Chapter 1

THE PROBLEM AND REVIEW OF RELATED LITERATURE

Introduction:

Travel agency is a retail business that sells travel

related products and services to customers on behalf of

suppliers such as airlines, car rentals, cruise lines,

hotels, railways, sightseeing tours and package holidays

that combine several products. In addition to dealing with

ordinary tourists most travel agencies have a separate

department devoted to making travel arrangements for

business travelers and some travel agencies specialize in

commercial and business travel only. There are also travel

agencies that serve as general sales agents for foreign

travel companies, allowing them to have offices in countries

other than where their headquarters are located. As the name

implies, a travel agency's main function is to act as an

agent, that is to say, selling travel products and services

on behalf of a supplier. A package holiday or a ticket is

not purchased from a supplier unless a customer requests

that purchase. The holiday or ticket is supplied to them at

a discount. The profit is therefore the difference between

the advertised price which the customer pays and the

discounted price at which it is supplied to the agent. This

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is known as the commission. Therefore, travel agencies are

now forced to charge a percentage premium or a standard flat

fee, per sale. However, some companies still give them a set

percentage for selling their product. Major tour companies

can afford to do this; because if they were to sell a

thousand trips at a cheaper rate, they still come out better

than if they sell a hundred trips at a higher rate. This

process benefits both parties. Other commercial operations

are undertaken, especially by the larger chains.

The British company Cox & Kings is sometimes said to be

the oldest travel agency in the world, but this rests upon

the services that the original bank, established in 1758,

supplied to its wealthy clients. The modern travel agency

first appeared in the second half of the 19th century.

Thomas Cook, in addition to developing the package tour,

established a chain of agencies in the last quarter of the

19th century, in association with the Midland Railway. They

not only sold their own tours to the public, but in

addition, represented other tour companies. Other British

pioneer travel agencies were Dean & Dawson, the Polytechnic

Touring Association and the Co-operative Wholesale Society.

The oldest travel agency in North America is Brownell

Travel; on July 4, 1887, Walter T. Brownell led ten

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travelers on a European tour, setting sail from New York on

the SS Devonian.

Travel agencies became more commonplace with the

development of commercial aviation, starting in the 1920s.

Originally, travel agencies largely catered to middle and

upper class customers, but the post-war boom in mass-market

package holidays resulted in travel agencies on the main

streets of most British towns, catering to a working-class

clientele, looking for a convenient way to book overseas

beach holidays.

We conduct these studies because as a Hotel

Restaurant and Tourism Management student of Saint Paul

University Philippine we want to become competent in terms

of skills, knowledge, technology and most specially

values. By conducting these studies we hope that there

will be changes of our skills because we want something

new for this 21st century. We have Travel Agency subject

but unfortunately we failed to do some activities and

training for us to apply in our Travel Agency practicum.

In our studies we could able to evaluate the level of

performance of Bachelor of Science of Hotel Restaurant and

Tourism Management in their Travel Agency practicum.

During our practicum we are lack of exposure and knowledge

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with regards in the nature of travel agency most

especially in using different automated reservation

system. If we have some actual activities in travel agency

subject, those who will take their practicum in Travel

Agency have excellence skills and if we are competent they

will take us in their industry to work. To become travel

agent you must possess a skill of strong domestic and

basic international travel knowledge, ability to work in a

team environment, effective oral and written communication

skills, and proficient internet research skills for

customer information and achieves sales goals and

objectives.

Review of Related Literature and Studies:

To have clearer understanding about the background of

the study the following topics with sources are given:

A. Article 243 of the Tourism Code of 1980 defines a travel

agency:

A travel and tour agency is an entity engaged in the

business of extending to individuals or groups, travel

services and assistance to include documentation, ticketing,

booking for transportation and/ or accommodation,

arrangements, handling and/ or conduct of tours within or

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outside the Philippines, whether or not for a fee,

commission or any form of monetary consideration.

According to Andereck, K. L. (1995), many travel agents

have exited the industry, and relatively few young people

have entered the field due to less competitive salaries.

