TT Class XII PDF

Travel Agency
and
Tour Operations Business
Student Handbook
Class XII
CENTRAL BOARD OF SECONDARY EDUCATION

Shiksha Kendra, 2, Community Centre, Preet Vihar, Delhi-110301
Travel Agency and Tour Operations Business

i
Student Handbook, Class XII
Price: ` 95/-
First Edition : April 2016, CBSE
Copies : 1500
Paper Used : 80 Gsm CBSE Water Mark White Maplitho
“This Book or part thereof may not be reproduced by any

person or agency in any manner.”
PUBLISHED BY : The Secretary, Central Board of Secondary Education,

Shiksha Kendra, 2, Community Centre, Preet Vihar,
Delhi-110092
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THE CONSTITUTION OF INDIA
PREAMBLE
WE, THE PEOPLE OF INDIA, having solemnly resolved to constitute India into a 1SOVEREIGN
SOCIALIST SECULAR DEMOCRATIC REPUBLIC and to secure to all its citizens :
JUSTICE, social, economic and political;
LIBERTY of thought, expression, belief, faith and worship;
EQUALITY of status and of opportunity; and to promote among them all
FRATERNITY assuring the dignity of the individual and the2 unity and integrity of the Nation;
IN OUR CONSTITUENT ASSEMBLY this twenty-sixth day of November, 1949, do HEREBY ADOPT,
ENACT AND GIVE TO OURSELVES THIS CONSTITUTION.
1. Subs, by the Constitution (Forty-Second Amendment) Act. 1976, sec. 2, for "Sovereign Democratic Republic” (w.e.f. 3.1.1977)
2. Subs, by the Constitution (Forty-Second Amendment) Act. 1976, sec. 2, for "unity of the Nation” (w.e.f. 3.1.1977)
THE CONSTITUTION OF INDIA

Chapter IV A
FUNDAMENTAL DUTIES
ARTICLE 51A
Fundamental Duties - It shall be the duty of every citizen of India-
(a) to abide by the Constitution and respect its ideals and institutions, the National Flag and the National
Anthem;
(b) to cherish and follow the noble ideals which inspired our national struggle for freedom;
(c) to uphold and protect the sovereignty, unity and integrity of India;
(d) to defend the country and render national service when called upon to do so;
(e) to promote harmony and the spirit of common brotherhood amongst all the people of India transcending
religious, linguistic and regional or sectional diversities; to renounce practices derogatory to the dignity of
women;
(f) to value and preserve the rich heritage of our composite culture;
(g) to protect and improve the natural environment including forests, lakes, rivers, wild life and to have
compassion for living creatures;
(h) to develop the scientific temper, humanism and the spirit of inquiry and reform;
(i) to safeguard public property and to abjure violence;
(j) to strive towards excellence in all spheres of individual and collective activity so that the nation constantly
rises to higher levels of endeavour and achievement;
1
(k) to provide opportunities for education to his/her child or, as the case may be, ward between age of 6 and 14
years.
1. Subs. by the Constitution (Eighty - Sixth Amendment) Act, 2002
iv
Preface
Tourism is now recognized as being an economic activity of many nations in the world.
India is second to none in the world in having most attractive tourism destinations
for all time for all types of tourists around calendar year. As the importance of the
activity has increased, the attention has been given to it by Indian Governments and
other various organizations in both the public and private sectors, and academics.
At the same time, the new millennium has witnessed the continued growth of interest
in how people spend their spare time, especially their leisure time and non-work time.
Some commentators have gone as far as to suggest that it is leisure time – how
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in these holidays, particularly those times that are dedicated to travel and holidays
which are more concentrated periods of leisure time. This interest is becoming an
international phenomenon known as ‘tourism’: the use of this leisure time to visit
different places, destinations and localities which often (but not exclusively) feature
in the holidays and trips people take in.
It has given enormous opportunity for tourism business and lot of scope for establishing
service providers like travel agency and tour operators. In this direction, Government
of India has taken several steps in past few decades to develop tourism professionals
to cater the needs of emerging demand for trained manpower for tourism industry.
The Central Board of Secondary Education (CBSE), New Delhi also joined hand in
inculcating and preparing students to join tourism industry as professionals. In this
direction, this book is an introduction to understand the functions and operational
mechanism of travel agency and tour operations. This book also plans to provide
a comprehensive introduction to the tourism industry to encourage further study and
to stimulate interest in the subject area.
The faculties of the Department of Toursim Studies, School of Management,
Pondicherry University (Central University), Puducherry have involved in writing
this book. Mr. Pranjal Kumar Mahanta and Mr. Rohit Borlikar, Ph.D. scholars, have
worked at back of the screen in bringing out the book. I extend my heartfelt thanks
to my faculty and scholars.
Chairman, CBSE

v
Acknowledgements
ADVISORS
z Sh. Y.S.K. Seshu Kumar, Chairman, CBSE
z Sh. K.K. Choudhury, Controller of Examinations & Director (V.E.), CBSE
MATERIAL PRODUCTION GROUP

z Dr. Y. Venkata Rao, Associate Professor , Department of Tourism Studies, Pondicherry University,
Puducherry - Convener
z Dr. Anjaneya Swamy, Professor, Department of Tourism Studies, Pondicherry University, Puducherry
z Dr. Sampad Kumar Swain, Professor, Department of Tourism Management, Indira Gandhi National
Tribal University, Amarkantak, Madhya Pradesh
z Dr. Jitendra Mohan Mishra, Asstt. Professor, Department of Tourism Studies, Pondicherry University,
Puducherry
z Dr. Anu Chandran R.C., Asstt. Professor, Department of Tourism Studies, Pondicherry University,
Puducherry
z Dr. Sibi P.S., Asstt. Professor, Department of Tourism Studies, Pondicherry University, Puducherry
z Dr. Sherry Abraham, Asstt. Professor, Department of Tourism Studies, Pondicherry University,
Puducherry
z Mr. M. Siva, Guest Faculty, Dept. of Tourism Studies, Pondicherry University, Puducherry
EDITING AND COORDINATION
z Dr. Y. Venkata Rao , Associate Professor, Department of Toursim Studies, Pondicherry University,
Puducherry
z Dr. Biswajit Saha , Additional Director (V.E.), CBSE
vi
Contents
Unit 1
Introduction to Travel & Tour Operations Business
1
Unit 2
Operations of Travel Agency
15
Unit 3 23
Transport Network
Unit 4
Itinerary Planning 36
Unit 5
Tour Packaging & Programming
44
Unit 6
Package Tour Costing 54
Unit 7
Government and Professional Bodies 62
Unit 8
Global Distribution System 83

vii
viii
UNIT–1
INTRODUCTION TO TRAVEL &

TOUR OPERATIONS BUSINESS
Unit Overview and Description

This unit aims to provide extensive outlook on introduction to travel and tourism business.
It will help students understand basics of travel and tour operations business.
This unit will impart the following knowledge and skills;
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Resource Material
One copy of the study material for each participant and Copies of the Observer’s Sheet—
for each group and teacher, pen, marker, a set of package tour brochure and computer.
1. Bhatia A.K., Travel Agency and Tour Operations, Sterling Publications, New Delhi.
2. Negi J., Travel Agency Operations : Concepts and Principles, Kanishka, New Delhi.

1
1.1 Evolution of Travel Business
The use of the term travel trade dates back from the early years of the 19th century,
but this should not obscure the fact that what we describe today as travel trade (travel
agency and tour operation business) was taking place much earlier in history. Throughout
the history, there were travel middlemen who helped the merchants traveling for trade
and others who traveled for religious purposes. Let’s trace the historical development in
travel trade – in world as well as in India.
In 1670, the Grand Tour concept was developed especially for educational purposes.
Another major development took place in the year 1730. Health experts suggested that
sea water is found to be useful to cure many diseases. The result was that many resorts
around the English Coast were established to attract visitors seeking to cure themselves
by sea water. In 1815, steamboat services were introduced from London to Gravesend.
One effect of this development was the construction in all major resorts of a pier to
accommodate the vessels on their arrival. In 1820, European cultural centers were opened
to British travelers. The rail link was introduced between Liverpool and Manchester in 1830.
In 1838, Peninsular and Oriental (P&O) Steam Company introduced steamship services
to India and Far East.
The 2008 marks the 250th anniversary of Cox & Kings, the longest established travel
company in the world. The company’s history stretches back to May 1758 when Richard
Cox was appointed as regimental agent to the Foot Guards, later the Grenadier Guards,
by Lord Ligonier during the French and American Indian War. There was not a strict
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men, organised the provision of clothing, acted as a go between for the buying and
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or supplies. Such was Cox’s success that by the end of the 18th century the company
acted as agents for 14 cavalry regiments, 64 infantry regiments and 17 militia regiments,
becoming the largest military agent for the army. Through partnership with the Drummond
family the company had also become involved in banking. In 1922 the company merged
with the Henry S. King bank and, although the banking business was sold the following
year, the Pall Mall building was opened as the Cox & Kings branch. It has been a long
and eventful journey since then and it offers a one-stop shop for the travel needs of all
segments of travelers. It specializes in Destination Management, Leisure Travel MICE,
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Wars and today it thrives as an independent travel company, with associated operations
in India, Japan and the USA.
2
A fortunate day came in the history of travel trade when in 1841, Thomas Cook as secretary
of the South Midland Temperance Association, organized a trip by train for 570 members
of his association to a distance of 22 miles. He bought railway tickets in bulk to sell them
back to the people. The experiment was successful and everybody was exultant. Initially
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he turned it into a tour business. Four years later, in 1845, he set up the ‘World’s First
Travel Agency’ to organize excursions. Due to this innovative approach, Thomas Cook is
known as the Father of the Travel Agency Business. He coordinated railway and steamship
excursions throughout England, Scotland and Europe. However, railways used to give
him only 5 % commission which was not enough to meet his overheads. So he decided
to diversify this business into tour operation. In 1855, Cook started operating package
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an inclusive tour and in this way he developed the concept of inclusive tour.
It was a sheer coincidence that in the same year 1841, Henry Wells started his freight
business in USA. Thomas Cook’s company is still by the name Thomas Cook and Sons
while Henry Well’s company is known as American Express. In 1870, in order to eliminate
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Review Questions :
1. Explain the historical background of travel industry.

2. How Thomas Cook played a key role in evolution of travel business.
3. Activity: Recall your last educational study tour.
4. Write one page details of your study tour.
a) Travel Trade in India
The travel agency and tour operation business is relatively new in India. At the time of
independence, there was hardly any company worth the name in the present context.
The travel business in India, in an organized manner started with the setting of ‘Travel
Agents Association of India ‘(TAAI) in Mumbai in 1951. Prior to it, there were two major
foreign companies – Thomas Cook and Sons, and American Express with their main
branches; and Indian Companies – Jeena and Co., Lee and Muirhead India Pvt. Ltd.,
and N. Jamnadas and Co. Ltd. operating in India. However, the bulk of the international
tourists were handled by Thomas Cook and Sons, and the American Express. In 1920,
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and Co. and the other two Indian travel agencies were merged into one composite travel
company known as ‘Travel Corporation of India Ltd.’ (TCI) in 1961. After this, there were
a number of travel companies established in India such as SITA (1963). In addition to
this, there are a large number of non-recognized travel agencies scattered all over the
country.
b) Meaning & Concept of Travel Business

Travel business is an economic activity, which is related with continuous and regular
buying and selling of travel related services for satisfying human wants. Travel industry
has been agreed as a service industry. In tourism, service is anything which is provided
to the traveler to travel, stay and involve in tourism activity. Travel has fascinated human
beings throughout the ages. During the past time travel was there but ‘tourism’ was not.
Because travel was not undertaken for the purpose of pleasure and their motive was not
to seek holiday from the daily routine works. When people learned to differentiate between
work and leisure then tourism started. When business agencies were developed to sele
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globalization of culture, hospitality, friendship, pleasure, and place and its attractions.
Within this realm, tourism is regarded as experience industry where travel experience is
sold as a commodity just like other household, recreation-oriented products. Therefore,
tourism is related to travel, stay and involvement of people in tourism activities. Their
travel and stay need to generate economy and economy is generated by service. For this
there should be buying and selling process. Only travel business are able to involve in
motivating travelers to travel, organize travel formalities, and provide travel related services
and they can sale tour.
Travel business is a complex concept as the industry includes many activities, which
together produce the tourist product that is travel experience. It is also complex due to
various sub-sectors of the tourist products. Tourism is a single industry but it is made of
different industries such as hotel, airlines, travel agency, trekking agency etc. Each one
of them provides individual product or they combine together to provide travel experience.
Any visit to a tourism destination comprises a mix of several components of different
organizations. A traveler may buy all the travel components from a commercial supplier,
for example a travel agency, as a single product or may buy travel components individually
from different suppliers. The buying and selling of all such travel related services constitute
travel business.
4
Review Questions :
1. What is the role of Travel Agents Association of India ‘(TAAI) in commencement

of travel trade?
2. Describe the concept of travel business with suitable examples from India.
3. Collect the names of such travel agencies, which comes to your notice.
4. Activity: Discuss with your family members/friends about names of travel agencies
situated in town/nearby city.
1.2 Types and Organisational Structure of TA & TO:-
a) Travel Agency
Travel agency is one of the most important organizations in the tourism private sector
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tourism in the country or at the destination. It is a travel agency which packages and
processes all the attractions, accesses, amenities and ancillary services of a country and
presents them to the tourists. That’s why travel agencies are known as image builder of
a country. A prospective travel agency is one that makes arrangement of travel tickets
(air, rail, road and sea); travel documents (passport, visa and other documents for travel),
accommodation, entertainment and other travel related services from the principal suppliers.
It may also secure travel insurance, foreign currency for the traveling people.
A travel agency may either be one of a chain of retail outlets or a single operation. The
work of the larger agencies is often divided between different divisions, e.g. counter service,
business travel and foreign exchange. In smaller concerns each member of the staff will
have to handle many aspects of the agency’s business. Some agencies limit their activities
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providers of holidays, transport, accommodation etc., and the client. Companies that deal
only with business travel are called Business Travel Houses. They may also be responsible
for dealing with the planning, publicity and bookings for trade fairs and conferences.
Travel agency sales clerks take bookings on behalf of tour operators, sell tickets for
travel, make hotel bookings, take payments from the public and give advice, on types
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They need to have a good knowledge of the products and destinations offered by the tour
operating and travel companies. Managers and assistant managers are responsible for
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a small agency training will probably be on-the-job. Large companies may offer a training
programme. The main features of travel agency business are:
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b) Types of Travel Agencies

Retail Travel Agency: A retail travel agency sells tourist products directly to the public on
behalf of the product suppliers and in return gets commission. Some package tours are
sold in two ways i.e. on a commission basis and mark-up price. When a travel agency
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tour and then sell it at a higher rate. The mark up price is the difference between retail
price and wholesale cost.
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fares and rates, make reservations, arrange travel tickets and accommodation, arrange
travel insurance, foreign currency, documents and accept payments.’ The main source of
revenue for a retail travel agency is the commission received from the vendors. However,
the rate of commission differs from organization to organization and from travel component
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Wholesale Travel Agency: These agencies are specialized in organizing package tours,
which are marketed to the customers/tourists through the network of a retail travel agency
or directly to the prospective clients (if the wholesale travel agency has a retail division).
A wholesale travel agency purchases tourist product components in bulk and designs
package tours. Sometimes, a wholesale travel agency buys travel components from a
vendor in bulk and resells them to another travel business organization.
Wholesale travel agencies assemble package holidays and sell them to the clients by
retail travel agencies. A typical package tour includes – air ticket, accommodation and
sometimes other services may also be included in it such as entertainment, sightseeing
and sports activities etc. These packages are referred to as ‘package tours’ as most of
these tours include the services of escorts but a few are sold to people who wish to travel
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6
receives volume discounts from principal suppliers because a wholesaler might agree to
purchase a large number of seats from a particular airline or reserve a large number of
rooms at a particular hotel and resort.
Practically, a wholesaler who sells package tours is called a tour operator. However,
technically there is a difference between a wholesaler and a tour operator. A wholesaler
who sells tourists products individually without assembling them into package tours is called
a consolidator. Mostly, these are specialized in a particular product component, such as
air tickets, accommodation, conferences and conventions etc.
Review Questions:
1. What do you mean by travel agency?

2. Discuss the functions of travel agency.
3. Describe the different types of travel agencies.
4. Make a casual visit to any of near by travel agency.
5. Activity: Identify the location of travel agencies near to your native place.
c) Tour Operator
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their suppliers and combines them into a package tour, which is sold with their own price
tag to the public directly or through middlemen is called a tour operator. More precisely,
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in a given package tour. They can provide these services themselves as some have their
own cars and coaches, hotels and other travel related services or can obtain these from
other suppliers. That is why they are called manufacturers of tourism products.
Tour operators are sometimes called wholesalers but this is partially true because a
wholesaler buys goods or services in bulk at his own account to prepare a tour package
and then retails it through the travel agencies or directly to the clients. However, a tour
operator who has his own one or more tourist product components formulates a new tourist
product for example ‘inclusive tours’. Tour Operators generally offer variety of package
tours to cater to the needs of different kind of travelers.
Although the holidays which are ‘manufactured’ by tour operators are usually sold by travel
agents, some companies have their own retail outlets or sell direct to the public. Thus
the work of a large operator may encompass all the stages in the production and sale of
a holiday. The larger the company, the more specialized each employee’s role becomes,
e.g. there are those concerned with negotiating the various components of a holiday with
carriers and hotel owners etc., those who produce the brochure or ‘label’ of the product,

7
those involved with the research and development of new ideas or marketing them, and
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administrative departments.
d) Types of Tour Operators

Inbound Tour Operators: These are also known as incoming tour operators. Technically,
the operators who receive guests, clients/tourists and handle arrangements in the host
country are called inbound tour operators. For example, a group of American tourists
coming through TCI to India and the company makes arrangements and handles the
JURXSLQ,QGLDWKHQ7&,LVFDOOHGDQLQERXQGWRXURSHUDWRU,QFLGHQWDOO\WKHLQERXQGWUDI¿F
to the country for the last two decades has been decreasing. Essentially, tour operators
need to adopt innovative marketing strategies and should introduce special interest tours
to cater to special needs of the foreign tourists.
Outbound Tour Operators: Tour operators, who promote tours to foreign destinations,
may be business tours or leisure tours are called outbound tour operators. Indian outbound
WRXULVWWUDI¿FLVJURZLQJ DWDUDWHRISHUFHQWDQQXDOO\ DQG WKLVPDNHV,QGLDWKHVHFRQG
largest country in the world with regard to the traveling population. However, India’s outbound
tourism is not only holiday oriented but it is business oriented too. There are many travel
companies which offer outbound packages such as SITA, TCI, Thomas Cook etc.
Domestic Tour Operators: Domestic tour operators are those who assemble and combine
tourist components into inclusive tours and sell it to the domestic travelers. In general,
these tour operators provide travel services within the boundary of home country and offer
package tours to the travelers viz. domestic inclusive tours or independent tours.
Destination Management Companies/ Ground Operators: These are commonly known

as handling agencies and their main function is to organize tour arrangements for incoming
tourists on behalf of overseas operators. When a tour operator himself promotes beach
holidays, wildlife holidays, wildlife tours, heritage tours, cultural tours at different places,
WKH GLI¿FXOW\ DULVHV ,W LV WKH JURXQG RSHUDWRU ZKR KDQGOHV WKH LQFRPLQJ WUDYHOHUV LQ WKH
same season but at different places ensures that the entire operation is according to the
package tours or agreements. Sometimes when a handling agency is at a prominent tourist
place, for example Delhi and it has to make arrangements to Goa, then it contracts (if it
KDV QR RI¿FH RI LWV RZQ ZLWK D ORFDO RSHUDWRU NQRZQ DV H[FXUVLRQ DJHQW WR KDQGOH WKH
arrangements on his behalf.
8
e) Organizational Structure of a Travel/Tour Company
The organization of a travel/ tour company largely depends on the size and type of
the business handled by it. Generally, in a small and medium scale travel agency/ tour
RSHUDWRU RQH ZLOO ¿QG D VLPSOH RUJDQL]DWLRQ VWUXFWXUH EHLQJ OLPLWHG LQ WHUPV RI RSHUDWLRQ
size, division of labor and so forth. Whereas in large scale travel companies such as
Thomas Cook, TCI, SITA etc., the organization structure is more formal.
$ VRXQG RUJDQL]DWLRQDO VWUXFWXUH RI D WUDYHO FRPSDQ\ EULQJV IROORZLQJ EHQH¿WV WR WKH
travel business:
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'HYHORS HIIHFWLYH OHDGHUVKLS
*URZWK DQG GLYHUVL¿FDWLRQ
2SWLPXP XVH RI µKXPDQ DVVHW¶
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7KHRUJDQL]DWLRQDOVWUXFWXUHRIDWUDYHOWRXUFRPSDQ\LVWKHIRUPDORUTXDVLIRUPDOQHWZRUN
of reporting or controlling relationship and the powers and duties associated with each role
in this network. The network of reporting relationship is commonly depicted through an
organization chart. But there are many travel companies, mostly young and small, in which
the structure is implicit rather than explicit. However it has been observed that a travel
FRPSDQ\ ZLOO RSHUDWH IXQFWLRQV PRVW HIIHFWLYHO\ DQG HI¿FLHQWO\ LI DQ H[SOLFLW RUJDQL]DWLRQ
structure is designed or adopted. Practically organization charts do not exist nor does the
role description. Yet, if one views around, one can discern a hierarchy of authority, some
division of work, some specialization in functions, some role specialization and so forth,
which are the hallmarks of an organizational structure.
The organizational structure of a large travel/ tour company is shown in Figure 1. The
chart depicts the visible ‘super structure’ of departments and the important reporting and
functional relationships in the organization of a travel company. The structure consists of
managerial hierarchy from top level to junior level managers and assistants. Normally, a
ODUJH VFDOH WUDYHO FRPSDQ\ KDV WZR SDUWV ± +HDG 2I¿FH DQG QXPEHU RI EUDQFKHV ZLWKLQ
WKH FRXQWU\ DQG DEURDG ,W LV DOVR FRPPRQ WKDW WKH KHDGTXDUWHUVUHJLVWHUHG RI¿FHV ZRXOG
have several divisions such as research and planning, travel and tour division etc. and
VR IRUWK +RZHYHU LQ WKH EUDQFKHV RQH ZLOO ¿QG D IHZ GHSDUWPHQWV DFFRUGLQJ WR WKH
UHTXLUHPHQWVRIVSHFLDOL]HGSDUWLFXODUDUHDV2EYLRXVO\LQGHVLJQLQJRUJDQL]DWLRQVWUXFWXUH

