CHAPTER VIII

Laws Regulating Travel and Tour Services

Members:
Mallo, Joshua Aaron
Mangaya, Maricris Alcantara
Mateo, Krysstal Eden Nicolas
Melevo, Joseph Galamay

Date of reporting: November 21, 2024

Table of Contents

1 Introduction ………………………………………………………………….… 2-3

2 Nature and Description of the Business
2.1 What is the Role of a Tour Operator? …………………………...… . 3
2.2 Functions of Travel Agencies …………………….…………….…. 3-4
3 Procedure in Setting Up a Travel Agency ……………………………,…… 4-5
4 Accreditation of Travel Agencies and Tour Operators ………………….….. 6
4.1 Accreditation under the International Air Transport Association
(IATA) …………………………………………………………………… … 7
4.2 Airline Appointed Services ………………………………………….. 7
4.3 Travel Sales Intermediary (TSI) ……..………………………….. 8-10
4.4 Accreditation of Tour Guides ………………………………………. 10
5 Responsibilities of Travel Agencies and Tour Operators in the Ph. .… 10-12
6 Ethical and Unethical Practices in Travel Agencies and Tour Operators
6.1 Ethical Practices …………………………………………………….. 13
6.2 Unethical Practices …………………………………………………. 14
7 Issues and Concerns in Conducting Business …………………………….. 14
8 References …………………………………………………………………….. 15
9 Topic Quiz ………………………………………………………………….. 15-17

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 CHAPTER VIII: Laws Regulating Travel and Tour Services

Learning Objectives:
 Understand the difference between a tour operator and a travel agency;
 Enumerate the procedure in setting up a travel agency;
 Identify the responsibilities of a legitimate travel agency of tour operator;
 Find out the responsibilities of travel agencies and tour operators in the
Philippines;
 Differentiate ethical from unethical practices by travel agencies and tour
operators; and
 Give examples of issues, concerns, and problems travel agencies and
tour operators may have in the conduct of their business.

The laws regulating travel and tour services in this chapter involve
implementing rules and regulations by the Department of Tourism and
Supreme Court decisions which define the the nature of the business of
a travel agency and tour operator.
Under the Tourism Act 2009, travel and tour services which include
inbound travel agencies and tour operators, local tour operators and
tour guides are classified as Primary Tourism Enterprises. Accordingly,
Primary Tourism Enterprises shall be periodically required to obtain
accreditation from the DOT as the quality of mandatory for travel and tour
services.

NATURE AND DESCRIPTION OF THE BUSINESS

The Law
Tour Operator shall mean an entity which either may be a
single proprietorship, partnership or corporation regularly engaged in the
business of extending to individuals or group, such services pertaining
to arrangements and bookings for transportation and/or
accommodation, handling and/or conduct of inbound tours whether
or not for a fee, commission, or any of the compensation.
Tour Guide shall mean an individual who guides tourists, both foreign
and domestic, for a fee, commission, or any other form of lawful remuneration.

Discussion of Law
A travel agency’s covenant with its customers is to make travel
arrangements in their behalf. A travel agency' s services include
procuring tickets and facilitating travel permits or visas as well as
booking customers for tours. The relation of a travel agency with respect to a
common carrier is that it merely acts as an agent of the common
carrier. Under Republic Act No. 8239, also known as the Philippine
Passport Act of 1996, renewal of application for the issuance of
passports may be filed by any licensed travel agency duly accredited by
the Department of Foreign Affairs, provided that the agent shall be
responsible for the authenticity of the supporting documents being
presented to meet the requirements for the application of passports.

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Application of the Law

Case: Giancarlo Capco will be traveling to the United States to

compete in an international business plan competition in Boston,
Massachusetts. His old passport will be expiring soon and he
needs a renewal of his old US multiple-entry visa. Can Giancarlo
avail of the services of a travel agency? What services can a travel
agency offer him?

What is the difference between a tour operator and a travel agency?

A tour operator handles the essentials of a holiday experience, from

booking and packaging to organizing accommodation, transport, meals,
guides, and optional tours. They’re like the behind-the-scenes magicians who
ensure everything runs smoothly once a customer steps off the plane at a
destination.

What is the Role of a Tour Operator?

