changing and online travel agencies are
selling tickets online. Global Distribution Systems have changed the way
ticketing used to be.

ACTIVITY 21.1
Have you ever tried booking a ticket online? Try this as part of your activity.
Visit IRCTC website, create a log in id and use the given password and reserve
a ticket to any station. Do not worry, you can always cancel the booked ticket
if you don’t want to travel.

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Functions of Travel Agencies and Tour Operations MODULE – 6A
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21.2.1 Reservation of Hotel Rooms Bussiness

Earlier Computer Reservation System (CRS) and now Global Distribution

Systems have enhanced the way reservation of hotel rooms is done. Hotels are
able to provide all the necessary information in advance such as category of
hotel, type of rooms, facilities and services, meal plans, tariff and seasonal offers.
Clients can search, compare, choose and book a room of their choice. One can
also make online payments through internet banking or debit/credit cards etc.
Specifications of rooms and facilities provided online should be the same as they Notes
actually exist. Guests should not feel cheated.

The First Indian owned Travel Company

Pallonji Katgara & Jamshedji Dastoor established Jeena and company (a

shipping and export company) with a startup finance of US$ 75, a small
capital in 1900. It then diversified into the travel field with Jeena Tours and
Travels in 1920 and became the first Indian - owned travel company. In 1961,
Jeena Tours and Travels was integrated with Travel Corporation (India) Pvt
Ltd which grew to become India’s largest travel company under the dynamic
leadership of the Katgaras.

In 1951 Travel Agents Association of India (TAAI) was established setting

the tone for organised travel business in India. Prior to TAAI, travel business
in India was in the hands of Jeena & Company, Lee and Muirhead India Pvt.
Ltd. and N. Jamnadas and Co. Ltd. Out of which Jeena ventured into
outbound tours as well.

It was only in 1967 that a separate Ministry of Tourism and Civil Aviation
was created under a cabinet minister. After that in India for the first time
an integrated marketing plan was developed for this trade which has now
become an Industry.

21.2.2 Reservation of Ground Services

Ground handlers at destinations provide a variety of ground services to tourists
like cars, coaches, caravans, entertainment entries, guides, interpreters etc. In
most cases reservation of these services may be done as part of a package tour
but at times, individuals can also avail the facility reservation of these ground
services these days as per their requirement either at the counters of service
providers or online these days.

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Bussiness 21.2.4 Selling Cruise Package
Cruises operate on the water hence sometimes have the disadvantage of direct
sales but so long as intermediaries are available it hardly matters where you
operate from. Travel agencies and tour operators are actively selling cruise
packages to prospective clients. Most of these agencies are promoting and
marketing cruise packages with a variety of offers and freebies to attract tourists.

Notes Functions of Travel Agencies and Tour Operators

1 Marketing and Publicity Package tours
Destinations, attractions and other
Services

2 Reservation of Tickets Airlines

Railways
Buses
Passenger ships
Events

3 Accommodation Reservation Hotels

Resorts
Motels
Homestays etc.

4 Reservation of Ground Cars

Services Coaches
Caravans
Entertainment entries
Guides, interpreters

5 Itinerary Preparation Planning and preparing various types

of itineraries and checking feasibility

6 Tour Packaging and Costing Dealing with vendors,

Market research
Costing and pricing
Designing of package tours
Promotion and selling

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7 Travel Information and Handling enquiries Bussiness

Documents Processing Counselling

Travel and destination information
Passport
VISA
Customs
Notes
Currency
Health and security checks permits
Immigration etc.

8 Research, Training and Market study

Development Customer behaviour
Training man power
Upgrading skills
New product development

9 Travel Insurance Personal

Baggage
Travel break-up
Accidents etc.

10 Event management Meetings

Incentive travel
conferences, conventions, exhibi-
tions, seminars symposiums etc.

11 CSR Corporate Social Responsibility

towards stakeholders, clients,
community and quality ethics

ACTIVITY 21.2
Visit a nearby travel agency/ tour operator and find out the formalities for
travelling to a foreign country. Ask them to show the copies of the travel
documents and collect copies and note the details.

