Unit 1

Travel Agency & Tour Operation Business

Introduction • Travel agency is an organized sector.• With the expansion of international trade and commerce, the

role of travel agency has become important for business and leisure tourists.

• Travel agent is a service provider in tourism distribution channel and most of the tourism intermediaries sell their products to the clients through travel agents.

• Travel for any purpose whether it is leisure, pleasure, recreation or business needs systematic planning and scheduling.

• The requirements can be made in a professional way by specialized agency.

Introduction • Travel agency manages the services from principal service

providers like hotels, motels, airlines, transporters, cruise liners, and caterers.

• With the advancement in technology people can directly collect data about destinations, facilities, services, price, mode of payment etc. However with life becoming increasingly busy, individual tourist find it difficult to make their own arrangements.

• The emergence of travel agency business has solved many fundamental problems such as unsafe, burdensome and unconfirmed travel.

Distribution channel in tourism

Principal Supplier

Travel Agent

customer

Customer General Sale Agent

Travel Agent

Customer

Tour operator

Travel agent

Customer

Defining a travel agency• 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.

• Travel agents act as intermediaries serving between the various service providers and travel consumers.

• They sell and market the products and services provided by the suppliers such as hotels, transport operators, airlines, railways, cruise operators, etc.

• They are also referred to as travel consultants or travel counselors.

• In addition to dealing with ordinary tourists most travel agencies have a separate department devoted to making travel arrangements for business travelers.

History & Evolution of Travel Agency Business• The origin of travel agency business dates back to over 250 years

ago.• The evolution of travel agency business may be traced back to the

tour operation started by Cox & Kings in the UK in 1758 • Another pioneer in the area of travel trade was Thomas Cook, who

was the first professional travel agent to operate a trip from Leicester to Loughborough in 1841.

• Thomas cook’s experiment to assist people for leisure travel in the early 1950’s may be called as beginning of modern travel agency business in the world.

• Introduction of pleasure travel, continental travel and round-the-world travel were some of the innovative package tours offered by Thomas Cook.

• Almost in the same period Henry Wells set up the American Express Company in 1850.

History continue…..• The polytechnic Touring Association in London was established

in 1888 and conducted organized tours for students.• There was a major breakthrough in travel agency business when

air ticketing was identified as an important source of revenue.• When aviation industry introduced commercial airlines to

increase the sale of tickets in 1920’s travel agencies were appointed as Passenger Sales Agents (PSA) in major cities and industrial towns.

• The business of travel agency originally depended on middle and upper class customers as they had a high willingness to pay for travel.

• There was a turning point during the Post World War II period as it created mass market for package holidays.

Travel Agency business in India• The evolution of modern travel agency and tour operation in

India is not as old as in Europe and North America.• The framework of travel agency in India was structured based on

functioning and activities of Thomas Cook, Cox & Kings and the American Express.

• It was Cox & Kings and subsequently Thomas Cook, that started packaged tours to India for British.

• In 1878, Mr. Cook brought the first group of British tourists to India by the steamship named Peninsular and Oriental.

• The group landed in Mumbai and travelled to Agra by train to see Taj Mahal.

• In 1880’s Thomas Cook set up offices in Mumbai and Kolkata, as those two British provinces were the potential outbound travel markets.

Travel Agency business in India• J. N. Katgara may be described as the first Indian to establish the travel

agency business in the name of Jeena & Company in Mumbai in 1920.• Subsequently Lee & Muirhead India Pvt. Ltd. and Jamnadas &

Company Ltd. conducted package tours.• The Indian travel agents catered to the clients of Thomas Cook and

American Express Company as ground handling agents.• The volume of travel agency business in India was very small during

post-independence period.• With the formation of Travel Agency Association of India (TAAI) in

Mumbai in 1951, the travel agency business in India got a formal shape and many new travel companies ventured into the business.

• Travel Corporation of India Ltd (TCI) was formed with the merger of Jeen & Company and other two Indian travel agencies in 1961.

• In 1963, the SITA World Travel (India) Ltd. was established by Inder Sharma.

• In 1978, Thomas Cook (India) Ltd. was established under Companies Act, 1956.

Current status in India• Currently, the Indian travel industry is in phase of

becoming mature market.• Although most package holidays are sold through

travel agents, there is growth of package tours promoted directly to consumers through telefax, travel shops and internet.

• It is estimated that there are 418 recognized travel agencies and 203 recognized transport operators, along with several hundred outlets across India in 2009.

Skill & competencies required for running a travel agency

• Competition in this business is very high, many travel agency has disappeared from travel market.

• Good administration and competitive service quality can make travel business grow.

• Travel agency focus more on improvement in service quality.• They focus on effective human resource management in order

to ensure service delivery.• The quality of service depends on skills and competencies of

personnel working in a travel agency.• Effective human resource management can optimally utilize

investments in resources.

Continue…..

• The travel agent’s important agenda is to ensure that clients are satisfied; they become goodwill ambassadors of the company, and the rate of retention of customers should be high.