9
a travel company is free to use any means of departmentation that are appropriate
to its business operation, type of customer - traveler corporation, its services and
VSHFL¿F IXQFWLRQV DQG DFWLYLWLHV WR DFKLHYH D PLVVLRQ RU JRDOV DQG WKH FRUH YDOXHV HWF
Figure: 1 Organisational structure of large travel/tour company
1.3 Difference between Travel Agencies and Tour Operators

7KH PDMRU GLIIHUHQFH EHWZHHQ WRXU RSHUDWRUV DQG WUDYHO DJHQFLHV LV LQ WKH V\VWHP
of providing service to customers. A tour operator is a company that buys certain
services from different companies (like hotels, restaurants, cafes, beauty salons)
and forms a single tourist product out of them using its own pricing system. A travel
DJHQF\ DFWV OLNH DQ LQGHSHQGHQW UHVHOOHU ,WV SUR¿W LV WKH FRPPLVVLRQ IRU WKH VDOH
of the operator’s tours to customers. That’s why the agent’s price is usually higher,
although there are moments when agents deliberately understate their prices.
8VXDOO\ D WRXU RSHUDWRU LV D FRPSDUDWLYHO\ ODUJH FRPSDQ\ LQ FRPSDULVRQ ZLWK D
WUDYHO DJHQF\ ,W KDV LWV PDLQ RI¿FH DQG VHYHUDO VXEVLGLDULHV LQ RUGHU WR RIIHU WKHLU
services to more potential customers. Many big tour operators have subsidiaries
in different countries. Irrespective of the number of subsidiaries a tour operator
usually concludes agent agreements with independent travel agencies that then
sell the operator’s tours to their customers. The more partners a tour operator
has in as many countries and regions as possible, the more the sales volume is
DQG FRUUHVSRQGLQJO\ WKH PRUH WRXULVWV ZLOO EX\ LWV WRXUV DQG WKH PRUH SUR¿W LW ZLOO
gain.
10
$ WRXU RSHUDWRU PD\ EH D VXSSOLHU PHDQLQJ WKH\ PLJKW RZQ KRWHOV RU FDU UHQWDOV
or both) and allow to use their own inventory or their supplying partner inventories
for a fee. A travel agent is only a distributor, and typically travel agents rarely own
any travel assets (such as car rentals or hotels) of their own
7UDYHO DJHQFLHV DUH OHVV LQFOLQHG WKDQ WRXU RSHUDWRUV WR SHUIRUP JURXQG VHUYLFHV
i.e. to act like a handling agency or ground operator.
$WUDYHODJHQF\PD\GHDOZLWKRQHFRPSRQHQWRIWUDYHOSURGXFWZKLOHDWRXURSHUDWRU
offers a variety of tour programmes.
1.4 Market Trends & Travel Agency Business Scenario

There has been a gradual decline in the number of travel agency business around the
ZRUOGZKLFKFDQEHDWWULEXWHGWRVRPHYHU\WDQJLEOHIDFWRUV7KH¿UVWZDVVKULQNLQJDLUOLQH
commissions beginning in 1995 and continuing until 2002, when they were eliminated. So,
after decades of offering travel agents a standard commission of 10 percent or more, with
no cap, many of the larger carriers stopped paying base commissions to travel agents.
These changes in the commission system driven by the airlines altered the distribution
system fundamentally. Agents were no longer paid to process transactions.
To offset the loss of commissions, agents had to develop new sources of income. The
most readily available source was service fees. In addition to charging fees, agents have
also turned to selling more cruises and tour packages and shifted to an emphasis on
leisure travel. Service fees put agents at a price disadvantage because when airlines
sell directly to passengers online, they do not add a separate fee to cover their own
distribution costs. Therefore, an airline-direct fare for the same seat for the same journey
is lower than a comparable ticket offered by an agent charging a fee. That provides an
incentive for the customer to deal directly with the airline and reduces the agent’s share
of the distribution pie.
A second major factor is the Internet, which has impacted travel purchase behavior. The
Internet has changed the way commerce is conducted. Many businesses use the Internet
as a way to bypass product and service intermediaries and deal directly with consumers.
The airlines have been a leader in aggressively using e-commerce. The major carriers
EXLOW SRZHUIXO ZHEVLWHV ZKHUH SDVVHQJHUV FRXOG PDNH UHVHUYDWLRQV UHYLHZ IUHTXHQW À\HU
DFFRXQWVDQGFKHFNRQWKHVWDWXVRIÀLJKWV$VDUHVXOWDLUOLQHRQOLQHERRNLQJVLQFUHDVHG
as did the depth of information airlines were able to collect on customers. Such information
gave the airlines a marketing advantage in creating direct relationships with consumers.
The relatively low cost of e-mail marketing enabled the airlines to contact customers more
IUHTXHQWO\ DQG OHVV H[SHQVLYHO\ WKDQ WKURXJK WKH PDLO

11
In parallel with airline website development, online travel agencies invested large sums
to improve their sites and presence. Since 1995, a number of online booking and fare
search sites have appeared (and disappeared), disseminating almost unlimited information
on any possible destination and thus creating more interest in travel. Consumers searched
for information and booked online to make travel the most successful commercial sector
on the Internet.
Another important factor is that airlines now attempt to bypass travel agents. As more
people have Internet access and are willing to purchase over the web, airlines have
adapted the strategy of selling direct, diverting business away from travel agents and
dealing directly with the passenger. This has two advantages: (1) reduced distribution
costs and (2) increased control over passenger information. Sale of travel over their own
airline sites has not only reduced CRS booking fees and commission costs, it has also
attracted passengers who have previously used travel agents.
The Internet has become the distribution channel of choice for the airlines, and they are
aggressively pushing sales on their own sites. Traditional travel agents will continue to
compete for sales with airline seats and online agencies. While the above explains some
major reasons why there has been a decrease in the number of travel agents, they have
not gone away and are still on the major distribution channel for travel. They will maintain
that position as long as they continue to deliver valuable service and save clients time
and money.
1.5 Business Integration

The tourism product consists essentially of transport, accommodation and attractions, both
constructed and natural. The producers or ‘manufacturers’ of these services include air,
sea, road and rail carriers, hotels or other forms of tourist accommodation, and various
forms of constructed facilities designed to attract the tourist, such as heritage sites &
amusement parks, and purpose-built activity centres such as skiing resorts. These services
can be sold to the tourist in a number of ways, either direct, through travel agents (the
retailers of the tourism industry) or through tour operators who can be described as
wholesalers of tourism. Figure 2 is an illustration of the chain of distribution in the travel
and tourism business. The term marketing channel is also used to describe this system.
12
Producers
Wholesalers
Retailers
Consumers
Figure: 2
A notable feature of the industry over recent years has been the steady process of
integration that has taken place between sectors of the tourism industry. If we refer to
the model of the chain of distribution in Figure 2 we can identify this integration as being
either horizontal or vertical in character. Horizontal integration is that taking place at any
one level in the chain, while vertical integration describes the process of linking together
organizations at different levels of the chain.
All business is highly competitive, and the tourism industry is no exception to this rule.
&RPSHWLWLRQ IRUFHV FRPSDQLHV WR VHHN ZD\V RI EHFRPLQJ PRUH HI¿FLHQW LQ RUGHU WR FXW
FRVWV ,QWHJUDWLRQ PDNHV WKLV SRVVLEOH E\ HQDEOLQJ FRPSDQLHV WR EHQH¿W IURP HFRQRPLHV
of scale. By producing and selling more of a product, the supplier reduces the unit cost
RI HDFK SURGXFW VLQFH WKH ¿[HG FRVWV LQFXUUHG DUH VSUHDG RYHU D ODUJHU QXPEHU RI XQLWV
whether these are hotel bedrooms, aircraft seats or package tours. At the same time,
buyers of these products, such as tour operators, can obtain lower net prices if they buy
LQ ODUJH TXDQWLWLHV MXVW DV DLUOLQHV FDQ QHJRWLDWH ORZHU SULFHV LI WKH\ RUGHU PRUH DLUFUDIW
from the manufacturers. The savings achieved through both these economies of scale can
be passed on to clients in the form of lower prices, making the product more attractive
to the consumer.
,QDGGLWLRQWRWKHVHEURDGEHQH¿WVRIIHUHGE\LQWHJUDWLRQJHQHUDOO\WKHUHDUHRWKHUDGYDQWDJHV
VSHFL¿F WR KRUL]RQWDO RU YHUWLFDO LQWHJUDWLRQ +RUL]RQWDO LQWHJUDWLRQ FDQ WDNH VHYHUDO IRUPV
One form is the integration between two companies offering competing products. Two
hotels may merge, for example, or two airlines competing on similar routes may unite. A
second form of horizontal integration occurs between companies offering complementary
rather than competing products. Close links therefore form between the accommodation and
transport sectors, which are interdependent for their customers. Without hotel bedrooms
available at their destinations, airline passengers may be unwilling to book seats, and
vice-versa. Recognition of this dual need has led many airlines to buy into or form their

13
own hotel divisions, especially in regions of high tourist demand, where bed shortages
are common.
$V ZLWK KRUL]RQWDO LQWHJUDWLRQ RUJDQL]DWLRQV FDQ DFKLHYH VLJQL¿FDQW HFRQRPLHV RI VFDOH
by expanding vertically. Vertical integration is said to take place when an organization at
one level in the chain of distribution unites with one at another level. This integration can
be forward (or downward in the direction of the chain) such as in the case where a tour
operator buys its own chain of travel agents, or it can be backward (or upward against the
direction of the chain) such as in the case where the tour operator buys its own airline.
Forward integration is obviously found more commonly, since organizations are more likely
to have the necessary capital to buy businesses further down the chain of distribution,
ZKLFK UHTXLUH OHVV FDSLWDO LQYHVWPHQW )RU H[DPSOH HYHQ WKH ODUJHVW WUDYHO DJHQF\ FKDLQ
would be unlikely to have the capital needed to form its own airline.
Review Questions:
:KDW DUH WKH EDVLV IRU FODVVL¿FDWLRQ RI WRXU RSHUDWRUV
2. List out the differences between travel agency and tour operators.
3. Describe the integrative system in travel and tour business.
4. Activity: Think why there are different types of travel agencies.
5. List out on paper the differences.
Exercises:
$UH \RX LQWHUHVWHG WR WUDYHO /LVW RXW WKH UHTXLUHPHQWV WR XQGHUWDNH WUDYHO
2. Explain the concept of tour operation.
3. Enumerate the organization structure of travel agency/operation.
Activity: Prepare a note on the different types tours and tour operators.
14
UNIT–2
OPERATIONS OF TRAVEL
AGENCY
Unit Overview & Description

7KLV XQLW DLPV WR SURYLGH H[WHQVLYH NQRZOHGJH RI WKH RSHUDWLRQ UHTXLUHG LQ WUDYHO DJHQF\
This unit will impart the following knowledge & skills-
ͻ Role, functions and responsibilities of TA & TO

ͻ Ticketing- fare calculation
ͻ Documentation- packaging tour
ͻ Foreign exchange
ͻ Hotel, cruise, bus & rail reservations- car rentals
ͻ Travel documentations
ͻ Marketing & publicity
ͻ Market research
Resource Material
One copy of the study material for each participant and Copies of the Observer’s Sheet—
1. Chand, M., Travel Agency Management: An Introductory Text, Anmol Publication Pvt.
Ltd., New Delhi.
2. Holloway, J.C., The Business of Tourism, Prentice Hall, London.
Introduction
The tour operator is far from easy process because their role, activities and form have
FKDQJHG GUDPDWLFDOO\ IURP WKH HDUO\ GD\V ZKHQ 7KRPDV &RRN ¿UVW RUJDQL]HG D SDFNDJH

15
trip by rail in the 1840s. One useful approach is to identify what a tour operator does as
a means of establishing their characteristics and form. In simple terms a tour operator will
organize, package together different elements of the tourism experience and offer them
IRUVDOHWRWKHSXEOLFHLWKHUWKURXJKWKHPHGLXPRIDEURFKXUHOHDÀHWRUDGYHUWLVHPHQWRU
using ICT. If a tour operator is to offer a package, also known as an inclusive tour, it will
normally have to include at least two elements that are offered for sale at the inclusive
sale price, and will involve a stay of more than 24 hours in overnight accommodation.
These elements normally include transport, accommodation and other tourist services
2.1 Agent
An agent is a person acting for, or employed by, the principal. If a company appoints another
person to act for it in the course of business, that person becomes the agent, whether the
DSSRLQWPHQW LV IXOOWLPH RU SDUWWLPH DQG ZKHWKHU RU QRW WKH DJHQW UHFHLYHV D ¿[HG VDODU\
or a fee from the company. In a travel agency, any individual director or employee or a
self-employed person acting for the travel agency is an agent of the company.
A travel agency is a private retailer or public service that provides tourism related services to
the public on behalf of suppliers such as airlines, car rentals, cruise lines, hotels, railways,
and package tours. In addition to dealing with ordinary tourists most travel agencies have
a separate department devoted to making travel arrangements for business travelers and
some travel agencies specialize in commercial and business travel only. There are also
travel agencies that serve as general sales agents for foreign travel companies, allowing
WKHP WR KDYH RI¿FHV LQ FRXQWULHV RWKHU WKDQ ZKHUH WKHLU KHDGTXDUWHUV DUH ORFDWHG
2.2 Origins of Travel Agency

The British company Cox & Kings is sometimes said to be the oldest travel agency in the
world, but this rests upon the services that the original bank, established in 1758, supplied
WR LWV ZHDOWK\ FOLHQWV 7KH PRGHUQ WUDYHO DJHQF\ ¿UVW DSSHDUHG LQ WKH VHFRQG KDOI RI WKH
19th century. Thomas Cook, in addition to developing the package tour, established a chain
RIDJHQFLHVLQWKHODVWTXDUWHURIWKHWKFHQWXU\LQDVVRFLDWLRQZLWKWKH0LGODQG5DLOZD\
They not only sold their own tours to the public, but in addition, represented other tour
companies. Other British pioneer travel agencies were Dean & Dawson, the Polytechnic
Touring Association and the Co-operative Wholesale Society. The oldest travel agency in
North America is Brownell Travel; established on July 4, 1887, Walter T. Brownell led ten
travelers on a European tour, setting sail from New York on the SS Devonia.
Travel agencies became more commonplace with the development of commercial aviation,
starting in the 1920s. Originally, travel agencies largely catered to middle and upper class
customers, but the post-war boom in mass-market package holidays resulted in travel
agencies on the main streets of most British towns, catering to a working-class clientele,
16
looking for a convenient way to book overseas beach holidays.
Review Questions:
1. What are the elements of a travel agent?
2. Discuss the reasons behind the origin of travel agency
,GHQWLI\ WKH UHTXLUHG DVVLVWDQFH \RX H[SHFW IURP WUDYHO DJHQF\WRXU RSHUDWLRQ
4. Activity: If you are planning to go to tour during your vacations, who will provide
travel related solutions to you.
2.3 Operations of Travel Agency
A travel agency’s main function is to act as an agent, selling travel products and services
RQ EHKDOI RI D VXSSOLHU &RQVHTXHQWO\ XQOLNH RWKHU UHWDLO EXVLQHVVHV WKH\ GR QRW NHHS D
stock in hand. A package holiday or a ticket is not purchased from a supplier unless a
FXVWRPHU UHTXHVWV WKDW SXUFKDVH7KH KROLGD\ RU WLFNHW LV VXSSOLHG WR WKHP DW D GLVFRXQW
7KH SUR¿W LV WKHUHIRUH WKH GLIIHUHQFH EHWZHHQ WKH DGYHUWLVHG SULFH ZKLFK WKH FXVWRPHU
pays and the discounted price at which it is supplied to the agent. This is known as the
FRPPLVVLRQ,QPDQ\FRXQWULHVDOOLQGLYLGXDOVRUFRPSDQLHVWKDWVHOOWLFNHWVDUHUHTXLUHGWR
be licensed as a travel agent. In some countries, airlines have stopped giving commission
to travel agencies. Therefore, travel agencies are now forced to charge a percentage
SUHPLXP RU D VWDQGDUG ÀDW IHH SHU VDOH +RZHYHU VRPH FRPSDQLHV VWLOO JLYH WKHP D VHW
percentage for selling their product. Major tour companies can afford to do this, because if
they were to sell a thousand trips at a cheaper rate, they still come out better than if they
VHOODKXQGUHGWULSVDWDKLJKHUUDWH7KLVSURFHVVEHQH¿WVERWKSDUWLHV,WLVDOVRFKHDSHU
to offer commissions to travel agents rather than engage in advertising and distribution
campaigns without using agents.
Other commercial operations are undertaken, especially by the larger chains. These can
include the sale of in-house insurance, travel guide books and timetables, car rentals,
and the services of an on-site Bureau de change, dealing in the most popular holiday
currencies.
The majority of travel agents have felt the need to protect themselves and their clients
against the possibilities of commercial failure, either their own or a supplier’s. They will
advertise the fact that they are surety bonded, meaning in the case of a failure, the
FXVWRPHUV DUH JXDUDQWHHG HLWKHU DQ HTXLYDOHQW KROLGD\ WR WKDW ZKLFK WKH\ KDYH ORVW RU LI
they prefer, a refund. Many British and American agencies and tour operators are bonded
with the International Air Transport Association (IATA), for those who issue air tickets, Air
Travel Organisers’ Licensing (ATOL) for those who order tickets in, the Association of

17
British Travel Agents (ABTA) or the American Society of Travel Agents (ASTA), for those
who sell package holidays on behalf of a tour company.
A travel agent is supposed to offer impartial travel advice to the customer. However, this
function almost disappeared with the mass-market package holiday and some agency
chains seemed to develop a ‘holiday supermarket’ concept, in which customers choose
their holiday from brochures on racks and then book it from a counter. Again, a variety
of social and economic changes have now contrived to bring this aspect to the fore once
more, particularly with the advent of multiple, no-frills, low-cost airlines.
2.4 Organization of Travel Agencies

Whilst the businesses in this sector can be broadly split into the independent travel agencies
and the multiples who are owned and operated by tour operators and other tourism
FRQFHUQVWZREDVLFSULQFLSOHVFKDUDFWHUL]HVXFFHVVLQHDFKJRRGTXDOLW\FXVWRPHUVHUYLFH
and management. In terms of management, controlling costs, ensuring highly motivated
staff are employed and building upon a customer base through word of mouth are all
critical. The independent agencies, which are manager-owned and typically employ fewer
WKDQ ¿YH VWDII FRQWUDVW ZLWK WKH ODUJHU FKDLQ DJHQFLHV ORFDWHG LQ SURPLQHQW KLJK VWUHHW
RU VKRSSLQJ PDOO ORFDWLRQV ZKLFK KDYH KLJK SDVVHUE\ WUDI¿F7UDYHO DJHQWV W\SLFDOO\ GHDO
with a diverse range of tasks including:
0DNLQJ UHVHUYDWLRQV
3ODQQLQJ LWLQHUDULHV LQFOXGLQJ FRPSOH[ URXQGWKHZRUOG WUDYHO
&DOFXODWLQJ IDUHV DQG FKDUJHV
3URGXFLQJ WLFNHWV DGYLVLQJ FOLHQWV RQ GHVWLQDWLRQV UHVRUWV DLUOLQH FRPSDQLHV DQG D
Wide range of travel products
&RPPXQLFDWLQJ ZLWK FOLHQWV YHUEDOO\ DQG LQ ZULWLQJ
0DLQWDLQLQJ DFFXUDWH UHFRUGV RQ UHVHUYDWLRQV
(QVXULQJ UDFNV DUH VWRFNHG ZHOO RU VXSSOLHV DUH NHSW LQKRXVH
$FWLQJ DV LQWHUPHGLDULHV ZKHUH FXVWRPHU FRPSODLQWV RFFXU
Not only do travel agency staff need technical skills in reading timetables, calculating fares
and an ability to write tickets, they also need good interpersonal skills in closing a sale
and in being able to use technology (e.g. CRS). Agents also need to be able to explain
the growing complexity of air fares and the conditions attached to them in simple, plain
English. An agency manager will have to be able to manage a group of staff and will
DOVREHHQJDJHGLQWKH¿QDQFLDOPDQDJHPHQWRIDFFRXQWVDQGFDVKÀRZWKHLQYRLFLQJRI
clients and the controlling of expenditure in running the business. Above all, it is critical
18
to ensure all staff provide a high level of customer service so as to make sales and build
the client base. To do this:
&XVWRPHUV PXVW EH JUHHWHG ZDUPO\ W\SLFDOO\ ZLWK D VPLOH

6WDIIPXVWHQVXUHKLJKVWDQGDUGVRIGUHVVDSSHDUDQFHDQGSHUVRQDOJURRPLQJDV
&XVWRPHUV DUH LQÀXHQFHG E\ ¿UVW LPSUHVVLRQV WKHLU SHUVRQDO SRVWXUH PDQQHU DQG
body language are also important as being alert, attentive and willing to empathize
and match client needs with available products is key,
$OO VWDII PXVW EH SROLWH DQG DEOH WR H[SUHVV WKHPVHOYHV FOHDUO\ ZKLOH DOZD\V
maintaining eye contact,
7HOHSKRQHV PXVW EH DQVZHUHG SURPSWO\ DQG FRXUWHRXVO\
Figure:3
,QVHOOLQJDSURGXFWDVHWVHTXHQFHLVXVXDOO\DGKHUHGWRDVLQ)LJXUH7KLVLOOXVWUDWHV
the consumer psychology of a holiday purchase, where an agent will need to gradually
XQGHUVWDQGZKDWWKHFRQVXPHUZDQWVKRZWRIXO¿OWKDWGHPDQGDQGWKHW\SHRILQWHUDFWLRQ
that is sought. In particular, a process of search, evaluation and re-evaluation goes on in the
agency or on a return visit if the client takes away brochures to assess product offerings.
7KHDJHQWKDVDFULWLFDOUROHWRSOD\QRWQHFHVVDULO\LQSURYLGLQJGH¿QLWLYHDQVZHUVEXWLQ
guiding the consumer, presenting options (and in managing their dismissal) until a suitable
product is located. It is clear that this is a time-intensive undertaking and, therefore, it is
apparent why many consumers will go through this process using technology such as the
worldwide web as well as using a travel agency.