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Bussiness

INTEXT QUESTIONS 21.1

1. What type of methods are being used for marketing and publicity of tourism
products?
2. Which technology has enhanced the speed of reserving tickets?
3. What are the modes of online payment?
Notes 4. Expand CRS.
5. Name the first Indian owned travel company.

21.3 PREPARATION AND PROCESSING OF TRAVEL

DOCUMENTATIONS
There are listed documents required while going on a tour, especially on a
foreign trip. Travel documents such as passport, VISA (It is an endorsement
on a passport indicating that the holder is allowed to enter, leave, or stay for
a specified period of time in a country), health certificates, vaccination,
insurance, foreign currency etc. It takes time to get the VISA clearance from
the concerned embassies. All such functions are handled by travel agencies and
tour operators to help their clients a hassle free travel. Travel documents are
very essential. If they are not in proper order, tourists may find themselves in
big trouble, particularly on foreign trips. They may not be allowed to enter the
country if documents are not in proper order.

21.3.1 Budgeting and Allocation

Financial management of any organisation or firm is quite an important function.
Budgeting for different activities and overall smooth functioning is crucial part
of management. They do a proper annual budgeting and specific a programme
budgeting prior to allocation. Then funds, man power and other resources are
allocated on the lines of budgeting. Without proper budgeting and sufficient
allocation of resources, it is hard to imagine the sustenance of any organisation.

21.3.2 The Research and Development

Large travel firms usually have their own research and development departments.
A lot of R & D activities are undertaken by them such as market research studies,
itinerary feasibility, designing new package tours, new product development,
customer preference studies, branding strategies, costing of products and so on.
Though it may not be possible for smaller firms to do research, they too are
involved in a limited research and development at the local level. R & D helps
in the sustainability of firms, enhances market expansion and better service to
the tourists.

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21.3.3 Corporate Social Responsibility Bussiness

Till recently CSR was seen as the social obligation of firms towards the society
and communities they are working with but in the present market economics
it has become an alternative way of positioning as well. Travel agencies and
tour operators are also participating in social issues, community development,
public awareness as part of their corporate social responsibility. Destination
sustainability is only possible with the social responsibility of all the stakeholders
of the industry. Hence the role of these travel firms through CSR stands vital Notes
to travel industry. Travel agencies and tour operators should ensure that their
activities should not adversely affect the lives of the people and community.
Corporate Social Responsibility is a new catching phrase these days, it implies
that business organisation should make some direct positive contribution to the
society. They can provide training and development facilities to generate pool
of skilled work force, help in providing basic amenities in local govt. schools,
empowerment of women etc.

21.4 TRAINING AND DEVELOPMENT

Human resource is the backbone of any organisation and it plays a greater role
when it comes to service industry. There is a need for skilled man power to
handle visitors/clients. It is only possible with a pool of trained professionals.
Hence it is listed as one of major functions of travel agencies and tour operators
for organisational growth and quality enhancement. Employees are trained in
industry suitability skills, handling guests, crisis management, soft skills, sales
and marketing and updating of operational skills with change in technology. This
will help developing the capabilities of its human resource specifically and
business of the organisation in general.

INTEXT QUESTIONS 21.2

1. List some of the travel documents.
2. What is VISA?
3. List some of the R & D activities done by travel companies.
4. What does CSR stand for?
5. What type of training is given to their employees by the travel companies?

21.5 DESIGNING PACKAGE TOUR

Preparing itinerary, designing package tours and costing are equally important
functions of a travel agencies and tour operators. With the growing competition

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 MODULE – 6A Functions of Travel Agencies and Tour Operations
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Bussiness in the travel market differentiation, their products is crucial to their sustenance
and revenue generation. Expert teams and experienced travel managers from
the research and development cells are involved in drawing itineraries, conducting
familiarisation trips, studying the feasibility of the itineraries. It is followed by
package tour designing, costing and finally launching it in the market.
This is how travel agency plays a vital role in the entire process of developing
and promoting tourism.
Notes

IRCTC also Sells Water!