• The key to ensure this is CRM system. It is a relationship marketing strategy.

• Word of mouth is a powerful marketing weapon to build the image of the company in service sector.

Continue….• Travel agency undertakes many activities out of them one is

travel advice or counselling.• To execute complex activities the staff need to be qualified,

trained and experienced.• The staff members work as consultants to clients to select their

best hotels, resorts, air carriers, as well as currency, visa, insurance and health tips.

• Specific skills are required to prepare a package tour itinerary and costing of those services.

• Beside this construction of international air fares as per the rules needs domain knowledge and skills.

• IATA offers basic and advance courses in airfare and ticketing to train professionals to work on international air fare calculation.

Continue…..• Apart from knowledge and skills of dealing with tickets,

skills of business communication are necessary to handle the business very tactfully and efficiently.

• Modern communication and technological gadgets are largely used in the travel agency business.

• Thus, executives should be familiar with the effective use of the gadgets.

• The staff members should have knowledge about the products that are ready to be offered to clients under readymade packages and the products to be offered under customized packages.

Continue……• In addition to possessing knowledge about tourism destinations

and facilities available at destinations, they should also be able to get the best possible alternative tour itinerary by using air and train schedules.

• Therefore, skills and competencies are highly essential for managing the complex functioning of the travel agency business.

• Similarly sufficient skills are also required to prepare GIT and FIT package tour itineraries.

• The travel agency can be a price leader or product leader in the travel market, but it can only be a leader with the performance of its human resource.

Types of travel agencies

• Travel agencies are classified as follows:1. Wholesale travel agent2. Retail travel agent

Wholesale travel agent• In the travel agency business, wholesalers have a vital role in

assembling diverse travel related services from various primary service providers.

• A travel wholesaler is not similar to any other wholesaler in other industry.

• Wholesale travel agent reserve accommodation, transportation and entertainment services with an advance payment and the full payment is made when guests avail the services.

• Thus purchasing wholesale services is a common concept as products are sold at a reduced price.

• Generally it is bulk items purchased by a wholesale travel agency to satisfy individual consumer.

Continue….• A wholesale travel agency works on idea that popular tourist

destinations have more potential to attract more people. • The outbound tour market leaders Cox & Kings and Raj

Tour & Travels in India are the two major wholesale travel agents in Indian travel market.

• A wholesale travel agent never works on a commission basis unlike a retail travel agents.

• They prefer bulk reservations on airlines, railways, coaches, sightseeing, cars, restaurants, hotels, resorts and entertainment.

• It helps book hotel rooms, airline seats, coaches, guides and tickets for events, which are usually difficult to get especially in the peak season.

Continue…..• Every wholesaler is aware about the trends of the market and

accordingly, reservations are made.• In some cases wholesalers have to bear loss of advance payments to

suppliers.• Therefore, wholesale travel agent takes the entire risk of blocking

rooms and incurs profits in most cases, but sometimes, bears the loss when there is heavy cancellation due to some unavoidable reasons.

• They sale holiday trips to consumers through retail travel agents or directly to consumers.

• In addition to providing regular services, they assist consumers in choosing destinations, transportation and lodging.

• They also inform tourist about issue of passport and visa requirements, rates of currency exchange, baggage allowances, and import duties.

• Wholesalers spend more on marketing to reach out to target market and take help of retail travel agent to increase the target sales.

Retail travel agents• Despite the simplification of online booking and payment procedures,

the role of retail agents is given much more importance today.• All principal suppliers get their products promoted and sold through

retail travel agents.• Both the retail travel agent and independent supplier have trade

contracts and understanding on the basis of commissions and amount of sale

• There is a usual rate of commission prevalent in the travel agency market.

• Commission is paid at the end of the season, month or year and the travel agent and suppliers are given complete freedom to decide on the commission rate.

Continue…..• The retail travel agency acts as a retailer in both big and small

cities.• It sells travel products directly to public by being an accredited

agent of primary supplier of products or services.• The rate of commission is usually decided as per industry practice

but in certain cases, travel agents demand higher commissions or incentives other then usual commission when bumper sales are achieved.

• Thomas Cook (India) Ltd. has recently launched the gold circle franchisee outlets to provide entire range of products across India through a unique franchisee program for retail travel agents in India.

Attributes of a Retail Travel Agency

• Preparation of quotation• Reservation, cancellation and delivery• Acceptance of payment• Travel arrangements• Commission and incentives

Characteristics of Travel Agency• It works as a link between principal supplier and tourist.• It works as a retailer and sells package tours on behalf of the

wholesaler.• It is an intermediary between outbound tour operator and

tourists• It follows a predetermined tour itinerary prepared by a

wholesaler• It negotiates terms and conditions for commission with

principal suppliers• It creates departments for effective functioning and

monitoring of operations• It schedules vehicles along with drivers for pick ups and

transfers• It formulates its business strategy to increase its market share

Tour Operator• A person or company that provides package holidays• A tour operator typically combines tour and travel

components to create a holiday. They prepare itinerary • A tour operator buys individual travel components

separately from different suppliers and assembles them into package tours by adding certain value and selling them with their own price tags to public directly or through the middleman.

