MIDTERM MODULE:

Tour and Travel Management

Chapter 1: Fundamental of Travels and Tours

Introduction:
1. Tourism:
 Definition: Tourism is a broader concept that encompasses the activities and
services associated with people traveling to and staying in places outside their
usual environment for leisure, business, or other purposes. It includes various
components such as accommodations, transportation, attractions, and
hospitality services.
 Example: If a family travels to Paris for a vacation, their visit involves
tourism. The family not only travels to Paris but also engages in activities like
sightseeing (visiting landmarks such as the Eiffel Tower), staying in hotels,
dining at local restaurants, and perhaps participating in guided tours. Tourism
is the umbrella term that covers all these aspects of the travel experience.
 “Tourism can be both an Industry and Concept” – Tourism is a Concept
because it refers to the activities and experiences associated with people
traveling to and staying in places outside their usual environment.
The concept of Tourism exists and has significance because people engage in
the act of “TRAVELING”. Without the movement of people from one place to
another, the concept of tourism would not have a basis.
Tourism is an “INDUSTRY” because it encompasses a wide range of
elements, including transportation, accommodation, attractions, services, all
contributing to the overall travel experience.

2. Travel:
 Definition: Travel refers to the movement of people from one place to
another. It involves the physical act of journeying, whether it's for business,
leisure, education, or any other purpose.
 Example: If a person goes on a business trip from New York to Los Angeles,
the act of moving from one city to another is considered travel. Similarly, if
someone travels for a family vacation, it involves the physical movement from
their home to the vacation destination.

Nature of Travels and Tours

Travel refers to a movement from one place to another. This can refer to short-and long-
distance travel, domestic and international travel, and other various forms. It includes both
round trips and one-way journeys, with a wide array of travel purposes.
The travel industry, therefore, refers to the several aspects of the service industry which cater
to the needs and wants of the people who have traveled and will travel from different parts of
the world. The travel industry is also called “Tourism Network”.
Below is a list of the important sectors of the travel industry with their descriptions.

Sectors of the Travel Industry:

1. Transportation:
The main purpose of this sector is to make it possible for people to go from one place to
another. There are many ways to do this, from primitive and simple to modern and complex.
This includes a wide variety of different types of travel including air, land, sea, and railway
modes. Thus, taking note of the amount of time spent from major population centers via each
mode of transportation is important to provide quality service. While the act of getting to the
chosen destination and staying there is crucial, the cost of transportation must also be
considered (Aquino, 2012).
 Airline Industry
The airline industry is a popular choice among travelers who want to arrive at
destinations quickly. The development in air transportation in the tourism industry
introduced many undiscovered areas to the travel community. It has managed to
increase a significant part of the transportation market in recent years, especially to
destinations farther than 500 kilometers away. A scheduled air transportation system
offers a safe, convenient, reliable, frequent, and consumer-centered service (Basnet,
2015).
 Car Rental
Car rental has been in close connection with airline and railway transportations since
its early years and is considered a similar part of the travel service industry (Eronen,
2015).
 Water Transport
Water transport is a major factor in tourism and hospitality. An example of this is the
cruise ships which became known in recent years because of the idea of developing
"floating resorts" or "flotels."
 Coach Services
Coaches typically much larger than buses but they are likely similar with buses.
Buses and coaches are the modes of transportation preferred by those in any social
class to reach their destinations. In the 21st century, buses became a safe, green,
comfortable, and affordable tool for transportation. They cater not only for intercity
lines or long-distance travel but also as charter vehicles for excursions, corporative
 trips, or just carrying from airport or railway station to hotel and back (Soloviev,
2015).
 Railway
The majority of seasoned travelers prefer to travel by train because of its safety record
and the convenience and satisfaction of viewing the scenery from a comfortable air-
conditioned car. The appeal of rail travel has been further enhanced by the recent
introduction of high-speed trains.
 Spacecraft
Spacecraft is now becoming known as a form of transportation, which is going to
become increasingly influential in the years ahead. The year 2001 marked the
beginning of space tourism as a wealthy California businessman, Dennis Tito, became
the first paying passenger for space flight (Britannica Online Encyclopedia, 2013).
Currently, Virgin Galactic remains the only private space tourism company that has
successfully air-launched its SpaceShipTwo vehicle (S. Fox, 2010). However, Virgin
Galactic is definitely not alone in its venture into space tourism as the industry is
being looked at as a lucrative market for many upcoming decades (Seo, 2013).
2. Accommodation
While away from home, the tourist needs to eat and sleep. Sleeping accommodations range
from hotels of international standards to condominiums, campgrounds, and homes of
relatives and friends. For a tourist region to succeed, a sufficient quantity of accommodations
of the right quality should be provided for the tourists.
Appropriate accommodations should always be available for all types of travelers. Luxurious
types of accommodations may be demanded by those who want the best and are willing and
able to pay accordingly. On the other hand, tourists who are budgeted should have practical
facilities available (Aquino, 2012).
 Hotels
The most popular form of accommodation for tourists, it provides meals and
refreshments for those who may reserve their accommodations in advance but need
not do so. It also provides facilities that meet the needs of modern travelers.
 Shared Accommodation

It is said that Airbnb favors the growth of shared accommodation. Travelers

nowadays use Airbnb as an online platform to rent spaces for their stay in a
destination. This type of accommodation usually includes all the facilities and
amenities of the entire home such as an apartment or a house or just a room space
where the owner/host usually stays.

 Hostels

Hostels provide minimal amenities such as a bunk bed and commonly shared toilets
and bathrooms. They are typically categorized as a budget choice and are usually
provided on a self-catering basis. They appeal mostly to young travelers.
  Camping

This is a type of outdoor accommodation that makes use of temporary shelter, usually
in the form of a tent. It appeals mostly to families who travel in recreational vehicles.

 Bed and Breakfast

Bed and breakfast accommodations provide a room, bath, and a hearty breakfast to
tourists. They are known as BnBs.

 Timeshare Accommodation

A timeshare accommodation is a type of accommodation which owned by multiple

individuals share the right to use a vacation property, typically a resort, condominium,
and villa for a specified period each year.

A timeshare is a modern tourism product that succeeds in combining tourism and real
estate in such a way to satisfy the ever- changing needs of the tourist-purchaser.
According to the definition of the World Tourism Organization (WTO) (1996),
"Timeshare offers the public the right to enjoy, for a set period or interval each year,
vacation time in an apartment or other type of lodging that is part of a tourist
complex, equipped with a variety of services and facilities."

