CHAPTER FOUR

ROLE OF TRAVEL AGENCIES IN THE DEVELOPMENT OF

INDIAN TOURISM
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HISTORICAL BACKGROUND OF TRAVEL AGENCY

Travelling is a very old phenomenon. In the

previous days the people used to go to other places in
search of food, pigrimage or visiting new places by
carts, bullock carts, camels and dolis. They stayed at
sarais and dharmshalas and also some times in temples and
other places they were provided food by the pr^iest of
the temple. In inodern time they all are converted into
modern star hotels and transport operators providing
luxuries facilities.

The travel agency business started first by Thomas

Cook and American Express Company. Travel agency does not
have a long history. On June 9, 1841 Thomas Cook walked
fifteen miles to a temperance meeting at Leicester. On
this journey he concieved the idea of hiring a train to
take his fellow members of the temperance society.

Thomas Cook put his idea into operation and he

organised a tripof570 passengers by train. It was the
first time that an agent bought the railway tickets in
bulk and resold them to the members of his group. This
venture was soon followed by excursions to various other
places and in 1843, 3000 school children were taken to a
trip from Leicester to Derby in England.
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Thomas Cook started a full time excursion agency in

18A5. Cook diversified his business in other directions
and became a tour operator, besides being an
excursionist. Cook started making his tours interesting.
He arranged the first all inclusive tour from Leicester
to Liverpool in 1845. He also invented hotel coupons. He
took 350 people by steamship on a tour to Scotland. He
also published a guide book for this tour.

The excursionist invasion of Scotland soon followed

in 1846 and 1847. From 1848 to 1863 Cook coducted many
circular tours of Europe including visit of different
countries. Thomas Cook and sons had established their
first official London office in 1865. John Mason Cook now
joined his father as a permanent partner and took charge
to London office.

In the late 70's of the ninteenth century Cook

arranged a deluxe tour of India with the P & 0 steamship
line. On arrival in Bombay, the travellers were moved in
spacious compartments on Indian railways to see the Taj
Mahal. Meals were served to the travellers in train. In
1874 he provided another services which was the begining
of the present day travellers cheques. It is insured
against loss. The issuing company makes little money on
selling travellers cheques.
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In the year 1880 John Cook left for India and

established offices in Bombay and Calcutta and formed the
Eastern Princess Department. The management of the company
passed on to John Mason Cook's three sons in the year
1898. At the time of John Mason Cooks death the Cooks
business in—eluded three aspects of travelling selling
tours, banking and shipping. The company has now 700
offices and about 13000 employees around the world. The
American Express Company is the world largest travel
agency comes at second place after Thomas Cook and sons.
Besides selling tours the company deals in travellers
cheques. The company may be said to have its origin in the
same year- 1841.

The American Express Company is the major

participant in the international currency transactions,
buying and selling about 200 million dollars on each
working day. The company also introduced American Express
Credit Cards which are perhaps the most popular credit
cards in the world. A holder of such credit card can go
to any part of the world and pay his hotel bills, eat
food in restaurants, buy an international air ticket or
any thing else from places where American Express Cards
are accepted.
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The AMEXO provides facilities of computerised

reservations of hotels in major cities through out the
world. If a traveller in United States wishing to make a
reservation of hotel anywhere in the world can make a
phone call to the American Express Company reservation
office at no charge.

In 1928 another big company Exprinter Travel

Services appeared on the scene in Loss Angles. It started
the whole business of selling tours to small travel
agents. There are estimated 44000 travel agencies located
throughout the world. Fifty percent of the travel agencies
are in the United States.

In India travel agency business is relatively new.

At the time of independence there was hardly any travel
agency. Organised travel agency business really started
after independence and by 1949 six travel agents in India
had set up an apex body called Travel Agents Association
of India with head quarter at Bombay and headed by a young
travel agent Nari J. Katgara. And till now there has been
a great development in the business of travel agencies.
Travel agency in India is now a major trade activity
generating direct employment and also considerable
indirect employment by bringing tourists.
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THE
ROLE OF TRAVEL AGENT IN*PROMOTION OF TOURISM

Travel agents play a vital role in the promotion of

tourism.Travel agency is a service industry. It depends on
the goodwill of the people. Travel agents provide all
facilities to the customers. A travel agent arranges
travel services from suppliers such as airlines, steamship
companies, railways, bus companies, car rental firms,
hotels and sightseeing operators. In the modern world
travelling is more complicated, especially to foreign
countries. The stations reveals that about 15% of people
depends on travel agents for planning their journey.A
successful journey cannot be operated without the help of
travel agents. It is the travel agent who packages and
processes all the various attractions of the country and
presents them to the tourists.

Before we study about the role of travel agents in

tourism promotion, we must understand the concept of
travel agency, early history, its functions and role of
travel organisation etc.

Travel means to make a journey especially of

some length to distant countries. Agent means one who does
the actual work . Especially one who represents a person or
firm in business. Agency means office of
agent-establishment for business purposes. One who does
the actual work for another person to enable that person
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to make a journey is a drawl agent . oi the establishment

the agent needtnot necessarily be an individual. It could
also be a f irm ,ocompany etc.

