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Retail Travel Environment

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INTRODUCTION
In this assignment, I have been asked to produce a report describing the retail travel environment in Travel and Tourism. This must include the roles of the different types of retail agents; the products and services that they are selling; the links that exist within the retail travel environment; and the different types of relationship that exist within the retail industry.

ROLES OF TRAVEL AGENTS
The main function of travel agents is to make the life of holidaymakers easier, relaxing and convenient.

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They can do this by providing outstanding customer service that would exceed the expectations of the customers. They must be able to match needs of the clients to the products and services that are on offer. It is their responsibility to provide information about the activities and events at the chosen destination of the holidaymakers and offer them advance booking services. Another responsibility of travel agents is to give important pieces of advice to the clients before the holiday such as: weather, vaccination and offer passport and visa services.

DIFFERENT TYPES OF RETAIL AGENCIES
Independent
This is the type of travel agents that has only one business firm. For this reason, it is not part of a chain and is usually owned and managed by a single proprietor. The products and services that this type of travel agent is said to be “unbiased” because it doesn’t have to just sell its own goods which means customers have a wide range of selection of merchandise. Some examples are: Nicoll World Travel and Dorchester Travel.

Multiples
Unlike independent travel agents, multiple travel agents (also known as mass-market) are part of a national or even international chain. These travel agents can be seen in every high street throughout the United Kingdom. Thomas Cook and Thomson are two of the most popular multiple travel agents and they rely on having large number of customers which are convinced through different forms of advertisements such as: television, newspapers and magazines.

E-agents
These are retail travel agencies who offer exclusively online bookings. With the use of the internet, it is becoming increasingly popular to holidaymakers most especially to those who experienced tailor-made holidays. They normally have a helpline telephone number, but do not have office available for the customers to walk in. Examples of e-agents are: Expedia, Last Minute and Travelocity.

Home Workers
Because of the technology innovations, travel agents no longer need to have an office for the public to walk in. Home workers travel agents are home-based employees working in an agency who sell holidays and other travel products. They usually have previous experience in holiday-selling. In addition, most of them have other commitments as well as obligations that are they require flexibility and working at their own time. Well-known home workers are: Travel Counsellors, Future Travel and United Co-op Travel Group.

Call Centres
Call centres are becoming increasingly popular by tour operators, travel companies, tourist boards, airline companies and hotel groups because their operations can be centred in one location which means the costs for daily procedures are reduced. They provide a better service to the public by offering more consistent levels of customer service. Multiple travel agencies such as: Thomas Cook and Thomson do this type of activity.

Holiday Hypermarkets
Holiday hypermarkets are large-scale travel agencies offering customers a wide range of holidays and travel products in a single, convenient, themed setting. A great example is the Trafford Centre in Manchester, Blue Water in Kent which is operated by First Choice.

Miniples
These are the type of travel agencies that have a small number of branches, often in a particular region of a county. A good thing about these companies is that they can offer the personal touch by being able to give independent advice on holiday choices. Having a small chain allows them to bargain more complimentary terms with principals such as: accommodation providers, transportation providers and many more. Some examples are: Bath Travel and Hayes.

Consortia
These are organisation or a combination, as of businesses, financial institutions, or investors, for the purpose of engaging in a joint venture. These are often groups of independent agents that come together to increase their authority and buying power and to compete with the big multiple agencies. Independent travel agents get to keep their own identities whilst they are a member of an organisation. Some examples are: World Choice, Travel Trust Association, Freedom Travel Group and World Travel Group.

PRODUCTS & SERVICES
These are goods that retail travel agents sell to holidaymakers. Below are some of the examples of products and services.

Traditional Package Holiday
It is a tour arranged by tour operators and sold by travel agents. This must consist of accommodation, transport and any other elements including: transfer, excursion, car hire or equipment hire all at one price.