3. Food and Beverage

Tourists look for food and beverage services everywhere. It is a significant aspect of anyone's
journey and often shapes one's satisfaction with a trip. In some cases, it is the reason some
people travel.

 Restaurants

A restaurant is a business where people sell food and drinks to customers in a public
place in exchange for money (Han Dian, 2014).

 Catering

The catering industry nowadays plays an important role in the travel and tourism
industry. Like restaurants and take-away outlets, caterers provide products and
services to hotels and airlines. Catering services promote local food and culture of
destination through their offerings.

 Bars and Coffee Shops

Bars and coffee shops provide a relaxing atmosphere for travelers to eat and drink.
Bars tend to focus on serving alcoholic and non-alcoholic beverages. On the other
hand, coffee shops tend to focus on serving hot drinks, frappes, and light snacks. Both
environments also provide a place for people to socialize.
  Nightclubs

Nightclubs are establishments that stay open until late at night and offer food and
beverage along with entertainment. Most of them have stage performers and a
spacious dance floor for the customers.

4. Entertainment
Tourists, once arrived at their chosen destination, often look for entertainment, any form of
activity that can satisfy the interest of the tourists during their stay in a destination.

 Casino

A casino is an entertainment establishment that provides people with opportunities to

gamble. It is often connected with hotels, restaurants, resorts, cruise ships, and other
related tourism establishments that are also known for hosting entertainment such as
musicals, concerts, and comedy performances.

 Tourist Information

Travelers usually are overwhelmed with the information and options they have once
they arrive at a new destination. A tourist information center provides reliable
information and resources about the destination. Moreover, it motivates the tourists to
stay longer by feeding them information about what the destination can offer. In some
destinations, tourist information provides a one-stop, physical location from which
travelers can connect with local businesses and services. It provides a welcoming
environment for tourists to learn about the destination's products and services.
Leaflets, brochures, and other promotional materials can also be displayed in the
tourist information center.

 Shopping

Shopping plays an important role in travel and tourism. The majority of tourists travel
to specific parts of the world to experience shopping.

 Tourist Guides and Tours

A tourist guide is an individual who, either as an employee or an affiliate of a licensed

tour operator, accompanies tourists, both foreign and domestic, for a fee or any other
form of lawful remuneration on local sightseeing excursions to provide pertinent
commentary and look after their general well-being.

5. Connected Industries
These are industries that are linked to the travel and tourism industry. They help boost
interest in the travel industry itself. These include companies and businesses that assist to
connect travelers with travel and tourism products and local agencies that provide practical
support and assistance for tourists and travelers.

 Foreign Exchange

As Charles Kindle-Berger, an economic historian, put it, "The foreign exchange

market is a place where foreign moneys are bought and sold." The foreign exchange
market is an institutional arrangement for buying and selling foreign currencies. It is
especially important when we travel because it is the only way to transact in a foreign
land, be it paying for a cab fare or just buying a meal.

 Travel Agents

Travel agents are middlemen that act as intermediaries between the suppliers and the
tourists. They sell tourist products and receive a commission from the supplier as their
income.

Travel agents provide a range of services, including booking flights, accommodations,

transportation, and other travel-related services. They help clients create personalized
itineraries based on their preferences and budget.

Travel agents primarily cater to individual clients or small groups. They focus on
tailoring travel plans to meet the specific needs and preferences of each traveler.

 Tour Operators

Tour operators design and organize packaged tours, often including various
components like transportation, accommodations, meals, and guided activities. They
create comprehensive travel packages and sell them to individuals or groups.

Tour operators handle the planning and execution of entire travel experiences. They
offer pre-designed packages that may cover multiple destinations, activities, and
services.

Tour operators are wholesalers of tourist products. They produce tour packages which
usually compose of complete itineraries from transportation, accommodations, food
and beverage, as well as entertainment and the service of a tour escort or tour guide.

Tour operators often cater to larger groups of travelers. They organize group tours
with set itineraries, allowing participants to join a pre-arranged travel experience

 Online Travel Agencies

 An online travel agency (OTA) is very much like the traditional travel agency when it
comes to its role, only that it uses the internet as its main source of operation. They
both connect with the tourists to sell travel products and services on behalf of the
suppliers.

 Tourism Organizations

Tourism organizations could be government and nongovernment units as well as

tourism councils which are usually composed of the different tourism sectors. Their
main purpose is to support the interests of the tourism industry.

 Educational

The educational subcategory includes academic institutions and tourism organizations

that organize or sponsor activities like seminars, conferences, exhibitions, training,
and tourism skills competitions.

Types of Tours

1. Independent Tour is a tour in which the tourist buys tourism components

(transportation, accommodation, food and beverage, entertainment, etc.) separately.
This can be done in advance through a travel agent.

2. Escorted Tour is a tour in which tourists are accompanied by a tour director or tour
manager who arranges everything and takes charge of the entire tour from the
beginning until its completion. Tourists who avail of this kind of tour are not familiar
with the destination they are visiting.

3. Hosted Tour is a tour where tourists are accompanied by a tour guide once the
tourists arrive at the destination region. It is called a "hosted tour" because the tour
operator usually acts as the host to the tourists during their stay.

4. Incentive Tour is given to employees as a reward for their excellent performance in

achieving the company's or organization's goals. The expenses of this tour are paid or
sponsored by the company or organization.

These tours serve as incentives to recognize and celebrate achievements, boost

morale, and foster a sense of loyalty and motivation among participants.

Key Concepts:

1. Travel Industry - The travel industry is composed of businesses that provide

services needed by travelers or tourists when they travel from one place to another.
This industry includes transportation, accommodations, food and beverages, services
of a travel agency and tour operator, foreign exchange, entertainment, etc.
 It is a multifaceted industry that includes various sectors providing transportation,
accommodation, entertainment, and support services to travelers. The travel industry
plays a significant role in global commerce and tourism, contributing to economic
growth and cultural exchange.

The travel industry is diverse and interconnected, with various sectors working
together to create seamless and enjoyable experiences for travelers worldwide. It
encompasses a wide range of services, from transportation and accommodation to
entertainment and support services, contributing significantly to the global economy.