• Tour operators are largely responsible for making timely delivery of services and providing the services as per the contract.

• Tour operators enter into long-term contract with air carriers, hotels, cruise liners and other suppliers for the provision of bulk travel services.

• Travel services are then assembled into a package tour featuring round trip transportation, accommodations, tours of local sites, entrance fees and cultural programmes.

• Any entity including hotels and tourist accommodations that offer tour packages and services such as transfer, lodging, meals and guided tours are called as tour operator.

• Tour operators can provide the service independently if they have their own cars and coaches, hotels and other travel related services or these services can be arranged through other suppliers in the distribution channels.

• A tour operator may have standardized or tailor-made packages to suit the clients.

Types of tours• Tour operator designs packages for meeting the demand of

independent and group tours.• Tours are conducted in different names and the components

of services and arrangement of ground services vary from one type of tour to another.

• The classification is made on the basis of operation and type of services that tourists want during the course of tours.

• Chand (2000) has classified package tours into four categories:

1. Independent tour2. Escorted tour3. Hosted tour4. Incentive tour

Independent tour

• A package tour is designed for independent tourists whose needs and priorities are different in terms of selecting destinations, accommodation and transportation.

• It gives enough freedom to travel.• The service element of independent tour comprise domestic air

tickets, hotel rooms, processing of travel formalities, arrival and departure transfer and sightseeing.

• Other services include adventure sports, cultural events, and health related activities

• The cost of tour is relatively high as it includes most of the customized services.

• Though an independent tour is operated as per the tour itinerary, it may be modified as per the convenience of the guest.

• All the leading tours operators try to bring innovation to improve quality of tours as demographic profile of urban population in tier-I and tier-II cities is changing.

Escorted tour• An escorted tour is conducted for a group as well as for independent

travel.• The need of the tour is provide timely assistance and guidance to group

members as they are unfamiliar with the culture and environment of the host destinations.

• This type of tours helps the group members in visiting the place safely.• The fundamental problem of package tour is understanding the host

language that has to be translated and interpreted in a very good manner.• Thus an escorted tour is accompanied by qualified, well-informed,

trained, experienced and professional tour managers or guides.• In most cases an escort-cum-language interpreter accompanies the

guests from the first to the last leg of the tour.• An important type of escorted tour is the affinity group package that

comprises member of a community club to travel together as they are known to each other. It offers the club members an opportunity to socialize.

Hosted tour• A hosted tour is conducted at the destination region.• The tour is called host because the local operator acts as the host to

guests.• It truly fosters the host-guest relationship• A hosted tour can be defined as a form of tour which is handled by the

ground operators, authorized representatives of wholesale tour operators.• In this tour both independent and group tourists are given a rousing

welcome at air ports or railway stations.• The host of the tour ensures that the arrival and transfer of guests is

made easy and comfortable.• As per the tour itinerary, there are ground operators at respective places

to greet the tourists upon arrival.

Example of Hosted tour• The german clients of Cox & Kings are received at Indira

Gandhi International Airport, New Delhi.• Guests are transferred to hotel and a city sightseeing tour is

also conducted for them. • The local ground operator is instructed to make ground

arrangements much before the arrival of the group.• Thus, it is the duty of the local tour operator to offer a warm

welcome to the guests.• A lot of personal care and attention is given in the tour as the

reputation and credibility of the principal tour operator depends on the hospitality extended to guests.

Incentivized tour• A package tour that is totally sponsored by business firms or

organizations is conducted for employees• The tour is an incentive for employees to enhance their performance.• It also includes all components of a standard package tour.• This concept is as old as industrial revolution.• They are motivational tours, which are fully sponsored by the

employer as a reward.• Formerly they were terms as paid holiday in seventeenth and

eighteenth century• Such tours are very common in public sector and medium and large

scale private firms.• Tour packagers like Carlson Wagonlit, SOTC etc design exclusive

incentive tours for large companies.• Conducting an incentivized tour requires proficiency and

experience. Therefore, all the tour operators can not conduct incentive tours.

Difference between tour operator and travel agent

• A tour operator is a person, firm or organization qualified to provide tours, cruises, transportation, accommodation, meals, transfer, sightseeing to public. A tour operator is treated as a wholesaler.

• A travel agent is a retailer, is a person, firm or organization which helps people book airline reservations, hotel reservations, car rentals, cruises, and tours (operated by the wholesaler).

Difference continue…..• A tour operator is a wholesaler who is responsible for manufacturing

a tour package.• The tour operator deals directly with tourists and foreign travel agent.• The itinerary is prepared by an experienced executive.• The tour operator provides a transfer from the airport to hotels at the

time of arrival and departure from the destination.• As a wholesaler a tour operator has full ownership of the package

tour and it design new package tours and add new attractive feature or appealing incentives on the existing tour packages to sustain demand.