1. Planning Tour Packages

2. Negotiating Rates
3. Arranging Travel
4. Providing Customer Support
5. Preparing Tour Budgets
6. Researching Travel Options

On the other hand, a travel agents act as matchmakers, connecting

customers with the perfect vacation package from various tour operators.
Once customers have made a choice, they liaise with the tour operator to
ensure all requests are met, handling the paperwork and payments along the
way.The history of travel agencies dates back to the 19th century when Sir
Thomas Cook set up the world’s first travel agency in 1845.

Functions of Travel Agencies:

1. Booking Services
 Flights: Secure airline tickets, manage seat selections, and handle special
requests.
 Accommodation: Reserve rooms, negotiate rates, and secure special
amenities.
 Car Rentals: Arrange vehicle hire, manage bookings, and offer insurance
options.
2. Itinerary Planning
 Customization: Tailor travel plans to individual or group preferences.
 Logistics: Coordinate transport, accommodation, and activities for a
seamless experience.
3. Travel Consultation
 Expert Advice: Provide recommendations on destinations, travel safety,
and legal requirements.

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 Up-to-date Information: Offer the latest information on travel advisories
and regulations.
4. Customer Support
 Assistance: Help with booking changes, cancellations, and emergencies.
 24/7 Service: Many agencies offer round-the-clock support to handle
issues as they arise.
5. Group Travel Management
 Coordination: Organize logistics for events like conferences, incentive
trips, and family reunions.
 Negotiation: Secure group rates and benefits.
6. Marketing and Sales
 Promotion: Market travel packages, seasonal deals, and exclusive offers.
 Client Engagement: Utilize social media, email newsletters, and other
channels to attract customers.

Legal Opinion: In order to save time and to be properly guided, Giancarlo

can avail of the following services of a travel agency:
(a) passport renewal assistance;
(b) US visa renewal assistance;
(c) airline ticketing; and
(d) hotel reservations

I. PROCEDURE IN SETTING UP A TRAVEL AGENCY

Setting up a travel agency requires a lot of planning and organizing and

is not an easy task. Before setting up a travel agency, it is vital to clearly
understand these companies’ functioning, activities, and products/services.

Following are the steps involved in setting up a travel business:

1) Identify the Market: Before entering the travel business, a thorough

understanding of the tourism industry’s current position and prospects is
essential. It is also necessary to know other travel businesses and their
strengths and weaknesses.

2) Deciding the Name and Structure: After choosing the niche of your travel
agency, decide on a unique and memorable name for your business and get it
registered. Another step to take into consideration is your business structure.
Whether it is a large, medium, or small business, you need to decide on
options such as remaining a sole proprietor, having a partnership, or forming
a corporation.

3) Selection of Ideal Location: An ideal location provides an added

advantage for a business to grow in a more competitive environment. A
company must be visible and easily accessible to its clients. The ideal location
is preferably a ground floor office with adequate nearby parking. Office space
must be as stipulated by IATA or any other standard organization.

4) Investment Capital: Capital is essential to set up and expand a business.

It is the lifeline of a company and is necessary at every stage of its operations.

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5) Hiring Qualified and Skilled Workforce: A travel agency is service-
oriented, and human resources is a core component of the total resources of
a travel agency. Therefore, it is essential to hire efficient personnel with
professional qualifications and skills. According to IATA or any other
recognized organizations, it is vital to have a minimum of two staff members
qualified from an approved tourism educational institution.

6) Develop Technical Resources: In today’s world, it is crucial to be up-to-

date with
technological advancements even in the tourism and hospitality sector. Most
travel agencies and tour operators use major computer reservation system
applications such as – GDS and software applications such as Amadeus
CRS, Galileo CRS, SABRE, and World span. The online presence of a travel
company is also crucial in today's modern scenario where everything,
including travel information and distribution, booking, controlling the operation,
handling the clients, fund transfer, can be done with the help of mobile phones
or laptops.

7) Managing Cash Flow: A travel agent not only needs the investment
capital to start a business but also needs continuous cash flow for day-to-day
business operations.Running out of cash despite your other assets will cause
the risk of business failure.

8) Recognition from Professional Agencies: Getting certified from any

local, national or international organization has a profound impact on the
clients and market. Though it is not mandatory, it is a sign of credibility and
makes any travel company stand out from others. Therefore, one should work
towards acquiring needed certifications for their business. The Ministry of
Tourism (GOI), IATA, IATO, TAAI, PATA, ASTA, and other professional
agencies provide such certifications and recognition.