‘Railneer’ bottled water is a product of IRCTC and they have their own
bottling units! Indian Railway Catering and Tourism Corporation Ltd.
(IRCTC) is a Public Sector Enterprise under the Ministry of Railways.
IRCTC was incorporated on 27th September, 1999 as an extended arm of
the Indian Railways to upgrade, professionalise and manage the catering and
hospitality services.
While discharging its mandate, the Company has made a significant mark in
its passenger-services oriented business lines like setting up of Food Plazas
on Railway premises, Rail Tour Packages and ‘Internet Ticketing’ bringing
a great deal of professionalism into the operations. In addition to the above,
IRCTC is managing on Board Catering Services in Rajdhani / Shatabdi /
Duronto and Mail / Express Trains and Static Catering Units such as
Refreshment Rooms, AVMs, Book Stalls, Milk Stalls, Ice Cream Stalls, Petha
& Peda Stalls etc. across the Indian Railway Network.

21.6 CONDUCTING FIT, GIT AND FAM TOURS

If designing of package tours is crucial to expert teams, it is even more crucial
for the operational teams to conduct Foreign Independent Travel/ Free
Individual Traveler (FIT), Group Inclusive Tour (GIT) and Familiarisation
Tours. Specialised, customised packages may be required at times to meet the
demands of these groups and individuals. Clear cut terms and conditions should
be laid out before sale of any such tours. Tour manages, travel associates,
interpreters, arrangement of guides, processing of travel formalities are some
of the issues to be taken care of. Travel agencies and tour operators also conduct
FAM tours apart from FITs and GITs as part of feasibility of the itinerary/
package tours or as promotional methods in collaboration with destination
promoters and other service providers.

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21.6.1 Provision of Travel Information Bussiness

Information is the basis of primary motivators for prospective clients. It is

important to convert lookers into bookers and it is possible only by providing
them with the right kind of information. Since information is vast, proper
organization, search mechanisms are required. A variety of information is
provided by agencies and operators such as destinations, attractions, rates and
tariff, accommodation alternatives, travel modes, package tours, travel formalities
and much more. Information is made available not only at the counters but also Notes
through print and electronic-media, customer care service centres etc.

ACTIVITY 21.3
Make a phone call to a leading local travel agent/tour operator and enquire about
their package tours and also seek a variety of information such as travel mode,
accommodation, meal plan, attractions, activities and events at a destination.

21.7 COORDINATION WITH PUBLIC AND PRIVATE

TOUR ORGANISATIONS
Public and private tourism organisations are an integral part of travel industry.
Hence it is in the interest of the travel agencies and tour operators to coordinate
with them for their own benefit. In India the Ministry of Tourism (MoT) is the
supreme policy maker, Indian Association of Tour Operators (IATO), Travel
Agents Association of India (TAAI) are major tourism organisations and
Universal Federation of Travel Agents Association (UFTAA), Pacific Asia Travel
Association (PATA), World Association of Travel Agencies (WATA), United
Nations World Tourism Organisation (WATA), International Air Transport
Association (IATA) and World Travel and Tourism Council (WTTC) are globally
famous travel organisations. Coordination with these organsiations can be of
sharing data, memberships, policy suggestions, participation in travel marts etc.

21.7.1 Travel Insurance

Travel insurance ensures insurance security to travellers’ personal as well as
baggage losses. Large travel firms in the present industry environment are
offering travel insurance to their clients. A client who insures his travel buys
a policy from an insurance company though the travel company which is
generally included in a package tour. A typical travel insurance may cover
insurance for life, accidents, medical treatment, baggage loss, trip cancellation
and similar losses. Travel Insurance provides security net to the travellers and
conpensate the loss of life, baggage, concellation etc.