19
Review Questions:
1. Explain the mechanism of operating travel agency?

2. Discuss the organization system of travel agency.
:ULWH D VPDOO QRWHV RQ WKH IXQFWLRQV RI LGHQWL¿HG MREV
4. Activity: Identify the jobs, involved in tour operations.
2.5 Commissions
Several areas of a travel agency’s focus pay commissions to the agency which becomes
it’s principal income. These are mainly car rentals, cruise lines, hotels, railways, sightseeing
WRXUV WRXU RSHUDWRUV HWF$ ¿[HG SHUFHQWDJH RI WKH PDLQ HOHPHQW RI WKH SULFH LV SDLG WR
the agent as a commission. Commissions are not paid on the Tax component of the price.
However regarding air travel, commissions are becoming a thing of the past. In the United
States, most airlines pay no commission at all to travel agencies. In this case, an agency
usually adds a service fee to the net price. Reduced commissions have taken place since
ZKHQ¿UVWFRPPLVVLRQUHGXFWLRQVKLW1RUWK$PHULFDDFDSRIRQUHWXUQWULSVDQG
RQ RQH ZD\ ,Q (XURSHDQ DLUOLQHV EHJDQ HOLPLQDWLQJ RU UHGXFLQJ FRPPLVVLRQV
while Singapore Airlines did so in parts of Asia. In 2002 Delta Air Lines announced a zero
commission base for USA and Canada; after a few months United Airlines, American Airlines,
Continental Airlines, Northwest Airlines, US Airways and American Trans Air joined Delta.
Types of Agencies
There are three different types of agencies in the UK: multiples, miniples and independent
agencies. The former comprises a number of national chains, often owned by international
conglomerates, like Thomson Holidays, now a subsidiary of TUI AG, the German
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a controlling interest in a chain of travel agencies, in order to control the distribution of
their product. (This is an example of vertical integration.) The smaller chains are often
based in particular regions or districts.
In the United States, there are four different types of agencies: mega, regional, consortium
and independent agencies. American Express and the American Automobile Association
(AAA) are examples of mega travel agencies.
Independent agencies usually cater to a special or niche market, such as the needs of
residents in an upmarket commuter town or suburb or a particular group interested in a
similar activity, such as sporting events, like football, golf or tennis.
There are two approaches of travel agencies. One is the traditional, multi-destination,
20
out-bound travel agency, based in the originating location of the traveler and the other
is the destination focused, in-bound travel agency, that is based in the destination and
delivers an expertise on that location. At present, the former is usually a larger operator
like Thomas Cook, while the latter is often a smaller, independent operator.
2.6 Travel Agencies in the 21st Century

With general public access to the Internet, many airlines and other travel companies
EHJDQWRVHOOGLUHFWO\WRSDVVHQJHUV$VDFRQVHTXHQFHDLUOLQHVQRORQJHUQHHGHGWRSD\
the commissions to travel agents on each ticket sold. Since 1997, travel agencies have
gradually been disintermediated, by the reduction in costs caused by removing layers
from the package holiday distribution network. However, travel agents remain dominant in
some areas such as cruise vacations where they represent 77% of bookings and 73% of
packaged travel. In 2009, the market size for travel agencies experienced a sharp decline,
GURSSLQJ IURP ELOOLRQ WKH SUHYLRXV \HDU WR ELOOLRQ
In response, travel agencies have developed an internet presence of their own by creating
travel websites, with detailed information and online booking capabilities. Major online
travel agencies include: Expedia, Voyages, Travelocity, Orbitz, CheapTickets, Priceline,
CheapOair, Webjet, and Hotwire. Travel agencies also use the services of the major
computer reservations systems companies, also known as Global Distribution Systems
(GDS), including: SABRE, Amadeus CRS, Galileo CRS and Worldspan, which is a subsidiary
of Travelport, allowing them to book and sell airline tickets, hotels, car rentals and other
travel related services. Some online travel websites allow visitors to compare hotel and
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packages by amenities, price, and proximity to a city or landmark. Travel agents have
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All travel sites that sell hotels online work together with GDS, suppliers and hotels directly
to search for room inventory. Once the travel site sells a hotel, the site will try to get
D FRQ¿UPDWLRQ IRU WKLV KRWHO 2QFH FRQ¿UPHG RU QRW WKH FXVWRPHU LV FRQWDFWHG ZLWK WKH
result. This means that booking a hotel on a travel website will not necessarily result
LQ DQ LQVWDQW DQVZHU 2QO\ VRPH KRWHOV RQ D WUDYHO ZHEVLWH FDQ EH FRQ¿UPHG LQVWDQWO\
(which is normally marked as such on each site). As different travel websites work with
GLIIHUHQW VXSSOLHUV WRJHWKHU HDFK VLWH KDV GLIIHUHQW KRWHOV WKDW LW FDQ FRQ¿UP LQVWDQWO\
Some examples of such online travel websites that sell hotel rooms are Expedia, Orbitz
and World Hotel-Link.

21
Review Questions :
1. Find out the changes that are happening in tourism business.
2. Activity: Find out the sources of income for travel agency/tour operations.
Exercises :
1. What are the elements of a travel agent?
2. Explain the mechanism of operating travel agency?
3. What is the role of commission in operating
4. Explain the future of travel agents
I. Guidelines for Practical:

One day visit to Travel Agency and take part in following activities:
,GHQWLI\ RI¿FH PDWHULDOPDFKLQHV LQYROYHV LQ WUDYHO DJHQF\ RI¿FH
2EVHUYH DUUDQJHPHQW RI RI¿FH HTXLSPHQW DQG WKHLU ORJLFDO DUUDQJHPHQW
3. Recognize people working with different roles
2EVHUYH WKH FOLHQWV DQG XQGHUVWDQG WKHLU UHTXLUHPHQWV
5. Find out various functions performed by people in travel agency.
Prepare a report.
22
UNIT-3
TRANSPORT NETWORK

This unit aims to provide an overview on transport network. It will help students to understand
various transport networks available for tourist to reach attractive tourism destinations.
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&DU UHQWDO V\VWHP
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Resource Material
A copy of the study material, road maps with travel brochures for each participant and
copies of the Observer’s Sheet—for each group and teacher, pen, marker, a set of package
tour brochure and computer.
1. Roday. S., Biwal, A & Joshi . V., Tourism Operations and Management, Oxford University
Press, New Delhi.
2. Bhatia A.K, Travel Agency and Tour Operations, Sterling Publications , New Delhi.
3.1 Transportation
Many economic activities that are intensive in infrastructures, the transport sector is

23
an important component of the economy impacting on development and the welfare of
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WRPDUNHWVHPSOR\PHQWDQGDGGLWLRQDOLQYHVWPHQWV:KHQWUDQVSRUWV\VWHPVDUHGH¿FLHQW
in terms of capacity or reliability, they can have an economic cost such as reduced or
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increases costs. Transportation links together the factors of production in a complex web
of relationships between producers and consumers.
3.2 Tourism and Transport

Since the 1970s where tourism became increasingly affordable for developed economies,
the number of international tourists has more than doubled. The expansion of international
tourism has a large impact on the discipline of transport geography. As of 2010, 877
million international tourist receipts were accounted for, representing more than 10% of the
global population. Tourism dominantly takes place in Europe and North America. Traveling
has always been an important feature of society. First the explorers traveled the world
to learn more about geographical regions, potential markets and to exploit resources. As
time moved on an as transportation became more reliable, traveling became a mundane
activity taking place in an organized environment; tourism. In the modern world, traveling
is more centered around the annual holidays and can be fairly well predicted. Tourism,
as an economic activity, is characterized by a high level of elasticity. As transport costs
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in international and even national transport infrastructures implies a very large number of
SHRSOHZKRZDQWVWRPRYHLQDQHI¿FLHQWIDVWDQGLQH[SHQVLYHPDQQHU,WUHTXLUHVKHDY\
investments and complex organization. Well organized terminals and intelligently planned
schedules are essential in promoting effective transportation facilities for tourists, notably
since the industry is growing at a fast rate. Transport is the cause and the effect of the
growth of tourism.
To start with, the improved facilities have stimulated tourism, and the expansion of tourism
has stimulated transport. Accessibility is the main function behind the basics of tourism
transport. In order to access the areas that are mainly aimed, tourists will use any
transportation mode. However, air transport is the main mode for international tourism,
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are pegged with growth rates of international tourism. Transport policies and decisions
of governments can make a big difference in the destinations available to tourists. One
24
dimension concerns the openness to tourism through travel visa restrictions, which vary
substantially depending on the countries of origin of tourists. Unsurprisingly, travellers from
developed countries, particularly Europe, are facing the least restrictions while travelers
from developing countries are facing a much more stringent array of restrictions. Another
dimension concerns the provision of infrastructures. If the public sector does not cope with
the demand in terms of transport infrastructures, the tourist industry might be impaired
in its development. However, land transport networks in various countries are designed
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usually make enough contribution to the local economy that governments are more than
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differences in the amount of spending per type of mode, namely between cruise and
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SDVVHQJHUV VSHQW SHU SRUW RI FDOO RQ DYHUDJH $ VLJQL¿FDQW UHDVRQ LV WKDW FUXLVH OLQHV
are capturing as much tourism expenses within their ships as possible (food, beverages,
entertainment, shopping).
Review Questions:
1. What do you mean by transportation?

2. Explain the linkage between transportation and tourism.
3. What is the importance of transportation?
4. Recollect your recent tour and mode of transport.
5. Activity: Understand the transportation system of your city/town/place
3.3 Air Transport

It is by far the most effective transport mode. Notably because of prices, only 12.5%
of the tourist travel by plane, but for international travel this share is around 40%. Air
transport has revolutionized the geographical aspect of distances; the most remote areas
can now be attained, any journey around the world can be measured in terms of hours
of traveling. Business people are among the biggest users of airline facilities, but a low
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Air transportation was slow to take off after the Wright Brothers breakthrough at Kitty Hawk
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SDVVHQJHU VHUYLFHV 2Q -DQXDU\ WKH ZRUOG¶V ¿UVW VFKHGXOHG ÀLJKW ZLWK D SD\LQJ
passenger hopped across the bay separating Tampa and St. Petersburg, Florida for a
IDUH WKDW HYHQWXDOO\ VWDELOL]HG DW SHU SHUVRQ URXQGWULS DERXW LQ %\

25
comparison, Low-Cost Carrier (LCC) Southwest Airlines could carry a passenger from
Tampa to Seattle and back, more than a hundred times farther for only slightly more than
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SURYLGHGWKH¿UVWUHDOVSXUWRWKHGHYHORSPHQWRIFRPPHUFLDODYLDWLRQDVDLUSRZHUEHJDQ
WREHXVHGDQGEHWWHUDLUFUDIWZHUHTXLFNO\GHVLJQHG7KUHHPDMRUFDWHJRULHVRISDVVHQJHU
jet planes may be recognized:
Short range aircraft: Bombardier’s CRJ series and Embraer’s ERJs are examples
of planes with relatively small capacities (30-100 passengers) that travel over
relatively short distances. They are usually referred to as regional jets that serve
VPDOOHU PDUNHWV DQG IHHG KXE DLUSRUWV 7KH\ DOVR SURYLGH KLJK IUHTXHQF\ SRLQW WR
point services between large city pairs.
Medium range aircraft: The airbus A320, with a range of 3,700 km, and its Boeing
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New York, most of North America can be reached. This range can be applied to
the European continent, South America, East Asia and Africa. This type of aircraft
is also used for high demand regional services where low cost air carriers compete.
Long range aircraft: There are a variety of aircraft capable of crossing the oceans
and linking together the continents. Early variants such as the B-707 have evolved
into planes offering high capacity, such as the B-747 series, or long range abilities,
such as B-777 series or the A350 series which have ranges of up to 17,400 km.
7\SLFDOO\ DLU FDUJR UHODWHV WR WLPH VHQVLWLYH YDOXDEOH RU SHULVKDEOH IUHLJKW FDUULHG
RYHUORQJGLVWDQFHV7KLVLVSDUWLFXODUO\VXLWDEOHLQVXSSRUWLQJ³MXVWLQWLPH´SURGXFWLRQ
and distribution strategies with low inventory levels. Air cargo has also a niche
market for emergency situations where the fast delivery of supplies (e.g. medical,
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operations:
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regular scheduled services between the airports they service. They also offer
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specialized and passenger aircrafts able to carry freight in their bellyhold. Most
of the cargo operations involve long haul services.
c) Passenger operators that will offer the freight capacity in the belly hold of their
aircrafts. For these operators, freight services are rather secondary and represent
26
a source of additional income. However, low cost airlines usually do not offer
air cargo services.
d) Air freight integrators commonly operating hub and spoke freight services that
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DUH XVXDOO\ GRRUWRGRRU DQG FDQ VXSSRUW WKH ORJLVWLFV UHTXLUHPHQWV RI WKHLU
customers.
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UHTXLUHPHQWVHJKHDY\ORDGVWKDWGRQRW¿WWKHFDSDELOLWLHVRIVWDQGDUGFDUJR
aircrafts.
In today’s competitive market scenario, organizations increasingly understand the importance

of building and effectively managing the relationship with passengers. For building and
maintaining a healthy relationship with the passenger, organizations need to understand
and meet the expectations of its passenger. The organizations today should aim not
only at delivery of the service to the passengers, but should also focus on satisfying the
passengers with the service. Thus it has become imperative for organizations to identify
factors that cause passenger satisfaction or dissatisfaction and consciously measure them
so as to try and bring about the necessary changes on the basis of passenger perceptions.
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Act of 1953 was repealed with a view to remove monopoly of air corporations on
scheduled services, enable private airlines to operate scheduled service, convert Indian
Airlines and Air India to limited company and enable private participation in the national
carriers. However, beginning 1990 private airline companies were allowed to operate
air taxi services, resulting in the establishment of Jet Airways and Air Sahara. These
changes in the Indian aviation policies resulted in the increase of the share of private
airline operators in domestic passenger carriage to 68.5% in 2005 from 0.4 of 1991. Due
WR ZHDNHU UXSHH ¿HUFH FRPSHWLWLRQ DQG KLJK ZRUOG FUXGH RLO SULFHV ZLWK WD[HV OHYLHG E\
state-run oil marketing companies made jet fuel prices in India among the highest in the
world, by the end of the 2011, 5 of the top 6 Indian airlines were loss-making, including
state-owned Air India which was operating on taxpayer life support.
Review Questions:
1. Explain the importance of air transport in an economy?
2. What do you mean by low cost carrier (LCC)?
3. What are the major categories of air passengers?
4. Write small notes on the airport that you know on your own or through your friends/
relatives.
5. Activity: Collect data on airport which is located at your place.

27
3.4 Rail Transportation
The rail travel has emerged as the dominant form of mass public transport before
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make it a second choice as a traveling mode. The railway systems of several countries,
notably in Europe, have seen massive investments for long-distance routes and high speed
services. Due to the scenery or the amenities provided, rail transportation can also be a
tourist destination in itself. Several short rail lines that no longer had commercial potential
have been converted for tourism.
Rail Transportation and Rail Lines-Although primitive rail systems existed by the 17th
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the product of the industrial era, playing a major role in the economic development of
Western Europe, North America and Japan. It represented a major improvement in land
transport technology and has obviously introduced important changes in the movement of
freight and passengers. This was not necessarily because of its capacity to carry heavy
loads, since maritime transportation excelled at doing so, but because of the time element.
Rail transport systems dramatically improved travel time as well as the possibility to offer
reliable and consistent schedules that could be included in the planning of economic
activities such as production and distribution.
The coherence of economic activities and social interactions was thus substantially improved.
With the introduction of the steam locomotive in 1829, a mechanized land transport system
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established differently because of the variety of strategies to be achieved, namely access to
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companies were mainly point to point ventures with the company often taking the name
of the serviced destinations. As the rail system expanded, several mergers took place,
which lead to rather peculiar semantic results.
Operating a rail system involves using regular (scheduled), but rigid, services. Rail
transportation, like roads, has an important relationship with space, since it is the transport
mode the most constrained by the physiography. These constraints are mainly technical
and operational:
Space consumption: Rail transportation has a low level of space consumption

along lines, but its terminals are important consumers of space, especially in urban
areas. This increases operation costs substantially. Still, rail terminals tend to be
28
centrally located and accessible. A major issue concerns rights of way that represent
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Gradient and turns: Rail transportation can support a gradient of up to 4% (e.g. 40

meters per kilometer), but freight trains rarely tolerate more than 1%. This implies that
DQRSHUDWLRQDOIUHLJKWUDLOOLQHUHTXLUHVNLORPHWHUVWRFOLPEPHWHUV*UDGLHQW
are also important as they involve more energy consumption, particularly for freight
trains traveling over long distances. For turns, the minimal curvature radius is 100
meters, but radiuses of 1 km for a speed of 150 km/hr and 4 km for a speed of
300 km/hr are needed.
Vehicles:5DLOWUDQVSRUWDWLRQLVYHU\ÀH[LEOHLQWHUPVRIYHKLFOHVDQGWKHUHLVDZLGH
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steam, to diesel (mainly for freight in the United States) and electric (mainly for
passengers in Europe). The recent trend has been a specialization of freight wagons,
such as hopper wagons (grain, potash and fertilizers), triple hopper wagons (sand,
JUDYHO VXOIXU DQG FRDO ÀDW ZDJRQV ZRRG DJULFXOWXUDO HTXLSPHQW PDQXIDFWXUHG
goods, containers), tanker wagons (petrochemical products), box wagons (livestock,
paper, manufactured goods), car wagons and passengers wagons.
Gauge: The standard gauge of 1.435 meters has been adopted in many parts of the
world, across North America and most of Western Europe for example. It accounts
for about 60% of the railways. But other gauges have been adopted in other areas,
such as the broad gauge (1.520 meters) in Russia and Eastern Europe accounting
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to the other. As attempts are being made to extend rail services across continents
and regions, this is an important obstacle, as for example between France and
Spain, Eastern and Western Europe, and between Russia and China. The potential
of the Eurasian land bridge is impaired in part by these gauge differences.
Network structure: Relates to the ownership of tracks and rolling stock, maximum
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IDFWRUV ZLOO LQÀXHQFH WKH FDSDFLW\ RI WKH UDLO V\VWHP SDUWLFXODUO\ LI ZHOO PDQDJHG
When tracks are privately owned, the operator is free to allocate its services without
much competitive hindrance. However, if the tracks are publically owned, they
are often reserved for a national rail carrier or service slots are leased to private
operators through a bidding process.

29
Other factors that inhibit the movement of trains between different countries include signaling
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WKH ODFN RI ³LQWHURSHUDELOLW\´ RI WKH UDLO V\VWHPV EHWZHHQ WKH PHPEHU VWDWHV LV D IDFWRU
limiting the wider use of the rail mode. There is also a trend where the passengers and
freight markets are being separated. First, it is occurring at the management level.
Review Questions:
1. Discuss the importance of rail transport in India.