Accommodation
It is classified into two categories: service and non-serviced. Serviced accommodation refers to a place of temporary residence which involves cooking, laundry and ironing and food shopping while non-serviced accommodation provides furnished on a rental basis but does not include provision of meals, bars and shops on the price. There are many types of accommodation in United Kingdom and some of them are: luxury hotels, holiday
parks, youth hostels and many more.

Transportation
There are several modes of transportation including: air (airplane), sea (ferry, ship), rail network, land (coach, bus, taxi) and even self-drive. Most tour operators sell tickets on theses transportations for a cheaper price because they are buying them in bulk.

Other Services:
Package holiday may include any of the following: transfers, services of a rep, car hire, equipment hire and excursions.

Tailor-made and Dynamic Holidays
These holidays are also known as ‘unpackaged holidays’. Because of the aid of the internet, holidaymakers have the freedom to book their own accommodation, flight, transfer and car hire that would suit their specific needs. Because of tailor-made holidays sales of tradition package holiday is greatly affected and travel agents are responding to this by selling more tailor-made experience holidays rather than selling them as package holidays. A good thing about this holiday is that, they are flexible and more customised as they are chosen by the customers themselves. On the other hand, these holidays are usually more expensive than package holidays which could be a disadvantage.

Ancillary Services
These are the ‘add-ons’ that would make the holiday of clients more enjoyable and convenient. These could come as any of the following: travel insurance, travellers’ cheques, foreign currency, pre-booked airline sears, airport car parking, passport and visa services and car hire. Every member of staff in a travel agent is encourage to sell at least two or three of the products/services listed above as they get commission on top of their monthly wages.

Scheduled Flights
As the term suggests, scheduled flights run to a particular destination at specific time. These include food, refreshments and toiletries such as toothpaste and toothbrush during the flight. Airlines will always sell seats to tour operators in exchange of commission. Some well-known airlines are: Singapore Airways, Cathay Pacific, Thai, KLM, Etihad, Virgin Atlantic and British Airways.

Charter Flights
In scheduled, flights are organised by the airline vut in a charter airline, flights are arranged by the tour operators so that the customers will pay cheaper to their holiday. This type of flight runs to a particular season and the price may vary. Thomson is probably one of the biggest airlines that operate charter flights in United Kingdom.

Low Cost or No Frills Flights
This type of airline is great for people who have low budget. The good examples of this are: EasyJet, Flybe, Ryanair and Bmibaby. Generally, Budget flights or Low Cost flights offer lower fares and fewer services and facilities. Food and refreshments aren’t included in the package; you are the ones responsible for your own amenities. These types of flights are not sold through travel agents.

Accommodation
It is classified into two categories: service and non-serviced. Serviced accommodation refers to a place of temporary residence which involves cooking, laundry and ironing and food shopping while non-serviced accommodation provides furnished on a rental basis but does not include provision of meals, bars and shops on the price. There are many types of accommodation in United Kingdom and some of them are: luxury hotels, holiday parks, youth hostels and many more. BOND OF TRAVEL AGENCIES TO OTHER COMPONENTS OF TRAVEL AND TOURISM

As you can see from the image above, travel agents must work with: tour operators, transport companies, entertainment sectors, ancillary services, accommodation suppliers and tourism organisations because without these elements, travel agencies would not be able to function properly.

Accommodation Providers
It is very important for the travel agents to build and establish a professional working relationship with accommodation companies such as: Accor Hotels and Sofitel as it is more convenient for customer and it saves time, money and effort. It is a good business because they can promote each other. More career opportunities will be presented. They can also make a package holiday.

Tour Operators
Travel agents should work with tour operators such as: Thomas Cook or Thomson Holidays. Tour operators can buy holidays in bulk for a discounted price if they agreed with each other. It is convenient for the customer and ensures repeat business.

Transport Providers
If the travel agents were able to build a professional relationship with transportation companies such as: British Airways and EasyJet, it will benefit the both of them. It will also benefit the customer as it will save time and effort if they are planning to travel or they have excursions and it is convenient as well. It will promote both of the companies through advertisement.