However, others have abandoned the 'brick and mortar' agency

for a home-based business to reduce overheads and those who

remain have managed to survive by promoting other travel

products such as cruise lines and train excursions or by

promoting their ability to aggressively research and

assemble complex travel packages on a moment's notice,

essentially acting as a very advanced concierge. In this

regard, travel agents can remain competitive, if they become

"travel consultants" with flawless knowledge of destination

regions and specialize in topics like nautical

tourism or cultural tourism.

According to Schuett (1991), the American Society of

Travel Agents is the largest such organization in the world.

Their main role is to advocate for travel professionals and

the travel industry. The association holds annual trade

shows at which travel professionals may exchange ideas and

learn about technological developments. The associations

mission is to facilitate the sale of travel products and

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membership in this organization signals the experience and

professionalism of the travel agent.

B. Function of Travel Agency:

It provides information and expertise in- country. As any

first time traveler has experienced, the first thing that

comes to mind when making travel plans, is to visit a travel

agency to secure as much information as possible on the

places to be visited. Normally it starts with the How to

get there. This includes airline schedules (airline names

and day of operations), fares, flight time, arrival/

departure times and the like. It also includes shipping and

bus schedules.

It impartially recommends particular destinations,

suppliers, products and services best suited to the needs of

the traveler. Once the needs of the prospective travelers

are correctly identified, the travel agent is now able to

impartially recommend a specific mode of transportation or

an airline best suited to the travel schedule of the client.

The agent can also recommend the hotel best suited to the

clients budget and the purpose of travel. Lastly, the AGENT

can recommend activities that would live up to the clients

expectations of the forthcoming trip.

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 It provides assistance in securing travel documents, such

as passport and visas, and immigration clearances. If

travelers do not have the necessary travel documents, the

travel agent will provide assistance in securing these, for

a free.

It processes travel arrangements by placing reservations,

obtaining confirmations and issuing corresponding tickets or

tour vouchers in behalf of the suppliers. Once the

prospective first- time travelers accepts the

recommendations of the travel agent, and requests that

reservations be placed, the client has been captured and

the money transaction begins. The placing of reservations by

the travel agency in behalf of the client is the first step

of travel operations. This step is followed by obtaining a

confirmation from the suppliers. Determining the payment due

to the travel agent and collecting same is the next step.

The last step of the transaction is the issuance of the

transportation tickets and tour vouchers, and of course

thanking and wishing the travelers a pleasant trip.

It assists in cases of refunds and cancellations. In the

event the travel arrangements made for the clients trip

were not available of due to circumstances beyond anybodys

control, and legitimate claims for refunds are in order, the

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travel agent will also help the client secure these from the

suppliers. The assistance extends to changes in the travel

arrangements which require additional payments or refunds.

C. The role of Tourism and Travel Agency in the Economic

Development:

According to Murphy (1990), the study concluded that if

tourism is properly planned the economic impact grows deeper

and wider as tourism grows. In Northern Areas tourism had

proved to be one of the major catalysts of initiation and

acceleration of development process. Significant rise in

income level, changing consumption pattern, flow of goods

and services in the area speaks of significant contribution

of the tourism to the improvement in the areas economy.

Till the time of conclusion of the study, tourist inflow had

very little or no impacts on the overall social and cultural

environment of the Northern Areas, as the local institutions

were too strong to counter the adverse imprints. However,

some adverse impacts, on negligible scale, have been

observed in localities, which receive tourists in relatively

large numbers, and those are mostly urban areas. However,

the intensity of social, economic, environmental, and other

impacts of tourism moves in sympathy with the level of

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tourist flow expressed as proportion of local population in

tourist receiving area.

D. Tour Package:

According to Holloway, a total tourism product consisting

of transportation from market area to the destination,

accommodation at destination and recreational activities

performed by the tourists.

According to Gregorg Tour Package, is an advertized

journey including specific features arranged and promoted

with tour literature by a tour operator and paid for in full

by the tourists before starting on a tour.