2. Explain the structural network of Indian railways.
3. What are the technical and operational constraints in railways track expansion.
4. Activity: Identify a railway station, which you know, then prepare a list of train pass
through that railway station.
3.5 Road Transport
The National Highways Authority of India (NHAI) : The National Highways Authority of
India was constituted by an act of Parliament, the National Highways Authority of India
Act,1988. It is responsible for the development, maintenance and management of National
Highways entrusted to it and for matters connected or incidental thereto. The Authority
was operationalised in Feb, 1995 with the appointment of full time Chairman and other
Members.
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RI WKH WRWDO URDG WUDI¿F
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RYHU WKH ODVW ¿YH \HDUV
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Highways Development Project (NHDP) which is -
a) India‘s Largest ever highways project
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The National Highways have a total length of 71,772 km to serve as the arterial network of
the country. The development of National Highways is the responsibility of the Government
of India. The Government of India has launched major initiatives to upgrade and strengthen
National Highways through various phases of National Highways Development project
1+'3 ZKLFK DUH EULHÀ\ DV XQGHU
NHDP Phase I : NHDP Phase I was approved by Cabinet Committee on Economic Affairs
30
(CCEA) in December 2000 at an estimated cost of Rs.30,000 crore comprises mostly of
GQ (5,846 km) and NS-EW Corridor (981km), port connectivity (356 km) and others (315
km).
NHDP Phase II : NHDP Phase II was approved by CCEA in December 2003 at an

estimated cost of Rs.34,339 crore (2002 prices) comprises mostly NS-EW Corridor (6,161
km) and other National Highways of 486 km length, the total length being 6,647 km. The
total length of Phase II is 6,647 km.
NHDP Phase-III: Government approved on 5.3.2005 upgradation and 4 laning of 4,035

km of National Highways on BOT basis at an estimated cost of Rs. 22,207 crores (2004
prices). Government approved in April 2007 upgradation and 4 laning at 8074 km at an
estimated cost of Rs. 54,339 crore.
NHDP Phase V: CCEA has approved on 5.10.2006 six laning of 6,500 km of existing 4
lane highways under NHDP Phase V (on DBFO basis). Six laning of 6,500 km includes
5,700 km of GQ and other stretches.
NHDP Phase VI: CCEA has approved on November 2006 for 1000 km of expressways
at an estimated cost of Rs. 16680 crs .
NHDP Phase VII: CCEA has approved on December 2007 for 700 km of Ring Roads,
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To meet the nation’s need for the provision and maintenance of National Highways network
to global standards and to meet user’s expectations in the most time bound and cost
effective manner, within the strategic policy framework set by the Government of India
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Car traveling: It is usually an independent means of transport. The driver decides where,
when and how he is going to get to a destination. It is usually cheaper since roads fees
are not directly paid but are rather from taxes. It is the only transportation mode that
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achieved without even stopping. Car transport is the dominant mode in world tourism (77%
RIDOOMRXUQH\VQRWDEO\EHFDXVHRIDGYDQWDJHVVXFKDVÀH[LELOLW\SULFHDQGLQGHSHQGHQFH
Tourists will often rent cars to journey within their destinations, which has triggered an
active clustering of car rental companies have emerged adjacent to main transport terminals
(airports, train stations) and tourist venues.
Coach traveling : This type of mode of transport uses the same road network as cars.
Coaches are well suited for local mass tourism but can be perceived as a nuisance if in
WRRODUJHQXPEHUVVLQFHWKH\UHTXLUHDODUJHDPRXQWRISDUNLQJVSDFH7KH\FDQEHXVHG

31
for short duration local tours (hours) but also can be set for multi-days journeys where
the coach is the conveyance.
Car Rental: &DU UHQWDO FRPSDQLHV RSHUDWH E\ SXUFKDVLQJ RU OHDVLQJ D QXPEHU RI ÀHHW
YHKLFOHV DQG UHQWLQJ WKHP WR WKHLU FXVWRPHUV IRU D IHH 5HQWDO ÀHHWV FDQ EH VWUXFWXUHG LQ
several ways – they can be owned outright (these are known as ‘risk vehicles’ because
the car rental operator is taking a risk on how much the vehicle will be sold for when it
is removed from service), they can be leased, or they can be owned under a guaranteed
EX\EDFN SURJUDP DUUDQJHG GLUHFWO\ WKURXJK D PDQXIDFWXUHU RU PDQXIDFWXUHU¶V ¿QDQFLDO
arm (these are known as ‘repurchase vehicles’ because the manufacturer outlines the
H[DFW SULFH RI RULJLQDO VDOH DQG RI UHSXUFKDVH DW WKH HQG RI D GH¿QHG WHUP $W WKH HQG
of a rental vehicle’s useful life, rental companies will often sell them into the used car
market to dealers across the country via several methods, including direct-to-dealer and
via specialized wholesale auctions companies (such as Manheim Auctions in the USA).
Dealers generally will go through an inspection of the vehicles to make sure they comply
with the safety standards of that dealership and then sell the car to the public. Many of
these are known as program vehicles in the representation by the selling dealer.
Car Rental System : 0RVWFDUUHQWDORI¿FHVRIIHUDUDQJHRIYHKLFOHVL]HVWRVXLWDYDULHW\

RI EXGJHWV DQG VSDFH UHTXLUHPHQWV DQG VRPH DGGLWLRQDOO\ RIIHU VSHFLDOLVHG YHKLFOHV WR
suit its location such as convertibles, prestige models, hybrid/electric vehicles or SUVs
and passenger vans. At major airports or in larger cities, some independent car rental
agencies offer high-end vehicles for rent. Some specialized companies such as Rent-
D:UHFN RIIHU ROGHU YHKLFOHV DW UHGXFHG SULFHV 7R DOORZ IRU D XQLIRUP FODVVL¿FDWLRQ DQG
easy comparison of car rental prices, the Association of Car Rental Industry Systems and
6WDQGDUGV $&5,66 KDV GHYHORSHG WKH$&5,66 &DU &ODVVL¿FDWLRQ &RGH FRGLQJ V\VWHP
This describes the size, door count, gearbox type (manual/automatic) and whether the
FDU LV DLUFRQGLWLRQHG HQFRGHG LQWR IRXU OHWWHUV $GGLWLRQDO FODVVL¿FDWLRQV EDVHG RQ VHDW
numbers and trunk volume were also set by the Belgian Rent a Car association in order
WRSURYLGHDXQL¿HGV\VWHPIRUDVVHVVLQJWKHFDUW\SHVLQRQOLQHUHVHUYDWLRQV\VWHPVVXFK
as Amadeus or Argus.
Car rentals are subject to many conditions which vary from one country to another and from
one company to another. Generally the vehicle must be returned in the same condition it was
rented in, and often must not exceed mileage restrictions, otherwise extra fees may be incurred.
32
Review Questions:
1. What are the different forms of car travels?

%ULHÀ\ H[SODLQ WKH 1DWLRQDO +LJKZD\V$XWKRULW\ RI ,QGLD 1+$, LQ ,QGLDQ URDG ZD\V
3. Write a short note on various projects promoted by National Highways Development
project (NHDP).
4. Write a small note on the reaons for existance of toll on booth highways.
5. Activity: Identify major national high ways in India with their numbers.
3.6 Shipping
The shipping is the physical process of transporting commodities and merchandise goods
and cargo by sea, and is extended in American English to refer to transport by land
RU DLU ,QWHUQDWLRQDO (QJOLVK ³FDUULDJH´ ³/RJLVWLFV´ LV D WHUP ERUURZHG IURP WKH PLOLWDU\
environment, is also fashionably used in the same sense.
/DQG RU ³JURXQG´ VKLSSLQJ FDQ EH E\ WUDLQ RU E\ WUXFN ,QWHUQDWLRQDO (QJOLVK ORUU\ ,Q DLU
DQGVHDVKLSPHQWVJURXQGWUDQVSRUWLVUHTXLUHGWRWDNHWKHFDUJRIURPLWVSODFHRIRULJLQ
to the airport or seaport and then to its destination because it is not always possible to
establish a production facility near ports due to limited coastlines of countries. Ground
transport is typically more affordable than air, but more expensive than sea especially in
GHYHORSLQJ FRXQWULHV OLNH ,QGLD ZKHUH LQODQG LQIUDVWUXFWXUH LV QRW HI¿FLHQW 6KLSPHQW RI
cargo by trucks, directly from the shipper’s place to the destination, is known as a door
to door shipment and more formally as multimodal transport. Trucks and trains make
deliveries to sea and air ports where cargo is moved in bulk.
0XFK VKLSSLQJ LV GRQH DERDUG DFWXDO VKLSV $Q LQGLYLGXDO QDWLRQ¶V ÀHHW DQG WKH SHRSOH
that crew it are referred to as its merchant navy or merchant marine. Merchant shipping
is like lifeblood to the world economy, carrying 90% of international trade with 102,194
commercial ships worldwide.
Cruises : The cruises are mainly concentrated towards short sea journeys of about a
ZHHN &UXLVLQJ KDV EHFRPH D VLJQL¿FDQW WRXULVW LQGXVWU\ ELJ FUXLVHUV DUH OLNH ÀRDWLQJ
resorts where guests can enjoy luxury and entertainment while moving towards their
multiple destinations. The international market for cruising was about 18.3 million tourists
in 2010, which showed an annual growth rate of above 7% since 1990. The main cruise
markets are the Caribbean and the Mediterranean, which Alaska and Northern Europe
fjords also popular during the summer season. This industry is characterized by a high
level of market concentration with a few companies, such as Carnival Corporation and
Royal Caribbean Cruises who account for about 70% of the market. The impacts of

33
cruising on the local economy are mitigated as the strategy of cruising companies is to
retain as much income as possible. This implies that tourists spend most of their money
in the cruise ship itself (gift shops, entertainment, casinos, bars, etc.) or on island facilities
owned by cruise shipping companies.
Star Cruises : Star Cruises a member of Genting Hong Kong, is the third largest cruise
line in the world behind companies such as Carnival Corporation and Royal Caribbean
&UXLVHV 6WDU &UXLVHV GRPLQDWHV WKH$VLD3DFL¿F PDUNHW DQG LV RZQHG E\ *HQWLQJ +RQJ
Kong who also owns 50% of the Norwegian Cruise Line, and NCL America with a total
FRPELQHG ÀHHW RI VKLSV DQG RYHU EHUWKV 7KH FRPSDQ\ LV OLVWHG RQ WKH +RQJ
Kong Stock Exchange and the Singapore Exchange.
Star Cruises is credited with almost single handedly developing the cruise industry in the
$VLD3DFL¿F UHJLRQ ,WV IRUD\ LQWR WKH JOREDO VKLSSLQJ PDUNHW KDV DOORZHG LW WR WDS LQWR
lucrative and more mature markets in North America and Europe. Its services cater to Asian
passengers as well as to North Americans, Europeans and Australians interested in Asian
destinations. Star Cruises was founded as an associate of the Genting Group of Malaysia,
LQFRUSRUDWHG LQ %HUPXGD RQ 1RYHPEHU ZLWK LWV FRUSRUDWH KHDGTXDUWHUV LQ +RQJ
.RQJ 7KH FRPSDQ\¶V ¿UVW VKLSV ZHUH WZR FUXLVH IHUULHV DFTXLUHG IURP WKH EDQNUXSWHG
estate of Swedish Rederi AB Slite. In the following years, the company purchased several
RWKHUXVHGVKLSV,Q6WDU&UXLVHVWRRNGHOLYHU\RILWV¿UVWQHZEXLOG6XSHU6WDU/HR
IROORZHG E\ VLVWHU VKLS 6XSHU6WDU 9LUJR LQ 6WDU &UXLVHV DOVR DFTXLUHG 6XQ &UXLVHV
the same year.
India has an extensive network of inland waterways in the form of rivers, canals, backwaters
and creeks. The total navigable length is 14,500 km, out of which about 5200 km of
river and 4000 km of canals can be used by mechanised crafts. Freight transportation by
waterways is highly underutilised in India compared to other large countries and geographic
areas like the United States, China and the European Union. The total cargo moved (in
WRQQH NLORPHWHUV E\ WKH LQODQG ZDWHUZD\ ZDV MXVW RI WKH WRWDO LQODQG WUDI¿F LQ ,QGLD
FRPSDUHG WR WKH ¿JXUH IRU 8QLWHG 6WDWHV &DUJR WUDQVSRUWDWLRQ LQ DQ RUJDQLVHG
PDQQHU LV FRQ¿QHG WR D IHZ ZDWHUZD\V LQ *RD :HVW %HQJDO$VVDP DQG .HUDOD ,QODQG
Waterways Authority of India (IWAI) is the statutory authority in charge of the waterways
LQ ,QGLD ,WV KHDGTXDUWHUV LV ORFDWHG LQ 1RLGD 83 ,W GRHV WKH IXQFWLRQ RI EXLOGLQJ WKH
necessary infrastructure in these waterways, surveying the economic feasibility of new
projects and also administration and regulation.
3.7 Mass Transportation
Mass Tourism and Mass Transportation can be divided in two categories:
,QGHSHQGHQW PHDQV RI WUDYHO FRQWUROOHG E\ LQGLYLGXDO WRXULVWV
34
0DVV WUDYHO ZKHUH WRXULVWV WUDYHO LQ JURXSV
When tourism was mainly for the elite, independent means of travel prevailed. However,
ZLWK WKH HPHUJHQFH RI PDVV WRXULVP DQG WKH VLJQL¿FDQW UHYHQXH LW SURYLGHG IRU ORFDO
economies, to led setting up of mass transportation systems.
Review Questions:
1. What is sea transport?

2. Explain the different types of cruise lines.
3. What do you mean by mass transportation?
4. Write one page notes on the port trust that you visited/known from others.
5. Activity: Identify any port trust
Exercises:
1. Write few pages/note on various types of transportation services.
2. What do you mean by car travels? .
3. Activity: Identify any national high way, airport and port trust

35
Unit-4
ITINERARY PLANNING

The unit aims to provide an understanding of the itinerary planning. The unit will impart
following knowledge and skills:-
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Types of tour itinerary
Steps for preparing itinerary
Do’s and don’ts of itinerary preparation
Itinerary
Planning for FIT & GIT
Resource Material
One copy of the study material for each participant and copies of the Observer’s Sheet—
1. Goeldner, R. & Ritchie, B., Tourism: Principles, Practises and Philosphies, John Wiley
and Sons, London.
2. Holloway, J.C., The Business of Tourism, Prentice Hall, London.
Introduction
Itinerary is known as a tour plan. It is related to the tour programs, timetable and the
information of the places to be visited. A program includes only activities, whereas, an
itinerary includes date, day, time duration and points of interests between the destinations,
36
on the way to the destination, the special features of the tour and happenings at the
destination etc. An itinerary is the combination of the different components of tourism to
form a product ready for sale. So, it explains and shows how different components of
tourism are joined together. Travel was there since a long time but there was no tourism.
Hotels were there, transport or movements of the people were there but there was no
tourism because there was no joint or coordinated effort. By the introduction of the travel
agency, there came the concept of tourism. Travel agencies produce the tourism product
WKDW LV WR SURGXFH LWLQHUDU\ 1RZ WKH WRXU LV VROG DV D VLQJOH SURGXFW 7RXULVP LV GH¿QHG
as sum of the total activities related to travel and stay and itinerary joins that travel and
stay together to form a product. Itinerary is the commoditization of tour.
4.1 Itinerary Planning

Itinerary is developed to perform the sales process. It tries to solve the problems created
E\VHUYLFHQDWXUH³KHUHDQGWKHUH´QDWXUHDQGV\QFKURQL]HGHIIRUWQDWXUH7DQJLEOHSURGXFWV
are weighted, measured but service is measured in duration. Itinerary is prepared to identify
the duration of service, tangible and intangible nature of service, solves the problem of
immovability of tourism products. The other interesting fact of tourism is to have point of
sales (POS) and point of service delivery (POSD) in different places. Itinerary solves the
problems of joint efforts also. An itinerary is the combination of the different components
of the tourism to form a product ready for sale. So, it explains how different components
of tourism are joined together. The travel agencies produce the tourism product that is to
produce the itinerary.

$ GHWDLOHG SODQ IRU D MRXUQH\ HVS D OLVW RI SODFHV WR YLVLW

$ OLQH RI WUDYHO URXWH

$Q DFFRXQW RI D MRXUQH\

$ JXLGHERRN IRU WUDYHOHUV 7UDYHO SODQ VFKHGXOH FRXUVH UHFRUG RI D MRXUQH\ DQG
so on.
Example: Their trip’s itinerary was disrupted by an unexpected snow storm.
Review Questions:
1. What do you mean by programme?

2. What is tourism?
3. Identify itinerary for the tour packages.
4. Activity: Collect tour packages from tour operators

37
4.2 Importance of Travel Itinerary
If you arrange your own travel plans, a travel itinerary is a key component of staying
organized and being able to maximize your vacation time. Below is my itinerary for an
XSFRPLQJ WULS WR WKH 3DFL¿F 1RUWKZHVW , OLNH WR UHVHDUFK PRVW GHWDLOV DKHDG RI WLPH VR
I don’t use valuable vacation time. You can determine how many sights and/or activities
\RX FDQ VTXHH]H LQ FRPIRUWDEO\ 6SRQWDQHLW\ LV QLFH WKDW¶V ZK\ , DOZD\V OHDYH RU
days open. Some people might prefer to plan a lot less and take it day by day, but I feel
when you’re spending a lot of money, you should get to see and do as much as you can.
Types of Tour Itinerary

There are three types of itineraries.
1. Skeletal: Proposed and preliminary schedule of activities.
2. Technical: VSHFL¿HV WKH GHWDLOV OLNH WKH VFKHGXOHG WUDQVSRUWDWLRQ DUULYDO DQG
departure schedules, duration of sightseeing, land travel time, type of accommodation
and so on.
3. Descriptive: provides a narrative of the planned activities and destinations visited.

It’s produced for marketing purposes.
Itineraries are also Differentiated According to the Person for it is Prepared

for, Which are:
1. Tourist itinerary: short itinerary which can be included in the tour brochure. It
emphasises on the basic things that the tourist need & want to know relating to
all the aspects of the tour. This document provides him the essential information
such as departure point/time, check in – check out time, etc.
2. Tour Manager’s itinerary: this is the most comprehensive type of itinerary. It includes
information about all tour related elements, which are passenger list, accommodation
DOORWPHQW VSHFLDO UHTXLUHPHQWV WUDQVSRUWDWLRQ DUUDQJHPHQWV HWF
3. Vendor’s itinerary: (Vendors – Hotels, Ground services, Guides, etc. ): Providing

a general tour itinerary to the vendors help them to offer scheduled services &
facilities to the tourists.
4. Bus driver itinerary: includes pickup points, turn around points, route map, drop-
off points, sightseeing points & schedule. etc. to give him better understanding of
his job.
5. Tour Escort itinerary: Similar to the Manager’s itinerary but with lesser details.
38
Prerequisites of Itinerary Preparation
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Required Resources / Material

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Things to be Considered While Preparing an Itinerary
Route Map & Routing of Itinerary: Exact route of the intended tour must be clear.
Backtracking or routing the pax in circles should be avoided, unless its necessary.
Pacing the Itinerary: 6SHHG RI WKH LWLQHUDU\ VKRXOG EH DV SHU FOLHQWV UHTXLUHPHQW
age, health, purpose, preference etc of the tourists. One should never take the
passengers for granted.
Interests of Tourists: This is an important way to add more value to the tour
itinerary. The clients interest can be matched with the corresponding attractions &
activities of the proposed tour.
Details to be considered: Details like holidays, opening & closing timmings of
monuments and other tourist places, allowed baggage, expected weather, airport
FKHFNLQ IRUPDOLWLHV VXLWDEOH FORWKLQJ HWF DUH H[WUHDPO\ LPSRUWDQW ZKLOH ¿QDOLVLQJ
the itinerary.

