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Distance Learning
Senior High School Department Instructional Module
TVL TM Track 2 – Travel Services
Module 3
The Travel Management Company

Lesson 1: The Travel Agency

(Week 6)

MY JOURNEY

Travel, whether for business or pleasure, requires arrangements. The traveler usually
faces a variety of choices regarding transportation and accommodations; and if the trip is for
pleasure, there are a variety of choices regarding destinations, attractions, and activities. The
traveler may gather information on prices, value, schedules, characteristics of the destination,
and available activities directly, investing a considerable amount of time on the Internet, or
possibly money on long-distance telephone calls, to complete the trip arrangements.
Alternatively, the traveler may use the services of a retail travel agency, obtaining all these
arrangements for a fee.
The relationship between the suppliers of tourism services (transport, hotels,
restaurants, entertainers) and tourists is an intermediary (most of the time) coming from tour
operators (the creators of tourism packages) and the retail travel agencies (which sell the
tourism products created by tour operators for a commission). A tourism package usually
includes air transport, accommodation, transport services from the airport to the hotel and back.
Tour operators purchase beforehand a large range of services, for example airplane seats from
different airline companies, hotel rooms, and other facilities regarding transfers from/to hotels
or airports (Marin-Pantelescu, 2009). Tour operators buy in bulk and then sell the created
tourism packages individually. Travel agencies handle all types of travel such as holiday and
business travel on individual or group based.
The travel trade is a big part of tourism. It consist of people and companies that resell
travel products that they have bought and/or reserve from other parties. These are competent
travel professionals, and they are call travel agents & tour operators.

MY TARGETS

Upon completion of this lesson, you will be able to:

a. Understand travel agents and their role on the distribution system.
b. Consider the growing impact of the Internet in the distribution system.
c. Examine the role of the tour wholesaler.

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 MY WARM-UP

Task 1
Direction: Have you tried joining educational trips? How was your experience in travelling
when somebody is working it for you to have a memorable trip? If you had no experience joining
a trip, research on a blogs that shares their experiences. Share a scenario of which you appreciate
the roles of travel agency or tour operator. Write your answer on answer sheet labelled as
M1L1T1. Submit it on Oct. 9, 2020.

MY READING TEXT (ENGAGE)

THE TRAVEL AGENCY

Article 243 of the Tourism Code of 1980 defines “travel and tour agency is an entity engaged
in business of extending to individuals or group, travel services and assistance to include
documentation, ticketing, booking for transportation and/or accommodation; arrangements,
handling and/or conduct of tours within or outside the Philippines, whether or not for a fee,
commission or any form of monetary consideration.”
“A Travel Agency is a commercial enterprise where a traveler can secure information and
expertise, get impartial counseling, and make arrangement to travel by air, sea or land, to any
point in the world.”
It acts as an agent of the different suppliers in the tourism industry (also known as travel
components), namely:
 Transportation companies
 Hotels/resort
 Car rental companies
 Tour operators
 Sightseeing companies
A travel agency is a middleman—a business or person selling the travel industry’s individual
parts or a combination of the parts to the consumer. In marketing terms, a travel agent is an
agent middleman, acting on behalf of the client, making arrangements with suppliers of travel
(airlines, hotels, tour operators) and receiving a commission from the suppliers and/or a fee
from the client.

THE TOUR OPERATOR

Tour Operator, on the other hand, are companies that contract and purchase separate
travel components and assemble them into tour package. They are considered to be
“wholesaler”.
Tour operator links between customers (tourists) and primary service providers. This acts
as a major destination promoter and this is also called as wholesaler. It is a professional agent
with the capacity of buying services in bulk and distributing through the channel in methodical
and organized manner.
“The Tour Operator is the NUT that keeps all the BOLTS (suppliers) together”

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THE CHANGING WORLD OF THE TRAVEL AGENT
Although the travel industry has struggled through tough times in the twenty-first
century because of 9/11 (that is, September 11, 2001) fears of severe acute respiratory
syndrome (SARS) in 2003, the global recession of 2008 and 2009, and concerns regarding
terrorism and war throughout the decade, the long-term expectation for all travel sectors—
except travel agents, is recovery and growth. The travel agent sector reached its peak in numbers
in September 1997 with 33,775 ARC-accredited retail agency locations. As of July 2010, there
were 15,335 ARC-accredited retail agency locations. Agents sold over $80 billion worth of air
travel in 2009.
After decades of offering travel agents, a standard commission of 10 percent or more, air
carriers in the United States stopped paying base commissions to travel agents in 2002. These
changes in the commission system driven by the airlines altered the distribution system
fundamentally. Agents were no longer paid to process transactions, and the airlines lost a huge
sales force that was not paid until a sale was made.
To offset the loss of commissions, agents developed new sources of income. The most
readily available source was service fees. Today, travel agencies charge fees for their services. In
addition to charging fees, many agents have also turned to selling more cruises and tour
packages and shifted to an emphasis on leisure travel.
A second major factor in the decline in travel agents is the Internet, which has affected
travel purchase behavior. The Internet has changed the way much commerce is conducted.
Many businesses use the Internet as a way to bypass product and service intermediaries and
deal directly with consumers. The airlines have been a leader in aggressively using e-commerce.