• As a tour operator relies on overseas clients, it is essential for it to become a member of various international association such as Universal Federation of Travel Agent Association (UFTAA), the American Society of Travel Agents (ASTA) and Pacific Asia Travel Association (PATA).

Difference continue……• Travel agents work for the tour operators.• The scope is limited as compared to tour operator for ex. a travel agent

can only function as an intermediary between tour operator and tourist to market tour packages.

• A travel agent follows the itinerary prepared by tour operator and he can not change it.

• A tour operator appoints travel agent to handle ground services such as sightseeing, tours, airport arrival and departure.

• The travel agency depends on tour operator for business.• Travel agency prefers to become a member of national and regional

organization with a primary objective to establish new contract with tour operator and other service providers.

• For ex. Travel agents are members of Indian Association of Tour Operation (IATO)

• Finally the travel agents follow the ideas and values created by tour operator

Types of Tour Operators

• Tour operators are classified on the bases of nature of tour business and area of operation of package tours.

Tour Operators

Domestic tour operator

Inbound operator

Outbound operator

Ground Operator

Inbound tour operator• Inbound tour operators are those which handle tourists in the

host country.• They provide services to overseas or foreign clients• An inbound tour operator design the tours package after

obtaining special commission from the principal service provider.

• For ex. Indo Asia Tours & Travels located in New Delhi is an inbound tour operator which design tour packages and promotes these inbound tour packages through the foreign travel agents.

• The tour is operated through the ground operators.

Outbound tour operator

• They promote inclusive package tours for foreign destinations.

• Outbound package tours are meant for clients who prefer to visit overseas destinations for the purpose of business, leisure and VFRs.

• Retail travel agents sells the outbound packages on commission basis.

Domestic tour operators• They specializes in the promotion of package tours for target customer.• Like inbound and outbound package tours, domestic tours are designed

as readymade and tailor made packages.• Both independent and group package tours are prepared and promoted.• The target customers are domestic tourists who directly or through retail

travel agents, purchase tour packages.• Furthermore, domestic tour operators organize package holidays for

national of their own country and offer the inclusive weekend, fortnight tours or long tours across the country.

• They also appoint the ground handling agents at each stopover point as per the tour itinerary.

• For ex. Southern Travel situated in New Delhi is the leader in the domestic package tour business and the company has received the award of ‘best domestic tour operator’ from the MoT, GOI, consecutively for three years between 2006-07, 2007-08 and 2008-09.

• The company offers a wide range of tour packages and it is a major competitor to domestic tour packages promoted by IRCTC.

Ground operators• Ground operator are those who take complete responsibilities

of providing all ground services like car and coaches, guides and porters upon the arrivals of inbound and domestic tourists at the airport or railway station.

• It is necessary for a principal tour operator to assess the capability of handling agents.

• For ex. Travel Link Pvt. Ltd. located in temple city Bhubaneshwar has been in ground handling business for last three decades.

• The agency provides luxury cars and coaches, guides and interpreter services.

Specialist tour operators• Specialist tour operators offers soft and hard adventure tours, wildlife tours,

eco-tours, ethnic tours, farm tours, village tours etc.• They conduct wildlife and ecotourism package tours for groups and

individuals.• Special tours meet the specific need of tourists interested in natural and

scenic beauty. • The cost of such tour is relatively high compared to conventional packages.• Eventually specialist tour operators are called personalized or customized

tour operators.• For ex. Orbit tours & travels in Chennai, is a specialist in the trade of fair

packages, Shikhar Tours & Travel in Delhi has specialized in adventure tours in the state of Uk and Himachal Pradesh, similarly Discover Tours in Bhubaneshwar are providing ethnic tours to Odisha.

Diversified role of a Tour Operator

• The role of tour operator in promotion of tourism in India is very crucial.

• Tour operators make efforts to showcase a wide array of destinations through package tours.

• Tour operators signs contracts with principal supplier for procuring services in bulk on yearly basis.

• They deal directly with tourist as a principal agent • The tour operator has liberty to amend the tour itinerary and program if

the situation warrants it.• No ground handling agent are allowed to alter the component of service

unless and until they are directed to do so by tour operators.• Tour operators set up a research and development wing to chart out

delightful and value added tour itineraries.• They reserve hotel rooms in big cities but in small cities they appoint

ground handling agents to book hotel rooms on their behalf.• Apart from usual function of a tour operator, they have the role of

promoting destinations with other tour organization.

Role continue…..• Tour operators designs the tours in such a way that handling

agents may not get demand for extra excursion tours directly from tourists.

• It means they ensure that all important places and activities are covered in the tour itinerary.

• It accepts foreign currency for the tour package and gets accreditation from RBI as a money exchange dealer.

• It becomes member of national and international tourism, travel, hospitality and aviation associations.

• It is responsible for increasing popularity of a destination and exploring new ideas and attractions in the package in order to defend the quality of tour programs and offend the competitors.