39
Step By Step Procedure
,GHQWL\ PDUNHW7RXULVW UHTXLUHPHQWV EXGJHW
Negotiate with destination operators
Identify ARNK segments
Study & understand the use of world wide city to city schedule
Emphasis on right kind of sightseeing
Include optional ingredients with free time
Consider views of past tour participant
Do’s and Don’ts of Itinerary Preparation

Identify the number of days you’ll have on the ground. Include air travel days so everyone’s
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¿UVW GD\
Include the names, addresses, phone and fax numbers of hotels or private homes as well
as the time difference (plus 8 hours from Mountain Standard time). Research connecting
options in advance. Pay particular attention to potential delays related to airport check-in,
travel to and from airports or train stations, car rental, distances between attractions, time
GLIIHUHQFHV XQIDPLOLDU URDGV DQG HYHQ ORFDO WUDI¿F FRQGLWLRQV DW YDULRXV WLPHV GXULQJ WKH
day.
Resist the impulse to over plan. Some destinations don’t conform to schedules and you
ZDQWWRVWD\ÀH[LEOHDQGEHRSHQWRVSRQWDQHRXVRSSRUWXQLWLHV7KH\ZLOODULVHXQH[SHFWHGO\
such as delay of trains etc. A fellow traveler suggesting a scenic detour.
Contact tourism boards at your destination for brochures, coupons or referrals. Keep all
SHUWLQHQW WULS LQIRUPDWLRQ LQ RQH ¿OH &RPSLOH D OLVW RI ÀH[LEOH WDVNV WR ¿OO VSDUH WLPH ZKLOH
you wait for connections. Bring a book or magazine as well as bottled water.
40
Review Questions:
1. What are do’s and don’t in itinerary planning.
2. Locate the each activity and its importance.
3. Activity: Underline schedule of activities in itinerary.
GIT : Group Inclusive Tour

7KHUH DUH WRXULVWV ZKR WUDYHO LQ JURXSV DV WKH\ ¿QG WKDW E\ WUDYHOOLQJ LQ D JURXS WKH\ FDQ
enjoy an economic tour. Such persons who travel in group feel more secure because they
are in company with others and also there is always a tour leader on a tour, an escort
ZLWK WKH JURXS WR ZKRP WKH\ FDQ WXUQ WR LQ WKH FDVH RI DQ\ GLI¿FXOW\ )RUPDWLRQ RI JURXS
is also activated by the foreign language which the tourist do not speak and they have a
tour leader or tour escort who speaks the languages of the country they visit.
The group tours are always prepaid, partly or fully. Partly paid means that at certain places
the participants of the tour may be allowed free time for their independent activities and
may not be provided with full board to enable them to eat wherever they like. Those
travelling in groups buy what we call ‘package tours’ or an ‘inclusive tour’ which includes
the fare from their country and back, hotel accommodation with meals, sightseeing and
excursions with guide, and transportation from the airports to hotels and vice versa. Most
such tour operate under special IT fare.
‘IT’ means inclusive tour and it has certain conditions laid down by IATA. For example, from
all points from Europe to India, Nepal, Ceylon and Pakistan, there is an IT fare that allows
39 per cent reduction on the normal economy class fare provided there are minimum of
four persons travelling together and provided they spend minimum of fourteen days and
maximum of 35 days in the area of India, Nepal, Ceylon and Pakistan, and provided the
minimum prices of their inclusive tour is 90% of the normal economy class fare. Similar
fares are available from USA, Japan and Australia to India and from various countries to
different parts of the world. Wherever a tourist may go, before leaving he has to make
up his mind. At times, the cost of a tour is a deciding factor.
:KHUHYHU KH PD\ JR KH ZDQWV WR JHW WKH PD[LPXP EHQH¿W RI WKH PRQH\ KH VSHQGV RQ
his travel. Be it an advantageous routing for his air ticket or the popular hotels or the
sightseeing tours, he must get full value of his money and of course the best services.
$OOWRXULVWVDUHJXLGHGE\WKHLURZQ¿QDQFLDOSRVLWLRQ/RZFRVWZLWKRXWVDFUL¿FHVRIKLJKHU
TXDOLW\ UHPDLQV D GHWHUPLQLQJ IDFWRU LQ WKH WRXULVWV¶ FKRLFH RI D SODFH WR YLVLW

41
FITs
7KH ZHDOWK\ DQG DIÀXHQW WUDYHO DV DQG ZKHQ WKH\ OLNH DQG WUDYHO LQGLYLGXDOO\ 7KLV FODVV
of tourists get their tours tailored by their travel agents. They know where they want to
go and how many days they want to spend at each place and what category of hotel
and transportation they want. The travel agent works out the cost for them and if they
accept it, all arrangements are taken in hand for them. These tourists are known as FITs.
Foreign Independent Traveller who travel on prepaid basis which means that they have
paid to their travel agent the cost of their entire tour including the cost of travel, hotels
with meals (if needs) and transportation for sightseeing and excursions as well as transfers
from airports to hotels and vice versa.
Another type of independent traveller is one who has not made prepaid arrangements, but
has just bought an\air, rail or steamship ticket and he makes his own arrangements for stay
and sightseeing at each place. This is mostly done by the economy minded tourist.
4.3 Packages or Inclusive Tours

The growth of packaging achieved something of a revolution in tourism. The entire system
of tour operation involves a lot of correspondence and needs at least two or three months
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VKRXOG EH HYROYHG ZKLFK ZRXOG FXW WKH YROXPH RI FRUUHVSRQGHQFH DQG DFTXLUH IDFLOLWLHV
of instant reservations with the hotels and airlines. It led to a new system known as
package tours. The idea of buying a package of travel, accommodation, and perhaps
some ancillary services such as entertainment became established in Western Europe.
This system succeeded in reducing the real price of travel abroad.
In this system, the travel agent plans package tours covering fully at least one unit and
RIIHUV¿[HGVHUYLFHVDQGXVHV¿[HGKRWHOVDWD¿[HGSULFH$QLQFOXVLYHWRXULVDSDFNDJH
of transport and accommodation separately from individual hotels and transport tariffs. The
agency prints and circulates among the agents and airlines abroad a detailed pamphlet
of these package tours.
Review Questions:
1. List difference between FIT and GIT.
2. Activity: Name packages inclusive tour from different travel agencies .
Exercises:
:KDW LV WKH GH¿QLWLRQ RI LWLQHUDU\"
2. What do you mean by itinerary planning.
42
3. How to calculate the cost of itinerary.
4. What is the importance of travel itinerary?
5. What types of instructions are needed to plan an itinerary?
6. Explain the features of GIT (Group Inclusive Tour).
7. Discuss the nature of Packages or Inclusive Tours.
II. Guidelines for Practical:

6WD\ GXULQJ RI¿FH KRXUV DW DQ\ 7UDYHO $JHQF\ IRU WKUHH GD\V GXULQJ ZHHN
ends and take note on the following:
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2. Meet all employees and discuss their day to day activities and take note of all.
Prepare a small report on the functions of the travel agency.

43
Unit-5
TOUR PACKAGING &

PROGRAMMING

This unit aims to provide comprehensive information about the intricacies of tour packaging
& programming for a small, medium and large tour operating company. It will help students
understand various methods of designing tour packages and programming for more value
addition to the customers.
7KH YDULRXV HOHPHQWV RI WRXU SDFNDJHV
0HWKRGV RI GHYHORSLQJ LQQRYDWLYH FXVWRPL]HG DQG WDLORUPDGH SDFNDJH
(QDEOH WR IRUPXODWH DQG GHVLJQ FRPSHWLWLYH WRXU SDFNDJHV
3URPRWLRQ RI WRXU SDFNDJHV WKURXJK WKH WRXU EURFKXUHV
5ROH RI SURJUDPPLQJ LQ JUHDWHU SDFNDJH DSSHDO DQG PRUH YDOXH
Resource Material
One copy of the tour brochure for each participant and Copies of the Observer’s Sheet—
1. Holloway, J.C., The Business of Tourism , Prentice Hall, London.
2. Bhatia A.K , Travel Agency and Tour Operations, Sterling Publications, New Delhi.
44
Introduction
Packaging tours is an innovative business concept that has gained worldwide visibility
VLQFH LW ZDV ¿UVW LQWURGXFHG LQ WKH PLG RI QLQHWHHQWK FHQWXU\ $VVHPEOLQJ EDVLF DQG
desirable services and offering them in one price is the primary function of package tour
business. This serves two important purposes: First, it is to reduce the unwanted hassles
for the customers and provide value-for-money services and Second, it is to give business
opportunities to the travel agents, tour operators, transport operators, accommodation
service providers, event companies, etc. Thus, a package tour is a sum total of services
consisting of transport from the point of origin to all traversing destinations, accommodations
at en route places and at the destination, other recreational and travel services. This unit
will explain the meaning and types of tour packages, components of organized package
tours, and process of designing packages, tour brochure designing and programming the
package tour.
5.1 Meaning and Classiʩcations of Tour Packages

The package tour business was planned and organized after the conduct of organized
package tour to Paris in 1855 by Thomas Cook. Package holidays can be escorted or
unescorted given the needs and demands of customers. A package tour comprises a
combination of two or more components of services with an objective of helping the clients
or customers save time & cost and avoid uncertainties. It largely includes the services
of transport, accommodation, food, guide and other miscellaneous services. Moreover,
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organized package tour.
These services are offered at inclusive prices and customers primarily prefer to pay a
single price at one place as it is convenient for the high-end customers. Thus, pre-arranged
VHUYLFHV DUH VHOHFWHG WR EH LQFRUSRUDWHG LQ WKH SDFNDJH RQ WKH EDVLV RI WKH TXDOLW\ RI
services and good will of the service providers. In addition, the design of package tour
is done taking the travel trends and motivation into consideration. Hence, tour operators
evolve strategies to increase the perceived value by combining complimentary products and
services in more attractive ways. Increasing the value and demand for a tourism product
through packaging and partnership is the ultimate objective of the tour operation business.
Classiʩcation of Package Tours

The tour operator is a consolidator or wholesaler in assembling primary and related services
with a different price tag. However, packages are designed for the independent and group

45
tours after making comprehensive study and analysis. Broadly, all these package tours
provide a bundle of services to the customers who are generally leisure and business
WRXULVWV 7KH FODVVL¿FDWLRQ LV PDGH RQ WKH EDVLV RI WKH RSHUDWLRQ DQG W\SHV RI VHUYLFHV
Given the nature of package tour business, it may be named as group tour, individual
tour, sponsored tour, special interest tour and common interest tour, guided tour, and
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hosted tour and incentive tour.
Escorted Tour:$QHVFRUWHGWRXULVDFFRPSDQLHGE\TXDOL¿HGWUDLQHGDQGH[SHULHQFHGWRXU
managers or guides, who provide information and assistance to the group at the origin,
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in, meal arrangements along with interpretation about the places of tourist importance
during sightseeing. Tour escorts provide timely assistance and advice about the seating
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package comprises the members of a community club to travel together.
Independent Tour: A package tour is designed for independent tourists or free independent
travelers. They are very much particular about selecting types of destinations, accommodation,
and transportation as it suits the budget, comfort and time. Each individual element of
service is purchased or a combination of components services is included in package. The
independent tour largely includes domestic air tickets, hotel room services, processing of
travel formalities, arrival and departure transfer and sightseeing. Other services include
adventure sports, cultural events, and health related activities that generally enhance value
of the independent tour. The cost of the package tour is relatively high as it includes
most of the customized services. For example, the high-end or budget travelers prefer
independent tours.
Hosted Tour: A hosted tour is handled by the ground operator or destination management
agency as an representative of wholesale tour operator for making ground services like
FDE FRDFK JXLGH FRQ¿UPDWLRQ RI KRWHO URRPV WRRO WD[HV HQWU\ WLFNHWV HWF DV SHU WKH
contract. A hosted tour is one where the local ground operator becomes the host to
receive the guests at the destination. This is a type of tour that brings in the concept of
host-guest relationship that leads to demonstrating the local culture and heritage to the
guests. It provides a traditional reception upon the arrivals of guests at the airports or
railways stations.
Incentivized Tour: Incentivized Tour is usually all-inclusive package tours that include
all essential components of a standard package tour. It is organized package tour that
LV FRQGXFWHG IRU HPSOR\HHV ZLWK WKH VSRQVRUVKLS IURP WKH EXVLQHVV ¿UPV RU FRUSRUDWH
46
houses. It is an incentive or intangible reward for employees given periodically as per
the organization’s policy. For example, Thomas Cook, and SOTC promote corporate and
MICE package tours.
Freedom Tour
Tour is arranged as per the demand of customers. It is a freedom of customers to select
the travel. The selection of places of interest and components of package tour is decided
as per the wish and budget of customers. This type of tour is designed for the working
class people whose budget of expenditure is limited and their choice of place is largely
different from others. There can be small or large groups with maximum freedom of
deciding how, when and where to travel, stay and halt.
Review Questions:
1. What do you mean by package tours?

(QXPHUDWH WKH FODVVL¿FDWLRQ RI SDFNDJH WRXUV
3. Discuss the concept of freedom tours.
4. Make a list of package tours promoted by the tour operators
5. Activity: Visit one tour operating company and one franchise and observe the
operation and functioning of package tour designing.
5.2 Components of Package

The elements of a package tour determine the sale of package tour in the travel market.
The tour includes the services that are the sum total cost of related and complementary
services. Tour operators take the services from the airlines, hotels, cruises, railways,
ground transport, and event planner. In order to make a package tour more appealing
and attractive, tour wholesalers examine the buying ability of customers and the cost of
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of the package tour. Generally, tour packages are determined by the market demand and
trends and tour companies try to reduce the cost of buying the services through aggressive
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price tag. Tour operators assemble components of services to enrich the experience of
tourists. The following component of services is delivered assembled in package tours.
These are the following elements of package tours.
Accommodation: Accommodation is an important component of package tour and it

constitutes almost one third cost of package. There are primary and supplementary
accommodation service providers. The star hotels, business hotels, resorts and international

47
hotels are the conventional accommodation operators with the provision of providing room
cum food services. The supplementary accommodation service providers are lodges, guest
houses, bungalows, service apartments, etc. Tour operators include the services of both
the categories depending on the cost of package tours and affordability of customers.
Sightseeing Tour: Sightseeing is one of the most important elements of a package

tour. It is an integral part of a package tour as it offers conducted tours to the places of
tourist interest in the cities. Tour operators arrange for more activities in the sightseeing
or excursion tours. Each member of the conducted sightseeing tour is billed in such a
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Airlines: Air travel is an important component in the package tour segment. This includes
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different segments of customers.
Railways: Tour operators include the train travel and other on-board services in domestic
sector. It is an important mode of travel to reach various off-the-beaten-track destinations
as air connectivity is limited in many countries. For example, the Indrail pass, Eurail Pass,
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of transport and different experience to the visitors.
Car Rental Service: Luxury car service is an important element of package tour as it is
primarily needed at the time of arrival, departure and sightseeing. A wide range of luxury
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is done for the smooth operation of car rental services. Tour operators have now adopted
the latest technology to make the schedule of cars.
Luxury Coach Service: All the conventional package tours include the luxury coach
services provided it is a group travel. Each tourist coach is customized with elevated bucket
seats, white window glass, micro phone, air conditioning, and refrigerator. For example
the KPN travels provides luxury Volvo coach services for sightseeing and excursion trips.
Cruise or Ferry Services: Cruise Liners themselves promote the all-inclusive packages
and get it promoted through the wholesale and retail travel agent. They include room, food,
drinks, sightseeing, entertainment, casino, etc. On–board package tours also comprise
the service of ferry operators so as to provide alternative and safe conveyance service.
For example, the Royal Virgo operates luxury cruise liners for high-end tourists across
the countries.
48
Event Services: Tour operators take the services the MICE operators for the purpose of
booking venues, food, conference kits, and pre & post-conference sightseeing programmes.
Event management companies appoint tour wholesalers to sell the packages.
Insurance: Tour packages are insured for compensation to the tour operators or guests
in the event of cancellation. Thus, insurance is included in the package tour. Health and
luggage insurance are included the package tour. For example, Bajaj Allianz and TATA
AIG have customized travel insurance for the foreign outbound travel for Indian travelers.
Ground Handling Services: Apart from arranging the luxury cars and coaches, the
services of guides and language interpreters, entrance fees and transfer and drop are
also included in the package tour.
Miscellaneous Services: This service includes porter at airports and railway stations, tips
to guides, interpreters and room boys, entrance fees, gifts and welcome dinners.
Review Questions:
1. Explain the components of package tours.

2. What are the different types of accommodation services?
3. What do you mean by ground handling services?
4. Find the difference between primary and complementary services in the package
tour?
5. Activity: Interact with two or three executives of a large tour operation companies
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5.3 Customized or Tailor-Made Package and Group Inclusive Tours

Customized or Tailor-made package is designed for the Free Independent Traveler (FIT)
or Group Inclusive Tour (GIT). In most cases, packages are customized with personalized
services for the FIT category of customers. The FITs make free movement of travel
across destinations with the intention of exploring new places and attractions as per their
convenience. The FITs are novelty seekers and can manage in any hostile environment
with basic facilities and amenities. They mentally tune to get adjusted with the facilities
as the exploring new places are the primary activity. These groups consist of a minimum
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hostels, government guest houses, and paying guest houses and the bed-and-breakfast
scheme or the European Plan (EP) is preferred. Independent tourists generally shy away
from the crowded places and look for exclusivity and privacy. However, FITs can organize
the tour on their own and ask the tour operators for selected services. The business of

49
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behaviour.
Group Inclusive Travel (GIT)

The GIT package tours are developed to include the beaten-track destinations and places
of interest are programmed keeping the time, capacity of group members and parking
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with much highlight on common interest places. However, group tailor-made packages
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long-haul travel in case of the GIT. The former is meant for the MICE activities and the
latter is apt for the leisure and pleasure activities. Furthermore, group tour packages are
relatively cheaper as compared to the FIT tour packages. There is bulk of sale of hotel
rooms, airline seats, and coach services in group organized package tours. The principal
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of tour operators.
Review Questions:
1. Explain the key features of customized tour packages?
2. What do you mean by Tailor-Made Tour Package?
3. Describe the particular of Group Inclusive Tours.
4. Find how a tour operator takes measures in designing FIT and GIT packages.
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included in the package tour.
5.4 Tour Formulation & Designing Process

The business of package tours is not free from risks like season, rising price and socio-
political factors. At the same time, it is a high breakeven business when the socio-political
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WR¿QGWKHGHPDQGWUHQGVDQGWRXURSHUDWRUVDFFRUGLQJO\IRUPXODWHSDFNDJHWRXUVWRFDWHU
WKHPDUNHW7KXVPHWKRGLFDOWRXUSODQQLQJLVHVVHQWLDOO\UHTXLUHGWRKDQGOHWKHULVNIDFWRUV
DQG WR LPSURYH WKH TXDOLW\ RI D SDFNDJH WRXU7KH WRXU RSHUDWRU DVVLJQV WKH UHVSRQVLELOLW\
of designing and formulating package tour to senior and experienced executives as the
design of package tour makes the business and breaks the business. It helps in achieving
bumper sale in a record time. For example, the World Famous Tour (WFR) of SOTC and
the Duniya Dekho of Cox & Kings have become generic outbound package tour for Indian
customers. These are the following steps in tour design and selection process.
50
It is a multi-stage process that helps the tour manager develop and formulate a new
package tour. First, the concept of designing a new package tour is taken a solid shape
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report is also assessed to understand the salebility and sustainability of package tour.
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ZLWK RSHQHQGHG DQG FORVHHQGHG TXHVWLRQV 2Q WKH EDVLV RI UHFRPPHQGDWLRQV WKH DUHD
RI RSHUDWLRQ RI QHZ SDFNDJH WRXU LV JLYHQ ¿QDO VKDSH VXEMHFW WR WKH SROLWLFDO HFRQRPLFDO
and social developments in a particular area. Thus, it is a combination of innovative ideas,
feedback of tour guides and recommendations of guests to develop package tour. The
following are suggested processes through which package tour may be designed.
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tour.
z A well-structured itinerary is prepared with due considerations to several do’s and
dont’s during the tour.
z Selecting the destination companies and authorizing them with the ground handling
responsibilities.
z Vendors of primary and supplementary services are contacted and negotiated to
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z Costing of elements of package tours and pricing package tours is done carefully.
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vendors and costing is completed.

z Selling the package tour directly or through the retail travel can be done through
a robust reservation system.
z Marketing and sales promotion helps in reaching the target market.
z Operation of tour is carried out with the help of ground operators.
Besides these broad stages of developing, marketing and operating the package tours,
other processes are implicitly associated in making the formulation and designing process
complete.
Review Questions:
1. What are the tour formalities?

2. Explain the designing process of tour packages.
3. What are the formulation processes for developing a package tour?
4. Why there is a need for systematic and planned approach for package tour?

