Linkages of a Travel Agency

Linkages of a Travel Agency

(a) Airlines

International Air Transport Association operates a network by which travel agencies sell airline tickets and receives Commission thus the sale of airline tickets is highly regulated and strictly controlled. The agency commission range from 5 to 11 percent but most major airlines offer additional incentives i.e. cash bonuses and over ride commission. However in some cases when a travel agency purchases air tickets in bulk the margin of commission will be high. This largely depends on relationship between the two organizations. The producer of sale of domestic airline tickets is different from country- to country and even the rate of commission also varies. Today airline ticketing and reservation is almost entirely automated.

(b) Accommodation Companies

Most hotels and other lodging companies including major Indian and international hotel chains pay commission to the travel agencies, (the rate varies from hotel to hotel) however hoteliers in dealing with travel agencies are more information and less regulated than the airline companies Interestingly many hotel and hotel chains participates in computer reservation system permitting hotel reservation to be made at the same terminal, which is used to sell airline tickets. The commission received from hotels is the second largest component of total agency revenue. But if the purchase is made in bulk than the profit is based on the negotiated prices and accordingly the profit may be higher or lower.

(c) Cruise Companies

The cruise companies are informally regulated by its Own governing body i.e. cruise lines association which must approve any travel agency that. Desires to sell booking on behalf of any member of a cruise company the raise companies also offer a complete package including sea travel accommodation food entertainment and sometime air travel also. The commission varies room

10 to 20 percent. However most cruise package tour are sold to the public through travel agencies. It was Thomas cook who brought first group of foreign tourist in India through sea rout.

(d) Insurance Companies

Today many travel companies have included travel insurance in their package tour like Thomas cooks. The company insured the travelers to protect them against accident, loss of baggage and missing flights. Successful travel agency management has to make close contact with Insurance companies to obtain insurance polices for its clients. Recently the Oriental Insurance Company has introduced two new travel policies for domestic as well foreign tourist i.e. ‘Suhana Safar’ for domestic travelers And ‘Videsh Yatra Mitra’ for foreign travelers. Incidentally the foreign policy is an upgraded version of overseas medical insurance.

(e) Banking Companies

Travel agencies offer banking facilities to the traveler like clearance of traveler cheques and arrangement of foreign currency. Only those travel agencies, which are authorized by the reserve bank of India under Foreign Exchange Regulation Act 1973, can deal with foreign currency. Banking companies give commission to travel agencies on traveler cheques and currency exchange.

(f) Educational Institutions

An agency’s success depends almost entirely on the competence of management and expertise of the staff. It develops manpower planning in such a way that will help to conduct on campus selection and match the student to the requirements of the company. The linkage between travel Companies and tourism education institutions will solve the problem of human resource requirements of present and future. Therefore a travel company needs to maintain close contact and interface with tourism Education intuitions. Many chief executives from the industry are the members of the advisory board of the intuitions.

(g) Travel Trade Associations

These associations provide a common platform to solve many problems of the members such as training, common code of conduct airlines commission to any other. There are a number of travel trade associations like TAAI, ICAO, ASTA, IATA, and PATA, WTO, that are quite active in the Promotion of travel trade at global. Essentially every travel company should be this association to avail financial and non – financial incentives and commissions from the airlines, hotels, railways etc  (h) Other Organizations

The travel agencies need to maintain close ties with many other organizations offering travel related service like cultures and entertainment organizations foreign tour companies’ regional passport office, department of tourism both at center and states sports operators transport operators food and beverage business etc. in fact these organizations play a vital role in making travel a complete product. Travel companies provide business to above cited organization and in return receive commissions. However there are few other originations that help the agency to run travel business smoothly and promote India as a tourist Destination. Technically a Travel Company cannot work in isolation but is interdependence with other travel related enterprises.