Linkages of the tour operation business

Principal Service Provider Tour Operator Retail Travel Agents

Leisure, Holiday, Business and

corporate packages

Bulk purchase of services from

principal service providers

Tourist (FIT & GIT)

Accommodation,Transportation,

Entertainment and event services

Sell through tour operator and travel

agents

Accredited agent to retail the package and hotel room, air line tickets, cruise

and events in small cities

Report the sales and claim for commission to tour operator and

principal service providers

Segments of tourism sector

• Airlines: It is the major stakeholder in tour operation business network. Tour operators maintain a continuous relation with airline companies for the bulk reservation of seats. Airlines as a part of their sales promotion work with tour operators for the mega sale of airline seats. Both airline and tour operator promote each other. Airline companies prefer to receive the full fare from tour operator and remit commission.

Segments continue….

• Railways: Tour operators also work with the railway companies for booking seats and other amenities. Tour operators prefer signing contracts with railway companies for the reservation of coaches. For ex. The Indrail pass, Eurail Pass, AMTRAK etc are issued. Railway companies offer discounts because big chunks of seats are sold to the tour operators.

Segments continue…..• Car rental: Car rental companies maintain a wide range

of luxury cars customized for sightseeing and excursion tours. They are known as primary service providers. The service quality depends on maintenance and safety measure in vehicles and moreover, tour operators hire transportation service from car rental companies for departure and transfer, sightseeing and excursion tours.

• An annual contract and fixed rate are the industry practice and sometimes, a fixed commission too is preferred.

• Practice of payment and commission differ from one operator to another.

Segments continue…..• Coach companies: Coach companies works as primary

service provider in tour operation business. Tour operators negotiate with the coach companies to obtain competitive rates. Professional transport operators prepare quotations for transfer, sightseeing and excursion trips. The coach is designed for group tours and latest gadgets are available to make travel comfortable and enjoyable.

• It is necessary to maintain punctuality, safety, flexibility and adaptability to maintain service quality in tour operation.

• For ex. Rathimeen Travels provides luxury volvo coaches to the tour operators in Chennai, Bengaluru, Coimbatore, and Kochi.

Segments continue…..

• Cruise Liners: Cruise lines use tour operators as an important means of bulk sales of cruise packages. Cruise companies appoint tour operator for the sale of cruise package and provide commission and other incentives. Retail travel agents can also sell cruise packages as GSA in small cities.

Segments continue….• Accommodation operators: Expenditure on hotel

rooms, and food & beverages accounts for one-third of the tourist expenditure. Tour operators work with accommodation operators for the bulk sale of rooms. Hotels provides standard and special commission, complementary rooms for group leaders, and company executives during fam tours. In case of a group tour it is compulsory that cost of hotel rooms and food services are included. Hotels add lot of value to package by including services like room, food, cocktail, cultural event and duty-free shopping.

Segments continue….

• Event Planners: Tour operators also deals with event management companies for the purpose of booking venues, food, conference kits, and post and pre-conference sightseeing programs. Event management companies appoint tour wholesalers to promote their event packages.

Segments continue….

• Insurance Providers: Tour operators also collaborate with the insurance companies to obtain insurance services for package tours. Tour packages are insured for compensation to the tour operators or guests in the event of cancellation. The expenditure on travel insurance is sometimes included in the tour price as it is an important element of tour package. Moreover tour operators also get commission from insurance companies.

Segments continue….

• Ground handling agency: Ground handling operators, in arrangement with the tour operators, arrange services of luxury cars, coaches, guides and languages interpreters, entrance fees, and reception on arrivals. Tour operators offload the tourists to ground operators located at the major tourist centers.

Segments continue….

• Miscellaneous services: Tour operator maintain a rapport with the passport office, foreign consulate office and Ministry of home affairs for seeking permission to conduct tours in restricted areas. For promotion of tourism central and state tourism departments associate with tour operators for road shows, press conference etc.

Approval of Travel Agency by Ministry of Tourism, GOI

• The aims and objectives of the scheme for recognition of Travel Agent are to encourage quality standard and service in this category so as to promote tourism in India.

• This is a voluntary scheme open to all bonafide travel agencies to bring them in organized sector.

• A Travel Agent is one who makes arrangements of tickets for travel by air, rail, ship, passport, visa, etc. It may also arrange accommodation, tours, entertainment and other tourism related services.

Continue….• The application for approval shall be addressed to the

Assistant Director General, Travel Trade Division, Ministry of Tourism, Government of India, Room No. 23, C – 1 Hutments, Dalhousie Road, New Delhi – 110 011, Tel No. 011 2301 2805, Fax No. 011 2301 9476

• The recognition as an approved Travel Agent shall be granted by the Ministry of Tourism, Government of India, New Delhi initially, for five years, based on the Inspection Report / Recommendations of a Committee comprising of concerned Regional Director and a member of TAAI.

Continue….