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Bussiness 21.7.2 Currency exchange
All outbound and inbound tours require foreign currency. Clients may require
foreign currency of the destination country and clients visiting from a foreign
country may need to exchange foreign currency for the host country currency.
Foreign exchange service is permitted by the Reserve Bank of India and Foreign
Exchange Management Act (FEMA) to the registered travel agencies and tour
operators. They charge a minimum commission as per RBI rules to provide this
Notes service.

21.7.3 Organising conference/convention etc.

Event management is today a completely professional business. Organising
seminar, conferences, conventions and exhibitions is also being undertaken by
travel agencies and tour operators apart from their regular travel services though
there are specialised event management companies for handling such events and
programmes. It may be noted that many large travel firms are now offering
exclusive Meetings, Incentive travel, Conventions/conferences and Exhibitions
(MICE) packages which are handled by their MICE divisions.

21.8 DISASTER PREPAREDNESS

Due to the growing uncertainty about natural and manmade disasters such as
cyclones, floods, earthquakes, tsunami, landslides, accidents, fires, stampedes,
terror strikes and others, disaster preparedness is the most inevitable function
of travel agency and tour operations. Safety and security of the visitors is prime
responsibility of the operators and they should be prepared to handle all such
disasters. A team of professional is these days, trained to handle such incidents
and avoid any harm to their clients to a great extent. They also coordinate with
the local disaster management teams to face such challenges.

INTEXT QUESTIONS 21.3

1. Expand FIT and GIT
2. Why are FAM tours conducted?
3. List some of the private and public tourism/travel organisations in India.
4. Expand UNWTO
5. What is the need for travel insurance?

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Bussiness

WHAT YOU HAVE LEARNT

z The various functions of travel agencies and tour operations such as travel
information, documentation, packaging tours, itinerary preparation, research,
training and development etc.
z Marketing and publicity of package tours, their other products, services, plus
destinations and attractions is one of the major functions. Notes
z Travel information is shared with clients, counseling is done and processing
of travel documents such as passport, VISA, getting clearances, health
certificates, currency, immigration, security permits etc is also done.
z Training of human resource, development of new products and market
research of segments, customer behaviour and other issues are also
important functions.
z Preparation of itineraries, designing of package tours, all customised, tailor
made and specialised, costing and marketing products which are major core
functions of the business.
z Supporting and promoting Corporate Social Responsibility.

TERMINAL EXERCISE
1. List all major functions of a travel agency and a tour operator.
2. How are itinerary preparation, designing of packages tours and costing
important for the tour related organisations?
3. What type of travel information is shared with the clients?
4. List out travel documents that travel companies involve in preparation and
processing.
5. Why are research, training and development considered a serious function
of travel companies?
6. Why should there be an increased focus on Corporate Social Responsibility?
How can a travel agency fulfil its Social Responsibility?

ANSWER TO INTEXT QUESTIONS

21.1
1. Print and visual media such as brochures, leaflets, tele-ads, ads in
newspapers, magazines, FAM tours, social media etc.

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 MODULE – 6A Functions of Travel Agencies and Tour Operations
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Bussiness 2. Global Distribution System (GDS)
3. Internet banking, credit/debit cards, paypal etc.
4. Computer Reservation System
5. Jeena and company

21.2
Notes 1. Passport, VISA, health certificates, vaccination, currency, insurance, permits
etc.
2. Endorsement on a passport indicating that the holder is allowed to enter,
leave, or stay for a specified period of time in a country
3. Market research studies, itinerary feasibility, designing new package tours,
new product development, customer preference studies, branding strategies,
costing of products
Refer 21.3.1 section
4. Corporate Social Responsibility
5. Employees (human resource) are trained in industry suitability skills,
handling guests, crisis management, soft skills, sales and marketing and
updating of operational skills

21.3
1. Foreign Independent Travel/ Free Individual Traveler (FIT), Group Inclusive
Tour (GIT)
2. To know the feasibility of the itinerary/package tours or as promotional
methods in collaboration with destination promoters
3. MoT, TAAI, IATO
4. United Nations World Tourism Organisation
5. To secure against loss of life, baggage, accidents and travel interruptions
etc.

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