9) Legal Documents Required: Some primary legal documents are needed

to start a new travel agency business which is as follows:
 - Certificate of Incorporation
 - Certificate for commencement of business
 - Business License
 - Business Plan
 - Statement of Business
 - Education Certificates of Staff Members
 - Online privacy policy
 - IATA or any other approved organizations' approval
 - Minimum office space of 150 sq. ft.

10) Developing Partnerships: Collaborating with local partners, such as

hotels, tour operators, and transportation providers, can help you offer
competitive prices and unique experiences to your customers. Building strong
relationships with these partners will also enhance your reputation and
credibility within the industry.

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III. ACCREDITATION OF TRAVEL AGENCIES AND TOUR OPERATORS

The Law

Section 2. Who May Apply for Accreditation. The following may apply for
accreditation as tour operator and travel agency:
a. A resident Filipino citizen.
b. A partnership organized under the laws of the Philippines, at least
60% of its capital being owned by Filipino citizens; and
c. Corporations organized under the laws of the Philippines, at least
60% of the subscribed common or voting shares of stocks of which is
owned by Filipino citizens and the composition of its Board of Directors
being at least 60% Filipinos.

Section 3. For purposes of accreditation, the following are the supporting

documents to be submitted with the applications:
a. In case of a single proprietorship, a business name certificate and all
amendments there to; in the case of partnership or corporations, a
certified true copy of the articles partnership/incorporation and its by-
laws and amendments there to, duly registered with the Securities and
Exchange Commission;
b. Complete list of its executive officers and employees, tour guide ad
travel representatives, if any, indicating there in their nationality, home
address and experience, including names and establishments
previously or currently affiliated with, position and length of service
showing the following:
1.In the case of the manager, proof that he has at least three (3)
years managerial experience in tour operations or has earned
a degree in Bachelor of Science in Tourism or has successfully
completed a tour operator's course; and
2.Proof that, at least, two (2) of the permanent staff have at least
two (2) years experience in tour operations.
c. For alien officers and employees, valid visa from the Bureau of
Immigration and the proper permit from the Department of Labor and
Employment;
d. Contract of lease or contract to lease the office space intended for
the use of the agency, or in the absence there of, a sworn statement by
the lessor that said agency is a lessee of his building stating the area
there of;
e. Mayor's permit/municipal license;
f. Latest Income Tax Return and Audited Financial Statements
reflecting a minimum working capital of Five Hundred Thousand
(P500,000.00) Pesos;
g. An annual performance report on the sales production and a tariff
sheet detailing services, rates validity, terms/conditions and
responsibilities; and
h. Such other documents that the Department may require from time to
time.

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Section 4. Additional Requirements for Tour Operator Using a Motor Vehicle.
No tour operator shall use any motor vehicle while conducting tours or
transporting tourists unless such motor vehicle is accredited with the
department and sporting a tourist plate.

Section 5. Minimum Office Requirements. The tour operator shall comply with
the following office requirements:
a. It shall be located in a commercial district and not in a residential
district; and
b. It must be easily identifiable and shall be used exclusively for the
tour operation business.

Accreditation under the International Air Transport Association (IATA)

IATA accredits two distinctive types of travel agencies - Airline
Appointed Agencies holding ticket stock or capable of e-ticketing, and all other
categories of travel agencies called appropriate business standards that travel
agencies must meet.

Case: KLM Royal Dutch Airlines vs. Philippine Travel Bureau

Background: The Philippine Travel Bureau, accredited by IATA, acted as an

agent for various international air carriers, including KLM Royal Dutch Airlines.
A dispute arose regarding the handling of ticket reservations and the
subsequent denial of boarding for passengers, leading to allegations of
breach of contract and misconduct.

Legal Issue: The central question was whether the Philippine Travel Bureau,
as an IATA-accredited agent, had the authority to make binding reservations
on behalf of KLM, and whether KLM was liable for the actions of its agent.

Court Decision: The court held that the Philippine Travel Bureau, being
accredited by IATA, was authorized to act as an agent for KLM.
Consequently, KLM was found liable for the damages caused by the bureau's
actions, as the agency relationship was established through the IATA
accreditation.