A wholesale travel agent specializes in putting

together tour lofferings. It is marketed to the public
through a netwfcfek of retail agents or airlines. He does
not directly deral' with the consumers.

A number of wholesellers in the USA and Europe do

have retail divi-sions. WholeseUers may contact with a tour
operator for all'or only certain land arrangements.

A wholesale travel agent desires tour packages

under the agency's name. He may take land packages already
assembled by ac ground operator and combine them with or
surface transportation to form new packages. The latter
practice is more common in international tourism rather
than negotiating directly with individual sellers i.e.
hotels, transportis operators and guides.

The retail travel agent sellers travel services

directly to the^ consumers. He acts as the agent for
airlines steamship lines, railways, hotels, car rental
firms or, sometimes, for the wholesale travel agencies.
Most of the travel agents hold appointments from lATA and
steamship conferences.
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ROLE OF TRAVEL AGENCY IN TOURISM

Travel agency is one such organisation in the

Private sector which playes a key and crucial role in the
entire process of developing and promoting tourism. It is
the travel agent who packages and processes all the
various attractions of the country and presents them to
the tourists.

The scope of the rolls of Thomas Cook company and

American Express company were also limited in the
begining as the mass tourism as we know it had not begun.
The introduction of the air travel which gave boost to the
travel agency business. The introduction of an economy
class on aeroplanes, crossing the North Atlantic heralded
the era of travel agency and was responsible for their
growth.

Continuing development of transport system improved

living standards combined with reduction in working hours
is the root cause of today's upward surge in travel. The
scope of the activities of the travel agents in the
context of modern tourism can be described as follows" to
give advice to the potential tourist on the merits of
alternative destination and to make the necessary
arrangements for a choosen holiday which may involve the
booking of accomodation, transport and other relevant
services".
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The retail travel agent provides a direct link

between the consumer and the suppliers of tourist
services is airlines, transport companies, hotels,
autorental companies etc. The travel agency provides
informations about tourism.

Tourism is a journey which depends upon the

travel agency because travel agencies gives advice to
intending travellers on the type of programme which they
may choose for their holiday or business travel. Travel
agent who is the retailer of the tourism product, the
tour operator is a manufacturer of a tourism product. He
plans, organises and sells tours. Tour operat-^or makes
all the necessary arrangements-transport, accomodation,
sight seeing, insurance, entertainment and other matters
of this package in an inclusi-ve price.

So the travel agency plays an important role in

the development of tourism in the country and its
promotion is recognisedby all the segments of the travel
industry. The government works in close collaboration
with not only in India but abroad as well, encouraging
them to plan an organise package tours for various
destinations in the country. In India the Department of
Tourism recommends the release of foreign exchange to the
travel agents to enable them to open their branch offices
abroad to promote tourism.
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TRAVEL INDUSTRY DEFINITION

Travel Agent: "A person, firm or corporation

qualified to provide tours, cruises, transportation, hotel
accomodations, meals, transforms, sightseeing and all
other elements of travel to the public as a service".

The scope of the functions of a modern travel

agency has widened greatly over the years and specially
after the introduction of the jet air travel. The scope of
the activities of the travel agent with reference to
modern tourism can be described as follows: "to give
advice to the potential tourist on the merits of
alternative destination and to make necessary arrangement
for a chosen holiday which may involve the booking of
accommodation, transport or other relevent seruices. The
travel agent accummulates knowledge, expertise and
contacts with those who provides services. Thus, this is,
sometimes an invaluable intermediary.

The need for a travel agency had arisen because

travel in •foreign countries was complicated and the
various components of a trip had to be laboriously
assembled to suit the requirements of the traveller.
Moreover, the travel agents are helping the tourists in
all fields.
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The best use of travel agency for a tourist who

comes to India or visits any country is in making best use
of time and money at its disposal. It is a source of
advertisement media for a country. When the tourist will
go back to their native lands happily and satisfied, the
country will receive more tourists. In result the economic
and social condition of the country will improve by
earning more foreign currency from tourists.

Travel agency provides other services to the

clients accordingtothe travelling need within the country
or outside the country. It helps in the booking of air
seat, reservation, booking of hotel room, purchasing of
railway ticket, arrangements of ground transportations,
provide services related to passport, visa, foreign
exchange, insurance services etc.

The working of travel agency depends upon the

capacity of travel agency. Some times it provides the
complete travel services to the clients and some times
limited. In holidays masses of tourists move to various
destinations, for them travel agency is the best place
which provides complete travel informations to the clients
under one roof.
 iu-j

Travel agency also preiF'ares package tours of

different types like Special Interest Tours, Incentive
tours, Educational tours, Conferences, Resort holidays,
Motor coach tours. Cruises, Night tours and Excurssions.