• The application for renewal/extension shall be addressed to the Regional Director of the concerned region as per the following addresses:-

• a) The Regional Director (East), India Tourism, “Embassy”, 4, Shakespeare Sarani, Kolkata – 700 071, West Bengal. Phone No. (033) 2282 5813 /2282 1475, Fax: (033) 2282 3521

• b) The Regional Director (West), India Tourism, 123, M. Karve Road, Opp. Church Gate, Mumbai – 400 020, Maharashtra. Phone No. (022) 2208 3263 / 2207 4333 / 2207 4334, Fax: (022) 2201 4496

• c) The Regional Director (North), India Tourism, 88 – Janpath, New Delhi 110 001. Phone No. (011) 23320342 / 2332 0005 / 2332 0008, Fax: (011) 2332 0109

• d) The Regional Director (South), India Tourism, 154, Anna Salai, Chennai – 600 002, Tamil Nadu. Phone No. (044) 2846 0285 / 28461459, Fax: (044) 2846 0193

• e) The Regional Director (North – East), India Tourism, Asom Paryatan Bhawan, 3rd Floor, Near Nepali Mandir, A. K. Azad Road, Paltan Bazar, Guwahati – 781 008, Assam. Phone No. (0361) 273 7554, Fax No. (0361) 273 7553

Continue….• The renewal / extension, thereafter, shall be granted for

five years after Inspection conducted by a Committee comprising of concerned Regional Director and a member of TAAI, on an application made by the Travel Agent along with the requisite fee / documents.

• The documents received from applicants after scrutiny in all respects will be acknowledged by the Travel Trade Division in respect of first approval and by the concerned Regional Director for renewal.

• The inspection for first approval / renewal shall be conducted by the Inspection Team within a period of sixty working days from the receipt of complete application.

Condition to be fulfilled by TA for grant of recognition by MOT, GOI

• The application for grant of recognition / renewal or extension shall be in the prescribed form and submitted in duplicate along with the required documents.

• TA should have a minimum Paid up Capital (Capital employed) of Rs. 3.00 lakh for rest of India and Rs. 50, 000/- for the agencies located in the North – Eastern region, remote and rural areas duly supported by the latest audited Balance Sheet / firm’s Statutory Auditor’s certificate.

Conditions continue…..• TA 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.

• TA should have been in operation for a minimum period of one year before the date of application.

• The minimum office space should be at least 150 sq. ft for rest of India and 100 sq. ft for hilly areas which are above 1000 meters from sea level.

• Besides, the office may be located in a neat and clean surrounding and equipped with telephone, fax and computer reservation system etc.

• There should be sufficient space for reception and easy access to toilet facilities.

Conditions continue..• TA should be under the charge of the Owner or a full time

member who is adequately trained, experienced in matters regarding ticketing, itineraries, transport, accommodation facilities, currency, customs regulations and tourism and travel related services.

• Besides this, greater emphasis may be given to effective communication skills, knowledge of foreign languages, other than English.

• There should be a minimum of four qualified staff out of which at least one should have Diploma / Degree in Tourism & Travel Management from a recognized University, IITTM or an institution approved by AICTE.

• The owner of the firm would be included as one of the qualified employees.

Conditions continue…..• The academic qualifications may be relaxed in case of the

other two staff members who are exceptionally experienced personnel in Airlines, Shipping, Transport and PR agencies, Hotel and other Corporate Bodies and also those who have two years experience with MOT approved Travel Agencies.

• For the Travel Agents / Agencies located in the North – Eastern region, remote and rural areas, there should be a minimum of two staff out of which one should be a qualified employee with a Diploma / Degree in Tourism & Travel Management from a recognized University, IITTM or an institution approved by AICTE. The owner of the firm would be included as one of the qualified employees.

Continue…….• TA should be an income-tax assessee and should have

filed Income Tax Return for the current assessment year.• For outsourcing any of the services relating to tourists, the

TA(s) shall use approved specialized agencies in the specific field of activity.

• TA would be required to pay a non-refundable fee of Rs.3, 000/- while applying for the recognition and renewal of Head Office as well as each Branch Office. The fee would be payable to the Pay and Accounts Officer, Ministry of Tourism, in the form of a Bank Draft.

Continue…..

• The TA should adhere to the tenets of the Code of Conduct for “Safe & Honourable Tourism” for which the following action would have to be taken:

• A signed copy of the pledge of commitment towards “Safe & Honourable Tourism” should be attached with the application.

• On the day a staff member joins the TA, he / she would be required to take / sign the pledge. The pledge would be incorporated in the appointment letter / joining report of the staff.

• The training would be provided to the staff of the approved TA by MOT under its Capacity Building of service Providers (CBSP) scheme in connection with “Safe & Honourable Tourism”.

Continue….• Two focal points would be nominated at the time of applying

for approval by the TA in the case of organizations which have more than 25 personnel. In the case of TA with less than 25 personnel, one focal point would have to be nominated.

• The focal points of the TA would be trained first within first six months of MOT approval. Subsequently, the trained focal points in turn would impart further in – house training to the staff which would be arranged within next six months.

• The Pledge of Commitment towards “Safe & Honourable Tourism”would have to be displayed by the TA prominently in the front office area / lobby of the TA.

Continue…..• TA would have to report action taken by them in their

Annual Report which shall be kept with them & shown to the Committee(s) at the time of renewal.