E. Functions of a Travel Agent:

According to Holloway, J.C., (1983), understanding the

functions of a travel agency - travel information and

counseling to the tourists, Itinerary preparation,

reservation, ticketing, preparation and marketing of Tour

packages, handling business/corporate clients including

conference and conventions. Sources of income: Commission,

Service Charges. Travel Terminology: Current and popular

travel trade abbreviations and other terms used in preparing

itineraries.

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 According to Bennett (1993), travel agents role in

family decision-making advertising strategies effective use

of relationship marketing and the selection attributes of

travel agencies Gitelson 1993). However, very few studies

have been carried out in Australia, particularly in the

South-East Queensland region, which is the key focus of this

paper.

F. Functions of a Tour Operator:

According to M Syratt Gwenda (1995), market research and

tour package formulation, assembling, processing and

disseminating information on destinations, Visioning with

principles, preparation of Itineraries, tour operation and

post tour Management and sources of income for tour

operation.

G. Types of Travel Agency:

A retail travel agency sells tourist products directly

to the public on behalf of the product suppliers and in

return gets commission.

According to Airlines Reporting Corporation (ARC) a

retail travel agency is defined as a business that performs

the following functions:

1. Quotes fares
2. Rates

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 3. Make reservations
4. Arrange travel tickets and accommodation
5. Arrange travel insurance
6. Foreign currency documents and accepts payments.

According to SARC retail travel agency business

consists of the activities involved in selling tourism

products/ services directly to the tourists and performs

normal functions such as issuing air tickets, making

accommodation and transportation reservation, providing

specialized service, and accepting and making payments.

A Wholesaler Travel Agency is specialized in organizing

package tours, which are marketed to the customers/ tourists

through the network of a retail travel agency or directly to

the prospective clients. A wholesale travel agency purchases

tourist product components in bulk and designs package

tours. Wholesale travel agencies assemble package holidays

and sell them to the clients through retail travel agencies.

H. Characteristics of Travel Agency:

A Retailers normally transact business and sell directly

only to the travelers; Act as counselor to the end- user,

and is an agent for the suppliers; Derives a fixed income

from predetermined commission schemes dictated by the

suppliers of travel components. Occasionally, when provided

with net rates, a limited mark up is added; Charges fees

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for ancillary services such as travel documentation and; is

limited to direct selling to end- users.

I. Activities of Travel Agency:

Travel Information a travel agency must give up to

date, accurate and timely information regarding

destinations, modes of travel, accommodation, sightseeing,

shopping, immigration, passport, visa, custom clearance and

procedure, health and security rules and about various

permits required to travel in particular areas. Itinerary

Preparation the term tourist itinerary is used to identify

the origin, destination, and all the stopping points in a

travelers tour. It is a composition of various elements and

designed after detailed study of market. Airline Ticketing

and Reservation use CRS. Tour Packaging and Costing tour

package is a combination of various tourism services/ goods

like transport, accommodation and other facilities at and en

route destination.

According to Zhou (1997), most travel agencies operate

on a commission-basis, meaning that the compensation from

the airlines, car rentals, cruise lines, hotels, railways,

sightseeing tours, tour operators, etc., is expected in the

form of a commission from their bookings. Most often, the

commission consists of a set percentage of the sale.

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J. Tourism Business and Development:

In a pioneer paper, Kraph (1961), the impact of global

tourism reflects the fact that it is an activity of

considerable economic importance. Tourism is not only source

of income and employment, but it also serves as a major

factor in the balance of payments for many countries, and

has therefore gained increasing attention on the part of

governments, as well as regional and local authorities,

business investors and other with an interest in economic

development.

K. Five Sector of Tourism:

According to Pierce (1996), in his book viewed tourist

destination from five broad sectors namely attraction,

transport, accommodation, supporting facilities, and

infrastructure. He explain that attractions encourage

tourists to visit the location, the transport services

enable them to do so, the accommodation and supporting

facilities like (e.g. shops, banks, restaurants, and

hotels)cater to the tourist well-being during their stay and

the infrastructure assure the essential functioning of all

the above sector.