Airline Appointed Services

When a travel agency is appointed by the airlines through International
Association of Travel Agents Network (IATAN), the owner enters into an
Agency Agreement with one or more of IATAN's 79 customer airlines. Each
airline sets its own standards for appointing travel agencies and each airline
may select any number of appointment criteria. Travel agencies receive
remuneration, generally in the form of commissions, on the sale of air
transportation services. The rate of commission is set between the individual
agency and each airline. Any travel agency holding standard and/or airline
ticket stock or capable of e-ticketing may apply as IATA Airline Appointed
Agency. The standards for accreditation will be based on the following:

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A. Managerial Qualifier - a full-time person authorized to make
managerial decisions and exercise daily supervision of the location,
and who has had:
  at least two (2) years full-time employment within the last ten (10) years
in a managerial position at an accredited agency or corporate travel
department or in a passenger air transportation sales capacity at an
airline; or
  at least three (3) years full-time employment within the last ten (10)
years as a sales counselor at an accredited agency, or corporate travel
department or in a passenger air transportation sales capacity at an
airline; or
  at least four (4) years full-time employment within the last ten (10)
years in a managerial position in a travel-related business (such as
hotel, cruise line, or tour operator) that offers travel services to the
general public.
B. Technical Qualifier -a full-time person who performs or supervises the
performance of all technical aspects of selling commercial air
transportation (ie, making reservations,issuing tickets, assigning seats,
generating other traffic documents, etc.). He must have at least:
 one year full-time experience in this field within the last three years
at an accredited agency, or an airline, or a corporate travel
department; and
 has successfully passed the Certified ARC Specialist (CAS) test
administered by the Airlines Reporting Corporation (ARC).
C. Premises
D. Financial
E. Capability
F. Security Standards

Travel Sales Intermediary (TSI)

A Travel Sales Intermediary (TSI) is a business (proprietorship,
partnership, or corporation) that is engaged in the sale and/or brokerage of
travel and travel-related services such as cruises, tours, hotels, car rental, bus
and rail transportation. TSIs do not hold airline agency appointments or issue
airline tickets.

Application of the Law

Case: Gatchalian Travel and Tours vs. Spouses Lim (2005)

Background: In this case, Gatchalian Travel and Tours, a travel agency,

acted as an intermediary to facilitate a tour package for the Spouses Lim. The
Lims paid for a tour package to Hong Kong, which included accommodations,
transfers, and other travel-related services. However, upon arriving in Hong
Kong, the Lims encountered various issues – their accommodations were not
booked as expected, and some promised services were not provided.

Legal Issue: The Spouses Lim filed a complaint against Gatchalian Travel
and Tours, claiming that the agency failed to fulfill its obligations as a travel
intermediary. They alleged that the agency was responsible for ensuring all

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arrangements were in place and that their experience would match what was
promised in the tour package. Gatchalian Travel and Tours argued that they
were merely intermediaries and were not liable for the issues that occurred
abroad.

Court Decision: The court ruled in favor of the Spouses Lim, stating that
Gatchalian Travel and Tours had a duty to ensure that the services paid for
were adequately arranged and provided. As an intermediary, the agency was
found responsible for exercising due diligence in verifying that all bookings
and arrangements were in order. This case underscored that travel
intermediaries have legal obligations to fulfill the services promised to
customers, even if they rely on third-party providers.

Any business who wish to obtain accreditation by IATAN as a TSI is

required to meet the following standards:

a. The owner of the business has been registered with IATAN for two (2) of
the past the (3)years and was eligible for an IATAN ID Card and earned at
least $20,000 in each of those two (2) years from the sale of travel and
travel-related services, or the business considered a "Home based
Travel Agency" (operating from your residence in accordance with local
and state laws) and the owner has invested or has committed to invest
minimum of $10,000 in the travel business; or the business has
been in operation for at least one (1) year immediately prior to
application and produced at least $20,000 in g-travel income or
$200,000 in gross travel sales in the previous twelve (12) months; or
the business has been in operation less than one (1) year and the
owner has invested or has committed to invest a minimum of $25,000
in the travel business;
b. That the gross travel income and gross travel sales represent no more than
15%personal travel (applicant and family); of
c. Proof of legal form of the business and of a business bank account;
d. Two (2) letters of recommendation from national and international industry
suppliers or from a national travel association;
e. Proof of the business listing in a telephone or equivalent directory, website
home page advertisement showing how customers could contact the
business;
f. Proof of a valid and relevant errors and omission insurance policy in the
name of the business;
g. Proof that the business and location are in compliance with all federal,
state, country and local laws, including but not limited to zoning, registration,
and business license;
h. Proof of Sellers of Travel State Registration;
i. Certification that there are no pending or unresolved complaints at the state
or local consumer affairs office; and
j. Personnel Qualifier - Each TSI location must be managed by a person who
devotes substantially all of his time to the affairs of the business and
has had at least two (2) years (reduced to one [1] year if the person
has successfully completed an undergraduate degree in travel and
tourism or has earned certification as a Certified Travel Counselor, a