51
5.5 Tour Brochure Designing
Tour brochure depicts the places of interest, types of services, nature of operation and
conditions. Information related to the mode of transport, accommodation, and other
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lucid language to describe the components of services and places of tourist interest. Tour
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The introductory part of the brochure illustrates background and areas of tour operation.
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transfer, location of hotel with room services, transport, guide services, sightseeing and
cultural programmes along with suggested places to dine and shop for souvenirs. Do’s
and don’ts are clearly stated to help guide the guests to make the tour more enjoyable
and memorable. Over and above, tour brochure clearly explains the inclusive and
exclusive component of services. Images of places of tourist interest, pictures of hotels,
transport, and souvenir shops are placed against the contents to arouse much interest
to buy package tour. In nutshell, a tour brochure generally includes the booking form
and booking conditions, including meal plans and ground services. Overall, these pages
contain a wide range of information that can help the service providers at different points
and customers understand clearly. Brochures are sent to the wholesale and retail travel
agents for sales promotion.
Review Questions:
1. What is brochure?
2. Explain the importance of tour brochures
3. What are the skills needed to designing a tour brochure?
5. What are the stages of developing a tour brochure?
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SDFNDJHWRXUDQGUHDGWKHPFDUHIXOO\DQGSUHVHQWWKHXQLTXHIHDWXUHVRIWKHVHEURFKXUHV
5.6 Tour Programming and its Importance

Each package is embedded with some appealing elements and the programmes or events
are planned in order to provide value-added services. Programming is nothing but an
addition of services without cutting the prime activities of sightseeing or excursion. Tour
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customers feel of worth buying the packages. When the package tour market is becoming
larger and more buyers are happy to get their vacation arranged with the professional
52
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repeat buyers for the package.
Programming comprises activities like learning photography, music, dance, painting, sculpting,
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are interested to learn these activities as a lifetime experience. Tour operators refer to
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include them in the itinerary. The following are the advantages of programming from both
tour operators and customer’s point of view.
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Review Questions:
1. What are the skills needed to design a tour brochure?
2. What is the importance of tour packages
3. Why programming is given much importance in package tour business?
$FWLYLW\5HYLHZWKH),7DQG*,7SDFNDJHVRUVKRUWRUORQJKDXOSDFNDJHVDQG¿QG
the scheduling of programmes.
Practical Activity:
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3UHSDUH D PRGHO SDFNDJH WRXU RI \RXU RZQ

53
UNIT–6
PACKAGE TOUR COSTING

This unit is intended to give comprehensive information on the methods of package tour
costing that a tour operator adopts for designing the organized package tour. It will help
students to gain clarity on the costing a package tours.
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Resource Material
One copy of the Tour Cost and Pricing Sheet for each participant and Copies of the
Observer’s Sheet—for each group and teacher, pen, marker, a set of tour costing format,
computer.
1. Roday. S., Biwal, A & Joshi. V., Tourism Operations and Management, Oxford
University Press, New Delhi.
2. Goeldner, R and Ritchie, B., Tourism: Practises, Principles and Philosphies,

John Wiley and Sons, London
54
Introduction
Costing a package tour is an important exercise that determines the scale of sale and margin
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WRWDOH[SHQGLWXUHVIRUDFTXLULQJWKHYDULRXVFRPSRQHQWVRIVHUYLFHVIURPWKHKRWHOUHVRUW
transporter, etc for the tailor-made or ready-made packages. Cost is something that each
tour operating company makes an in-depth survey of the available supplies in the market
and the capability of the suppliers. The reduction of cost can help the tour operator tag
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discounts for the customers. In a cut-throat competitive market environment, costing the
elements of services included on the package tour needs methodical approach to curtail
unwanted expenditures and increase the salability of tour packages. In this context, this
unit aims to explain the meaning and types of cost, concept of tour costing, components of
tour cost, preparation of cost sheet, tour pricing, calculation of tour price, pricing strategies
DQG IDFWRUV LQÀXHQFLQJ WKH WRXU FRVWLQJ
6.1 Meaning and Types of Cost

Cost is otherwise explained as the sum total of all expenditures for buying the principal
and ancillary services. Cost is the amount of expenditures that may be actual or notional
incurred on buying services. Cost does not include distribution of capital and revenue
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economic resources in order to take managerial decisions is called cost. The concept of
cost is measured in monetary terms that the amount of resources is used for the purpose
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knowledge and skills to control the cost and maximize the output. Tour operators incur
the cost of booking the hotel rooms, airline, cruise line seats, railway seats and bus seats
and other primary services.
6.2 Concept of Tour Costing

Tour cost is represented as the total cost incurred or attributed to various elements of
package tour. The sum of costs for booking the services is incurred to design the FIT
and GIT tour package. As such, tour operator does not own the primary services of
package tour and it assembles the services in bulk from the accommodation and transport
companies. However, the cost of package tour is determined by the tastes and preferences

55
of customers and the business strategy to increase the sale of more tour packages. Tour
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method of calculating the costs largely vary from one tour operating company to other
depending on their core competency and company’s business strategy.
Break-even analysis is one of the key concepts of tour costing. It is the total revenue
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IRU DFTXLULQJ WKH VHUYLFHV 7KLV WHFKQLTXH LV XVHG WR HYDOXDWH DOWHUQDWLYH SULFLQJ OHYHOV
7KXV EUHDNHYHQ VDOHV FDQ EH REWDLQHG E\ GLYLGLQJ WKH VXP RI WKH WRWDO ¿[HG FRVWV DQG
the total variable costs by the package prices.
Types of Cost
Like any other manufacturing business, tour operation business has two types of cost.
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costs that do change in short run, but it varies in the long run as every cost is variable in
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with the overhead/marketing costs. Variable costs change as per the number of pax in
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entrance fees and other costs charged at a rate per person. It includes the actual expenses
(direct costs) of rooms, tickets, and other package components incurred with the sale of
each package.
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SHULRGVHDVRQ)L[HGFRVWVDUHLQFXUUHGEHIRUHDFTXLULQJWKHYDULDEOHVHUYLFHVIRUWKHSDFNDJH
tour. These costs often include advertising, pamphlets, brochures, salary, interest on loan
DQGDGYDQFHV7KXV¿[HGFRVWVDOVRLQFOXGHKLULQJEXVHVDQGJXLGHVRULQWHUSUHWHUV7KH
RYHUKHDGDQGPDUNHWLQJFRVWVDVSDUWRIWKHYDULDEOHDQG¿[HGFRVWVDUHLQFOXGHGDFURVVWKH
package tours. Thus, there is a variation of between 60 per cent and 70 per cent between
Fixed, variable, and overhead costs in the package tour. Tour operations, after taking all these
costs into considerations, usually add 10-15 per cent mark-up for an individual tour package.
Review Questions:
1. What do you mean by costing?
2. Explain the meaning and types of costing
3. What is the importance of break-even-point in tour business?
4. What do you mean by tour costing and how is tourism calculated?
5. Observe the variable costs and understand them from practical point of views.
56
6. How tour cost is calculated? Explain.
7. What are the different types of costs involved in tour package?
8. Activity: Collect tour brochures of three leading outbound tour operators and assess
the component of variable costs in package tour.
Preparation of Cost Sheet
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of costs are calculated to arrive at a competitive price. Here we may divide the costs of
the elements of services in the package into direct and indirect costs. The direct costs
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bills, rent, electricity, and employee amenities. The indirect cost include advertising, sales
SURPRWLRQDQGSXEOLFLW\7KXVDWRXURSHUDWRUFDQPDNHDSUR¿WRIDURXQGSHUFHQWRQ
each sale of the package tour that includes the commission or override from the principal
service providers. The component of tour costs is given in Table 1.
Table 1. Component of Tour Costs
Type of Cost Components (%)

Direct Costs Accommodation & Food ( Room, Breakfast & Meals) 25
Airlines ticket ( Scheduled and Charter Flights) 20
Transfer, Sightseeing and Excursion ( Coach, Car & Van) 15
Agent commission 10
Total 70
Indirect Costs Administrative (salary, perks, recruitment, selection, allowances, 09
employee insurance, etc.) and maintenance ( rent, electricity &
telephone bill, software, etc)
Marketing and Sales Promotion 05
Miscellaneous ( medical, incentive travel, get together, etc) 01
Total 15
1HW,QFRPH3UR¿W 15
Grand Total 100
Review Questions:
1. What is the procedure for preparing cost sheet?

57
2. Explain the direct cost and indirect costs in tour packages.
3. How does a tour operator arrive at the net income?
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costs in a sample cost sheet .
6.3 Components of Tour Cost

The sum total of cost components of a package tour is known as the cost of package
sold. However, the process of ascertaining a package cost becomes complicated, if it not
done with a established budget. Hence, it is wise to prepare a tour budget before the
costing and pricing and also reviewing the cost structure of competitors. The budget is
based on the market research to determine the exact and accurate cost. The projected
cost helps the tour planners to determine and adopt effective pricing strategies. Before
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into several other variable costs. Generally, a package tour includes the cost of travel and
ground services. Thus, the cost components of a package tour include:
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Research and Product Development: The expenditure on market research is used to

conduct study on the travel behaviour and motivations of customers. It incurs cost to
prepare a survey report. The cost for development of new packages includes the process
of planning and exploring new places of tourist interests.
Travelling and Transfer: International and domestic air fares, rail travel, transfer and
departure tariffs are also included in the cost component of package tour.
Accommodation: The cost of booking rooms constitutes one third of total cost of package
tour. Tour operators get best possible room rate after negotiations.
Sightseeing & Activity: Tour operators arrange several value-added activities in sightseeing
DQG H[FXUVLRQ WRXUV7KH FRVW RI DFWLYLW\ LV HTXDOO\ GLYLGHG DFURVV WKH PHPEHUV RI JURXS
Administrative and Technical Cost: This cost is incurred towards the payment of salary,
58
allowance, incentives, etc. It is also added to the total tour costing. Technical cost includes
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rooms, air, train and bus and ferry tickets.
Training and Development: The cost of training staff is indirectly included in total cost.
Tour operators hire the trainers for in-house training or send the staff and senior managers
to professional institutes.
Marketing and Sales Promotion: Marketing cost includes advertising and sales promotion.
7KHVDOHVSURPRWLRQLQFOXGHVGLVFRXQWVFRPPLVVLRQDQGRWKHUEHQH¿WVWRWKHWUDYHODJHQWV
and customers.
Printing and Publicity: The cost of printing tour brochures is included in total tour costing.
The cost of foreign promotional tour is included in total cost of package tour.
Payment of Interest: Tour operators incur the cost of payment of interest to the banks
on the investment of capital to run the business.
Depreciation of Assets: Tour operators incur depreciation cost in the long run due to the
obsolete nature of software and hardware, and electronic gadgets.
Miscellaneous Cost: This cost includes porterage charges at airports and railway stations,
tips at hotels or airports, entrance fees, insurance premiums, gifts and welcome dinners.
Review Questions:
1. How to incorporate the components of tour cost?

2. Explain the importance of cost over marketing and promotion
3. Which are the implicit and explicit costs in the package tour?
4. Activity: Make a list of component of tour costs and assess the percentage cost
that is shared by each component.
6.4 Pricing Package Tour

Tour operator takes lots of precaution for giving a price to the package tour. The pricing
of a package depends on the positioning and branding of the product. After examining
the trends, tour operators add their margins and cost of package. Further, the price on
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absolutely the freedom of tour operator to price the package. Some of the essential
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DPRXQWZKLFKWKHFRPSDQ\FDQPDLQWDLQRQHDFKVDOH*URVVSUR¿WLVWKHUDWHDWZKLFKD
VXSSOLHUTXRWHVIRUSURGXFWVVHUYLFHVWKDWLWGHOLYHUV7KHFRPPLVVLRQFRQVWLWXWHVDPDMRU
share of earnings in tour operations.

59
Review Questions:
1. What is pricing? and how it is done in a package tour business?
2. How does a tour operator label the price of a package tour?
6.5 Pricing Strategies

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analysis. Tourism products are rarely identical, often because of location, but also because
of the people and the components that make up the experience provide to a traveler. It
can be incredibly diverse and pricing strategies can evolve as a tourism business develops
it’s brand and market share. Even star ratings for accommodation only give a general
guide for travellers on what the pricing will be – there are not set criteria. There are three
types of traditional pricing strategies in tour operation business.
Cost-Based Pricing: This type of pricing strategy is used to make over the cost in
order to reach at the breakeven point. It calculates the average cost of each element of
services in the package tour and it adds a markup over and above the average cost to
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and the Oberio Hotel were used to be known for adopting the cost-based pricing strategy
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pricing strategies like competition and consumer-based pricing.
Competition-Based Pricing: This pricing strategy takes tab of the prices of its competitors
in order to tag the price of its own product. Price may be set at the same price of
competitor or it may be a little above or below the price of competitor. Unlike the package
tour market in early nineties, there has been a great change in the pricing due to the
penetration of foreign and domestic tour companies with aggressive marketing and sales
promotion. There is a marginal difference in the price of outbound package tour of SOTC
and Cox & Kings.
Consumer-Based Pricing: This is a form of pricing that is primarily set to target customers
E\ WDNLQJ WKH DIIRUGDELOLW\ DQG WKH TXDQWLW\ RI SXUFKDVH LQWR FRQVLGHUDWLRQV *RQH DUH WKH
days, it was producer dominated market; it is now consumer-driven and led market. Thus,
the inbound, domestic and outbound tour operators design the package tour taking socio-
economic backgrounds of customers. All package tours are designed after assessing the
market.
A part from the above mentioned typical and age-old pricing strategies, the following are
the pricing strategies used in the tour operation business.
60
Rack Rate Pricing: It is full rate before discounts are given. It is generally printed in the
tour brochures for the forthcoming season.
Seasonal Pricing: A wide mix of pricing of package tour is set to cater low, high and
shoulder seasons as tourism is largely driven by the season.
Last Minute Pricing: ,W LV D FRPPRQ PHWKRG RI JLYLQJ GLVFRXQWV IURP WKH GDLO\ TXRWHG
SULFHVLQRUGHUWRFORVHERRNLQJV,WLVSXWLQWKHÀDVKLWHPVLQWKHZHEVLWHVIRUODVWPLQXWH
booking. In the group travel, tour operators offer some additional services or discount in
the prices to get minimum booking to operate the tour.
Per Person Pricing: This type of pricing is set per person or for each category service. It
can be per adult or child or additional person. It can be a taxi at the disposal of customers.
Per Unit Pricing: It is set of price for one unit of package. It may include husband and wife
with children (cost free). Sometimes, the package includes room, transfer and sightseeing
cost. The room rate generally includes breakfast as per the European Plan (EP).
Review Questions:
1. What is strategy? Explain the need of strategy in preparing tour package price.
2. Discuss various pricing strategies in tour packages.
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$FWLYLW\ &ROOHFW ¿YH WRXU SDFNDJHV RI ¿YH GLIIHUHQW FRPSDQLHV DQG LGHQWLI\ WKH
strategy adopted by the respective companies in pricing of the packages.
Exercises:
1. Look at the content and analyze the content of each brochure
2. Draw chart with comparative statements of all components involved in tour
package costing and pricing?
3. Activity: Collect brochure of different tour packages of different companies
understand message behind the size, style and content of the brochures.
III. Guidelines for Practical:
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ZHHNHQGVDQGWDNHQRWHDQGSUHSDUHDVPDOOUHSRUWVLWLQWKHRI¿FHZLWKDUHTXHVW
to observe components of a group tour.

61
UNIT–7
GOVERNMENT AND
PROFESSIONAL BODIES
7.0 Unit Overview & Description

This unit aims to provide extensive information on various government and professional bodies
who regulate this sector. .
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ADTOI- TAFI- FIYTO)
Resource Material
One copy of the Tour Cost and Pricing Sheet for each participant and copies of the
Observer’s Sheet—for each group and teacher, pen, marker, a set of tour costing format,
computer.
1. Chand, M., Travel Agency Management: An Introductory Text, Anmol Publication Pvt.
Ltd., New Delhi
2. Bhatia A.K, Travel Agency and Tour Operations, Sterling Publications , New Delhi.
62
Components of tourism
The tourism industry is based on many different components and interrelated parts. For
example, transport, accommodation, attractions, activities, marketing and government
regulation. Many businesses span in more than one sector and has impact in more then
one part of the tourism industry. The tourism industry includes:
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example travel agents, airlines, bus companies, tour operators and rental car
companies).
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accommodation, facilities and attractions).
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bodies such as industry associations.
It is the fourth segment that we will discuss here. Many countries with an established or
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by promoting tourism further, are likely to have a separate department of government
or a public body responsible to government for this purpose. These bodies are known
as National Tourism Organizations or NTOs. A typical NTO will have four main areas of
responsibility:
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the policies and strategies for the organization);
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The national tourism bodies work closely with the regional tourist boards who in turn work
closely with the local authorities or councils and tourism principals in order to improve
the provision and promotion of tourist facilities and attractions in that region. The United
Nations Conference on International Travel and Tourism in Rome in 1963 adopted the
following resolution:

63
The Conference considers that it is incumbent on governments to stimulate and co-ordinate
national tourist activities, convinced that this task can, in the main, be carried out through
the medium of national tourist organisations.
Virtually every country in the world has a national body responsible for tourism. It can
be part of a ministry, a constituted part of a government department or an organization
with a separate legal status. Generally the role of a NTO will be to ensure appropriate
development and promotion of a nation as a tourism destination.
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practices because they represent the industry. These associations provide a common
platform to solve many problems of the members such as training, common code of conduct,
airlines commission or any other. There are a number of travel trade associations like
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globally. Essentially, every travel company should be approved by these associations to
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etc. However, the contribution of professional bodies is limited by two factors. First, most
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the bodies rarely have the power to insist that members undertake particular initiatives.
Review Questions:
'HVFULEH ³LQWHUUHODWHG FRPSRQHQWV´ ZLWK H[DPSOH

2. Explain the importance of professional bodies in tour operation.
3. Activity: Think and identify components of tour operation. Understand the logical
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7.1 Integration between Government and Professional Bodies

In recent years tourism has become one of the fastest growing sectors of the world economy
and is widely recognized for its contribution to regional and national economic development.
In a diverse and fragmented tourism industry, there has arisen a need for integration or
you can say some kind of collaboration or partnerships to achieve broad-based support for
policies within the industry. Integration in tourism development is a recent phenomenon.
It is an essential approach to tourism development, particularly in developing countries.
This approach is being used increasingly in developing countries and has emerged as
a means to overcome the recognized fragmented nature of tourism development. It has
become clear to governments and professional bodies that no one individual organization
can be effectively responsible for the development of tourism. There is a recognized need
for coordination and cooperation between government and professional bodies.
64
It is being increasingly recognized that the establishment of integration is closely linked
with the improvement of the effectiveness of national tourism organisations (NTOs) which
is becoming an important instrument for implementing tourism policies more effectively. The
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resources and services, safeguarding the environment and developing human resources.
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advantages both in government and professional bodies. Integration must be based on
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bodies. Government has to play an important role in new ways of organizing this co-operation,
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guide innovative partnerships and give incentives to all individual partners to participate in
the development. Effective integration between government and professional bodies can
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delivery,
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authority and industry,
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7.2 Rules for Setting up Travel Agency & Tour Operators

Technically and practically, a travel/tour company needs to be approved and recognized
not only by the airlines but also by the railways, hotels, Department of Tourism (Govt.
of India), IATA, TAAI, IATO and other travel trade organizations. However, the most
important approval and recognition in this context is from the Department of Tourism
and the International Air Transport Association (IATA). In the recent past, the department
of tourism has realized the vital role played by the travel agencies and tour operators
in the promotion and development of tourism in India. In this context, government has

65
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and for the overall growth and development of tourism industry. These rules and guidelines
are drawn from the broader parameters of travel trade and ethics of the industry. These
rules/standards are prepared for the effective and extensive control over the activities of
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from time to time.
Review Questions:
1. What is the importance of harmonious relations between government and

professional bodies?
2. Explain the rules that are followed in establishing travel agency/tour operations.
3. Observe the relationship between Government and Professional Bodies.
4. Activity: 9LVLW DQ\ *RYHUQPHQW 7RXULVP 2I¿FH
7.3 Department of Tourism (DoT) Different Schemes and Policies
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agencies and tour operation enterprises to bring them in organized sector. However the
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sometimes at their discretion, refuse to recognize any travel agency/tour company or
withdraw the approval already given. The travel companies which are granted recognition
are entitled to such incentives and concessions as may be granted by Govt. from time
to time. The recognition may be extended throughout India or it may be limited to a
particular region.
The recognition as an approved Travel Agent shall be granted by the Ministry of

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Report / Recommendations of a Committee comprising of concerned Regional Director and
a member of TAAI. Applications for renewal/extension shall be addressed to the Regional
Director of the concerned region. The renewal / extension thereafter shall be granted for
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Director and a member of TAAI, on an application made by the Travel Agent along with
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The following are the main rules prescribed by the DoT for the approval of travel
agencies;
66
1. Application shall be in the prescribed form and shall be addressed to the Additional
Director General, Ministry of Tourism, Govt. of India, New Delhi and to be submitted
in duplicate.
2. The Travel Agency should have been in operation for a minimum period of one
year before the date of application.
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access to toilet facilities.
4. The travel Agency has a minimum paid-up capital (or capital employed) of
Rs.3.00 lakhs duly supported by the audited balance sheet/Chartered Accountant’s
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5. The Travel Agency should be approved by International Air Transport Association

