PONDICHERRY UNIVERSITY (A Central University) DIRECTORATE OF DISTANCE EDUCATION Travel Agency and Tour Operations Management Paper Code: MBTM 4002 MBA - TOURISM IV - Semester Author Dr. Sampad Kumar Swain, Professor, Dept.of Tourism & Hospitality, Indira Gandhi National Tribal University, Amarkantak All Rights Reserved For Private Circulation Only ISBN 978-93-81932-24-7 TABLE OF CONTENTS UNIT LESSON TITLE PAGE NO.1 Travel Trade - Historical Perspectives 3 1.2 American Express Company and History of India’s Travel Trade 13 I 1.3 Wholesale and Retail Travel Agency Business 23 1.4 Linkages and Integration in Travel Trade 37 1.5 Changing Scenario of Travel Trade 48 2.1 Functions of Travel Agency and Tour Operation 63 2.2 Setting Up A Travel Agency and Tour Operation 75 II 2.3 Sources of Income in Travel Agency and Tour Operation Business 87 2.4 Diversification of Travel Agency and Tour Operation Business 97 2.1 Concepts of Itinerary Planning 135 3.2 Resources for Itinerary Planning 147 III 3.3 Tour Formulation and Designing Process 156 3.4 Planning and Components of Package Tour for FIT & GIT 159 4.1 Classifications of Tour Packages 171 4.2 Components of Package Tour 182 4.3 Package Tour Costing 194 IV 4.4 Components of Tour Costing and Preparation of Cost Sheet 200 4.5 Tour Pricing and Pricing Strategies 208 4.6 Package Tours of Thomas Cook, SOTC, Cox & Kings and TCI 219 5.1 Roles and Responsibilities of Travel Trade Associations 239 5.2 Roles and Functions UFTAA 250 5.3 Roles and Functions of PATA 259 V 5.4 Roles and Functions of ASTA 269 5.5 Roles and Functions of TAAI AND IATO 279 5.6 Roles and Functions of ATAOI, ADTOI, IAAI, FIYTO and TAFI 288 MBA (Tourism) – IV Semester Paper Code: MBTM 4002 Paper - XVII Travel Agency and Tour Operations Management Objectives Students will be able to: ➢➢ understand the significance of travel agency and tour operation business; ➢➢ know the current trends and practices in the tourism and travel trade sector; and ➢➢ develop adequate knowledge and skills applicable to travel industry. Unit - I Travel Trade - Historical Perspectives - Emergence of Thomas Cook and American Express Company - Types of Tour Operators - Wholesale and Retail Travel Agency business - Linkages and Integration with the Principal Service Providers - the Changing Scenario of Travel Trade. Unit - II Travel Agency and Tour Operation Business - Functions of Travel Agency - Setting up a full-fledged Travel Agency - Sources of Income of a travel agency - Diversification of Business - Travel Insurance, Forex, Cargo & MICE – Documentation - IATA Accreditation - Recognition from Government.
Unit - III Itinerary Planning & Development - Meaning, Importance and Types of Itinerary - Resources and Steps for Itinerary Planning - Do’s and Dont’s of Itinerary Preparation - Tour Formulation and Designing Process - FITs & Group Tour Planning and Components - Special Interest Tours (SITs). 1 Unit - IV Tour Packaging & Costing - Importance of Tour Packaging – Classifications of Tour Packages - Components of Package Tours - Concept of costing - Types of costs - Components of tour cost - Preparation of cost sheet - Tour pricing - Calculation of tour price - Pricing strategies - Tour packages of Thomas Cook, SOTC, Cox & Kings and TCI. Unit - V Role and Responsibility of Travel Trade Associations: Objectives - Roles and functions of UFTAA, PATA, ASTA, TAAI, IATO, ATAOI, ADTOI, IAAI, FIYTO, TAFI. (2002), THE BUSINESS OF TOURISM, Prentice Hall, London, pp.
(2009), TOURISM OPERATIONS AND MANAGEMENT, Oxford University Press, New Delhi, pp-164-296. B (2010), TOURISM, PRINCIPLES, PRACTICES AND PHILOSOPHIES, John Wiley & Sons, London. 2 UNIT - I Unit Structure Lesson 1.1 - Travel Trade - Historical Perspectives Lesson 1.2 - American Express Company and History of India’s Travel Trade Lesson 1.3 - Wholesale and Retail Travel Agency Business Lesson 1.4 - Linkages and Integration in Travel Trade Lesson 1.5 - Changing Scenario of Travel Trade Lesson 1.1 - Travel Trade - Historical Perspectives Learning Objectives After reading this lesson, you should be able to understand ➢➢ The evolution of travel agency business in the world; ➢➢ Various innovations introduced by Thomas Cook; and ➢➢ Different milestones in the history of global travel agency business Introduction The business of travel agency has undergone significant changes in the last two decades. Gone are the days when there were no formal travel intermediaries to help travelers visit places of interest.
Several travel obstacles discouraged people to travel distance places. Only a selected few managed to travel due to their own curiosity, motivation and spending ability. Many could not make it due to the lack of communication network along with facilities and amenities. Leaving behind the job of a travel agent, a destination did not even have minimum facilities to hold the visitors for an hour long.
So many changes have taken place over the centuries. Tourism destinations are connected by modes of transport and visitors find a place of stay at the destinations. 3 When modern communication system came into existence in 18th and 19th centuries, the world could witness mass travel leading to the demand of luxury transport and advance arrangement of stay and sightseeing. Those advance bookings of train, ferry, bus, airlines, theater hall, entry fees, etc were organized by a person with sound experience and information.