2. Travel Services - These are services provided by tour operators and travel agents
that have something to do with the tourists' travel such as ticket reservation, booking,
or both, for local and international, for air, sea, railroad, and land travel. It also
includes reservations for accommodation and other tourism components such as food
and beverage, entertainment, etc.
Here are some key components of travel services along with examples:
 Transportation services
 Accommodation services
 Tour and Activity Services
 Travel Planning and booking services
 Ground Transportation services
 Visa and Documentation Services
 Currency Exchange and Financial Services

3. Tour Operation Business - This is a type of travel business that assembles the
tourism products from different suppliers to create a complete tour package and sells
it to the tourists directly or through travel intermediaries.

A tour operation business is a type of company or organization that specializes in

planning, organizing, and executing travel packages and services for individuals or
groups. These businesses play a crucial role in the tourism industry by creating and
selling comprehensive tour packages that often include various components such as
transportation, accommodation, guided tours, activities, and sometimes meals.

Chapter 2: Historical Perspective of travels and Tours

Introduction:

The travel industry already existed way back in the early years of the 19 th century, but it was
not the same as what we have to date as we now have a system through travel agencies and
tour operations businesses.
Historical Background of Travel Agency and Tour Operation
-The travel agency industry has witnessed significant development over the years, evolving
from the first modern travel agency in the 19th century.
-Modern tour operators, which organize group tours and independent travel packages, trace
their origins back to the mid-19th century when they served as ticket agents for steamship
lines and railroads.
-In the 1930s, the tour wholesaling business began to grow, but it faced challenges due to the
high cost of travel, hindering industry development.
-The post-World War II period, particularly the late 1940s and early 1950s, marked a turning
point for the tour operator industry with the introduction of modern long-range commercial
aircraft and the interstate highway system, making travel more accessible.
-Growth factors included the rise of low-cost airlines, improved airport access, and cost-
effective travel options, encouraging more people, especially in the middle class, to travel.
-Media played a crucial role in promoting travel, fostering public interest and contributing to
the success of tour operation businesses.
-Today, there is a proliferation of tour operators operating as wholesalers, selling packages
through travel agents or directly to clients over the Internet.
-Despite the internet enabling travelers to create their own itineraries, tour operators and
travel agencies remain essential for providing a remarkable travel experience.

COX AND KINGS, to be known as the First Travel Agency in the

World

Establishment and Early Growth:

Cox and Kings, founded on May 25, 1758, is recognized as the oldest established
travel company globally.

Richard Cox, initially appointed as the regimental agent to the Foot Guards,
contributed to the company's growth, and Cox and Co. became a major agent for
British regiments.

Transformation to Cox and Kings:

In 1923, Cox and Co. was sold to Lloyds Bank, leading to the formation of Cox and
Kings, which transitioned from its origins as a shipping company to organizing travel
and tours for passengers.

Contribution to Indian Tourism (1970):

In 1970, Cox and Kings Agency gained popularity and played a significant role in the
growth of the tourism industry in India.
 The agency specialized in cultural and wildlife tours within the country, establishing
itself as a prominent player in the travel sector.

Global Expansion (1980s):

During the 1980s, Cox and Kings expanded its operations globally, introducing travel
and tour packages for regions such as Latin America, the Middle East, Africa, and far
eastern Europe.

The company diversified its offerings, catering to diverse cultural and geographical
preferences.

Continued Modernization:
In the contemporary era of travel and tours, Cox and Kings remains a prominent and
continuously growing entity.

The company is dedicated to developing modernized travel and tour packages,

extending its services to different parts of the world.

Cox and Kings, with its rich history and adaptability, has evolved from its 18th-
century roots to become a globally recognized and continuously innovating travel
company.

Thomas Cook and His Contribution to Tour and Travel

Management:

Founding of the First Travel Agency (1845):

Thomas Cook established the world's first travel agency in England in 1845, marking
the beginning of the travel agency industry.
Pioneering Train Excursion (1841):
In 1841, Cook organized a historic train trip covering 22 miles for 570 members of his
association, a pivotal event in the history of travel trade.
Cook's innovative approach involved buying railway tickets in bulk and selling them
to interested travelers.
Success and Business Idea:
The initial trip was a success, leading Cook to recognize the potential impact of
organized travel.
Inspired by the positive response, Cook conceptualized and established the "World's
First Travel Agency" in 1845, focusing on organizing excursions.
Father of the Travel Agency Business:
Thomas Cook earned the title "Father of the Travel Agency Business" due to his
pioneering efforts in establishing and popularizing organized travel.
Expansion of Services (1845 onwards):
Cook expanded his travel business by organizing railway and steamship excursions,
covering destinations in England, Scotland, and Europe.
Expansion into Tour Operations (1855):
Railways and steamship excursions provided only a 5% commission, prompting
Thomas Cook to expand into tour operations to meet expenses.
In 1855, Cook started creating and offering package tours to the public, conducting
the world's first international tour from England to Paris.
Establishment of the First Modern Travel Agency (1845):
In 1845, Cook organized the first mass tour across England, marking the beginning of
the first modern travel agency in the world.
The trip, incorporating special activities and entertainment, generated profits from a
railway journey covering Leicester to Nottingham, Derby, and Liverpool.
Progression with Package Tours (1851):
Sir Joseph Paxton convinced Cook to organize package tours for the Great Exhibition,
leading to further success in his travel business.
Travel Innovations (1868-1874):
Introduction of hotel coupons in 1868, offering hassle-free check-in procedures and
benefiting both customers and hotels.
In 1874, Cook introduced the Circular Note, a precursor to today's traveler's cheque,
accepted in hotels, restaurants, and transport services across Europe and the USA.
Package Tours for the Middle Class (Mid-19th Century):
With the rising income and consumption of the middle class, Cook developed
customized package tours for this market.
Negotiations with hoteliers made the package tours more affordable, catering to the
middle-class demand for destinations like Switzerland and Italy.
Great Journey (1869):
Cook's company successfully traveled across the Atlantic Ocean by steamship,
discovering new points of interest for the travel business.
In 1869, Cook conducted a party trip up the river Nile, and in 1872, he embarked on a
Round-the-World Tour, gathering first-hand information for his business.
Personal Achievements and Learnings (1872):
Cook's 222-day world tour included visits to Egypt, Palestine, Turkey, Greece, Italy,
and France.
 The journey served as a personal achievement and a source of valuable insights for his
travel business, providing firsthand knowledge of places, cultures, and up-to-date
travel facilities.

Chapter 3: Roles of Travel Agencies And Tour Operators

Introduction:

In the travel industry, travel agencies and tour operators plan an essential role. They are the
ones who are responsible not only for selling and promoting tourism products and services
but for also producing them. They are also involved in the development of these products for
the satisfaction of the tourist’s demands. About the process of developing tourism products,
both the travel agencies and tour operators contribute to the entire process before they can be
patronized by the tourists.