Ancillary Services
Retail Travel Agents must work with ancillary service providers so that they would get more commission and it makes it easier for the holidaymakers to book all at once.

Entertainment Sector
The main advantage working with entertainment sector like Merlin Entertainments is that the customers will save time and effort and time if the travel agencies and visitor attractions will work together. It will help the companies to earn more popularity through the words of mouth.

Tourism Organisations
It is a good practice for the travel agencies to work well with the regulatory bodies and trade associations like: ATOL and ABTA. They can look after each other and they can promote each other. After all they have the same aim which is to ensure the health and safety of the passengers and look after the environment.

Integration in Retail Environment

In business, there are some very complex relationships between different companies. These can come about because of the changes of ownership in different sectors of industry. It occurs when one company owns or controls more than one part of the distribution process. Vertical integration refers to ownership at different levels of the distribution chain. Some well-known companies are Thomson, Thomas Cook and Virgin. Horizontal integration means owing at the same business level and some great examples are: Carnival Corporation, Thomas Cook and Thomson.

Agency Agreements
These are legal contracts creating a bond between the principal (which is the tour operator) and the travel agents. It contains instructions on how the travel agents must manage the assets of tour operators. The written document may be revoked, terminated, or amended at any time by the tour operator provided that he/she is competent enough to make the decision. Travel agents are prohibited from revealing information about the assets held under the agreement to anyone without the tour operator’s permission. It is very important that the both parties to settle and understand the agreement to avoid the cost of re-arrangements if there was a mistake or error

Preferred Agents
Every travel agency has its own chosen organisation. Obviously, integrated travel organisations such as: Thomas Cook and Thomson will convince its clients to purchase its own branded products. These companies usually have a racking policy that every branch must follow and abide. This procedure is done for them to be able to increase their profit margins. On the contrary, individual travel agents to do not have any restrictions when it comes to choosing holidays for their customers. They can select any thing that they think would suit the needs of their customers but for them to earn a bigger profit, they must be able to sell holidays from tour operators who give bigger commission.

Commission Levels
Several areas of a travel agency’s focus pay commissions to the agency which becomes its principal income. These mainly are: car rentals, cruise lines, hotels, railways, sightseeing tours, tour operators, travel insurance, foreign exchange and many more. A fixed percentage of the main element of the price is paid to the agent as a commission. Commissions are not paid on the Tax component of the price.

Ancillary Products
Commission Rates
Package Holidays
10%
Airline Tickets
0% – 9%
Ferry Bookings
9%
Traveller’s Cheques
1%
Travel Insurance
25% – 40%
Coach Holidays
10%
Cruises
9% – 15%
*this diagram is just a guide

WORKING PRACTICES IN RETAIL ENVIRONMENT

Front and Back Office System
This system has been used by many travel companies for several years. According to this system, every organisation is divided into two partitions, the front office and the back office. Front office is responsible for welcoming the customers, providing customer service, dealing with complaints, taking bookings, asking enquiries and promoting products and services. Back office on the other hand, is responsible for cash and credit control, training of staff, health and safety, maintenance, client databases, stock control, total quality management and analysis of management data. Even though the both of them are different, they must work together and communicate with each other in order to come up with a grand outcome.

Selling Travel Services
The image shown above is the different stages of sales process. The first thing that an agent must do is to build a rapport to his/her customer. He/she can do this by giving them warm welcome, asking them if they need help and offer them a seat. After this, the agent must get to know his/her customer by asking open and closed questions. In third stage, he/she must be able to find a holiday for the customer and justify why they book the holiday the agent has found. There are some instances that the agent might receive any objections but he/she must overcome theses. If the agent is seeing buying signals he/she must then respond to this by asking if the customers are ready to book. If no, he/she should ask why the customers are not happy and provide them with more information or alternatives. Otherwise, the agent must then complete the essential documents. After completing the documents, the agent must tell the customers that he/she is available anytime if they have further enquiries.