The travel agency sells the tourism products of the

country.Travel agency attracts the tourists by advertising
the tourist attractions of the country. Travel agency
plays a significant role in the national integration an
international understanding. It provides employment
opportunities to the people. Travel agency exploits the
design of the people, culture and way of life to visit the
various attractions present in the country.

FUNCTIONS OF TRAVEL AGENCY

The travel agency provides complex and varied

services to the clients. It has a wide range of functions.
The functions will again depends upon the scope of
activities it is involved in and also the size and the
location of travel agency. If the travel agency working
in a wide range its activities will be more wide. The
travel agency will have specialized departments each having
to perform different functions.
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The travel agency takes the charge and undertakes

to handle the tour throughout the country from the time he
sets his foot in our land till the times of his departure.
The travel agency provides services to the clients at the
airport during the stay and at the time of his departure.
In other countries more than 907o clients are availing the
services of travel agents. Some of the major functions may
be classified as under:

TRAVEL INFORMATION

This is one of the prime function of travel agency.

The informations are provides relating to destination,
climate, modes of travel, prices, time table, visa,
currency and health, to those people who wish to travel
inside the country or outside the country. This is a very
specialised job and the person behind the counter should
be specialist having excellent knowledge of various travel
alternate plans. He often adjust his travel services to
the needs of the clients. If the clients are old man he
needs better class services and if he is a young person
he may need different advice. The travel agent should be
in a pos'-ition to give upto date and accurate information
regarding various services and general information about
travel. A good travel agent is a counsellor who knows all
 i '' /'
I I I

the the details about the travel needs and interest of the
clients. He should be able 'communicates with the customer
in his language. The travel agent is well verse in the
knowledge of other foreign languages because of personnel
working in travel agency it is essential.

PREPARATION OF ITENARARIES

A travel agent advices people on the type of

itenerary which they should select for their holiday or
business travel. He also advices them where they should go
for a holiday.

Tourist itenerary is a composition of a series of

operation that are a result of the study of market.
Itenerary is a total tour programme of a person. All the
details should be given in an itenerary like transfers,
timing and destination. First of all the suggested
iteneraries are prepared and then the final itenerary is
selected. The travel agent gives advice to intending
travellers on the type of programme which they may choose
for their holidays or business travel.

There are some basic factors which a travel agent

has to kee |3 in mind while preparing an itenerary.
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INTEREST

Interest of all the travellers of the group or a

particular traveller should kept in mind and places of
interest, shopping, excurssion should be decided.

NUMBER OF DAYS
First of all the number of days should be decided
that for how many numbers of days the itenerary is to be
prepared.

NUMBER OF PERSONS

It should be decided at the first hand that how

many persons wants to join the tour.

FINANCIAL RESOURCES

The travel agent should provide the services of

economy class, luxury class or first class on the bagis of
financial resources available.

CHOICE OF ACCOMODATION & TRANSPORT

While preparing an itenerary it should be decided

that what kind of accomodation and transport services the
clients wants.
CONNECTIONS/TIMING

It is very important point and one who is preparing

an itenerary must be aware of all timings and connections
of all transports.

PURPOSE OF TOUR

The purpose of the tour should be kept in mind that

either it is for leisure, reservation, cultural, education
or conference etc.

TICKETING

The travel agency sells tickets to hisclients on

all modes of travel. He does not charge any thing from the
clients for this service, but gets his commission from air
carrier, road, steamship companies and hotels. He should
have thorough knowledge of schedules of various modes of
transports like air carrier, railways, steamship companies
etc. Ticketing is not an easy job and the diversity of
international air fairs are very complex and varied. He
must remain up to date and alert to keep abreast of every
new change. A major part of travel agents business is
arranging air travel both for business men and vacationers.
The travel agent have a through out knowledge of fare
construction, writing off tickets, types of tickets and
fare of tickets.
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INSURANCE

It is yet another activity of travel agency for

personal accident risks and of baggage. The services of
travel agent in modern times has expanded a great,
disablement, loss or damage of baggage. Airlines
automatically includes insurance policies for the
passengers and is packaged up to an extent specified by
the carrier terms and conditions of carriage, but no such
insurance is offered by other principals like hotels. The
travel agency earn additional revenue by recommending
appropriate insurance to the clients.

INFORMATIONS ON DESTINATIONS

At the other end of the airline ticket the travel

agency provides imformations to the clients for hotels,
and other accomodations, its locality, prices and
category. He helps the clients in the reservation of seats
for theatres, cultural shows and places cl entertainments.
On arrival at the airport he arranges for the clients to
be met by a car and a guide or by self driven car. He
also makes proper arrangements for the car on rents.

Every year new destinations appears where people

wish to go. For this a sense of geography is part of his
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equipment/mind. The travel agency himself is a widely
travelled person. They are sent to different parts of the
country and outside the country to ensure balanced
development of tourism.

PACKAGING AND SELLING OF TOURS

The travel agency sells the readymade packages on

behalf of wholesale tour operator. In this case he
deducts- his own commission and remit the remainder to
the tour operator who has marketed this package. The
travel agency is free to design its own tours and market
them to its clients directly. The travel agent can become
the whole seller of the tours if he has resources.