Travel Agency and Its Nature

A travel agency is a type of business that acts as an intermediary or middleman between the
tourism products' suppliers and the tourists/travelers. One of the main functions of this
business is to market and promote all types of tourism products and services which includes
tour packages, accommodations, transportations, and other components of the travel industry
(Goeldner & Ritchie, 2003). Travel agencies are private entities that could operate as a sole
proprietorship, partnership, or corporation.
The travel agency is considered as one of the most essential businesses in the tourism
industry. As stated above, it plays an important role in the entire process of developing and
creating tourism products and services. It normally creates itineraries for all-inclusive tours
and offers them to tourists. With this, the travel agency is also known as the "image builder of
a country" (TourismNotes, 2018).
Another service offered by the travel agency business, aside from offering package tours, is
the service of arranging tourism sectors such as ticketing and booking and reservation for air,
rail, land, and sea travel. They also assist and arrange travel documents such as passports,
visas, and other documents required to travel. They can also secure travel insurance and
foreign currency for their clients (TourismNotes, 2018).
The travel agency is an axis of tourism. Tourism activities revolve around travel agencies. In
the definition of tourism as "the movement of people from one place to another," the travel
agencies generate the movement. With this, we can say that a travel agency is a generator or
creator of tourism. It plays a vital role in tourism as the brain in the human body. Without
travel agencies, tourism will have no joint effort, no planning, and no programming. In the
present context, we cannot imagine tourism without the travel agencies that join them
together to form a travel industry.
A travel agency is a commission agent. It makes agreements with different service agencies
and develops products and sales for customers to gain profit or to collect commission. To
facilitate the tour of a traveler is the objective of a travel agency. Travel agencies are the
organizations that make arrangements and schedules for travel. They help a great deal in
saving time for the tourists; they keep close direct living contact with all tourist service
producers. They provide quality services to the tourists; they coordinate between the
enterprises and customers. They collect commission or service charge for the coordinating
work. They are the bridge that fills the gaps between the customer and service agencies and
the facilities they provide. They stimulate and motivate people to travel.
A travel agent is someone who acts as the direct contact of a traveler or tourist who is seeking
assistance and planning to visit a certain destination through a travel agency. He/She arranges
tours according to the needs and wants of the tourists. In the same as a tour guide, travel
agents could also specialize in a certain type of tour such as adventure travel, educational
tour, cruising, pilgrimages, etc. Some travel agents work permanently and are associated with
a travel agency business while others work as freelancers (go2HR, 2014).
Aside from providing consultation services and entire travel packages, travel agents simplify
the process of planning a trip for their customers. They may book transportation such as
flights, car rental, and cruises and hotels for accommodations and other events. Travel agents
cater to a wide sector of the tourism market, serving both individuals and corporations. They
may also concentrate on a special segment of the field such as leisure travel and business
trips.

Tour Operator and Its Nature

A tour operator is an organization, firm, or company that buys travel components individually
and combines them into a package tour to be sold to their direct customers or through a
tourism channel. Tour operators are also known as the manufacturers of tourism products and
services as they are responsible for delivering and performing all the products and services
included in the packaged tour they offer to their customers.
Tour operators are sometimes also called wholesalers because they buy goods and services in
bulk to prepare a tour package and then retail it through the travel agencies or directly to their
clients.
Tour operators generally offer a variety of tour packages to provide the needs and wants of
different types of tourists and travelers.

Definition of Tour Operators

 According to Poyther (1993), the "tour operator is one who has the responsibility of
putting the tour ingredients together, marketing it, making reservations, and
handling actual operation."
 Holloway (1992) stated that one of the main functions of tour operations is to
purchase products and services of the travel industry, put them together to create a
new product-a package tour-and sell them to the tourist directly or indirectly.
Tour operators nowadays are becoming very competitive. They try to attract great
numbers of travelers, both from domestic and international tourists. The success of the
tourism industry, mostly in developing countries, depends on the performance of the tour
operators on how they market and promote the countries' tourism products and services.

Functions of Tour Operators

A tour operator provides the most convenient option for the tourists to travel to and
enjoy the stay in their chosen destination. A tour operator, most of the time, owns
businesses within the tourism sector such as transportation, accommodations, and food
and beverage. As cited in TourismNotes (2018), some of the most important functions of
the tour operators are the following:
1. Planning a Tour
The tour operators assist the travelers to plan the most memorable experience that they
could have during travel, which includes the making of an itinerary to their chosen
destination. They also offer different types of tour packages from which the tourists may
choose.
2. Creating Tour Packages
One of the main functions of tour operators is the development of tour packages. They
purchase travel components separately from transportation, accommodation, food and
beverages, to tourists' attractions and assemble them to create new travel products known
as tour packages. This final product can be sold by the tour operator to the tourists
directly or indirectly.
3. Organizing a Tour
Tour operators can also arrange or organize a tour package based on the preferences of
the tourists. As their goal is to give tourists satisfaction with their travel, they can arrange
a tour package that would give a unique experience to the tourists.
4. Providing Travel Information
Another task of the tour operator to complete the travel experience of the tourists is to
provide them with the necessary information concerning their travel to the chosen
destination. This pertinent information includes the mode of transportation, types of
accommodations, tourists spots for sightseeing and other activities, immigration process,
health and security rules and protocols, and other documents required to visit a certain
country or destination.
5. Making a Reservation
Tour operators are tasked to assist tourists in the reservation of the travel components
needed for their travel and stay in the chosen destination such as tickets for the
transportation, room for accommodation, meals, etc.
6. Managing a Tour
One of the responsibilities of the tour operator is to manage the entire tour availed by the
tourist. Tour operators should check every detail of the tour from the time of its execution
 until its completion. Aside from the activities in the itinerary of the tour chosen by the
tourists, tour operators should also provide the services of a tour guide and other escorting
services.
7. Evaluating the Available Options
Tour operators usually assess and evaluate the tour packages that they offer to the
tourists. They make sure to consider all the possibilities and other options to make the
travel of the tourist a memorable and remarkable one.
8. Promotion
All tour packages and other travel products offered by the tour operation and travel
agency businesses are also promoted. They promote them to their target and regular
clients, both domestic and international.
9. Sales and Marketing
As part of the transactions in the tour operation business, tour operators also do sales and
marketing especially to their target markets to attract their attention and eventually have
them avail their products and services.
10. Taking Care of Problems that may Arise During the Tour
Since tour operators are in charge of the entire tour travel of the tourists, they take charge
of all the issues and problems that may arise during the tour. They are prompt to fix
identified glitches and provide the best solution.

