Retail travel assignment
I’m a branch manager with ‘centre spot travel’ I’m looking to open another retail outlet in my area. Some investors have asked me to do a report to explain the business and its operations as they are not familiar with it. The UK retail travel environment has several agencies within its sector; independents; only have one or two outlets, usually managed by the owner may not be as tough on rules and uniform etc. multiples; are found on high streets throughout the UK, have well known names, they are often owned by large tour operators, have a large number of staff, crack down on rules and uniform.
Integrated; part of a multiple, sell their own holidays first and e-agents; advertise holidays via the internet, sell holidays via the internet, offices not generally open to the public and have large call centres. For example e-agents operate as online travel agents; they may not have any retail shops. Lastminute.com is an e-agent, a bloke called Mr. Hoberman owns it, and it is a worldwide company and advertises on the net. It employs 198 staff and has access to selling city breaks, cruises, spa’s etc.
The UK business travel environment again, has several agencies; transnational;
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The types of products and services offered by retail are holidays and ancillary sales. The products and services offered by business are scheduled flights, accommodation and ancillary sales. There are many trade and regularity bodies in the retail travel environment; ABTAC( association of British travel agents) ATOC(association of train operating companies), IATA(international air transport association), ATOL(air travel organizers license) ABTA- is an organization which represents UK travel agents and tour operators. ABTA is responsible for the sale of 90 percent of package holidays. It operates under a strict code of conduct to promote customers best interest.
ATOC- represents train companies to the government regularity bodies, the media and other opinion formers on transport policy issues. IATA- they represent, lead and serve the airline industry. ATOL- is a consumer protection scheme set up to protect consumers in the event of their ceasing to trade. Independent travel agents usually seek to maintain control of their own business. Companies apply vertical and horizontal integration. Horizontal integration is where a company reaches out to more people for example; Thomson do different holidays, sun holidays and Thomson ski; they sell holidays to Sky tours and Manos. Vertical integration is where a company keeps money in their own firm. They open their own travel agents to keep money in their own business.
Tour operators make agreements with travel agents when they sell holidays for them or sell some of their products and services. This is called an agency agreement. The tour operator will agree to give the travel agent commission and send them brochures and tickets as long as the travel agent agrees to promote the holidays and display the brochures they have been sent. Racking policies- this is the displaying of brochures on shelves for customers to browse. Vertically integrated travel agents will give themselves priority to their own products. Independent travel agents will select a range of products they think will sell. A policy of integrated travel agents promoting its own brand is known as ‘directional selling’.
A preferred operator is where an agency will switch sell to earn more commission. It depends on what deals or links an agency has with the tour operator. Financial bonding is used to be able to protect customer’s money. Members of ABTA must have money in a separate account. If a travel agent went bust there would be money in a different account to compensate for the customers. Global Travel are a cheaper financial bonding, they operate a central bank account- they pay the clients money into their central bank account and when the customers come back off holiday the TTA gets the commission. TTA is the Travel Trust association, they offer full consumer financial protection.
Advances in technology have affected retail and business travel operations in many ways. The internet has been a major rise in all holidays as you can now book over the net. Many independent travel agents are failing as call center’s are opening to assist customers doing online booking. With the net coming in, there has been an increase in sales, more direct sales and a bigger selection.