• It shall be mandatory for an approved TA to prominently display the Certificate of approval of recognition / renewal or extension given by MOT in the office by pasting it on a board or in a picture frame so that it is visible to a potential tourist.

• The TA so granted recognition / renewal or extension 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 by the MOT, GOI.

Approval to TA by IATA• Travel/tour companies need to obtained approval and recognition

from IATA, authorizing them to serve as sales agents and allowing them to right tickets and collect commission from the air transport enterprise

• Once the travel companies or tour companies get the approval they get IATA applicant status for six months. During these periods the performance of company is consistently monitored and the company has to submit its monthly productivity report to an agency investigation panel (AIP).

• An approval from IATA entitles the travel company or tour company to use IATA logo or all its communication and to avail all benefits which a fulltime IATA member gets.

Benefits of IATA approval

1.Travel companies can sale and purchase airlines tickets (domestic and International).

2. Companies get the privilege of holding international airline ticket staff stacks from IATA members.

3. Training facilities for agency staff.4. Travel companies are entitled to use IATA logo.5. It helps in marketing of products.6. IATA helps an agency y to establish its credibility

and integrity in the tourism field.

Rules and conditions for IATA approval

• All application for recognition shall be addressed, to the director, agency investigation panel IATA India, New Delhi.

• The application form of approval shall be in the prescribed form • The company has to be in the business from last one year • The company must have at least two staff members qualify from IATA approved institutions • Sound financial credibility.• The location of agency must be freely accessible and clearly identified to the tourists • Security for the control of airlines ticket stock• Ability to generate business • The company must attach and audited annual report with the application form. • Agency must attach the statement of international sale with the application form.• The decision of the IATA in the matter of recognizable shall be final. The association may in

the direction of its committee, refuse to recognize the company without assigning any reasons.

• The association reserves the rights to be dropped at anytime the recognition already dotted without assigning any reasons

• Have maintained ethical standards of tourism business. • The recognition granted by the IATA shall not automatically entitle the travel agency to be

approved by any other organization.

Approval by MOT to Inbound Tour Operator • An ITO is the one who makes arrangements for

transport, accommodation, sight seeing, entertainment and other tourism related services for foreign tourists.

• The application for approval shall be addressed to the Assistant Director General, Travel Trade Division, Ministry of Tourism, Government of India, Room No. 23, C – 1 Hutments, Dalhousie Road, New Delhi – 110 011

• The application for renewal / extension shall be addressed to the RD of the concerned region which are applicable for Travel Agency business.

Rules & regulations• The recognition as an approved ITO shall be granted by

the Ministry of Tourism (MOT), Government of India (GOI), New Delhi initially, for five years, based on the Inspection Report / Recommendations of a Committee comprising the concerned Regional Director (RD) and a member of Indian Association of Tour Operators (IATO).

• The renewal / extension, thereafter, shall be granted for five years after inspection conducted by a Committee comprising of concerned RD and a member of IATO, on an application made by ITO along with the requisite fee /documents.

Condition to be fulfilled by ITO for grant of recognition by MOT, GOI

• The application for grant of recognition / renewal or extension shall be in the prescribed form and submitted in duplicate along with the required documents.

• ITO located in rest of India should have a minimum Paid up Capital (or Capital employed) of Rs.3.00 lakh and Rs. 50,000/- in the case of North – Eastern region, remote and rural areas, duly supported by the latest Audited Balance Sheet / certificate of the Statutory Auditor of the firm

• The turn-over in terms of foreign exchange earnings by the firm from inbound tour operations only during the preceding financial year or calendar year should be a minimum of Rs. 25.00 lakh for rest of India and Rs. 5.00 lakh for the North – Eastern region, remote and rural areas duly supported by firm’s Statutory Auditor’s certificate.

• All the conditions that are bound for a Travel Agency are bound for ITO also.

Approval to Adventure Tour Operator by MOT, GOI

• However, all the conditions related to ITO are applicable to adventure tour operator, following are additional conditions for them:

• The Agency must clearly indicate its specialization of activities or activity it wishes to pursue as business like trekking, water sports, aero sports, scuba diving, Safaris etc.

• The operator must have his own Adventure equipment as well as specialized trained staff.

• The field staff members of the party must be qualified for the activity or must have minimum of five years of practical experience. The staff member must obtain an Adventure certificate from the specialized organizations like IMF (for Mountaineering/trekking) & NIWS Goa (for Water Sports/Aero sports, etc.).

Conditions continue….

• Field members of the company must be qualified in First - Aid by Red Cross or equivalent body or Certificate Course conducted by the Adventure Tour Operators Association of India.

• The party must sign an undertaking for adherence to sustainable ecological practice and protection of environment

• It would be recommended to distribute a copy of the Eco - Tourism guidelines to each client.

• The party must have printed brochure or website clearly describing its i) present activities (ii) Its area of operation (iii) its commitment to follow Eco - Tourism guidelines.