Documentation
These written documents are vital in every aspect of travel and tourism industry. These could include the following: initial form completed by the agent; receipt for a deposit or the full cost of the holiday; holiday confirmation invoice; and tickets/vouchers and final travel information documents. It is vital to keep these records for future reference.

Merchandising and Displays
These two play a significant role in running a retail business. They are drawing in more and more customers by promoting the different products and services that are offered. It is very essential to changethem regularly, as much as possible, to ensure that the customers are freshly informed and provide them with new focal point. These are also good ways of notifying potential customers and old customers to new products, late deals and special offers. The key to this is that they should be eye-catching as well as well written, most especially the displays.

Racking Policies and Preferred Agents
Mass-market travel agents have to follow a certain pattern in displaying brochures. Brochures of their own company must be displayed on the shelves to persuade customers to patronise and book their own products. On the other hand, individual travel agencies do not have a racking policy that they must follow. They are free to display any brochure they want but of course they have their own preferred agents who give them more commission whenever they sold products from these companies.

Commission Levels, Sales Targets and Switch Selling
Members of staff of mass-market travel agencies are given their own sales targets by the head office and it is supervised by the retail manager. However, proprietors of independent travel agencies give out individual sales targets to the members of staff. In order to meet these targets, incentives are generally used to motivate the staff or encourage them to sell products from a particular company to earn extra commission. ‘Switch selling’ occurs when a customer is persuaded to buy a different product to the one originally chosen

TECHNOLOGY
Technology plays a vital role in travel and tourism industry. Its significance stems from the importance of data. The use of technology serves as a basis for integrating the functioning of various departments. When a retailer decides to use the power of technology to aid business, the investment in terms of money is usually high; however, the benefits of the use of technology are many. As the process gets automated the time involved in particular task is reduced. Now technology is being used for a variety of functions in the tourism industry, ranging from an internal organisation role to external communication between different parts of the industry. The continuous development of information technology has profound implications for the whole tourism industry.

Impacts of Technology
One of the largest impacts on the travel agency has been the rise of online booking. Customers looking to book a trip no longer need to visit an agency – they can go online to companies such as Expedia or Priceline and book an entire trip themselves. Airlines and hotels themselves also have cut out the travel agent altogether by allowing customers to book tickets and lodging directly from their sites. That’s an unpleasant circumstance for travel agencies, who have traditionally relied on being seen as a necessary intermediary between customers and the services they require. Aside from this, many companies are merging together in order to get back to competition. This would lessen the production cost, contribute more ideas and share bigger investment that they can use in order to improve their service in their organisation.

Timeline of the Major Developments and Changes

The figure shown above illustrates how the technology developed over the past few decades. The continuing evolution of technology has had a considerable impact on the travel agency service industry. The widespread public use of the Internet has created a number of conditions that have been game-changer, in both beneficial and negative ways to the modern travel agency. As a result, many travel agencies in the 21st century have had to make considerable adaptations to remain solvent and relevant. The introduction online booking and red button made mass-market travel agencies more advantageous and gain more competitive advantage whilst on the other hand, individual travel agencies are suffering as they cannot adopt to these changes due to lack of investments and capitals.

LEGISLATION IN RETAIL TRAVEL

EU Package travel regulations
The main aim of the Package Holidays and Package Tour Regulations of 1992 is to protect consumers and giving them the right for compensation when something when wrong before and during their holiday. The consumers with the complaint will have to write a letter and give it to the travel agent and/or tour operator and the travel agent/tour operator will send it to the EU on their behalf.

Data protection
Members of staff in retail travel have a duty to store information on customers safely and securely, using it only for the purpose for which it was gathered in the first place. Complying with the Data Protection Acts means following a set of data protection principles, which include only keeping information as long as it is necessary, making sure that it is securely stored in electronic or paper-based form and ensuring that data is not sold or given to another company or individual for any purpose.