Conceptual Framework of the Study:

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 During practicum students are assigned to different

area in travel agency under the supervision of the

department heads/supervisors. They familiarize themselves

with the work flow assign to them as well as communication

flow where they will be able to deal with different people

especially tourist. They must also familiarize on how to

and
2. other automated
Level of reservation system.
performance
This may help ofthe students for them to become aware on
the respondents In-depth
how to operate the different facilities and technical system
in travel agency analysis on
when they will have their
practicum. theon-the-job training in Manila. If
practicum
the
3. students train well performance
Significant there are moreof career
Enhanced
opportunities
Bachelor of performance of
difference
available forofthem
the in the future.
Science in BSHRTM students
respondents
Hotel of SPUP in
level of
Restaurant and Travel Agency
Research Paradigmin
performance of the Study:
Tourism Practicum
travelInput agency Process Output
Management
practicum when
Students of
grouped according
Saint Paul
to profile
University
variables
Philippines in
[Link]
Travel Agency
encountered in
Practicum
travel agency
practicum.

5. Suggestions
and 14
recommendations
for improvement.
 The Paradigm of the study presents that the inputs are

the profile, level of performance of the respondents in

Packaging and Tour Costing, significant difference of the

respondents level of performance in travel agency practicum

when grouped according to profile variables, problems

encountered by the respondents in their travel agency

practicum and suggestions and recommendations to improve the

skills, knowledge and values of BSHRTM students in travel

15
agency practicum. In here, they will improve performance or

skills most especially to the future practicumers.

The output on the hand is an enhanced performance of

Bachelor of Science in Hotel Restaurant and Tourism

Management Students of Saint Paul University Philippines in

Travel Agency Practicum.

Statement of the Problem:

This study aimed to assess the level of performance of

Hotel, Restaurant and Tourism Management students of Saint

Paul University Philippines in Travel Agency Practicum.

More specifically, it sought to investigate the

following problems:

1. What is the profile of the respondents when grouped

according to:

1.1. sex;
1.2. place of work

2. What is the level of performance of the respondents in

their travel agency practicum in the following areas:

2.1. ticketing

2.2. tour packaging

2.3. tour costing

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 3. Is there a significant difference of the respondents

level of performance in travel agency practicum when

grouped according to profile variables?

4. What are problems encountered by the respondents in

their travel agency practicum on the aforementioned

areas?

5. What are the suggestions and recommendations to

maintain/improve the performance level of the

respondents in their travel agency practicum?

Hypothesis

There is no significance difference on the respondents

level of performance on their travel agency practicum when

grouped according to profile variables.

Significance of the Study:

The finding of study will be beneficial to the

following:

To the Administration, Faculty and Staff of HRTM. The

result of the study would make the administration, faculty

and staffs realize the impact of the practicum performance

to the development of the students and consider the need for

its improvement. And the study will help the Administration

to be assured if the travel agency they will partnering with

will provide a good training for students.

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 To the Future Practicumers. The result of the study

would pave way to the enhancement of the practicum

performance. Thus it would be of benefit for them to be

familiarizing to the operation especially in their

respective areas if they will have their practicum in travel

agency.

To the Travel Agency. The result of the study may

encourage travel agency to recruit student of BSHRTM to work

in their field base on the performance they have shown when

they will have their on-the-job training in travel agency.

To the Researchers. It would be great significance for

them in recommending appropriate strategies that would help

enhance the BSHRTM practicum and training program.

To the Future Researchers. The result of this study

would help other researchers by providing references for

future follow-up research.