Type of Tours

(I) PACKAGE TOURS

A package tour is designed to fit a particular

group of travellers. It is a travel plan which includes
most elements of a vacation, such as transportations,
accommodation and sightseeings. It is a prearranged tour
designed to fit the requirements of a wide variety of
travellers. There are many other types of tours. These
tours details are printed in the form of the brochures,
like prices of tours, type of hotel cu:commodation and
services provided etc.
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(II) ESCORTED TOURS

It is the tour which normally includes

international transportation, meals, sight seeing,
accommodation, guide service and even tipping. The tour
director maintains the overall schedule of the tour,
attends to all problems that might arise enroute and
generally ensures that the tour goes off satisfactorily.

(III) GROUP INCLUSIVE TOUR

This is the most common form of tours in which

people travel in groups of fifteen or more. For this tour
group, the escort normally travels free (the airlines
provides him with a free ticket and a free hotel room from
the host hotel. These types of tours are available for ay
destination. The minimum terms and conditions are laid
down by lATA and the travel agency is free to add their
mark up and profit.

(IV) FOREIGN INCLUSIVE TOUR (FIT)

These are the unescored package tours. The

traveller does not tour with a tour director or a group
but arrange his own programme according to his preference.
These tours are more flexible in nature. The organisation
of price requires creativity on the part of travel agent
coupled with innovation and good management.
 I'cS

Because of bulk business the hotels, airlines and

ground transport operators offer special rates to group
tours. The travel agencies promote areas which sell easily
and where the profit margin is high. Some times these
packages are even cheaper than a trip to a destination
within Japan because of the higher cost of living in
Japan.

CHARTERS

Some times the travel agencies provides charter

facilities to their clients. If the flight is not
available they can arrange a charter flight for the group
and it is much cheaper than the routine flight prices. It
has become a major business for many travel agencies in UK
and USA.

EXCURSSION/TOURS

Travel agencies operates their own sighseeings

tours and excurssions. Some facilities are provided to the
traveller for visiting historical places, mountains, beach
resorts and ski resorts. Some travel agencies have their
own luxury coaches and cars and so they offer regular
sightseeing tours and excurssions at fixed prices on seat
in coach and seat in car basis. Excurssion including
lunches, local entertainment and over night accomodation
where necessary.
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FOREIGN EXCHANGE

The travel agency earns foreign currency through

foreign tourists. Some of the large travel agencies deals
in the provision of foreign exchange. This is an
important facility to intending travellers as it saves
avoiding to visit regular banking channels. Only those
travel agencies which are authorised by the government of
India can deal in foreign exchange.

ADVERTISING/PUBLICITY/MASS COMMUNICATION

Travel agency use the best advertising techniques

to create favourable image in the minds of travellers.
Most of the travel agencies have their own advertising
agencies which specialize in planning, creating and
placing of advertising. They have artists j copy writers
photographers and experts in printing and publicity.

REPRESENTATION ABROAD

This is the main function of travel agency which is

possible by the sub agents. New offices are opened in
foreign countries and the Indian head offices should
supply the published material to the sub offices and the
sub offices should distribute it among the people to
create an image of the country in their minds.
 iso
Now computerised reservation system in the recent
years rather revolutionised^ the reservation system both
for air and rail seats and also room in a hotel. Many
large travel agencies are using this system. This system
comprises a computer net-work that can be used by the
travel agent to reserve an air or rail accommodation as
also accommodation in hotel. Through a wide net-work
confirmations of reservations are available in a matter of
seconds.

Linked with the function of ticketing and

reservation of accommodation in a hotel is the settlement
of accounts of the clients. Accountancy plays a great part
and is one of the important duties to be performed by the
travel agency. Dealing with the settlement of accounts in
all parts of the world calls for a thorough knowledge of
foreign currencies, their cross-values and. above all, the
intricacies of exchange control regulations, which vary
from country to country.

4.4.SOURCES OF INCOME OF TRAVEL AGENCY

The main source of income of Travel Agencies is commission

they gets from so many sources. The main source of income
of travel agency is as follows:
 y.iii.

TICKETING

Ticketing is the main source of income of travel

agencies. Indian travel agencies gets the commission from
the airlines, transporters and shipping companies.They
gets commission on tickets from domestic and international
airlines. The commission gives to a travel agent is not
uniform. Normal travel agency commission on an
international airline tickets paid to a travel agent is 87o
to 107o and some times more than that, because the
commission of a general sales agent depends on the
agreement which they may have with the carrier.

The travel agent provides the facility of getting

the air ticket from the airlines through the agent and
for this the travel agent don't make any plus charge from
the customer. If any person wants to go to Kuwait, he may
get the air ticket at his house without making personal
contract with the airlines.. Dor.estic ticketing is the
source of earning commision for the travel agency. The
domestic airlines mostly gives 5% commission to the travel
agents. Some time they get more than that because it
also depends upon the contract made between the general
sales agent and airlines.
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Segmentation of the Market

The travel agents provides domestic as well as

international airlines, tickets to the following people in
different segments of the markets. The following is the
segmentation of the market.