THE TRAVEL AGENT VERSUS THE INTERNET

The Internet is no longer an emerging channel, but a major channel—a juggernaut—with
half of travel in the United States now booked online. Consumers have a choice. They can make
their own bookings on the Internet, or they can use the services of the travel agent and they are
choosing the Internet. For simple, easy-to-make transactions and attractive travel opportunities,
the Internet is a powerful tool. It can increase the scope and reach of a consumer’s efforts and
allow a person to check hundreds of options or research destinations in depth. But to make the
Internet work effectively, a person has to understand where to look and what questions to ask;
otherwise, hours can be wasted surfing the Web. This is where a travel agent can save clients a
lot of time and effort.
Because of the expertise of travel agents, many customers may save time and achieve
savings that more than cover the cost of service fees. Agents have superior knowledge of the
industry and are aware of various alternatives that provide lower fares that the average
consumer is unaware of. Agents are more likely to know enough to check alternative airports
and departure times. Agents can search the Internet as well as their CRS for low fares, and they
typically have specialized Web search tools that make searching more efficient. Perhaps the
greatest advantage is that once a booking is made, travel agents continue to manage the
customer’s travel, serving as an alert system, troubleshooter, and customer advocate when
supplier problems occur. The Internet can be a valuable resource, but it cannot replace a human
being who will provide personalized service to help a client and offer a number of alternatives.
Traditional travel agents have an advantage over Internet sites because they know their
clients and how to serve and please them. For example, they know or have the opportunity to
know when their birthdays are, their anniversaries, their travel patterns and history, their
limitations of time and budget. Their database allows them to suggest a trip to celebrate an

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anniversary. The personal touch can be a real competitive advantage for traditional travel
agents.
The market segment looking for these benefits will continue to use the traditional travel
agent while the price-sensitive consumer will go online because the Internet can provide
multiple comparisons and it enjoys the perception that the lowest price can be found on the
Internet. Currently, the Internet is winning the marketplace battle.

TYPES OF TRAVEL AGENCIES

Travel agencies are broadly divided into wholesale and retail travel agency for the distribution
of sale of tourism services. In addition to this classification, travel agency can also be classified
as implant agency, conference organizer, meeting planners, trade fair organizer, etc.

Wholesale Travel Agency

The business of wholesaling in tourism industry is no way different from the wholesaling
in the commodity market. A wholesale travel agency assembles different components of services
to design tour packages for catering FIT and GIT customers. A wholesaler is one who initiates the
process of forming organized tours or sells the individual components directly or indirectly
through franchise or retail agents. For example, a wholesaler of Singapore airline or Taj Hotel or
Sterling Time Share Group is authorized to sell the airline tickets or hotel rooms on behalf of the
principal service providers. A wholesaler may be a consolidator or a manufacturer of tours or
General Sales Agent (GSA). It buys service components in bulk from different suppliers and it
designs package and sells or resells these components together.
If it is tour wholesaler, the process starts from the research development followed by
itinerary preparation. The most critical role of a tour wholesaler is the pricing of package that
positions the product in the market. Thus, tour wholesaler buys the service in bulk from the
primary or direct service providers. It means that bulk of hotel rooms and airline seats is sold in
a target time period for which wholesalers receive special commission. The GSA of British
Airways also appoints the retail travel agents to sell the tickets.
On the other hand, a wholesale travel agent is appointed to promote the sales of
outbound package tour in a particular region. Many retail travel agents are also authorized to
retail the outbound package tour in smaller cities and towns. The commission is paid to retail
agents periodically.
It however depends on retailer agencies to promote the products. Wholesaler travel
agents may also directly sell to the customers through their own retail divisions. For example,
Thomas Cook has its own network of branch offices in big cities to directly sell tour packages to
customers. In many cases, Thomas Cook appoints retail travel agents. It generates revenues
through volume discounts from principal services providers such as hotels, airlines, railways, car
rentals, coach operators, ground handlers etc.
A wholesaler doesn’t earn on commissions directly and it earns revenue through
discounts on bulk reservations from principal suppliers. There is always an element of market
risk for tour operators to block airline seats or hotel rooms in bulk. It takes the risk of selling
them in advance for which advance payments are made to the primary service providers. Apart
from the usual services, it also renders services like consultancy, travel counseling, travel
document processing, currency exchanges, insurance, shipping items etc. The wholesale travel
agencies in India are Raj Tours and Travels and Mercury Travels which are also the full-service
travel agents.