Consumer Protection
It consists of laws and organisations designed to ensure the rights of consumers as well as fair trade competition and the free flow of truthful information in the marketplace. The laws are designed to prevent businesses that engage in fraud or specified unfair practices from gaining an advantage over competitors and may provide additional protection for the weak and those unable to take care of themselves. Consumer protection laws are a form of government regulation, which aim to protect the rights of consumers

Contract Law
When a customer books a holiday with travel agent, he/she enters into a legally binding contract with the tour operator offering the holiday. Travel agents ask the customer to read and accept the tour operator’s booking conditions before booking, but do not enter to a contract with the customers themselves. They may ask the client to sign a document allowing the travel agent on his or her behalf.

Trade Associations
These are set up to represent the interests of companies in a particular industry sector, for example ABTA – the Travel Association in retail business travel and ATOC – the Association of Train Operating Companies in the rail industry. Many trade associations draw up codes of conduct that lay down the minimum standards under which member of the association are expected to conduct their business with the customer suppliers.

Licensing
In addition to becoming a member of ABTA or an independent consortium, travel agencies can also apply for a license to sell airline tickets. An agency may also need to obtain an ATOL (Air Travel Organisers’ License) from the CAA (Civil Aviation Authority) if it intends to take on the role of a tour operator by selling flights or flight-based package holidays on its own behalf (rather than acting as an agent for another tour operator).

THE IMPORTANCE OF WORKING WITH OTHER COMPONENTS OF TRAVEL & TOURISM INDUSTRY

THOMAS COOK
Is a British online and offline travel company established on the 19th day of June 2007 by the merger of Thomas Cook AG and My Travel Group PLC. The new Thomas Cook Group PLC has seven core consumer brands including Thomas Cook, Sunset, Airtours, Neckermann, Condor Airlines, Ving, Direct Holidays and my Sunquest. It operates in five main divisions namely: United Kingdom, Northern Europe, North America, Continental Europe and German Airlines. With a joint fleet, at merger, of 97 aircraft, 2,926 stores, 32,722 employees, and over 19.1 million annual customers, the new group became the second largest travel company in Europe and the UK, behind TUI Travel, and the largest in the Scandinavian, French, Dutch, German and North American markets. The company also operates financial services, Thomas Cook Cash Passport, Thomas Cook Credit Card and foreign exchange.

Accommodation Providers
It is vital for Thomas Cook to work closely with accommodation providers.
This would benefit the both organisation by attracting more customers through words-of-mouth and advertisements through the brochures. It will also benefit the customers for the reasons that it will save time, costs and effort.

Tour Operators
Just because Thomas Cook has its own tour operator does not mean it does not need to work with other tour operators. It must work with other tour operators because it does not have all the things that customers might want. It should also work with specialist tour operators such as: Kuoni, Statclippers, Inghams and others.

Transport Providers
Transportation is essential in any holiday that is Thomas Cook should work with them. If they were able to do this, the life of customers will be much easier and more convenient. It will save their time, money and effort. This is also a good way of promoting each other. Transfers are also important. Customers should have information on how to get to different places whilst they are on their holiday and if travel agents were able to provide them this information, this will enhance their experience and it will then lead to repeat business and promoting through words-of-mouth.

Ancillary Services
Ancillary services are the ‘add-ons’ in customers’ holidays. These are sold to make their holiday experiences enjoyable and memorable. Providing little extras such as: excursion tickets, foreign exchange, travel insurance, airport lounges and room upgrades will enhance the customers’ experience and there is a higher possibility that they will book with you over and over again.

Entertainment Sector
Thomas Cook does not have its own visitor attractions and for this reason, it should work with visitor attraction provider. Thomas Cook was able to do this, the main advantage this is that the customers will save time and effort as they can make bookings through its travel agencies.

Tourism Organisations
Thomas Cook should work with other tourism organisations such as: ATOL, ABTA and IATA because it is a good practice and they can closely look after each other. After all they have the same aim which is to ensure the health and safety of the passengers and look after the environment. They can investigate the demands of the customers and satisfy all these demands including their wants and needs.