Business market 401

Government market 207o
Labour market 20%
Holiday 10%
Students market 5%,
Visiting friends 5%

Discover India Ticket

The travel agents also gets commission after

issuing Discover India Tickets. They gets 9% commission on
issuing this ticket. This ticket is available only for
foreigners and can be purchased only against foreign
currency. On this ticket one can visit India. This ticket
is not transferable nor the owner of this ticket can
repeat the same journey over same root. li is available
for 14 days and its cost is US § 375. It has validity for
21 days. It is open jaw ticket, one sector cannot be used
twice .
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Off Season Ticket

This is one of the important source of earning for

travel agents. They gets 9% commission on this ticket.
Only domestic airlines issues tickets and is available
within India. These tickets are available in April, May
June, July, September etc.
Railways

Railways were also a source of earning for travel

agents till 1984. They gets 37o commission on first class
tickets but now the railways don't give any commission to
the travel agents. The travel agents also gets commission
from railways on In-rail pass. On In- rail pass travel
agency earn 10% commission. This pass is like Discover

India Ticket and can be purchased in foreign currency

and for foreigners only. Its validity is for 14 days, 21
days, 60 days, 90 days etc.

Inclusive Tours
Inclusive Tours
It is also the most important source of earning of
travel agent on the sale of inclusive tour packages.
Travel agents normally gets commission of 107c, from the
whole sale tour operator. The tour operator arranges many
 lU

types of tours in bulk quality and sells them to the

retailers on the commission basis.

Hotels

The travel agents gets commission from the hotels

on booking of rooms for their customers. Some times the
travel agencies books hotel rooms in bulk in different
cities and the hotels give them commission. Mostly the
travel agents commission which they get from hotels is
107o. Some hotels offer additional incentives commission on
bulk bookings. Some times it varies from hotel to hotel
which depends upon the personal contracts.

Domestic Holiday Tours

The travel agencies arranges many religious tours

like honey-moon, cultural tour and others. When the
people wants to join they need different services from the
travel agents and the travel agents earn commission by
providing these services to the clients. So these tours
are also the source of earning for travel agencies.

Shipping

The travel agents also earn commission from the

shipping companies. The clients gets services of shipping
 135

through travel agencies and the shipping com-panies gives

commission to the travel agencies.

Transport

Transport companies also gives 107o commission to

the travel agencies. Some times this percentage may vary
depends upon the contract between them. There is a
competetion between the transporters so the rate of
percentage of commission some times varies.

Cargo

Cargo is also an important source of earning for

travel agencies. For booking of in-bound and out-bound
cargo using any means of transportation through agents^the
cargo agencies gives commission to the travel agents.

Other Services

There are various other services which a travel

agency provides to the clients and earn some amount.
- Visa
- Passport
- Foreign currency exchange
-P.Form
- Car hire
- Insurance
 IS 6

For providing these services the travel agencies

earn commission from the customers. Some of the companies
still not providing the services of insurance to customers
for their luggage safety and for providing this service the
travel agent earns some amount of money from the
customers. So the above are the some other basic services
and sources of income for travel agents.

4.5 SET UP OF A TRAVEL AGENCY

Opening of a travel agency requires a high degree

of skill and organisational capacity. A large travel
agency have several numbers of departments with several
members of staff while a small unit is managed by only a
few hands. Some travel agencies may offer complete service
including airline ticketing, tour packaging. cargo,
shipping and rail booking while other may limit their
activities to certain specific areas.

The opening of a travel agency is not an easy

job, it involves lot of planning and organisation. In
industrially advanced countries of the world where a large
number of people engaged in travel, large percentage of
them utilize the services of travel agency. In these
 iS7

countries the travel agencies tend to be large having many

specialized departments. On the other hand the services of
travel agencies in developing countries are limited making
them smaller in size.

Any how the basic organisational set up almost

remains the same in all the cases. The main divisions or
sections which a travel agency would have to include are
sales, research and planning, finance and accounts
destination and services , publicity and public
relation'. All of these departments plays an important role
in the working of a travel agency following is the set up
of a travel agency.

MANAGING DIRECTOR

RESEARCH & DESTINATION FINANCE &

SALES
DIVISION PLANNING & SERVICES CONTROL

ADVERTISING
SALES MARKETING CONTRACT WITH
PROMOTION RESEARCH THE AGENTS
PUBLIC RESERVATION TOURIST PROMOTION
RELATION & CONTRACT
BRANCH COST & PRICING TECHNICAL HELP
OFFICES
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liASIC REQUIREMENTS TO OPEN A TRAVEL AGENCY

A travel agency acquire the following

requirements.

A) LOCATION

To open a travel agency the central location is

required in the area which is easily accessible to the
general public. Ground floor location is preferred.