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 Certified Travel Industry Executive, or as a Certified Travel Associate)
full-time or equivalent experience within the last three (3) years in a
travel sales capacity at an accredited agency, corporate travel
department, airline, cruise line,hotel, car rental, railroad, bus company,
tour operator, or other travel-related business.

ACCREDITATION OF TOUR GUIDES

The Law
Section 9. Requirements for Issuance of Accreditation. An applicant for
accreditation as tour guide shall submit the following:
a. Proof that the applicant has passed a seminar for tour guides duly
conducted by the Department of Tourism or other agencies duly
authorized by the Department to conduct the seminar; provided,
however, that this requirement may be waived by the Department
where the applicant possesses special academic or professional
qualifications relevant to tourism;
b. Certificate of good health issued by any duly accredited government
physician.
c. Clearance from the National Bureau of Investigation; In the case of
alien applicants valid visa from the Bureau of Immigration and the
proper permit from the Dept. of Labor and Employment;
d. Mayor's permit/municipal license;
e. Latest Income Tax Return; and
f. Such other documents that the Department may require from time to
time.

The above are the minimum requirements for accreditation as a tour

guide by the Department of Tourism. It is vital that an accredited tour guide
must have passed a seminar for tour guides duly conducted by the
Department of Tourism of its duly authorized agencies.

Application of the law

Case: Arturo Corpuz is a recent graduate with a degree in B.S. Tourism

currently seeking employment with Rajah Tours as a tour guide. He has just
completed the required seminar for tour guides and secured his NBI
clearance. Upon receiving the results of his medical examination, he learned
that he has Hepatitis B. hence. Was unable to seek a clean bill of health. Can
Arturo proceed with his desire to seek accreditation as a licensed tour guide?
How can Arturo fulfill his dream career?

Legal Opinion: Arturo needs to comply with the medical and mayor’s permit
requirements to pursue his career goals. Travel agencies are required to
exercise prudence and due diligence in their operations, although
extraordinary diligence is not necessary. Tour guides must anticipate and
attend to tourists’ needs, ensure provision of basic necessities, and arrange
for medical attention. Failure to exercise prudence and due diligence may
hold tour operators liable for damages caused to tourists due to
Amisrepresentations or incompetence.

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IV. RESPONSIBILITIES OF TRAVEL AGENCIES AND TOUR
OPERATORS IN THE PHILIPPINES

In the Philippines, travel agencies and tour operators play a crucial role
in promoting tourism and facilitating travel experiences for both local and
international visitors. Given the unique cultural, legal, and economic
landscape of the country, these business entities have specific
responsibilities. This report outlines their legal obligations, customer service
expectations, and ethical considerations within the Philippine context.

1. Legal Obligations

 Licensing and Registration

Travel agencies in the Philippines are required to secure necessary
licenses from the Department of Tourism (DOT). This includes
registration as a legitimate business entity and compliance with
regulations set forth by the Tourism Code of the Philippines.

 Consumer Protection Laws

Agencies must comply with the Consumer Act of the Philippines, which
protects consumers against unfair business practices. This includes
providing clear information about services, cancellation policies, and
refund processes.

 Insurance Requirements
Travel agencies should offer or recommend travel insurance to clients.
The Insurance Commission of the Philippines regulates this, and
agencies must ensure that customers are informed about the benefits
and options available to them.

 Data Protection
Agencies must adhere to the Data Privacy Act of 2012, which
mandates the protection of personal information. This includes proper
collection, storage, and handling of client data.

 Health and Safety Compliance

Travel agencies must ensure that their service providers comply with
local health and safety standards. This is particularly important in the
wake of the COVID-19 pandemic, where health protocols have become
essential.