Travel Agency Versus Tour Operator

Table 1. Difference Between Travel Agency and Tour Operator
Travel Agency Tour Operator
Acts like an independent reseller and Purchases travel components from
receives commissions for the sale of different suppliers, forms a single
the tour operator's package tour tourist product, and sells them using
its own pricing
Small to medium enterprise Usually large companies
Acts as the distributor/reseller of the Acts as the supplier or manufacturer
tourism products of tourism products
Deals with one component of travel Offers a variety of tour programs
products

Types of Travel Agencies

1. Retail Travel Agency
 Retail travel agencies act as resellers of tourism products and services. They sell their
products and services directly to the tourists and receive commissions from the suppliers
as their income. Aside from commission-based selling of tour packages, retail agencies
could also do mark up price in which they add mark up cost to the product and then sell it
at a higher rate. The mark up price is the difference between retail price and wholesale
cost.
Functions of retail travel agencies are as follows: preparing tour quotations for the
tourists, booking and reservation of transportation, accommodation, food and beverages,
entertainment, visa assistance and other travel documents, foreign exchange, and arrange
travel insurance.
2. Wholesale Travel Agency
Wholesale travel agencies purchase travel components in bulk from suppliers, assemble
tour packages, and sell them to the tourists through retail travel agencies. Assembled
package tours are usually all-inclusive trips that include transportation, accommodation,
meals, entertainment, and other activities and services required by the tourists.
In terms of function, a wholesaler travel agency that typically sells package tours can also
be known as a tour operator. However, technically there is a difference between a
wholesaler travel agency and a tour operator.

Table 2. Difference Between Wholesale Travel Agencies and Tour Operators

Wholesale Travel Agency Tour Operator

Does not sell their products and Sells different travel components
services directly to the public directly to tourists
Deals with one component of travel Offers a variety of tour products/
products and services programs
Medium to large business organization Larger business organization

Types of Tour Operators

A tour operator is an organization, firm, or company that purchases tourism products and
services separately and combines them into all- inclusive tours that, with their own price rate,
sell directly to the tourists or through travel agencies.

A tour operator can also be defined as a private entity that assembles travel components to
create a package tour that can be offered to tourists.

Today, tour operators are becoming highly competitive. They aim to achieve a high volume
of turnover from the maximum number of market shares both from domestic and
international markets. Furthermore, the success of mostly developed and developing
countries as tourist destinations depends heavily on a tour operator's ability to entice tourists
through its promotional strategies and development of tour packages.
Tour operators, based on the nature of business and their operations. are categorized into four
types.

1. Inbound tour operators

Inbound tour operators are also known as incoming tour operators. Their role is to receive
tourists in the host country and handle all their land arrangements. They are based locally,
and they normally offer local destinations, attractions, events, and other services to the
tourists. They usually partner with local travel agencies and work hand and hand to boost
the travel industry within their locality.

2. Outbound Tour Operators

Outbound tour operators promote tours for foreign destinations. They normally worked
with international travelers and offer specialized tour packages in a particular country or
region. Their role is to develop and create tour packages that will allow the tourists to
visit and enjoy their stay from one country to another country.

3. Domestic Tour Operators

Domestic tour operators create and assemble travel components into all-inclusive tours
and market them to domestic travelers. They provide travel services within the country of
the tourist's residence. They also operate tour packages that are composed of travel
components within the boundary of the home country and offer them to domestic
travelers.

4. Ground Operators

Ground operators are also known as handling agencies, and their main role is to organize
and arrange tours for incoming tourists on behalf of overseas operators. They see to it that
the entire travel in the destination is in accordance with the package tours or agreements
the tourists have with the overseas operators.

Role of Travel Agency and Tour Operation in the Tourism Industry

The tourism industry is one of the fastest-growing industries in the world. With millions
of people traveling across different countries, it obviously favors the growth of its
economy, especially those in developing countries. Whatever purpose or reason people
have, it is the role of the tour operators and travel agencies to entice them to travel, thus
having remarkable hold in sustaining the growth of the travel and tourism industry all
over the world (Jain, n.d.).

Mainly accountable for providing comprehensive packaged travel services, travel

agencies and tour operators act as experts who take charge of every aspect concerning the
needs and wants of the travelers every time they travel. Their role starts from the
development and creation of a package tour and continues during the entire travel of the
tourists. They also provide a hassle-free travel experience and make sure of the
satisfaction of their clients by providing them with quality travel services.

Emerging Technology in the Operation of Travel Agencies and Tour Operation

A few years ago, planning a tour or a holiday escapade meant that you had to go and
scout for well-known travel agencies or tour operators for your travel needs. Then, all you
had to do is ask for a quotation and for the price for your chosen package tour. They will
take care of everything about the trip.

Those days are undeniably gone. We have to accept the fact that we cannot turn back to
the good old days of doing business, especially in the travel industry where technology
matters. Travel agencies and tour operators must adopt the current trends because we
cannot deny that at this time, doing business has changed dramatically and will definitely
be continuously changing in the future.

Technology nowadays has a huge impact on different businesses, not to mention travel
agencies and tour operations. This has also been observed by the travel industry from the
different transactions that they do such as booking and reserving, ticketing, etc.

Travel agencies must embrace and adapt to the technological changes that may affect
their business. They have to reinvent themselves so that they can still compete and be
profitable. Below are some of the fundamental technological changes that have affected
travel agencies and tour operation businesses (KeyforTravel, n.d.):

1. Internet usage - In the 21st century, the most powerful source of business is the
Internet. Everything has to do with the web. The internet helps create modern travel
agencies and tour operators. Every transaction involved in the process can be done over
the internet; thus, to remain in the business world, they have to go with the flow.

2. Use of social media - Travel agencies and tour operators need to have personalities of
their own. They can use social media as part of marketing and communications strategies.

3. Mobile technology - Nowadays, travelers have all the pertinent information about their
trip in the palm of their hand. Travel agencies and tour operators have to adapt to this
swift change in reality to be able to sustain their business.

4. Digitalization - Digitalization helps travel agencies and tour operators to be highly

competitive in the business world. With this technological strategy, they can transform
the experiences of the tourists into the most convenient way.