(IATA) or should be General Sales Agent (GSA)/Passenger Sales Agent (PSA) of
an IATA member Airlines.
6. The Travel Agency should be under the charge of a full time member who is
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accommodation facilities, currency, customs regulations and travel and tourism related
services. Besides this, greater emphasis may be given to effective communication
skills, knowledge of foreign languages, other than English.
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the current assessment year.
8. The Travel Agency should employee only Regional guides trained and licensed by
the Ministry of Tourism, Government of India and State Level guides as well as
local guides approved by State Governments.
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Diploma/Degree in Travel and Tourism from recognized University, like department
of tourism studies, Pondicherry University , IITTM or Institutions approved by AICTE.
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personnel in Airlines, Shipping, Transport and PR agencies, Hotel and other Corporate
Bodies and those who have worked for three years with IATA/UFTAA Agencies.
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companies are located at North-east, religious, remote and rural areas, there should
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67
10. For outsourcing any of the services relating to tourists, the travel agencies shall
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in the form of a Bank Draft.
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13. The Travel Agency granted recognition shall be entitled to such incentives and
concessions as may be granted by the Government from time to time and shall
abide by the terms and conditions of recognition as prescribed from time to time.
IATA Approval for Travel Agency/ Tour Operator:
Travel/ tour companies need to obtain approval and recognition from IATA, authorizing them
to serve as sales agents and allowing them to write tickets and collect commissions from
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and regulations for establishing a new travel company. But IATA approval is necessary in
all countries except USA where they have their own set up. The travel companies in USA
need the recognition from Air Transport Conference (ATC) which is recognized by IATA.
The following are the main rules which are prescribed by the IATA for the recognition of
travel/ tour companies in India:
1. All applications for recognition shall be addressed to the Director, Agency Investigation
Panel (AIP), IATA, New Delhi, India.
2. The application for the grant of approval shall be in the prescribed form.
3. The objective of the recognition shall be to promote and develop travel industry in
the country.
4. The company has to be in the business for at least one year.
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institutions.
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tourists.
8. It should have security for the control of airlines ticket block.
68
9. It should have the ability to generate business.
10. The travel company granted approval shall be entitled to such rights and privileges
as may be granted by the association from time to time and shall abide by the
several terms and conditions of recognition as prescribed by the Association from
time to time.
11. The company must attach an audited annual report with the application form.
12. The agency must attach the statement of international sales with the application
form.
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may in the directions of its committee refuse to recognize a company without
assigning any reason.
14. The Association reserves the right to withdraw at any time the recognition already
granted without assigning any reason.
15. The travel/ tour company should have maintained ethical standards of tourism
business.
16. The recognition granted by IATA shall not automatically entitle the travel agency/
tour operator to be approved by any other organization/association.
Once the travel/tour companies get the approval, they get IATA applicant status for six
months. During this period, the performance of the company is consistently monitored
and the company has to submit its monthly productivity report to the Agency Investigation
Panel (AIP). There are a number of committees and sub-committees which appraise the
agency from different angles before making recommendations for IATA approval. However,
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$UHD 2I¿FH$,3 DVNV WKH DJHQF\ WR IXUQLVK D EDQN JXDUDQWHH LQ IDYRU RI ,$7$ 1RUPDOO\
WKH YDOXH RI EDQN JXDUDQWHH LV HTXLYDOHQW WR IRXU ZHHNV¶ SURGXFWLYLW\ OHYHO RI WKH DJHQF\
Approval from IATA entitles the travel/tour company to use IATA logo on all its communications
DQG WR DYDLO DOO EHQH¿WV ZKLFK D IXOO WLPH ,$7$ PHPEHU JHWV 7KH PDLQ EHQH¿WV DUH
7UDYHOWRXU FRPSDQLHV FDQ VHOO DQG SXUFKDVH DLUOLQHV WLFNHWV GRPHVWLF DQG
international).
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members.
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,$7$ SURYLGHV D FRPPRQ SODWIRUP WR VROYH PDQ\ WUDYHO SUREOHPV
,$7$KHOSVDQDJHQF\WRHVWDEOLVKLWVFUHGLELOLW\DQGLQWHJULW\LQWKH¿HOGRIWRXULVP
Review Questions:
1. What is the procedure for establishing travel agency/tour operations as per the
rules of Department of Tourism?
2. What is the procedure for establishing travel agency/tour operations as per the
rules of IATA.
3. Activity: Collect relevant documents, which are needed to get approval from
Department of Tourism and from IATA.
7.4 Professional Bodies and their Activities
1. UFTAA
The United Federation of Travel Agents’ Associations (UFTAA) emanates from the Universal
Federation of Travel Agents’ Associations created in Rome, Italy, on November 22nd, 1966.
In 1989, UFTAA set up its General Secretariat in the Principality of Monaco. UFTAA started
LWV RSHUDWLRQ DV D &RQIHGHUDWLRQ RQ -DQXDU\ VW ,W LV D QRQSUR¿W &RQIHGHUDWLRQ
of International Scope, representing Regional Federations comprising some 80 national
associations.
UFTAA is a world body representing the travel agency and tourism industry. UFTAA effectively
represents Travel Agents and Tour Operators views on both Inbound and Outbound travel
by continuous dialogue and consultation with other international organizations such as
the International Air Transport Association (IATA), the International Hotel and Restaurant
Association (IH&RA) the International Union of Railways (IUR), the International Road
Union (IRU), and the International Chamber of Commerce (ICC) to mention only a few.
UFTAA has consultative status with the UN/NGO/ECOSOC, and works closely with other
world bodies such as UNESCO, WHO etc for a sustainable and responsible tourism.
8)7$$ LV DQ DI¿OLDWH PHPEHU RI WKH :RUOG7RXULVP 2UJDQL]DWLRQ :72 DQG LWV %XVLQHVV
Council (WTOBC).
UFTAA’s mission is to be an international forum where matters affecting the world travel
industry are addressed, representing and defending the interests of incoming and outgoing
70
tour operators, travel and tourism agencies before the governmental bodies, suppliers and
other entities of international scope. It also aims at strengthening its members’ image and
enhance the world travel and tourism industry and a sustainable tourism.
To comply with its mission, the Confederation develops the following functions :
z To unite and consolidate the Federations of Travel Agents’ National Associations

and to globally enhance the interests of their members;
z To represent the travel agents’ activities before various world-wide bodies,

governmental authorities and suppliers;
z To work towards the adoption of measures that will ease travel for the consumer
and to offer services to its member federations;
z To be an investigation and information centre supporting the member Federations’

work and to offer information for technological development;
z To offer, as a voluntary mechanism, an arbitration service which assists in solving

FRQÀLFWV UHVXOWLQJ IURP FRPPHUFLDO UHODWLRQV IRU ZKLFK DPLFDEOH VHWWOHPHQW FDQQRW
be reached;
z To organize a world congress of travel agents and other meetings necessary to the
exchange and transmission of knowledge.
8)7$$ KDV DI¿OLDWHV DQG PHPEHUV $I¿OLDWHV LQFOXGH LQGLYLGXDO WUDYHO DJHQFLHV KRWHOV
WRXULVWRI¿FHVDQGJHQHUDOO\VSHDNLQJWKHVWDNHKROGHUVRIWKHWRXULVPDQGWUDYHOLQGXVWU\
Members include the national or regional associations of travel and/or tourism.
2. PATA
7KH 3DFL¿F $VLD 7UDYHO $VVRFLDWLRQ 3$7$ LV D PHPEHUVKLS DVVRFLDWLRQ DFWLQJ DV D
FDWDO\VWIRUWKHUHVSRQVLEOHGHYHORSPHQWRIWKH$VLD3DFL¿FWUDYHODQGWRXULVPLQGXVWU\,Q
partnership with PATA’s private and public sector members, it enhances the sustainable
JURZWKYDOXHDQGTXDOLW\RIWUDYHODQGWRXULVPWRIURPDQGZLWKLQWKHUHJLRQ7KH3DFL¿F
$VLD7UDYHO$VVRFLDWLRQ3$7$LQÀXHQFHVWKHGLUHFWLRQWKHLQGXVWU\WDNHVWKURXJKLWVXQLTXH
membership structure of public-sector tourism organizations; air, land and sea carriers;
DQGRUJDQL]DWLRQVHQJDJHGLQWKHSURGXFWLRQGLVWULEXWLRQ¿QDQFLQJFRQVXOWLQJHGXFDWLQJ
and other technical aspects of the travel industry.
)RXQGHG LQ WKH 3DFL¿F$VLD 7UDYHO$VVRFLDWLRQ 3$7$ FRQWLQXHV WR EH WKH OHDGLQJ
DXWKRULW\ DGYRFDWH DQG FDWDO\VW IRU WKH UHVSRQVLEOH GHYHORSPHQW RI $VLD 3DFL¿F¶V WUDYHO

71
DQG WRXULVP LQGXVWU\ 3$7$¶V XQLTXHO\ VWUXFWXUHG RUJDQL]DWLRQ KDV KHOSHG XQLWH WKH PDQ\
facets of tourism in the region. PATA provides leadership and advocacy to the collective
efforts of nearly 100 government, state and city tourism bodies, more than 55 airlines
and cruise lines, and hundreds of travel industry companies. In addition, thousands of
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partnerships with and between its members, it continues to enhance the sustainable
JURZWK YDOXH DQG TXDOLW\ RI WUDYHO DQG WRXULVP WR IURP DQG ZLWKLQ $VLD 3DFL¿F ² WKH
world’s most dynamic region.
PATA is committed to encouraging and assisting in the development of tourism and travel
LQGXVWU\ WKURXJKRXW 3DFL¿F$VLD DQG DV VXFK DOO PHPEHUV PXVW FRQGXFW WKHPVHOYHV DQG
their business activities in a manner that promotes the ideal of integrity in travel and
tourism and agree to act in accordance with the following principles of the PATA Code of
Ethics. In promoting the aims of PATA, members will:
3URPRWH DQG HQFRXUDJH WKH KLJKHVW OHYHO RI HWKLFV ZLWKLQ WKH WRXULVP DQG WUDYHO
industry while maintaining the highest standards of professional conduct.
3URPRWH WKH DLPV RI 3$7$
6WULYHIRUH[FHOOHQFHLQDOODVSHFWVRIWKHWRXULVPDQGWUDYHOLQGXVWU\E\SHUIRUPLQJ
consistently at or above acceptable industry standards.
3URWHFW WKH SXEOLF DJDLQVW IUDXG DQG XQIDLU SUDFWLFHV DQG SURPRWH DOO SUDFWLFHV
which bring credit and respect to the industry.
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6WULYH WR FRRSHUDWH ZLWK DOO PHPEHUV LQ RUGHU WR SURYLGH WKH KLJKHVW TXDOLW\
service.
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:LOO QRW HQJDJH LQ DQ\ XQODZIXO DFWLYLW\ LQ DQ\ FRXQWU\
3. ASTA
ASTA (American Society of Travel Agents) is the world’s largest association of travel
SURIHVVLRQDOV7KHPLVVLRQRI$67$DQGLWVDI¿OLDWHGRUJDQL]DWLRQVLVWRIDFLOLWDWHWKHEXVLQHVV
of selling travel through effective representation, shared knowledge and the enhancement
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a rewarding place to work, invest and do business. Founded in 1931 as the American
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ODUJHVWDQGPRVWLQÀXHQWLDOWUDYHOWUDGHDVVRFLDWLRQZLWKPHPEHUVLQFRXQWULHV$VWKH
72
world’s largest travel trade association, its work encompasses every aspect of the travel
experience.
The main activities in which ASTA is involved are:
Industry Affairs: ,W ¿JKWV WR HQVXUH D OHYHO SOD\LQJ ¿HOG DQG IDLU FRPSHWLWLRQ
WKURXJKRXWWKHLQGXVWU\ZKLFKRIFRXUVHEHQH¿WVLQGXVWU\SURIHVVLRQDOV DVZHOODV
consumers.
Education:,WSURYLGHVLWVPHPEHUVZLWKWKH¿QHVWHGXFDWLRQDQGLQIRUPDWLRQUHVRXUFHV
available, so that they are able to provide the utmost in professional service to their
clients. ASTA’s home-study program allows ASTA member agencies, non-members
and future travel professionals the opportunity to expand their business through
VSHFLDOL]DWLRQ JLYLQJ DJHQWV WKH WRROV WR VHOO XQLTXH WUDYHO H[SHULHQFHV
Consumer Affairs: ,W FRQVWDQWO\ PRQLWRUV WKH WUDYHO LQGXVWU\ WR LGHQWLI\ ³VFDP´
operators and others whose practices cheating consumers and negatively impact the
industry. Only ASTA members subscribe to a 13-point code of ethics which stands
IRU ³,QWHJULW\ LQ 7UDYHO´ 7KLV LV WKH SOHGJH LWV PHPEHUV VWDNH WKHLU UHSXWDWLRQV RQ
It provides traveling consumers with a complete range of informational resources.
Consumer Awareness: Through its advertising and public relations efforts, ASTA
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SURIHVVLRQDO WR DUUDQJH DQG SXUFKDVH WUDYHO $67$¶V DGYHUWLVLQJ VORJDQ ³:LWKRXW
D WUDYHO DJHQW \RX¶UH RQ \RXU RZQ´ FDQ EH VHHQ LQ FRQVXPHU DGV LQ QDWLRQDO
magazines, national television and in local markets.
$67$RIIHUVPDQ\EHQH¿WVWRLWVPHPEHUVDQGWKHWUDYHOLQJSXEOLF7KHPDMRULW\RI$67$¶V
members are travel agencies. However, travel suppliers, such as airlines, hotels, car rental
¿UPV FUXLVH OLQHV DQG WRXU RSHUDWRUV DOVR MRLQ$67$ ,W DOVR KDV PHPEHUVKLS FDWHJRULHV
for students, travel schools, retired travel professionals, retail travel sellers, and others.
4. TAAI
The Travel Agents Association of India (TAAI) was formed towards the end of the year
1951 by a group of twelve leading travel agents, who felt that the time had come to
create an association to regulate the travel industry in India. The primary purpose was to
protect the interests of those engaged in the industry, to promote its orderly growth and
development and to safeguard the rights of the traveling public. TAAI represents all that
is professional, ethical and dynamic in our nation’s travel related activity and has been
recognized as the voice of the travel and tourism industry in India. With a membership

73
data base of over 2300 active, allied, associate and overseas members comprising of IATA
accredited Travel Agencies; Airlines & General Sales Agencies; Hotels and Tour operators;
TAAI is the largest Travel Association of India.
TAAI Endeavors to Build in its Constituents, and others it deals with, a

commitment to:
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'HOLYHU WKH KLJKHVW TXDOLW\ RI VHUYLFH
$FW ZLWK UHVSRQVLELOLW\ ZLWKLQ VRXQG ¿QDQFLDO SDUDPHWHUV
%XLOG WUXVW DQG FUHGLELOLW\ LQ WKH PDUNHWSODFH
,QIXO¿OOLQJLWVPLVVLRQDQGVXSSRUWLQJWUDGLWLRQDOYDOXHVDVZHOODVHPEUDFLQJFKDQJH
TAAI’s objectives are to work towards:

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:LGHQLQJ LWV DUHD RI LQÀXHQFH E\ MXGLFLRXVO\ GHOHJDWLQJ DXWKRULW\ DQG UHVSRQVLELOLW\
to Regions, Chapters and City Committees.
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$ UHVSRQVLYH DQG ZHOO HTXLSSHG 6HFUHWDULDW ZKLFK EHQH¿WV DOO PHPEHUV
5. IATO
The Indian Association of Tour Operators (IATO) is the national apex body of the tourism
industry. Founded on 13th January, 1982 with just seven members, it has now over 4000
members from different segments of the tourism industry like travel agents, hotels, airlines,
government tourism departments/ development corporations, educational institutions,
transport operators and both national and international tour operators. IATO today has
international acceptance, and linkages. It has close connections and constant interaction
with other Tourism Associations in US, Nepal and Indonesia, where USTOA, NATO and
ASITA are its member bodies and is increasing its international networking with professional
bodies for better facilitation to the international traveler visiting not only India but the
entire region. IATO interacts closely with the Government on all critical issues affecting
the Tourism Industry in India with the highest priority to tourism facilitation. It interacts
closely with all Government Ministries / Departments, Chambers of Commerce and Industry,
Diplomatic Missions etc. It acts as the common medium between the decision makers
and the industry, and presents the complete perspective to both sides, synergizing their
common agenda of tourism facilitation. All IATO members observe the highest standards of
74
professional ethics and offer personalized service to their clients. Being the National Apex
Body of the Tourism industry, IATO is always actively responsive to its social responsibility.
All IATO members actively participate in meeting their social obligations not only during
national emergencies and natural calamities, but also as an ongoing venture. During the
recent years IATO members contributed generously for the National Defense Fund and
DOVR RUJDQL]HG EORRG GRQDWLRQ FDPSV GXULQJ WKH .DUJLO FRQÀLFW FDUULHG RXW UHOLHI ZRUN LQ
the cyclone affected areas in Orissa, set up emergency relief supplies for the victims of
*XMDUDWHDUWKTXDNHEHVLGHVDGRSWLQJDYLOODJHDQGSURYLGLQJWKHPWKHQHFHVVDU\UHOLHIDQG
rehabilitation infrastructure. IATO has contributed whole heartedly to the Prime Minister’s
Relief fund, also to help the Government in their efforts during the national crisis.
,$72 KDV ¿YH FDWHJRULHV RI PHPEHUVKLS $FWLYH $OOLHG $VVRFLDWH ,QWHUQDWLRQDO DQG
Honorary. All its active members are recognized and approved by the Indian government’s
Department of Tourism and have at least three years of experience of handling International
Tourists to India, before being admitted to the IATO fraternity. The aims and objectives
of the IATO are as follows:
1. To promote national integration, welfare and goodwill.
2. To take all steps which may be necessary for promoting, encouraging and assisting
in the development of tourism throughout the country and to take initiatives to
secure the welfare of the tourism trade in all respects.
3. To communicate with Chambers of Commerce, other Mercantile and Public Bodies

in India, Government Departments or Committees, International Air Transport
Association and various foreign and local associations and corporations, companies
and concerns and promote measures in the interests of the travel trade and
nominate members to act on them.
4. To encourage and promote friendly feelings among the tour operators and travel
DJHQWV RQ DOO VXEMHFWV LQYROYLQJ WKHLU FRPPRQ JRRG DQG EHQH¿W
5. To try to amicably settle the disputes of the members of this association by referring
the disputes for settlement to a sub-committee to be constituted for such purpose
by the Executive Committee.
6. To protect the interest of the members of this association from the malpractices
of foreign tour operators.
7. To set up and maintain high ethical standards in the industry.
8. To undertake such welfare activities which the members can not undertake
individually.

75
7R JHW DI¿OLDWLRQ ZLWK VLPLODU RUJDQLVDWLRQ LQ RWKHU FRXQWULHV
7RSURPRWHHTXDORSSRUWXQLWLHVIRUDOOYLVLWRUVWRHQMR\WKHWRXULVP WUDYHOIDFLOLWLHV
without distinction of race, color, creed or nationality.
11. To organize overseas promotional tours jointly with various airlines and Govt. of
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12. To conduct aiding and assisting seminars, group discussions, course of studies,
cultural meetings.
13. To institute awards for excellence in tourism related activities.
14. To assist students by scholarship to pursue higher education, study and research
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both in India and outside the country.
15. To institute chairs and fellowships in India.
16. To take initiative and ensure that the problems affecting any of the services relating
to the tourism trade are sorted out through the mediation of the association,
failing which joint legal action to be taken for and on behalf of the members of
the association for settling such problems.
17. To produce regular reports about the achievements of the members of the association
and to do all such things as are incidental or conducive to the aboveobjects.
18. 7R SULQW DQG SXEOLVK LQIRUPDWLRQ PDWHULDO IRU WKH EHQH¿W RI LWV PHPEHUV
6. ATOAI
ATOAI stands for Adventure Tour Operators´ Association of India which was founded in
1994 with a handful of members. In 2011, 17 years after its nascence, it is a national body
comprising more than 150 members across the country and abroad actively promoting
Adventure and Eco Tourism in India. The association was founded with an aim to create
awareness about the immense potential for adventure tourism in India and to harness
this potential in a safe, sensitive and environment friendly manner. ATOAI members are
recognized by the Ministry of Tourism, Government of India.
The ATOAI of India is an association of Adventure Tour Operators from all over India
and activities of its members include Trekking, mountaineering, rafting and other related
water sports, camel / jeep / horse safari, bike tours, sailing, ballooning, hand gliding and
RWKHU DHUR VSRUWV ZNLLQJ ZLOGOLIH VDIDUL ¿VKLQJ VFXED GLYLQJ WULEDO WRXUV DQG KHOL VNLLQJ
The activities of the association are as follows:
76
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7R DVVLVW VWXGHQWV E\ VFKRODUVKLS WR SXUVXH KLJKHU HGXFDWLRQ VWXG\ DQG UHVHDUFK
LQ WKH ¿HOG RI 'HYHORSPHQW RI$GYHQWXUH 7RXULVP LQ ,QGLD
7R LQVWLWXWH FKDLUV DQG IHOORZVKLS LQ ,QGLD
7R FRQGXFW VHPLQDUV JURXS GLVFXVVLRQV FRXUVH RI VWXGLHV FXOWXUDO PHHWLQJV DQG
to promote adventure tourism in India.
7RWDNHDOOVWHSVZKLFKPD\EHQHFHVVDU\IRUSURPRWLQJHQFRXUDJLQJDQGDVVLVWLQJ
in the development of Adventure Tourism throughout the country and to take initiative
to secure the welfare of the Adventure Tourism Trade.
7RHQFRXUDJHDQGSURPRWHLQWHUDFWLRQZLWKLQWKHDGYHQWXUHWRXURSHUDWRUVIUDWHUQLW\
and with other travel agents on all subjects involving their common good and
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travel facilities without distinction of race, colour, creed or nationality.
7R VHW XS DQG PDLQWDLQ KLJK HWKLFDO PRUHV LQ WKH LQGXVWU\
7R XQGHUWDNH VXFK ZHOIDUH DFWLYLWLHV DV WKH PHPEHUV FDQQRW WDNH LQGLYLGXDOO\
7R FRPPXQLFDWH ZLWK &KDPEHUV RI &RPPHUFH RWKHU 0HUFDQWLOH DQG SXEOLF ERGLHV
in India, Government Departments or Committees, Department of Tourism and
various foreign and local associations and corporations, companies and concerns
and promote measures in the interests of the members to act on them.
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7RSURGXFHUHJXODUUHSRUWVDERXWWKHDFKLHYHPHQWVRIWKHPHPEHUVRIWKHDVVRFLDWLRQ
and to do all such things as all incidental or conducive to attainment of the above
objectives.
7. ADTOI
Association of Domestic Tour Operators of India (ADTOI), a National Body of Domestic Tour
Operators, was constituted on 7th August 1996 with the express purpose of consolidating
the efforts of all those tour operators who are actively engaged in the promotion of
³'RPHVWLF 7RXULVP´ LQ WKH FRXQWU\ ,W KDV PHPEHUV DOO RYHU ,QGLD RQ WKH UROOV DQG
likely to enroll more members to its fold in the near future. Its members work to ensure
delivery of professional service to the consumer, through its principal suppliers, which

77
are primarily the accommodation facilities, as also travel intermediaries like railways,
transporters, airlines & guides.
Some of major objectives of this association are:
1. To co-ordinate with Ministry of Tourism and other related Central and State Ministries
LQWKHLUHQGHDYRXURIFUHDWLQJWKHWKUHHHVVHQWLDOSUHUHTXLVLWHVIRU'RPHVWLF7RXULVP
Development:
(A) SUVIDHA: Provision of facilities and amenities
(B) SURAKSHA: Guaranteeing safety and security for travelers
(C) SOOCHNA: Upgrading, updating, and disseminating information
2. To establish a healthy atmosphere in the domestic tourism industry and foster healthy
relations between tour operators, travel agents and other persons and organizations
in tourism industry.
3. To formulate a uniform code of conduct to govern the procedure of booking,