2. Customer Service Expectations

 Accurate Information Provision

Travel agencies are responsible for providing accurate and timely
information about destinations, accommodations, and travel packages.
Misrepresentation can lead to customer dissatisfaction and potential
legal issues.

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 Clear Pricing Transparency
Agencies must ensure transparent pricing, detailing all costs involved
in travel services, including taxes and fees. This clarity is vital in
building trust with customers.

 Quality of Service Delivery

Agencies are expected to maintain high standards of service. This
includes partnering with reputable hotels, transportation providers, and
activity organizers to enhance customer experiences.

 Effective Conflict Resolution

Establishing a robust process for addressing customer complaints and
resolving issues is essential. A timely and fair resolution can improve
customer loyalty and satisfaction.

 Expert Travel Advice

Agencies should provide knowledgeable advice regarding local
customs, travel safety, and visa requirements. This empowers
customers to make informed decisions and enhances their travel
experience.

3. Ethical Considerations

 Commitment to Sustainability
Travel agencies in the Philippines should promote sustainable tourism
practices. This includes supporting local businesses, minimizing
environmental impact, and encouraging eco-friendly activities.

 Respect for Cultural Sensitivity

Agencies must educate travelers about local customs and traditions,
fostering respect for Filipino culture. This can enhance the travel
experience and promote positive interactions with local communities.

 Social Responsibility
Engaging in socially responsible practices is crucial. Travel agencies
can support local economies by sourcing services from local providers
and participating in community development initiatives.

Travel agencies and tour operators in the Philippines have vital

responsibilities that encompass legal compliance, customer service, and
ethical practices. By fulfilling these obligations, they not only protect their
clients but also contribute to the sustainable growth of the tourism industry.
Adhering to these responsibilities enhances the travel experience and
promotes a positive relationship between tourists and the communities they
visit.

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V. ETHICAL AND UNETHICAL PRACTICES IN TRAVEL AGENCIES AND
TOUR OPERATORS

Ethical practices in the travel industry are essential for building trust,
ensuring customer satisfaction, and promoting sustainable tourism.
Understanding the difference between ethical and unethical practices can
help travel agencies and tour operators maintain integrity and foster positive
relationships with clients and communities.

ETHICAL PRACTICES

Ethical practices refer to behaviors and actions that are morally right,
transparent, and respectful to customers, communities, and the environment.
These practices foster trust, enhance customer loyalty, and promote long-
term business success.

 Transparency - being open and clear about all aspects of travel services,
including pricing, terms and conditions, and potential risks.
Example: Providing a detailed breakdown of costs for a travel package,
including taxes and additional fees, so customers know exactly what they are
paying for.

 Honesty in Marketing - accurately representing services and

experiences in promotional materials without exaggeration or deceit.
Example: Using real images and testimonials from previous travelers rather
than stock photos or misleading claims about the quality of accommodations
and activities.

 Respect for Cultural Sensitivity - acknowledging and promoting respect

for local cultures and traditions and educating travelers about them.
Example: Offering pre-trip briefings that inform travelers about local customs,
appropriate behavior, and important cultural practices to enhance their
experience and respect local communities.

 Commitment to Sustainability - engaging in practices that promote

environmental stewardship and support local economies.
Example: Partnering with eco-friendly service providers and promoting tours
that minimize environmental impact, such as guided hikes that follow Leave
No Trace principles.

 Customer Empowerment - providing clients with the necessary

information and tools to make informed decisions about their travel
plans.
Example: Offering comprehensive travel guides that include safety tips,
cultural insights, and detailed itineraries to help customers plan their trips
effectively.

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UNETHICAL PRACTICES

Unethical practices involve behaviors that are misleading, dishonest, or

exploitative. These actions can harm customers, damage reputations, and
lead to legal consequences. Engaging in unethical practices can undermine
the integrity of the entire industry.

 False Advertising - making misleading claims about products or services

to attract customers.
Example: Promoting a hotel as "five-star" when it has not received such
accreditation or using images that do not accurately represent the actual
accommodations.

 Misrepresentation - providing false or misleading information about

travel packages, destinations, or activities.
Example: Claiming that a tour includes certain attractions or amenities when
they are not actually part of the package, leading to customer disappointment.