B) WELL FURNISHED OFFICE

The office of the travel agency should be well

furnished and decorated so that the client may attract and
comfortably feel.

^' TELEPHONE

Telephone plays a significant role in such

modern time and without a telephone the business is
impossible to carry. Telephone is essential to cont-act at
any time with airlines, railways, transport and hotels.

D) STAFF

For efficient and quick service of a travel

agency the skilled staff is needed to quote fares, make
reservations and issue of tickets.
 lo9

E) GOVERNMENT LICENCES

The travel agency in India offering

documentation service like passport, visa etc for which
the travel agency have to be on the approval list of the

Regional passport office as well as the Reserve Bank of

India to release . foreign exchange.
A travel agency should have the following other approvals.
- Approval of International Air Transport Association to
represent member airlines. Separate recognition is
required for passenger and cargo sales.

-Approval of Indian Airlines to sell tickets. Here again

separate recognition is needed for selling of passenger
tickets and booking of cargo.

-Approval of Department of Tourism to claim publicity and

promotional benefits for tour operators handling in bound
tourists. Those who are not handling inbound tourists,
approval is n-ot required.

ADEQUATE FINANCE

Adequate finance is needed to start a travel

agency. In India the cash of one lakh or a property of
one lakh is needed. This varies from country to country.
 140

F) MEMBERSHIP OF TRAVEL ORGANISATIONS

A good travel agency should be a member of the

different travel organisations like ASTA, UFFTA, TAAI,
PATA, WATA, ICCA ETC; though it is not necessary.

FORMALITIES TO BE COMPLETED BEFORE OPENINGL A TRAVEL AGENCy

These are the types of businesses:

1. Sole Trading
2. Partnership
3. Private Limited
4. Limited
5. Government Undertakings.

First Step:

In sole trading busines of travel agency, only

one person is solely responsible^ of the agency. No one
will be share holder in the business. Onfe who wish to open
a travel agency of this kind may apply directly to the
Deptt. of Tourism Govt, of India.

The travel agency business under partnership

should be registered under Parternership Act 1932 in which
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minimum of partners are 2 and maximum number of partners

are 20. If registration is required a person may apply to

the registrar with the following:

(1) Application Form F3

(2) Partnership agreement on a stamp paper of Rs.l5/-

Application form should be filled up properly

with the details like name of travel agency, date of

starting, location of head office, name of partners,

number of partners etc, and submitted to the registrar

office alongwith the partnership agreement. The

partnership agreement should have the following details:

(1) Name of travel agency.

(2) Head Office.

(3) Business.

(4) Name and addresses with age of partners.

(5) Capital contributed by each partner.

(6) Profit and loss sharing ratio.

(7) Duties and responsibilities of each partner.

(8) Proceedure of admission and retirement.

After the partnership agreement is signed by all

the partners it is sent to the registrar alongwith the

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application. After registration the person is authorised

to carry on the business.
Second Step:

Travel agency must be in business for one

complete year from the date of filling the registration,
and after one complete year the complete informations
should be sent to the Department of Tourism, Government of
India with duly certified copies of Profit & Loss account
and balance sheet al--ongwith all possible annexture.

(1) Reciept from the registrar of partnership.

(2) A format application
(3) Details of foreign exchange earned and payment of
foreign exchange.
(4) Details of number of tourist handled, both national
and international.

If the travel agency is able to earn US § 5000

in one year and also the information of one year business
is sent by the travel agency to fulfill and satisfy the
requirements of Department of Tourism, Government of India
then the licence will be given to that particular travel
agency. If the travel agency is not able to earn US §
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5000' and other requirements needed by the Department of

Tourism not satisfied then it should be in business once
again to complete one more year.

In case of Private Limited Company and Public

Limited Company the travel agency should be registered
under 1956 Act. The following documents should be
submitted to the registrar before starting the business.
(1) Mamorandum of Association (External)
(2) Article of Association (Internal)

The above documents should have the same details

as are given in application form F3 and partnership
agreement.

A tour operator is approved by the Department

ofTourism if he has been in business for at least one
year, has a good office and has paid up capital of at
least one hundred thousand in his company.

Rules for Recognition as Tour Operators

1. All applications for recognition shall be

addressed to the Director General of Tourism,
Transport Bhawan, No. 1 Parliament Street, New
 144

Delhi-110 001, who is the authority empowered to

grant recognition.

2. The object of recognition shall be to actively

engage in promoting incoming tourist traffic and
contribute substantially towards the foreign
exchange earnings of the country through
Tourism.

3. The firm should have a minimum paid-up capital

of Rs.1,00 lakh duly supported by the latest
audited balance sheet.

4. The turn-over in terms of foreign exchange by

the firm should be a minimum of Rs.5.00 lakhs
duly supported by banker's certificates.

5. The application for grant of recognition shall

be in the prescribed form (copy enclosed).