Scope of Delimitation of the Study:

This study aim to determine the level of performance

of Bachelor of Science in Hotel Restaurant and Tourism

Management Students of Saint Paul University Philippines in

Travel Agency Practicum for them to enhance their skills and

knowledge in the operation of travel agency. For them also

to be aware on how to operate the different kinds of

facilities and technical system when they will have their

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practicum in travel agency and to be able to know the

specific job description working in travel agency. In this

study enable as to share our ideas to improve the skills of

our fellow HRTM students that we must have an actual

application on what we have learn during our lecture and

also focusing on how to operate the different automated

system and technical skills for the beneficiaries of future

practicumers. The respondents in this study are the BSHRTM

4th year who undergone their travel agency practicum. If we

become a travel agent in the future is one of the greatest

opportunities for as that we may apply on what we had

learned in our practicum on how to perform booking,

ticketing, packaging, making a reservation and itineraries

for tourist.

Definition of Terms:

To have a clearer understanding in the study the

following important terms are defined:

Abacus. Ancient Chinese counting and calculating device

using rows of beads to perform calculations; still in use in

many part of Asia.

Accounting. The process of recording financial

transactions as well as reporting on the financial status of

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a business. The department in a company that handles these

tasks.

Agent-less booking. A booking made by a consumer using

an automated system and bypassing a travel agent.

Back to back ticketing. A strategy used to reduce the

cost of a round trip involving no Saturday stay when the

cost of two excursions is less than the cost of one

unrestricted fare.

Booking. A reservation.

Certified Travel Counselor (CTC). One who has passed a

series of rigorous tests of professional competency

administered by the Travel Institute, formerly known as the

Institute of Certified Travel Agents.

Domestic fare. A fare charged for travel within a

country

Double booking. A not-nice practice of holding

reservations to the same destination for the same

times/days, on the same carriers but through different

travel agencies, when only one reservation will ultimately

be used.

Foreign independent tour. Actually used generically now

for a travel package put together by a travel agent from

separate components such as car, hotel and airfare, adjusted

exactly as the traveler wishes.

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 Global distribution system (GDS). An international

computer reservation system that accesses many databases of

suppliers, airlines, etc. in different countries, such as

AMADEUS.

Incentive travel. Travel as a reward for an employee's

outstanding performance.

Inclusive tour. A package tour that bundles

transportation, accommodations, transfers, sightseeing,

possibly some meals, etc.

Itinerary. a detailed plan for a journey, especially a

list of places to visit; plan of travel.

Late booking fee. A fee due if travel arrangement are

made at the last minute. Normally covers express delivery of

documents and other last-minute arrangements that may have

to be made by a tour operator.

Open jaw. A trip in during which there is no travel by

air between two cities, such as a flight to Washington DC,

then travel by rental car to Charlotte, NC, then a return by

air from Charlotte back to the original departure city.

Passport/visa service. A service that will take your

passport and hand carry, if necessary, to the appropriate

embassy in order to expedite a visa.

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 Performance. The linguistic behavior of an individual.

Retail travel agency. Sells tourist products directly

to the public on behalf of the product suppliers and in

return gets commission..

Tour operator. A person or company which creates

and/or markets inclusive tours and subcontracts with

suppliers to create a package. Most tour operators sell

through travel agents and/or directly to clients.

Tour order. A coupon given to the purchaser of a tour

package, identifying the tour, the seller, and the fact that

the tour is pre-paid. It is used as a form of proof of

payment and receives vouchers for meals, porter age,

transfers, entrance fees, and other expenses. Also see tour

vouchers.

Tour organizer. Person who locates and creates groups

for preformed tours. The tour organizer is often compensated

only with a free trip

Tourist. One who travels for a period of 24 hours or

more in a place other than that in which he or she usually

resides, whose purpose could be classified as leisure

(whether for recreation, health, sport, holiday, study or

religion), business, family, mission or meeting.

Travel agency. Is a retail business that sells travel

related products and services to scustomers on behalf of

22
suppliers such as airlines, car rentals, cruise lines,

hotels, railways, sightseeing tours and package holidays

that combine several products.

Travel Agent. A person who has full knowledge about

tourist product- destinations, modes of travel, climate,

accommodation and other areas of service sector.

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