 Hidden Fees - charging additional fees that were not disclosed upfront,
leading to a lack of transparency.
Example: Advertising a vacation package at a low price but adding on
significant charges for taxes, service fees, or equipment rentals that
customers were not informed about initially.

 Pressure Sales Tactics - using aggressive sales techniques to coerce

customers into making hasty decisions.
Example: Urging customers to book a trip quickly by claiming limited
availability or significant price increases, without giving them adequate time to
consider their options.

 Ignoring Customer Complaints - failing to address or resolve customer

issues in a timely and fair manner.
Example: Dismissing complaints about poor service or unsafe conditions
instead of taking corrective actions, which can lead to customer dissatisfaction
and harm the agency's reputation.

VI. ISSUES AND CONCERNS IN CONDUCTING BUSINESS

The following are the common challenges faced by travel agencies and
tour operators.

1. Handling customer complaints and cancellations.

2. Navigating regulatory changes.
3. Managing supplier relationships.
4. Adapting to market trends. (e.g., pandemic impacts)
5. Issues related to travel safety and consumer protection.

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References

(a) https://www.traveltek.com/blog/tour-operator-vs-travel-agent/
(b) https://phfinance247.com/guide/step-by-step-guide-on-how-to-start-a-
travel-agency-in-the-philippines/
(c) https://www.slideshare.net/slideshow/travel-agency-and-tour-operations-
lecture/39068240
(d) https://www.asta.org/ASTA/Ethics_Compliance/ASTA/
Code_of_Ethics.aspx
(e) https://www.unwto.org/tourism-and-culture-global-perspective
(f) https://www.tourism.gov.ph
(g) https://www.officialgazette.gov.ph/2009/05/12/republic-act-no-9593/
(h) https://wttc.org

TOPIC QUIZ

1. In a corporations organized under the laws of the Philippines, how

many percent of shares about Filipino have in a corporation?

a. 60%
b. 40%
c. 60%
d. 65%
ANSWER: C 60%

2. The history of travel agencies dates back to the ________ when Sir
Thomas Cook set up the world’s first travel agency.

a. 19th Century
b. 17th Century
c. 16th Century
d. 18th Century
ANSWER: D 18th Century

3. A full-time person who performs or supervises the performance of all

technical aspects of selling commercial air transportation.

a. Premises
b. Technical Qualifier
c. Managerial Qualifier
d. Techniques Qualifier
ANSWER: B Technical Qualifier

4. A business that is engaged in the sale and/or brokerage of travel and

travel-related services such as cruises, tours, hotels, car rental, bus
and rail transportation.
a. International Air Transport Association (IATA)
b. International Association of Travel Agent Network (IATAN)
c. Travel Sales Intermediary (TSI)

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d. Travel Sales Intermediate (TSI)
ANSWER: C Travel Sales Intermediary (TSI)

5. The following are the list of some primary legal documents are needed
to start a new travel agency business, except:

a. Business License
b. Certificate of Incorporation
c. Online business policy
d. Minimum office space of 150 sq. ft
ANSWER: C Online business policy

6. Which of the following is not a true statement?

a. Travel agencies in the Philippines should promote sustainable tourism

practices.
b. Travel agencies should offer or recommend travel insurance to clients.
c. Not engaging in socially responsible practices is crucial.
d. A timely and fair resolution can improve customer loyalty and satisfaction.
ANSWER: C Not engaging in socially responsible practices is crucial.

7. Travel agents act as matchmakers, connecting customers with the

perfect vacation package from various ___________.
a. Travel Management
b. Tour Operator
c. Customer Support
d. Booking Services
ANSWER: B Tour Operator

8. It is a kind of an unethical practices making misleading claims about

products or services to attract customers.

a. False Advertising
b. Misinterpretation
c. Hidden Fees
d. Ignoring Customer Complaints
ANSWER: A False Advertising

9. These actions can harm customers, damage reputations, and lead to

legal consequences.

a. Ethical practices
b. Ethnical practices
c. Unethical practices
d. Untechnical practices
ANSWER: C Unethical practices

10. A legal obligation which require travel agencies in the Philippines to

secure necessary licenses from the Department of Tourism (DOT). This

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 includes registration as a legitimate business entity and compliance with
regulations set forth by the Tourism Code of the Philippines.

a. Insurance Requirements
b. Data Protection
c. Licensing and Registration
d. Consumer Protection Laws
ANSWER: C Licensing and Registration

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