6. Firms granted recognition shall undertake to

maintain an office under the charge of a full
time member of their staff, who should be in a
position to give up-to-date and accurate
information regarding transport and accommodation
facilities, currency and customs regulation and
general information about travel etc.
 145

7. Firms granted recognition shall undertake to

employ only guide approved by the Department of
Tourism, failing which the firm liable to be
derecognised.

8. The recognition may be extended for the whole of

India or be limited to a particular region.

9. All recognised firms shall furnish to the

Department of Tourism, and Regional
Director/Director, Government of India, Tourist
Office of their region if the Govern-ment
desires yearly statement of their activities
and such other information as may be called for
by them from time to time in regard to the
volume of tourist traffice actually handled and
other relevant matters.

10. Application for initial recognition shall be

entertained for one year only and thereafter
future recognitions will be for a three year
period at a time if the Department is satisfied
that the firm is complying with all the cond-
tions/ applicable to this recognition.
 146
11. The firm wil be required to pay a non-refundable
one time fee of Rs.1,000/- while applying for
the initial recognition/extension for three
years. The fee will be made payable to the Pay &
Accounts Officer,Department of Tourism in the
form of a Bank Draft.

12. The decision of the Government of India in the

matter of recognition shall be final. The
Government of India may in their discretion
refuse to recognise any firm without assigning
any reason.

13. The Government of India reserves the right to

cancel or withdraw at any time the recognition
already granted without assigning any reasons
whatsoever thereof.

14. The recognition to be granted by the Department

of Tourism shall not automatically entitle the
firm to be appointed agents for the sale of
rail, tickets by the Ministry of Railways
(Railway Board). The agencies thus recognised
shall apply separately to the Railway Board.
 I'i7

15. The firm should be registered under the Local

Shops and Establishments Act and must have a
well appointed office.

16. The firm should have been in operation for a

minimum period of one year before the date of
their application.

17. The Firm should furnish the latest Income Tax

Clearance Certificate fro-m the Income Tax
Authority.

Rules for Recognition as Travel Agents

1. All applications for recognition shall be

addressed to the Director General of Tourism,
Transport Bhavan, No.l, Parliament Street, New
Delhi-110 001, who is the authority empowered to
grant recognition.

2. The object of recognition shall be to promote

the development of tourists industry in India.

3. The application for grant of recognition shall

be in the prescribed form.
 148
4. No firm shall be granted recognition unless it
has been engaged actively in handling tourist
traffic for a minimum period of one year before
the date of application.

5. Firms granted recognition shall be entitled to

such rights and privileges as may be granted by
Government from time to time and shall abide by
the several terms and conditions of recognitions
as prescribed from time to time.

6. Firms granted recogntion shall undertake to

maintain an office under the charge of a full
time member of their staff, who should be in
position to give up-to-date and accurate
information regarding transport and
accommodation facillities, currency and customs
regulations and general information about travel
etc.

7. Firms granted recognition shall undertake to

employ only guide approved by the Department of
Tourism, Failure to employ approved guides will
make the firm liable to be derecognised by the
Department.
 149

8. The recognition may be extended for the whole of

India or be limited to a particular region.

9. All recognition firms shall furnish to the

Deptt. of Tourism, and Regional
Director/Director, Govt, of India Tourist Ofice
of their region if the ^overnfment desires
yearly statement of their activities and such
other i-nformation as may be called for by them
from time to time in regard to the volume of
tourist traffic actually handled and other
relevant matters.

10. Application for initial recognition shall be

entertained for one year only and thereafter
future recognitions will be for a three year
period at a time if the Department is satisfied
that the firm is complying with all the
conditions applicable to this recognition.

11. The firm will be required to pay a

non-refundable one time fee of Rs.lOOO/-while
applying for the initial recognition/extension
for the three years recognition. The fee will be
made payable to the Pay & Accounts Officer,
Deptt. of Tourism In the form of a bank draft.
 150

12. The Government of India reserves the right to

cancel or withdraw at any time the recognition
already granted without assigning any reasons
whatsoever thereof.

13. The recognition granted by the Department of

Tourism shall not automatically entitle the firm
to be appointed agents for the sale of rail
tickets by the Ministry of Railways (Railyway
Board). The agencies thus recognised shall apply
separately to the Railway Board.

14. The firm should have a minimum paid-up capital of

Rs.2.00 lakhs only supported by latest audited
balance sheet.

15. Applications for grant of recognition by the

Department of Tourism wil be considered only if
the firm;

(i) is approved by LATA;

(ii) has valid licence to book foreign passage
issued by the Reserve Bank of India;
(iii) has the valid approval of the Ministry of
External Affairs to handle travel documents
and to deal with passport offices;
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(iv) is registered under the Local Shops

Establishments Act and should have a well
appointed offices.

4.6 SECTIONS OF TRAVEL AGENCIES

A travel agency either large or small size have

the head quarter and its branch offices. The office of the
travel agency would have the following sections.