5. Big data -A customer's database can help a travel agency or tour operator analyze its
customers' behavior patterns as well as guide it in forecasting based on their behavioral
information.

6. Artificial intelligence - Artificial intelligence nowadays is incorporated into mobile

devices and applications. It is a great help for travel agencies and tour operators, offering
convenient and comfortable services in assisting their clients.

7. Virtual reality - Virtual reality can be used by travel agencies and tour operators as a
marketing tool to entice more people to travel as virtual reality allows them to explore
their dream destinations.

Revolution in the travel industry is a must. It is about facing the world of reality.
Technology increases the speed and comfort in transacting business; as a result, it
responds to the client's needs and wants better than ever before. It also makes the
customer satisfied, leading to a more profitable business.
 In reality, with the existence of modern technology, various opportunities have
become available in this era, leading to a range of markets and better revenue. Most of all,
it is giving all the travel agencies and tour operators the chance to survive in this modern
business world.
 CHAPTER 4: THE BUSINESS OF TRAVEL MANAGEMENT

Introduction

The travel industry grew and evolved tremendously. For many years, modern approaches
were implemented to make travel operations efficient for both the consumers and the
suppliers. Changes were brought about by new technologies. Through travel systems and
applications, travel data are easily gathered and are used as references to improve travel
services. Data about the flight frequencies, most visited destinations, popular
accommodations, and effective insurance among other suppliers can guide companies in
monitoring their movements and their coinciding budget. Efficient travel handling and
execution contributes directly to savings. Travel management, therefore, plays a very vital
role beyond efficiency and savings-travel management also brings the apt standards through
professional and reliable arrangements.

In the wider context, travel management even help with environmental concerns. There
are big corporations that monitor their carbon footprint caused by their travels. They require
more efficient execution of their travel movements. Thus, a well-managed travel contributes
to ecological responsibility. Directly or indirectly, travel management affects environmental
concerns. An economical, efficient, “tailor-fit,” and well-planned travel is the result of
professional handling.

Business Setup

It is very important to understand the services being delivered by travel management

companies. It looks complicated, but if travel requirements are presented comprehensively,
everything that follows becomes simple. The business setup encompasses budget, people
management, exhaustive market requirements, and supplies. The business setup comprises
peoples and systems. Systems are manned by specialists. A setup also involves a technically
trained crew. Expertise is the combination of hard and soft skills and productive interrelations
within the organization, especially with clients. It requires product awareness. A balance of
all these attributes will give an ideal business setup that is responsive to a specific target
market.

At any given time, travel management in the Philippines has unique scenarios. The
introduction of multitasking may change the business setup or structure in terms of
organization and workflow. Cost of labor can lead to optimization of manpower without
sacrificing the quality of services to be rendered. It can never be a templated organizational
flow. The globally accepted organizational flow may have restricted functions. Thus, being
adaptive to optimize manpower has become an approach among travel management
companies. The installation of a flexible structure or an "interim" organizational flow can be
adaptive yet responsive. It can be evaluated in order to adapt as needed. The organization
may, therefore, change "structurally" but remain aligned to organizational objectives and
operating principles.

The most recommended setup covers three important basic departments: executive, sales
and operations, and administration and finance.

Travel Management Companies Focus on Eight Areas of Services

 The travel management company makes strategic value propositions. It must manage the
travel needs of the clients, taking into account the best acceptable budget that is responsive
and efficient. Most of the clients of travel managements companies are corporate companies,
individuals, families, and organizations that require professional travel handling.

Travel management companies also involve travel policy-making, negotiations with

travel suppliers and vendors, designing travel products, detailing the travel execution, and
documenting the processes and eventual results of a travel movement. Documentation of
travel details can be used for statistical purposes that can lead to further improvements of the
next travel approach and future considerations of the clients.

In the Philippines, there is a very thin line defining the difference between a travel
management company and a travel agency. A travel management company sets the
parameters, a travel agency executes the reservations and booking on the given parameters.

The Travel Management Companies' Deliverables

1. Professional Insights and Updated Advice

Different colleges, universities, and trade training centers offer different curriculum to fit
the needs of the tourism trade. This "trade academe" partnership is geared toward making
tourism practitioners apt to the fast-changing world of the tourism industry. They prepare a
curriculum or modules that are suitable to a specific field of the tourism sector they intend to
serve. The curriculum or modules are further supported by onsite trainings and exposure to
gain first-hand observations. These trainings can vary. It can be technically combined with
experiential or solely technical. Other than academic learnings, professional insights can,
likewise, be supported by regular and updated readings of publications and journals related to
tourism. In fact, airlines, hotels, embassies, and other tourism suppliers provide constant
updates and apt information made available to tourism trade practitioners. All these efforts
are geared to professionalize the crucial areas of the organization. In the area of tourism
economics, revenue management among travel industry supplies becomes very complicated.
Different service categories (e.g., economy seats) have different fare levels, different
restrictions, and different rulings. Many industry systems and terminologies may not be easily
understood by regular takers. This is where expert advice can be given by travel management
companies. Travel consultants that are assigned to handle specific accounts are equipped with
fare updates and the restrictions that come with it. As an example, an incentive market should
particularly be insightful on attritions and other details regarding deadlines and cancellations
among others. Thus, it is essential that the proper interpretation and timetable be considered.
If rulings are misunderstood, it can cost money. An itinerary with multiple destinations might
need border rulings and other more elements that the clients need to deliberate on. To
guarantee that there will be no challenges during travel, proper documentation to secure a
visa, review rulings and type of the visa, other immigration concerns, and fees need to be
revalidated.

2. Travel Advisories, Warnings, or Alerts

In the travel industry, there are many issues that affect travel plans and their
implementation. A very timely instance is this pandemic situation whereby information to
safeguard the health protocols, financial exposure, and border rulings are necessary. New
destinations, offline flights, service disruptions, repatriation rules, and border/immigration
guidelines are just some of the details that need to be closely monitored. With or without the
pandemic, there are advisories that need to be sorted out and are of much importance for the
travelers' awareness.

3. Guide and Review of Travel Policies

In the travel world, especially among corporate organizations, ethical practice, due
diligence, and travel policies are very important. Official travel covers only what is deemed
"official." Anything beyond what is in the request is not covered by an official travel request.
Just like movements for academe, they are regulated by the Department of Education. There
are definite and non-negotiable guidelines. It follows that anything that is not included in the
arrangements is unauthorized. Legal implications can be reviewed intensively prior to
embarking on travel movements. The professional handling must always be within
appropriate bounds.