Integration
Thomas Cook is a vertically and horizontally integrated company. A good advantage of this is that you it has everything that customers would need. These could be accommodation, transportation and ancillary products. If one company has these all necessities, customers can booked all of these at once which means instead of spending money to competitors, they will spend their money to your company because you have everything they might need and want.

Agency Agreements
Thomas Cook has to consider the significance of selling the popular products and services. These products are on demand and always eye-catching to the customers. It must find a way to promote these holidays so that they can expand their profit margin and gain a further competitive advantage.

Preferred Agents
Thomas Cook, being an organisation who engages with integration, favours its own products and services. In simpler terms, it is its own preferred agents which mean that it will try to persuade its customers to purchase and patronise its own products.

Commission Levels
Members of staff of Thomas Cook will earn more commission if they were able to book their own company’s holidays or their preferred agents. This will motivate them which means they will do their best and provide customers with outstanding service that will lead to expansion of the company and gaining competitive advantage

THOMSON HOLIDAYS
Is a UK based tour operator and part of TUI Travel PLC. It was founded as part of the Thomson Travel Group in 1965 following the acquisition of three package holiday travel agencies and the airline Britannia Airways. Its headquarter is located in Luton, England. Thomson Travel Group was floated on the London Stock Exchange in May 1998 with a valuation of £1.7 billion. In 2000, TTG was acquired by Preussag AG, an industrial and transportation conglomerate. Preussag was renamed TUI AG on July 1, 2002 and Thomson Travel became TUI UK. Thomson Holidays, Thomson Ski and Thomson Lakes and Britannia Airways (rebranded Thomsonfly, now Thomson Airways after the merger with First Choice Airways) are now subsidiaries of that group, part of TUI Travel PLC.

Accommodation Providers
Thomson Holidays that not own accommodation and for this reason, it is vital for the organisation to work accommodation providers as it would benefit its customers, its own organisation and the accommodation provider.

Tour Operators
Thomson Holidays has its own tour operators but it should still work with other tour operators as it does not provide all the kinds of holidays that customers might want. It is also a good way of promoting their own companies which would lead to increase number of customers.

Transport Providers
The organisation has its own airline and cruise ships but that does not mean that it should not work with other transportation providers. Both of them should work closely together as it will benefit the customers allowing them to save time, money and effort.

Ancillary Services
Thomson Holidays works with ancillary services providers because it does not own “add-ons” that would make the holidays of customers more convenient, memorable and enjoyable.

Entertainment Sector
Just like Thomas Cook, Thomson Holidays does not have its own visitor attractions because of this; it must work with visitor attraction provider. If the company was able to do this, the main advantage this is that the customers will save time and effort as they can make bookings through its travel agencies.

Tourism Organisations
Thomson Holidays works with other tourism organisation to ensure the safety and protection of its customers. This is a good practice they could investigate together in investigating the demands of the customers so that it could introduce new products and services.

Integration
Thomas Cook is a vertically and horizontally integrated company. A good advantage of this is that you it has everything that customers would need. These could be accommodation, transportation and ancillary products. If one company has these all necessities, customers can booked all of these at once which means instead of spending money to competitors, they will spend their money to your company because you have everything they might need and want.

Agency Agreements
Thomson Holidays recognises the importance of selling the widespread products and services. These products are on demand and always eye-catching to the customers. It must find a way to promote these holidays so that they can expand their profit margin and gain a further competitive advantage.

Preferred Agents
Just like Thomas Cook, Thomson Holidays is also an organisation that is vertically and horizontally integrated. Because of this reason, its organisation is its own preferred agents which mean that whatever the customers want, it will try to persuade them to buy its own goods to circulate the money within the company only.

Commission Levels
Members of staff of Thomson Holidays will earn more commission if they were able to book their own company’s holidays or their preferred agents. This will motivate them which means they will do their best and provide customers with outstanding service that will lead to expansion of the company and gaining competitive advantage

Cite this Retail Travel Environment

Retail Travel Environment. (2016, May 18). Retrieved from https://graduateway.com/retail-travel-environment/

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