• The firm should clearly indicate the area of specialization in all their promotional and display material

Condition continue…

• Although a large number of activities come under Adventure Tourism, MOT has decided to grant recognition primarily to the following four categories of ATO (s) at this point of time:-

I. Operators dealing with water sports. II. Operators dealing with aero-sports. III. Operators dealing with safaris of various types. IV. Operators dealing with mountaineering and

trekking

Approval Domestic Tour Operator by MOT, GOI

• A DTO is the one who makes arrangements for transport, accommodation, sightseeing, entertainment and other tourism related services for domestic tourists.

• All the condition applicable to a TA are applicable to DTO except following:

• The turn-over of the firm from domestic tour operation business only should be a minimum of Rs. 20.00 lakh duly supported by firm’s Statutory Auditor’s certificate

Guidelines for approved Tourist Transport Operator (TTO)

• A TTO is the one, who provides tourist transport like cars, coaches, boats etc., to tourists, travel agents and other service providers for transfers, sight seeing and journeys to tourist places etc.

• All the rules applicable to a travel agency or tour operation business are applicable to TTO except following:

• The applicant should have been in the tourist transport operation business for a minimum period of one year at the time of application.

• TTO has operated in the above period a minimum number of six tourist vehicles with proper tourist permits issued by the concerned State Transport Authority (STA) / Road Transport Authority (RTA) for commercial tourist vehicles.

• Out of these six tourist vehicles, at least four must be cars.• The turn-over of the firm from Tourist Transport operations only should

be a minimum of Rs. 25.00 lakh for rest of India and Rs. 10.00 lakh for the North – Eastern region

Guidelines continue….

• For Ex-Defence personnel, the condition of being in the business of tourist transport vehicles for one year is relaxable to six months and having six vehicles is relaxable to four tourist vehicles provided the candidate is sponsored by the Director General of Resettlement, Ministry of Defence, New Delhi.

Approval to Travel Agency by Indian Railway• Mandates for Registration • Registration as an agent in IRCTC is issued for booking of E- Tickets

only (except RTSA agents, who are authorized by Railways). • Agents are required to give the correct address, Mobile No mail id &

PAN No. in the registration form. • Change of address should be intimated to IRCTC immediately along

with the original certificate issued by IRCTC, in order to issue a fresh certificate.

• Agents should verify the ids provided to them and also the authorization certificate issued by IRCTC. If by mistake, id of another agent is issued to them they should immediately inform their agent group

• Agents should keep a sign board outside their agency in which IRCTC’s logo can be displayed. IRCTC’s logo (Soft copy) will be sent by e-mail on request by the Agent. Sign Board should include: display of rules & regulations, IRCTC service charges, agent services charges etc.

• Certificate of Authorization issued by IRCTC should be prominently displayed at the agency.

Continue….• Mandates for Booking/ Cancellation of Tickets • Tickets should be booked only when the customer approaches

• It is mandatory for all agents to take the written requests and a

copy of the ID proof from the customers for both booking & cancellation of the tickets. These requests are to be preserved for a period of six months.

• Mobile number of the customer or one of the passenger(s) while booking the ticket is mandatory. Mobile number of the passenger(s) must be indicated on ERS.

• The ERS issued by all the agents should be strictly in the format prescribed by IRCTC. ERS issued by the agent should contain name and full address contact details of the same agent

Continue….

• Agents must issue receipt on their own stationary for the amount collected from the customers.

• The receipt should contain details like Railway Fare, IRCTC’s service charges, agents service charges etc. (The service Tax as applicable on the agents service charges should be shown separately in the receipt).

• Service charges of Agent includes booking as well as cancellation transactions.

Mandates for Filing Refund

• It is mandatory for the agents to obtain a written request from the customers before TDR cases are filed with the Railways.

• Agent must refund the money as per cancellation rules to the customer immediately in all cases.

• Whenever the cancellation ticket which is credited back in the agent’s account used for ticket booking could not be refunded to the customer due to various reasons, the money must be returned to IRCTC.

• Agent to send regular reminder to tdrprocess@irctc.co.in for checking the TDR refund status.

Don’ts for Travel Agents• Agents or the Organization should register their Outlets /

Branches only if minimum basic Infrastructure already exists. The Agency should have its own office with valid license for online ticket reservation and efficient staff to handle the booking / delivery of e- tickets as and when required.

• No advertisement in any form whether in print or press media is to be issued without prior permission from IRCTC in writing.

• Agents should not book tickets using any other wrong ID except only through IRCTC provided agent ids. Agents if found to be using wrong id, then their ids will be deactivated immediately as well as legal action will be taken against them.

Continue…..• Transfer & re-sale of Tickets is punishable under Indian Railway

Rules under Sec.142. • Popularizing the organizations name as authorized Railway

Agents is strictly prohibited. The agents are “IRCTC authorized E- Ticketing agents”.

• IRCTC’s logo should not be used in Visiting Cards, Letterheads, and Pamphlets or in any other forms unless approved by IRCTC.

• Use of back or refresh option while booking tickets and Login page should not be kept idle for a long time

• Cancellation of the tickets without the knowledge and request of the customer is prohibited.