4. Collation of Reports for Data and Reference

In order to evaluate travel expenses of corporate accounts, properly recorded and the
travel-related agenda of the company are needed. Travel expenditures need analysis.
Indicators such as routes taken and optimization of recommended supplies will play a vital
role in reviewing overheads. This will eventually lead to a more effective source of advice
with regards to the budget projections of company for its future travel requests. Recorded
transactions can be a source of future recommendations. The slightest expense, the type of
fare, and the discounts availed are important elements that can result in the effective decision-
or policy-making of the clients. The comparative travel records of the costs and effective
measures considered can lead to an even more efficient travel program design.

Please refer to attachment: CHAPTER 4 - SAMPLE INCENTIVE PROGRAM to get an

idea on how an actual record of the program and expenditures can be used as a relevant
reference for any future incentive movements.

5. Current Systems and Methodologies

Susceptible to change are systems, computer software and hardware, and other tools used
for booking reservations. Mobile applications are updated and are often upgraded. Almost
yearly or even in a shorter period of time, these systems are covered with enhancements.
Travel management companies normally adopt whatever is amenable to align their services
with suppliers. It can make service quicker even during last-minute necessities. To seek the
services of a travel management company saves time. The companies, organizations, or any
clients that avails the services of travel management companies can devote more time to more
essential agendas that are not related to travels.

6. Better Relationship with Suppliers

Airlines, hotels, transportation companies, theater tickets, events venues are just among
the many supplies that are needed to complete a cycle of travel movement. Travel
management companies serve as intermediaries and can bring about a better relationship
between the supply and the market. Most travel management companies enjoy very good
representation because of the volume of transactions they maintain with different tourism
suppliers. Likewise, this benefit transcends to their clients. The collective sales production of
the travel company often results in cheaper contracted rates. All the companies they service
are direct beneficiaries of these favorable contracted tariffs.

7. Economical Rates for Airfares, Hotels, and Transportation

Discounted or preferential rates for room accommodations, airfare, and transportation

rentals can easily be availed through volume sales. Travel management companies enjoy such
privileges. They have the upper hand to negotiate for special fares or an "exclusive rate" for
their "exclusive" use. Some suppliers can easily identify their annual top producers, and in
return, they give them "preferred" contracted rates. Because of this, even after adding service
and processing fees, travel management companies can enjoy better legroom. This makes
their pricing more competitive. There are cases where big companies award their travel
management company an incentive from the savings it was able to deliver after the annual
performance review. These arrangements are rare, yet they can motivate the travel
management company to engage in best practices that result in mutual benefits.

8. Round the Clock Support System: 24/7 Help Desk: A Sense of Peace of Mind

The biggest challenge in handling corporate accounts and incentive markets can be the
sudden changes of schedules or urgent scenarios confronted by travelers during the actual trip
implementation. Thus, as an assurance for immediate attention, even during unholy hours, a
24/7 help desk is a premium. A help desk facility does not only assure the clients' instant
access; it also has a facility of connectivity that makes them feel that the travel management
company is assuming responsibility for the clients' arrangements. Furthermore, the 24/7 help
desk will take over any emergency situation that is related the travel such as change of flight
schedules, cancellation of flights, and insurance coverage as needed. It is an assurance that
we are just a text or call away. Currently, some companies avail of a third party to receive
such urgent concerns and course it eventually to the internal operations of the company. It
can be a special setup that needs proper manning. This facility is an indicator of quality
service handling.

Attributes of a Good Travel Management Company

The commitment to deliver excellent service comes with consistency and proficiency. No
matter how simple or how complex the travel requirements are, expertise and relevant
experience are indispensable. The industry is comprised of suppliers and systems-thus, the
reputation of the travel management company matters. Reputable travel companies enjoy
preferential contracted rates, credit facilities, and internal support from tourism suppliers. A
travel management company's reputation is earned. It reflects the standards of the suppliers
that they work with. This means that they only carry legitimate suppliers that are recognized
by the industry. Very often, they are endorsed by different accrediting associations like the
International Organization for Standardization and other associations. They passed the
minimum qualifications required by the clients. These requirements can be designed
internally by companies that seek their services.

Suitable travel management solutions are expected from professional travel management
companies. Other than proper technology and operational systems, the human resources that
comprise the organization take vital roles. Some of their attributes are:
 RELIABLE - This is the history of product and service delivery that is sometimes asked
for. Lists of clients are indicative of reliability. This does mean that if you are new in the
community of travel management companies, you do not have the opportunity to serve. The
market often invites various travel management companies to bid. In the process, their
criterion can qualify new players. Any organization with a reliable and competitive crew has
the opportunity to enter and service the market. Credibility follows when reliability is
evident.

COMPETENT - This is the capability of delivering a positive experience. It involves the

use of due diligence in canvassing what supply is best to respond to the criteria of the travel
requirements. The ability to survive among travel managements companies is becoming
harder. In order for the clients to optimize their budget, the travel management company must
be able to tailor fit and give sound advice. It must also have a tariff that is equally beneficial
to their accounts.

KNOWLEDGEABLE - This is the professional support and recommendations that are

expected from a well-informed crew. The tourism industry offers an array of options that are
paired with updates, travel solutions, and current trends. All these are the banked information
of knowledgeable, well-trained, and properly informed travel councilors.

RESOURCEFUL - Generally, most tourism supplies such as air tickets, rooms, and
conference venues are with restrictions, cancellation policies, and attrition guidelines. These
policies and rulings make the product very restrictive. Travel management companies should
be able to study them intensively and offer viable alternatives. To offer workable options that
are responsive to budget is a mark of a proficient travel management company. Being
solution-oriented is an attribute that leads to patronage. The practice of due diligence is
reflective of concern and mindfulness.

BONA FIDE – This means to give the right recommendations and to consider all viable
supplies that provide a positive experience that can only be delivered by a qualified travel
management company. The organization should be able to quantify the quality control of
deliverables and must conform to the agreed upon standards.

It follows that travel management companies should also be technology oriented. An

updated system and programs can bring efficiency and will optimize the search for supplies
that are globally available. New technology can support the business appropriately.

Organizational Structure

A. Basic/Commonly Used Structure

 This organizational composition can apply for the simplest structure regardless of the size of
a travel management company.