In the beginning of travel agency business, travel agents could help their own community members or fellow members travel safely. Later, it became a formal business with all professional practices. Gradually, the business has grown in such a scale that competitive multinational travel companies have entered into this travel business. This lesson will explain the origin of travel agency business in the world with reference to the contribution of Richard Cox and Thomas Cook for having set up professional travel agency in the 18th and 19th centuries respectively.
Origin of Travel Agency Business The nature of travel agency business is to provide holiday-related services such as ticket booking, transfer arrangement, hotel room booking and arrangement of ground transportation, venue selection and booking for MICE activities. The scope of business of travel agents was narrow and confined to selected services. Moreover, the business was managed with small investment. It was risky business as it was depending upon the natural and socio-political along with cultural factors.
The amount of profit was too little to attract new entrants to do this business. A number of restrictions were imposed by the government on travel agents and tour operators for entry into tour operation business. Tour operators had no choice, but to deal with other problems like confirmation of hotel rooms, safety in travel, quality of foods, travel documents, volatile political system, language differences, cultural differences, cumbersome and tedious travelling, long journey, etc. However, invention of railways and steamship as a common mode of transport changed the perceptions of people on travelling distance places.
Thus, Thomas Cook could emerge as the first professional Travel Agent in the wake of introduction of affordable railway services in the United Kingdom. However, prior to Thomas Cook, Cox & Kings introduced travel business in UK. You will read about the contributions of these two big travel agents along with a couple of other travel agents in Europe, USA and India in this lesson Cox & Kings Cox & Kings in the second half of eighteenth century became pioneer in providing travel logistics to British Army stationed at various locations in the world. It claims to be 4 the oldest travel agency in the world.
The origin started from the appointment for making arrangements of auxiliary services to the First Foot Guards as Regimental Agent. Richard Cox worked under the mentor of Colonel Lord Ligonier for providing necessary services to the Army Officers in the overseas. The Company became the most reliable military agents for British Government. In the subsequent period, business got expanded to banking, shipping and tour operation business.
Being a 250-year old company serving leisure and business travelers, it maintains business and operational networks across the world. Over the years, the company has created a huge brand and credibility in the outbound travel market. Its international offices and representatives are located in UK, USA, Japan, Germany, Spain, South Africa, Russia, Italy, Sweden and Australia. Cox & Kings was renamed as the Eastern Carrying Company Limited as per the Indian Companies Act, VII of 1913.
Fortunately, the company got back its generic name as Cox & Kings in 1950. It was registered as Private Limited Company in 2001 and an enlisted company of National Stock Exchange of India. It is a premium brand in offering all travel related services in the Indian subcontinent. About 5000 trained staff members are working at 14 offices, 25 associated offices and 44 associate offices in India.
In addition to its headquarters in Mumbai, 12 branch offices are located in New Delhi, Chennai, Bangalore, Kolkata, Ahmadabad, Kochi, Hyderabad, Pune, Goa, Nagpur and Jaipur. The company offers competitive tour packages to suit all segments of Indian customers. Its areas of operation include leisure and corporate holidays, insurance and frontier formalities. Its outbound package tours are promoted in the brand name of Duniya Dekho.
This particular package has become so attractive due to packaging, pricing and marketing strategies. It is a group tour comprising destinations in Australia, New Zealand, Europe, US, Canada, Far-East, Middle East, South Africa and Mauritius. Cox & Kings is a professionally managed Public Limited Company working for FIT and GIT travel as one-stop travel solutions point. Other services include charter flights, cruises, foreign exchange and MICE.
The Flexihols is an outbound holiday for FIT customized for independent travelers wishing to travel to Europe, Far East, America, Australia, New Zealand, and Africa. At the same time, many trade fare packages are also promoted for traders, exporters, importers and manufacturers to organize technical visits, factory visits, and buyer-seller meets. For example, Cox & Kings organized package tours for 75 corporate houses in 2006. 5 It is a recognized active member of TAAI, IATA, PATA, ASTA, IATO, ICCA and ICPB Charter.
The Government of India, Ministry of Tourism conferred on Cox & Kings as the Best Conference Agent for consecutive seven years. Radius is a business associate to maintain its operations across 4,640 branches around the world. The company acquired Holiday Break PLC for GBP 323.43 million in 2011 and the CVCI private equity investment has been made in Cox & Kings Ltd’s UK Subsidiary 2012. Reserve Bank of India (RBI) has granted the Company as Category II Foreign Exchange License.
It works with authorized dealer’s foreign exchange nominated banks. Thomas Cook and Its Origin Thomas Cook is known to have aroused interests to help people in England undertake travel within the country or neighbouring country. The 9th June, 1841 is a red letter day in the history of travel trade in the world. On this day, Thomas Cook walked from Harborough to Leicester to attend a temperance meeting and he stumbled upon with an idea of arranging train tickets for the members of Temperance Society where he was serving as an evangelist and Baptist book seller.
He started his carrier as a Cabinet Maker. A 32-year old cabinet-maker could become world’s founder professional travel agent. He achieved many milestones during his lifetime and many were achieved by his son John Mason Cook. Thomas Cook was much worried about the Victorian social problems due to the consumption of heavy alcohol.
He thought of bringing some changes with the travel that could be possible due to invention of railway system. Thomas Cook was the first travel agent who introduced hotel coupons, circular notes, credit cards and advance reservation as part of its travel innovations. Thomas Cook showed the path of travel business to other contemporary travel agents with his organized package tour for leisure tourists. His pleasure and continental travel are now being studied by many new-age entrepreneurs in travel trade.