FRQ¿UPDWLRQVSD\PHQWVUHIXQGVFDQFHOODWLRQVQRVKRZVFKDQJHVSUHSRQHPHQWV
and post-ponements, retention charges, commission and discounts.
4. To establish channels of communication and liaison with the Department of Tourism,

Govt. of India, state and other public and private bodies; and take all necessary
steps to promote and develop domestic tourism in India.
5. To promote environment protection, cultural exchange and national integration in

the territory of India.
6. To educate the traveler about the importance of eco-friendliness and promote the
cause of a pristine and clean environment.
7R DFKLHYH D OHYHO RI DFFUHGLWDWLRQ WKDW ZLOO LQVWLOO FRQ¿GHQFH LQ WKH EX\HUV RI WUDYHO
services.
Its aim is also to bring all those agencies who are actively involved in the promotion of
domestic tourism in the country under one umbrella. As its strength in domestic tourism,
it enrolls its members who are connected with the following activities:
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7RXULVP ([SR &RPSDQLHV
8. TAFI
The Travel Agents Federation of India (TAFI), established in 1986, is a dynamic organization
that guides the travel industry in India. A professional body of travel agents coordinating
different segments of the travel trade, TAFI is a non-political, non-commercial and not-for-
SUR¿WERG\7$),¶VPHPEHUVKLSLQFOXGHV$FWLYH$VVRFLDWH$OOLHGDQG$I¿OLDWH7UDYHO
Service Intermediaries – Non IATA) members from all over India. It is a proud member
RI :RUOG 7UDYHO $JHQWV $VVRFLDWLRQV $OOLDQFH :7$$$ ,W LV DQ DI¿OLDWH PHPEHU RI WKH
Southern African Tourism Services Association (SATSA). It has also an agreement with
WKH )HGHUDWLRQ RI +RWHOLHUV DQG 5HVWDXUDQW $VVRFLDWLRQ RI ,QGLD )+5$, IRU WKH EHQH¿W
of its members. TAFI is committed to creating a more evolved and stable environment in
the travel trade and becoming the cornerstone of the industry.
The aims and objectives of TAFI are:
1. To protect the interests of those engaged in the industry, to promote its orderly
growth and development, to safeguard the travelling public from exploitation by
unscrupulous and unreliable so-called travel agents.
2. To safeguard the interests of the travelling public and to maintain high ethical
standards within the travel trade through better communications and awareness
about regulations.
3. To augment the development of the travel industry in India by consistent improvement
in the standard of service and inculcate professionalism.
7R VSUHDG JUHDWHU DZDUHQHVV DQG XSGDWHG LQIRUPDWLRQ RQ WUDYHO WR HI¿FLHQWO\ FDWHU
to the needs of the travelers within India and overseas.
5. To promote mutual cooperation among members of TAFI and thereby ensure healthy
growth of the travel industry.
7R UHSUHVHQW WKH WUDYHO DJHQWV WUDGH EHIRUH RI¿FLDO ERGLHV RI *RYHUQPHQW DLUOLQH
bodies and other appropriate forums.
7R SURPRWH VXFK VFKHPHV ZKLFK ZRXOG EHQH¿W WKH PHPEHUV RI 7$), DV ZHOO DV
SURYLGH PXWXDOO\ EHQH¿FLDO DOWHUQDWLYHV WR WKH DLUOLQH LQGXVWU\ IRU EHWWHU JURZWK RI
travel.

79
8. To safeguard the interest of the travel agents vis-a-viz service providers such as
airlines, several consulates, several Government authorities.
9. To ensure compliance of rules, regulations and guidelines sent by the consulates,
Government authorities, airlines etc.
Below are some of the main activities in which TAFI is involved:
1. Fosters fraternity among its members through regular fellowships.
2. Brings the different segments of the travel industry into its fold by offering memberships
under different categories.
(GXFDWHV DQG HTXLSV WKH PHPEHUV WR PHHW WKH FKDOOHQJHV RI WRPRUURZ WKURXJK
regular meetings, seminars and conventions.
4. Creates avenues for its members by signing MOUs with Tourism Boards like DTCM
and TITC.
5. Works in tandem with several organisations like FICCI, CII, etc.
6. Gains recognition by the Monitoring Panels by the Government of India.
7. Represents Agency Programme Joint Council (APJC) and works closely with the
Council of Airlines.
8. Maintains close contact with world bodies and represents matters affecting the travel
industry of the country.
9. FIYTO
The Federation of International Youth Travel Organisation (FIYTO) is the founding
organisation of World Youth Student and Educational Travel Confederation (WYSETC). In
2006, FIYTO and the International Student Travel Confederation (ISTC) merged to form
the World Youth Student and Educational Travel Confederation (WYSETC). Its founding
organisations - the FIYTO and ISTC - were formed just after World War II to inspire young
people through international travel and to help remove cultural barriers. The confederation
is therefore built on decades of industry experience and is bound together by a trusted
global community.
The purpose of the Federation of International Youth Travel Organisation (FIYTO) was
to promote youth mobility and to broaden the horizons of young people through travel,
ODQJXDJH DFTXLVLWLRQ IDPLO\ OLYLQJ FXOWXUDO DQG VRFLDO WRXULVP DQG RWKHU RSSRUWXQLWLHV IRU
personal growth. As one of the largest trade organisations in the youth and student travel
sector, it was the meeting point and advocate for rapidly growing youth tourism. It had
80
PHPEHUV LQ ¿IW\IRXU FRXQWULHV ,W RIIHUV LGHQWLW\ FDUGV WR LWV \RXWK PHPEHUV WR IDFLOLWDWH
access to tourism facilities and culture and leisure activities. Its major publication is Youth
7UDYHO ,QWHUQDWLRQDO 7KH KHDGTXDUWHUV RI WKH RUJDQLVDWLRQ ZDV ORFDWHG LQ &RSHQKDJHQ
Denmark. FIYTO - an open, world-wide, non-political and non-sectarian travel trade
DVVRFLDWLRQ DGYRFDWHG WKH VSHFLDO LGHQWLW\ RI \RXQJ WUDYHOHUV DQG WKHLU ULJKW WR ÀH[LEOH
affordable travel and travel-related services.
Today, the World Youth Student and Educational Travel Confederation (WYSETC) is
committed to understanding the ever-changing characteristics, motivations, and needs
of young travelers. The Confederation works with members, sector associations, tourism
authorities and partners around the globe to:
3URPRWH WKH SHUVRQDO VRFLDO HFRQRPLF DQG FXOWXUDO EHQH¿WV RI \RXWK WUDYHO DQG
international education by working in partnership with governments and tourism
boards worldwide.
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WKH FULWLFDO UROH WKH\ SOD\ LQ WKLV XQLTXH ELOOLRQ QLFKH LQGXVWU\
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'HYHORSLQQRYDWLYHWUDYHODQGHGXFDWLRQDOSURGXFWV VHUYLFHVIRU\RXWKDQGVWXGHQWV
such as the International Student Identity Card (ISIC).
'HOLYHUWZRHVVHQWLDOWUDGHFRQIHUHQFHV:RUOG<RXWKDQG6WXGHQW7UDYHO&RQIHUHQFH
(WYSTC) and Work Experience Travel Market (WETM-IAC).
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and trends of today’s independent travelers.
3URYLGHEHVWSUDFWLFHJXLGHOLQHVRQSURGXFWVDQGSROLFLHVDQGUHSUHVHQWLWVPHPEHUV
at industry events worldwide.
Review Questions:
1. List out the professional bodies of tourism industry.

2. Explain the procedure laid down by Department of Tourism and IATA for establishing
travel agency and tour operations.
:KDW DUH WKH EHQH¿WV RI SURIHVVLRQDO ERGLHV IRU WRXULVP LQGXVWU\

81
Practical Activity:
1. Visit any professional body of tourism and Department of Tourism of

Government.
2. Collect information and understand the functions of the professional body in
integrating travel agents/tour operators.
3. Explain the rules that are followed in establishing travel agency/tour operations.
82
Unit–8
GLOBAL DISTRIBUTION
SYSTEM

This unit aims to provide knowledge about global distribution system (GDS). This unit will
impart the following knowledge and skills:-
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'LVSOD\ IDUHV
'LVSOD\FRPSOHWHKRWHOGHVFULSWLRQ DYDLODELOLW\GHFRGH HQFRGHFRXQWULHVFLWLHV

& airports, aircrafts, airlines
'LVSOD\ H[FKDQJH UDWHV PDSV DLUOLQH VHDW PDSV ORFDO WLPHV RQOLQH SRUWDOV
Resource Material
One copy of the Tour Cost and Pricing Sheet for each participant and copies of the observer’s
Sheet—for each group and teacher, pen, marker, a set of tour costing format, computer.
1. Negi. J., Travel Agency Operations: Concepts and Principles, Kanishka, New Delhi.
2. Goeldner, R and Ritchie. B., Tourism: Practises, Principles and Philosphies, John
Wiley and Sons, London.
8.1 Global Distribution System

Global Distribution System is a Travel Agency Network that enables interconnectedness
between Airline Computer Reservation Systems and travel agency terminals. It’s distinct
from a Computer Reservation System which is a reservation system used by Airlines.
The Global Distribution System (GDS) is used by travel agents to make reservation on
various airline’s reservations systems. A Global Distribution System (GDS) differs from an
airline CRS in one critical aspect, a GDS holds no inventory of its own. The inventory is

83
held in various airline reservation systems. The GDS system has links to all major airline
&56:KHQDWUDYHODJHQF\WHUPLQDOUHTXHVWVDUHVHUYDWLRQRQWKHVHUYLFHRIDSDUWLFXODU
DLUOLQHWKH*'6V\VWHPURXWHVWKHUHTXHVWWRWKHDSSURSULDWHDLUOLQH&RPSXWHU5HVHUYDWLRQ
6\VWHP 7KLV HQDEOHV D WUDYHO DJHQW ZLWK D FRQQHFWLRQ WR D VLQJOH *'6 WR ERRN ÀLJKWV
and associated services on virtually all the airlines in the world. The major GDS systems
are Amadeus, Sabre, Galileo & Worldspan.
8.2 The Evolution of Global Distribution Systems

*OREDOGLVWULEXWLRQV\VWHPV*'6KDYHHYROYHGIURPWKH¿UVWFRPSXWHUEDVHGUHVHUYDWLRQ
systems implemented by several U.S. airlines in the late 1960s and early 1970s. American
$LUOLQHV$$ZDVWKH¿UVWFRPSDQ\WRGHYHORSDUHDOWLPHFRPSXWHUL]HGUHVHUYDWLRQV\VWHP
In a joint venture with International Business Machines (IBM), the Semi-Automatic Business
Research Environment (SABRE) was launched in 1964 and helped process nearly 26,000
UHVHUYDWLRQUHTXHVWVSHUGD\%\WKHODWHVDQGHDUO\VYLUWXDOO\DOORIWKHPDMRU
carriers, including United, TWA and Delta were operating their own central reservation
systems (CRS). It was not, however, until 1976 that these systems were installed in travel
agencies, allowing agents to both book and change reservations directly in the system
using remote access terminals. Clearly, the ability for airlines to operationalize their booking
systems in geographically dispersed markets was a major competitive advantage for those
who participated.
This distributed system was paralleled by increases in computing and storage power; by
1978, SABRE was available in over 130 locations and could store 1 million airfares. After
deregulation in 1978, the importance of computerized reservation systems became even
more apparent. The rapid entrenchment of CRSs with travel agents enabled bias in the
reservation process. For example, SABRE might decide to withhold inventory from other
CRSs in an effort to gain a competitive advantage. Further, a CRSs owned by a particular
airline could be programmed to display their airline’s information ahead of their competitors
in an effort to distort consumer choice. This was compounded by the natural tendency
RI WUDYHO DJHQWV WR ERRN ÀLJKWV ZLWK WKH FDUULHUV SURYLGLQJ WKH &56 WHUPLQDOV ± NQRZQ DV
WKH³KDORHIIHFW´$VDUHVXOWLQWKH&LYLO$HURQDXWLFV%RDUGEHJDQWRUHJXODWHWKHVH
systems to insure a free and competitive market for both travelers and airlines.
By the early 1990s, CRSs had evolved into more complex systems. In part, this was
motivated by strategic alliances and mergers between U.S. and European carriers, laying
true global distribution systems. In addition, the ability to leverage the Internet as a tool
for expanding the presence of these booking systems was promising. In response to
these developments, the United States Department of Transportation (USDOT) increased
84
regulation of the GDS industry, mandating that GDS owners:
&DQQRWIDYRURUGLVIDYRUDQ\DLUOLQHLQVHWWLQJWKHGLVSOD\RUGHURIÀLJKWVRUERRNLQJ
fees;
0XVW SURYLGH GDWD WR DOO FDUULHUV RQ D QRQGLVFULPLQDWRU\ EDVLV
0XVW SDUWLFLSDWH LQ DOO RWKHU &56 V\VWHPV IRU DLUOLQH &56 RZQHUV DQG
0XVW RIIHU WUDYHO DJHQWV FRQWUDFWV RI WKUHH \HDUV RU OHVV
As the GDS industry continued to evolve in the 1990s, the availability of public interfaces
to these systems greatly expanded, particularly with the rollout of the Internet and World
Wide Web. As a result, consumers gained unprecedented access to information concerning
price, travel times and schedules. Today, airlines no longer have an ownership interest
in GDSs and the regulation provided by the USDOT is expired. There are currently four
major GDSs in operation, Amadeus, Galileo, Sabre and Worldspan, all of which provide
UHDOWLPH ÀLJKW LQIRUPDWLRQ WR WUDYHO DJHQWV DQG FRQVXPHUV 7KH SXEOLF LQWHUIDFHV WR WKH
GDSs can be categorized in the following way: 1) airline websites; 2) GDS-based online
WUDYHODJHQFLHVVXFKDV7UDYHORFLW\([SHGLD7UDYHODQG2UELW]RSDTXHVLWHVWKDWUHTXLUH
some type of bid/payment before knowing the actual travel schedule such as Priceline;
4) specialty low-fare sites which are analogous to a tip-sheet for selected bargains; and
³VFUHHQVFUDSHU´ VLWHV ZKLFK DFWXDOO\ UHDGV IDUH LQIRUPDWLRQ IURP WKH VFUHHQV RI RWKHU
sites and reports them to the consumer.
Review Questions:
1. What do you mean by global distribution system?
2. How the global distribution system has been evolved in due course of time.
3. Activity: Access any travel online portal. Understand the features of online tourism
business services on portal.
8.3 Amadeus and GDS

Amadeus is a leading global distribution system and technology provider that serves the
marketing, sales and distribution needs of the worlds ‘Travel and Tourism Industry’. It has
a comprehensive data network and database that is among the largest of their kind in
Europe serving more than:
217 markets worldwide, over 100 million visitors per month,
90,274 travel agency locations,
75,284 Hotel properties,
490 Airlines (95% of the world’s scheduled airline seats),

85
$LUOLQHV VDOHV RI¿FH ORFDWLRQV
22 Car rental companies, serving over 36,000 locations,
17 Cruise lines,
As well as other provider groups like ferry and rail services, tour operators and insurance
agencies.
Galileo InternationalLVDGLYHUVL¿HGJOREDOWHFKQRORJ\OHDGHU,WVFRUHEXVLQHVVLVSURYLGLQJ
electronic global distribution services for the travel industry through its computerized
reservation systems, leading edge products and innovative internet based solutions. It also
is a value added distributor of travel inventory dedicated to supporting its travel agencies
and corporate customers, and through them, expanding traveler choice. Currently, the
company is connected to :
49,000 travel agencies in 116 countries in 43,000 locations approximately,

70,000 hotel properties,
450+ airlines,
52 low cost carriers,
23 car rental companies,
And, a wide array of tour operators and cruise lines across the world.
Sabre is a leading provider of technology for the Travel Industry. It provides a broad
range of innovative products that enable travel e-commerce and services, and enhance
airline, supplier and travel agency’s operations and their ability to serve the traveler. Sabre
connects to
50,000+ travel agencies, travel suppliers, Fortune 500 companies and travel websites in
locations around the world,
77,000 hotel properties,
approximately 400 airlines,
32 car rental companies,
11 cruise lines,
35 railroads,
220 tour operators,
Worldspan is the global leader in Web based travel e-commerce and a foremost provider
of travel technologies and services for thousands of travel related companies worldwide,
86
including airlines, travel suppliers, travel agencies, web sites and corporations. Worldspan
transforms global travel distribution and transaction processing with industry leading
fares, pricing, shopping and booking technologies, enabling travel companies to reduce
costs, increase productivity and build revenues. Worldspan provides worldwide electronic
distribution of travel information, internet Worldspan is currently connected to:
21,000 travel agencies in nearly 90 countries and territories,

421 airlines approximately,
210 hotel companies, 40 car rental companies,
39 tour and vacation operators,
44 special travel service suppliers.
8.4 Display Airlines Schedules & Availability

Users access an airline’s inventory through an availability display. It contains all offered
ÀLJKWV IRU D SDUWLFXODU FLW\SDLU ZLWK WKHLU DYDLODEOH VHDWV LQ WKH GLIIHUHQW ERRNLQJ FODVVHV
7KLVGLVSOD\FRQWDLQVÀLJKWVZKLFKDUHRSHUDWHGE\WKHDLUOLQHLWVHOIDVZHOODVFRGHVKDUH
ÀLJKWVZKLFKDUHRSHUDWHGLQFRRSHUDWLRQZLWKDQRWKHUDLUOLQH,IWKHFLW\SDLULVQRWRQHRQ
ZKLFKWKHDLUOLQHRIIHUVVHUYLFHLWPD\GLVSOD\DFRQQHFWLRQXVLQJLWVRZQÀLJKWVRUGLVSOD\
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standard industry interfaces. Depending on the type of co-operation it supports access to
the last seat (last seat availability) in real-time. Reservations for individual passengers or
groups are stored in a so-called passenger name record.
Review Questions:
1. How does the Amadeus created database.
2. Explain the role of Amadeus in integrating travel services across the world.
3. Activity: Visit travel agency and collect details of Amadeus. Take part in mechanism
of using Amadeus.
Exercises:
1. Learn the usage of various GDS softwares in travel agency business.
2. Activity: Visit travel agency and identify the various GDS software’s used in their
UHVSHFWLYH RI¿FHV
VI. Guidelines for Practical:

87
6WD\ GXULQJ RI¿FH KRXU RI DQ\ 7UDYHO$JHQF\ IRU WKUHH GD\V GXULQJ ZHHN HQGV
and conduct a market survey among the tourists on various elements of tour.
3UHSDUHDTXHVWLRQQDLUHDQGDGPLQLVWHUWKHVDPHDPRQJWRXULVWVORFDOFRPPXQLW\
on any selected topic related to tourism.
2. Analyze the data and prepare bar/pie diagrams.
Prepare a report with background of the selected travel agency/ tour operator
and analyzed survey data. Submit the report.
88

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Travel Agency

CENTRAL BOARD OF SECONDARY EDUCATION

Travel Agency and Tour Operations Business

First Edition : April 2016, CBSE

Paper Used : 80 Gsm CBSE Water Mark White Maplitho

“This Book or part thereof may not be reproduced by any

PUBLISHED BY : The Secretary, Central Board of Secondary Education,

Travel Agency and Tour Operations Business

THE CONSTITUTION OF INDIA

1. Subs. by the Constitution (Eighty - Sixth Amendment) Act, 2002

Travel Agency and Tour Operations Business

MATERIAL PRODUCTION GROUP

EDITING AND COORDINATION

Travel Agency and Tour Operations Business

INTRODUCTION TO TRAVEL &

Unit Overview and Description

This unit will impart the following knowledge and skills;

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 'LIIHUHQFHV EHWZHHQ WUDYHO DJHQFLHV DQG WRXU RSHUDWRUV

 0DUNHW WUHQGV DQG WRXULVP EXVLQHVV VFHQDULR

Travel Agency and Tour Operations Business

1. Explain the historical background of travel industry.

a) Travel Trade in India

Travel Agency and Tour Operations Business

b) Meaning & Concept of Travel Business

1. What is the role of Travel Agents Association of India ‘(TAAI) in commencement

1.2 Types and Organisational Structure of TA & TO:-

Travel Agency and Tour Operations Business

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b) Types of Travel Agencies

1. What do you mean by travel agency?

Travel Agency and Tour Operations Business

d) Types of Tour Operators

Destination Management Companies/ Ground Operators: These are commonly known

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Travel Agency and Tour Operations Business

Figure: 1 Organisational structure of large travel/tour company

1.3 Difference between Travel Agencies and Tour Operators

1.4 Market Trends & Travel Agency Business Scenario

Travel Agency and Tour Operations Business

1.5 Business Integration

Travel Agency and Tour Operations Business

Unit Overview & Description

ͻ Role, functions and responsibilities of TA & TO

Travel Agency and Tour Operations Business

2.2 Origins of Travel Agency

Travel Agency and Tour Operations Business

2.4 Organization of Travel Agencies

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Travel Agency and Tour Operations Business

1. Explain the mechanism of operating travel agency?

2.6 Travel Agencies in the 21st Century

Travel Agency and Tour Operations Business

I. Guidelines for Practical:

Unit Overview and Description

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Space consumption: Rail transportation has a low level of space consumption

Gradient and turns: Rail transportation can support a gradient of up to 4% (e.g. 40

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Types of tour itinerary

Steps for preparing itinerary

Do’s and don’ts of itinerary preparation

Planning for FIT & GIT

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