SECTIONS
RESEARCH OPERATION SALES FINANCE &
& PLANNING DEPARTMENT DIVISION ACCOUNTS
DIVISION DIVISION
l^ARKKT CONTRACT ADVERTISING
RESEARCH WITH AGENTS

RESERVATION TOURIST SALES

& CONTRACT PROMOTION PROMOTION

COST & TECHNICAL PUBLIC

PRICING HELP RELATION

RESEARCH AND PLANNING DIVISION

The main section of the travel agency is the

Planning Division which plays a significant role in the
 52

over all working of the travel agency. In this

division more emphasis is given on the market research.
The marketing includes all direct and indirect
promotional activities to sell travel destinations.

Marketing effects all the operations of tourism.

The description of various planning process or analysis of
a plan of tourism development is very essential. The
investment in nr<.odern tourism are particularly very heavy
and the establishment of an adequate infrastructure
requires many years. The department of research and
planning helps to develop the tourism potential of a
country and for this t-here is a need of well planned
tourist marketing policy and market research which have
the following:

(1) Tourist Product

Unless there is a certain product be it tangible

or intangible or a service, marketing is not possible.
In case of tourism product the basic raw materials wouldbe
countriesof natural beauty, climate, history, culture and
the people. As far as the tourist is concern the product
he buys cover the complete experience from time he leaves
home to the time he returns home. All the tourist buy-s
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either sefjorately or jointly the various component of
tourism.

(2) Market Value

The main function of research and planning

division is to see what are the market demand of the
tourist products and concentrate on those which have more
value. For example some of the travel agencies running
successfully and some are not. The main drawback is that
they dont follow the demands of |oroducts.

The market demand of the tourist product is

possible only by a research and plan which is the
function of Research and Planning division.

(3) Cost and Pricing

The another function of this department is the

pricing and costing. This is the important aspect of
planning on which more attention should be given because
if the price of the tour will be more as compare to other
company then no any new tourist will avail the services of
this travel agency.

The tour packages should be prepared at the time

when airlines, railway and hotels give concessions so that
 154

many people will be attracted due to concession.

TOUR OPERATION DEPARTMENT

The function of tour operation department is to

arrange the tours and promotion work and these workes are

performed by travel agent. The operation department have

the following functions to perform.

1) Answerisng the queries alongwith the suggested

itenerary and tour cost.

2) Reciept of advance payment.

3) Booking of hotels, transport, guide etc.

4) Booking of air tickets (if any).

5) Reconfirmation of the above.

6) Payment of advances to the above.

7) Open a file,

8) Issuence of vouchers or exchange orders, usually

three copies of exchange orders are typed.

9) Reciept of confirmed vouchers.

10)Special permits (visa, passport, P.Form etc.).

SALES DIVISION

This department is also a very important division

which must be informed of the latest facts and figures

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both at the head office and branch offices. The department

should have the latest and uptodate knowledge about the
different parts of the world, by a mass of literature.

This division also looks after advertising and

public relation and sales promotion to attract more
tourist and export the advertising material to its abroad
offices to expand the business. The following functions
are :

1) Advertising

It is an activity which is designed to spread

informations for the promotion of sales. It operates in
two ways, firstly by spreading of sales information among
the customers about the possibilities of consumption and
secondly by seeking to influences their judgement in
favour of the particular goods which are the subject of
advertisement.

The media space for advertisement can be brought

and advertised in newspapers, general books, specialised
magazines in posters or bill boards. In addition to the
use of paid media space in the form of newspapers,
 156

magazines and radio, television in order to transmit a

predetermined message to a pre determined audience.

Advertisement may interest or inaccessibility to

salesman. Advertisment may reach such prospects through
many types of medias and under a variety of circumstances
and may thus attract their attention to arouse their
interest. Lower cost is another major advantage.

Advertising may be used to do a variety of

selling tasks. A great deal of advertising attempts to win
acceptence for the product. Advertising by a travel
agency thus directly stimulates sales to customers or
retailers. Some direct mail periodical advertising
attempts to make sales by requesting reader to forward
orders accompanied by the necessary payment. Advertising
then became the most economical means of doing the entire
sales job.

2) Sales Promotion

Sales division of a travel agency has also to

look after sales promotion. In tourism sales promotion is
all those promotional activities designed to transmit to
the public and to the travel trade specific and detailed
 15V

information on aspect like accommodation, transport,

attractions and prices concerning the "tourist services to
be promoted.

3) Public Relation

This division of travel agency is used to create

and maintain positive itn-age for a country, a tourist
destination in the minds of the people who are in a
pos-ition to influence public opinion. It is oriented
towards creating and maintaining an atmosphere where by
travelling public at large is convinced of the advantages
of visiting the country concerned.

FINANCE AND ACCOUNTS DEPARTMENT

All the divisions of travel agency are financed

and controlled by this division only. So this particular
division is the backbone of the whole organisation. All
the financial informations are supplied by this department
when needed. This department shows the real financial
pos~ition of the organisation.

Without adequate finance and control no travel

agency could reach to a successful end. The profit and
loss assessment of capital is done under the supervision
of this division only.