Hospitality Exam 6 Chapter 27 Travel Management Company A more accurate term for the new travel agency because it reflects less of a ticketing role and more consulting and management functions that successful agencies now provide Travel Management Companies provide information to plan an optimal trip arrange individualized coordinated itineraries and secure tickets for transportation lodging receptive services resorts and cruise lines Travel Management Companies represent about 70 of U S travel market sales Tour Operators Organize travel programs for people on every continent by all kinds of transportation modes Tour operators differ from travel agents in that they plan arrange and market established packages at a set price Tour Operators Offer competitive prices through volume buying power 166 Billion spent on packaged tours worldwide by U S and Canada residents Thomas Cook invented the first hotel coupon and started the travel agency business Travel Agencies 85 are small independently owned and operated Travel Management Companies 57 single location businesses 73 affiliated with or buy the services of an association or consortium The average Travel Management Company 68 revenue leisure travelers 25 revenue business travelers 7 revenue combination of business and leisure sales Corporate Agencies Serve clients with little or no walk in clientele Cater to corporations through telephone or email Rely heavily on revenue from airline tickets hotel rooms and rental cars Leisure Agencies Primary clients Tourists going on vacation Rely heavily on cruise sales resort packages airline tickets rental cars tours and hotel room sales Wholesalers future sales Specialized Leisure Agencies the offer Incentive Travel Houses Sell primarily to travel agents and NOT to the general public Organize and promote specific types of travel services Contract with suppliers for blocks of tickets or rooms in anticipation of Specialize in leisure products such as cruise or dive agencies Because they offer limited products they can become experts in the products Develop customized programs for corporations who offer incentives for high employee productivity by providing deluxe travel rewards Earn profits from supplier commissions and management fees Consolidators Purchase large blocks of airline seats or cruise berths at a substantial discount and resell them to travel agents for a lower than normal fare Known as Bucket Shops Electronic Travel Agencies Communicate entirely from websites and email No physical location Have extensive databases Open 24 7 Travelocity An online travel agency independently owned Taken away a significant amount of travel industry sales Projected to reach 40 of the U S travel market by 2007 Orbitz Electronic Travel Agency owned by airlines Travel Management Companies get paid in the form of commission based on the percentage of the sales price Commission used to be 10 on airline tickets but Delta announced in 1995 that they would not give more than 25 to a one way domestic ticket Cruise lines increased their commission to travel agents to 10 12 making travel agents leave the airline industry and start seeking other sources of income from cruises tours resorts and international air carriers Many travel suppliers are now offering agents an override commission for of an additional 2 5 for group sales Travel agents on average make 45 000 per year Global Destination Systems Lists over 15 million fares a quarter of which are updated daily Started by airlines Full scale travel information systems GDS is critical for travel agents Certifications 1 The Airlines Reporting Corporation ARC 2 The International Airlines Travel Agent Network IATAN 3 Certified Travel Counselor CTC Information Revolution Many are using broad internet searches now o Travelocity Hilton Hotels was the first to put all properties on the web Delta offers Internet only pricing to attract buyers to their home site The most basic functions of tour operators are to bundle together a package of travel services offer it at a fixed price and provide some or all of the services during a tour itinerary Wholesale Tour Company Arrange and promote tour packages but sell them primarily to travel agents or international tour operators and not to the general public Receptive Operators aka Ground Operator may meet and greet groups at airports make arrangements for lodging and shuttle them to the lodging at one particular destination Specialty Travel Tour Operators Organizations who possess highly specialized equipment and guides for unique tours such as diving rafting biking and photography programs Clients are on average 40 years old Motorcoach Tour Operators Own motor coaches holding up to 25 people Sightseeing is the most popular tour Types of Jobs with a Tour Operator 1 Tour Escort Guide 2 Operations Manager a Lead everything from adventure travel to sightseeing a Manages the logistics of equipment and staff scheduling as well as coordination with other suppliers Must be proficient in budgeting 3 Tour Planner a Designing a new tour contracting with appropriate suppliers testing the itinerary and costing the program are the duties of a tour planner 4 Sales and Marketing Manager a Develops promotions directed at consumers Chapter 28 Event A destination in search of an audience Meeting An audience in search of a destination Meeting and Conventions Bring people together for a common purpose Meeting and Event Planners work to ensure the purpose is achieved seamlessly Conventions A special type of meeting held in a specific location Conferences Larger business or educational meetings without a trade show Destinations that host meetings benefit economically from them because people will spend money Business travel creates 2 4 million jobs and creates 240 billion annually of all air travelers will attend a meeting 1 3 of all hotel income is generated by people attending meetings Meetings and events provide 16 billion in tax revenue at the federal state and local level Suppliers Meeting planners that represent destination or venue hosting the event Always trying to convince groups to have meetings at their location Buyers Employed by organizations that plan meetings Meeting Professionals International MPI is the leading international organization of meeting planners Meeting Catagories Corporations Associations Government agencies Civic Groups Religious Organizations Meeting prospects are referred to as SMERF 1 Social hobby clubs 2 Military
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