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Retail Travel Agency
According to Airlines Reporting Corporation (ARC), a retail travel agency is defined as “a
business that performs the following functions: quotes fares, rates, makes reservations, arranges
travel tickets and accommodation, arranges travel insurance, foreign currency, documents and
accepts payments”. A retail travel agency is one that sells directly to customers at several small
locations in cities or towns. Retailer gets commission from the gross sale of hotel rooms, airline,
train, bus and cruise tickets, insurance, foreign exchange, etc. Commission is the primary source
of its revenues. A two-way selling method, that a large travel agent practices, includes
commission and mark-up price. A marked-up price refers to mark up of cost of tour. It is sold on
a higher price. Further, market-up price is obtained from the difference between retail price and
the wholesale cost. The role of retail travel agencies is crucial when majority of principal service
providers have no choice to increase the sale without the help of retail travel agents. Thus, there
is a mushrooming growth of retail travel agents dealing with the booking of hotel rooms, airlines
seats, cruise line seats, etc. They consider in reaching the customers through retail agents or
getting the hotel or airline promoted through retailers easy, reasonable and sustainable.

Full Service Agency

It is a type of travel agent that deals with all kinds of services. It may be called as complete
travel agents. Apart from being an accredited agent of IATA or any other principal service
providers, this full-service travel agent owns the transport fleets and charter flights and cruises.

Commercial Agency
It is a category of unconventional travel agency that deals with business travel. It books
convention centers and stalls in exhibition center. It also arranges venue for conducting small
and large meetings.

Implant Agency
It is a type of travel agent that is located in the premises of corporate offices to make
travel arrangements of employees. It is a registered travel agent appointed as per the
agreements.

Group / Incentive agency

It is an emerging form of travel agency business that a specialized category of agent acts
as intermediary to deal with bulk bookings for employees and clients of corporate houses.

Online Travel Agency

It resembles an offline travel agency in all its services. It operates on the internet through
a website connected to a global distribution system. The OTAs apply the operational mechanisms
of e-commerce and transact online with their customers. The OTAs offer information, bookings
of hotels, cars, reservation of seats in airlines, railways, ships and buses. They sell package tours;
customize tours and take enquiries. Transaction of payment is also done online using online
payment modes such as credit/debit cards, internet banking, pay-pal etc. Some of the major
OTAs in India are cleartrip, goibibo, travelocity, traelguru, [Link]. [Link] etc.

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 Assess and Evaluate (EXPLORE AND EXPLAIN)
Task 2
Direction: Compare and contrast the advantages and disadvantages of getting the
services of travel agents as compared in availing a tour package through internet. Give at least 5
advantage and disadvantage. Which do you think is still advisable in availing a tour package?
Write your answer on answer sheet labelled as M3L1T2. Submit it on Oct. 9, 2020.
Connecting what I learned (ELABORATE)
Task 3
Direction: With the intensification of internet use in everyone’s lives individualistically
booking a tour package directly with tour operators or purchasing a passage directly to an airline
or shipping line company is now more available than it had been in the past. In your own opinion,
as a Tour Operator is it okay to directly sell tour packages to the tourist without passing thru the
travel agent? Why and Why not?