Manager

Operations Sales Administration Secretary

Travel Counselor Account Executive

Bookkeeper Cashier Utility Personnel

Reservation &
Ticketing Liaison Officer

Figure 3. Basic/Commonly used travel management company organizational Structure

B. Organizational Variations or Modifications

This is a sample organization structure as preferred by a client in order to adapt to a company
that needs specific travel management services.

MARKET ADAPTABILITY, The New Strategy for Competitive Position

Clients often pose the question, "With all the online development, how can travel
management companies even survive the competition?" The most manageable and
controllable elements are the actual operations and manpower.
Globalization, fast-changing technologies, transparent cost, and revenue management are
realities that confront business players. The tremendous challenge imposed by these
uncertainties triggers the need for adaptability. Management can engage in periodic strategic
reviews to set a strategic set of direction and organizational restructuring as needed. Clever
market positioning, proper market niche focus, and proper manpower audit will lead to a
more versatile response to competition.
B.1. The example of the SPECIALIZED STRUCTURE (Figure 4) is an expanded response to
a wider market base that includes MICE (Meetings, Incentives, Conventions, and Events) as
desired by a specific travel management company.

B.2. The example of an ADOPTIVE STRUCTURE (Figure 5)-modified according to the

clients' requirements-presents an organization that specifically caters to outbound and
inbound, with specific market destinations as required by a client.

Departmental Functions
There are three basic areas that need to be manned in order to operate a travel management
company. These may slightly vary depending on the structure that fits the demand of the
targeted clientele.

Note: Compositions of each group can be modified, depending on the actual structure of the
organization they prefer to adopt. This can also be different depending on the size of the
travel management company.

1. THE EXECUTIVE AND MANAGEMENT

This is comprised of the top officers of the company. They are in charge of creating policies
that concern the finance and operations of the company. Vital decisions are formulated by
this group. They are considered the think- tank group.
Composition: President, Chief Executive Officer, Directors, Department Managers

2. THE FINANCE AND ADMINISTRATION

The fiscal management is in charge of operational costs. The institutional obligations on
taxes, tariffs, credit facilities, and economics of the company are handled by this department.
The primary role of this team is to control the budget and financial perspective of the
company. They are chiefly in charge of the efficient control of expenditures and money
matters of the company. Financial obligation also encompasses personnel, human resources
concerns, issues, and policies. The accounting, financial reporting, and overall financial
health of the company are dependent on this team. They are the pocket, the "bank" of the
company.
Composition: Vice President for Finance, Finance Director, Chief Accountant, Director for
Human Resources

3. THE SALES, MARKETING, AND OPERATIONS

Sales acquisition, maintenance, and servicing are the primary function of this team. They
source revenue for the company. Customer relations and competent handling of the actual
travel arrangements and service delivery are their main responsibilities. Likewise,
advertising, product distribution, and product positioning are formulated and implemented by
this group. They can be called the "farmers" of the company.
Composition: Vice President for Operations, Sales Director or Sales Manager, Marketing
Director, Reservation Manager, Travel Consultants, Web Managers, IT Managers

The tourism industry benefited from the introduction of digitalization. Fast search engines,
technical innovations, the introduction of automation, and global distribution systems
guarantee tourism sustainability. Tourism trade is composed of expansive services and
products, and their access became easier because of the digital revolution. This area is headed
by an IT manager whose biggest responsibility is to make an efficient digital presence in the
market.
The current challenges of the Digital Age in tourism trade imposed a more creative approach.
Product marketing and client acquisitions can be done through computers using digital
content. The depository of information is a fingertip away. This information can easily be
accessed by the market. It can help them validate information. Travel management companies
use various computer applications to widen their market reach. A tech-driven approach from
the start to the end avails of all necessary information for a well-researched travel plan. A
digital support system can be used during the operations too.
Digital technology is vital to tourism marketing; thus, the travel trade has also ventured into
digital content.
In fact, digital developers explored how to make their content interactive. They wanted to
give "life" to the posted sights by using computer applications that simulate them.
Currently, the COVID-19 pandemic has caused an aggressive campaign for strict health
protocols. Tourism stakeholders encourage "less contact" toward the possibility of "no
contact" in terms of reservations, check-in procedures in airlines and hotels, and entrances of
theme parks. The travel sector is fine-tuning its visibility in e-commerce. They are forced to
adhere to whatever is called "new normal." Digital presence is non-negotiable as market
acquisitions can be continued through the execution of a well-prepared digital marketing
plan. The best example for suppliers, especially for accommodations in various categories, is
the need to be accredited by an international group to carry the "Symbol of Trust." This too
can be made digitally available.

Revenue Sources
a. Commissions System. Travel management companies are considered intermediaries.
Sometimes, they are called middlemen. They can represent airlines, hotels, transportation
companies, cruise lines, and other tourism-related supplies and services. The flow of these
supplies and products requires transactional and logistical functions and even sorting them as
necessary. In transactional functions, specific tasks are necessary to contract, to promote, to
negotiate, and to evaluate risks or other unnecessary exposures. This representation entitles
them to earn through the commission system. Travel management companies can enter into
an arrangement that will let them receive additional compensation for closing sales on behalf
of the suppliers of the product. The percentage of total sales amount can be agreed upon to
identify these additional earnings. In the Philippines, since the introduction of net fares, this
system prevails on a case-to-case basis. It is no longer a standard practice to protect the
intermediaries with commission, thus creating a bigger challenge in the relationship of
representation. It is not an institutional mandate or obligation of every tourism supplier to
protect their retailers with commission-instead, they compensate them with other perks or
freebies.
b. Mark Up Mechanics. Travel management companies can be part of a selected consortium
or be a wholesaler of tourism supplies and products. They are awarded lower contracted rates
than the published rate. These are sometimes termed as "net/net" or "net of net" rates. Travel
management companies can easily design an additional fee to the net of net rates as an
additional source of revenue. This "margin" is called mark up.
C. Service Fee. Given the challenges of the minimal budget that is allocated to a certain
travel movement, the travel management company is constrained to apply an agreed upon
service fee per delivered or accomplished transaction. The actual amount can be arranged and
be put into an agreement with their clients. The amount can be dependent on the degree and
nature of the service.
d. Performance Bonus. There are corporate accounts that challenge their appointed travel
management company to help them target savings for their annual travel budget. They can
enter into an agreement to reward a certain percentage of the total savings. The amount saved
by the company on all travel-related expenses can be a result of well-discussed alternative
supplies or from diligent sourcing of provisions. (Note that is not standard; they can enter into
an agreement if it is beneficial for both parties.)