GLOSSARY
Airlines Reporting Corporation (ARC) – An organization that provides a method of approving
authorized agency locations for the sale of transportation and cost-effective procedures
for processing records and funds of such sales to carrier customers.
All-inclusive package – A tour package in which most travel elements are purchased for set price.
Also called an all-expense package.
Electronic ticket – a “paperless” airline ticket allowing one to check-in and fly with just proper
photo ID. What may look like a ticket is actually just a paper passenger receipt. E-tickets
cannot be lost, or used by anyone else, so they are safer than standard paper tickets, which
may soon become extinct. One drawback is that e-tickets on one carrier cannot be honored
by another, so in a cancelled-flight snafu, the original carrier must print hard copy tickets
before another airline can accept them. This presents major paperwork problems for the
affected carrier.
FIT – 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. May include city tours, theater tickets, and other “independent”
options, and may also include custom mapping/routing to accomplish the client’s goals. It
now is more commonly used as an acronym for Flexible Independent Travel. It describes a
type of travel or tourism that does not incorporate a packaged tour but is nonetheless
customized by a travel-selling professional.
GDS – Global Distribution Systems – A system containing information about availability, prices,
and related services for Airlines, Car Companies, Hotel Companies, Rail Companies, etc.
and through which reservations can be made and tickets can be issued. A GDS also makes
some or all of these functions available to subscribing travel agents, booking engines, and
airlines. The GDS leaders are Amadeus, Apollo/Galileo/Worldspan, Sabre.
Itinerary – A list of a tour’s or entire trip’s schedule and major travel elements.
Travel Management Company (TMC) – A commercial establishment where prospective traveler
can secure information, expert advice, and make arrangement to travel by air, sea or land
to any part of the world.

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 REFERENCES
BOOKS

Versoza, R.,[Link].(2016) TLE-TVL Series Travel Services

Goeldner, C., Rithchie, J. R. B, (2009) 12th Edition. Tourism: Principles, Practices, Philosophies.

ONLINE SITE
[Link]

PRAYER FOR THE BEATIFICATION OF

VENERABLE MOTHER CONSUELO BARCELO
(Co-foundress of the Augustinian Sisters of Our Lady of Consolation in the Philippines)

God of Love and Compassion, you endowed Venerable Mother Consuelo

with great love and zeal for your honor and glory. We commend to You her life
and example of love of God and neighbor. With faith and trust in Your gracious providence,
we pray for her beatification sp that she may continue to inspire us in seeking Your will
and living a holy life. God of mercy, we also humbly present to You our need, united with the
confirmation of the holiness of life of Venerable Mother Consuelo.
(Silently mention your intentions)
In gratitude for your boundless blessings, we praise and thank you,
Our God, Father, Son and Holy Spirit. Amen.

Our Lady of Consolation, pray for us.

Our great father, St. Augustine, pray for us.
Mother Rita, Venerable Mother Consuelo, and
all deceased Sisters, Priests and Brothers, intercede for us.
MY HEART IS RESTLESS, UNTIL IT RESTS IN YOU, O LORD.

Prepared by:

MARY GRACE MALERIADO, CGSP

Track 2 – Teacher

Noted by:

ANIE O. DIAZ, CGSP, LPT, MBA-HRM

Track Chair – TVL HM TM

MANUEL A. DELUMPA, JR., LPT, MAEd

Assistant Principal

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 ANSWER SHEET

TRACK 2 – TRAVEL SERVICES 1

Name: Section :

Module 3 Lesson No. 1

Week 6: Task 1 – My Warm-Up ( M3L1T1)

Written Task Due Date : Oct. 9, 2020

5 4 3 2 1
Quality of Writing With excellent Very Informative Somewhat Gives some new Gives no new
information and and well organized informative and information but information and
organized very well organized poorly organized very poorly
organized

Ideas Present ideas in an Present ideas in a Presents ideas in Ideas are too Ideas are vague or
original manner consistent manner slightly consistent general unclear
manner

Understanding Writing shows Writing shows a Writing shows clear Writing shows Writing shows little
deep and clear fairly sound understanding adequate understanding
understanding understanding understanding

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 ANSWER SHEET

TRACK 2 – TRAVEL SERVICES 1

Name: Section :

Module 3 Lesson No. 1

Week 6: Task 2 – Assess and Evaluate (M3L1T2)

Performance Task Due Date : Oct. 9, 2020

TRAVEL AGENCY INTERNET

ADVANTAGES ADVANTAGES

DISADVANTAGES DISADVANTAGES

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 ANSWER SHEET

TRACK 2 – TRAVEL SERVICES 1

Name: Section :

Module 3 Lesson No. 1

Week 6: Task 3 – Connecting What I’ve learned (M3L1T3)

Performance Task Due Date : Oct. 9, 2020

RUBRICS

5 4 3 2 1
Quality of Writing With excellent Very Informative Somewhat Gives some new Gives no new
information and and well organized informative and information but information and
organized very well organized poorly organized very poorly
organized

Ideas Present ideas in an Present ideas in a Presents ideas in Ideas are too Ideas are vague or
original manner consistent manner slightly consistent general unclear
manner

Understanding Writing shows Writing shows a Writing shows clear Writing shows Writing shows little
deep and clear fairly sound understanding adequate understanding
understanding understanding understanding

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