Rohit Sir Ethics

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ETHICAL LEGAL AND RAGULATARY ASPECT OF TOURIM AND

HOSPITALITY BISINESS

HMT-564

ASSIGNMENT ON: -LEGAL BUSINESS ETHICS FOR TRAVEL AGENCY BY

IATA

SUBMITTED BY: SUBMITTED TO:

SUKHVINDER SINGH MR. ROHIT

RV8901A07

SESSION-(2009-10)


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Travel Agency

A travel agency is a retail business that sells travel related products and services to

customers on behalf of suppliers such as airlines, car rentals, cruise lines, hotels,

railways, sightseeing tours and package holidays that combine several products. Inaddition to dealing with ordinary tourists most travel agencies have a separate

department devoted to making travel arrangements for business travelers and some

travel agencies specialize in commercial and business travel only. There are also

travel agencies that serve as general sales agents for foreign travel companies,

allowing them to have offices in countries other than where their headquarters are

located.

ORIGINS:-

The British company Cox & Kings is sometimes said to be the oldest travel agency

in the world, but this rests upon the services that the original bank, established in

1758, supplied to its wealthy clients. The modern travel agency first appeared in

the second half of the 19th century. Thomas Cook, in addition to developing the

package tour, established a chain of agencies in the last quarter of the 19th century,

in association with the Midland Railway.

They not only sold their own tours to the public, but in addition, represented othertour companies. Other British pioneer travel agencies were Dean and Dawson, the

Polytechnic Touring Association and the Co-operative Wholesale Society. The

oldest travel agency in North America is Brownell Travel; on July 4, 1887, Walter

T. Brownell led ten travelers on a European tour, setting sail from New York on

the SS Devonia.

Travel agencies became more commonplace with the development of commercial

aviation, starting in the 1920s. Originally, travel agencies largely catered to middle

and upper class customers, but the post-war boom in mass-market packageholidays resulted in travel agencies on the main streets of most British towns,

catering to a working class clientele, looking for a convenient way to book

overseas beach holidays.


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OPERATIONS:-

As the name implies, a travel agency's main function is to act as an agent, that is to

say, selling travel products and services on behalf of a supplier. Consequently,

unlike other retail businesses, they do not keep a stock in hand. A package holidayor a ticket is not purchased from a supplier unless a customer requests that

purchase. The holiday or ticket is supplied to them at a discount. The profit is

therefore the difference between the advertised price which the customer pays and

the discounted price at which it is supplied to the agent. This is known as the

commission. A British travel agent would consider a 10-12% commission as a

good arrangement. In Australia, all individuals or companies that sell tickets are

required to be licensed as a travel agent.

In some countries, airlines have stopped giving commission to travel agencies.

Therefore, travel agencies are now forced to charge a percentage premium or a

standard flat fee, per sale. However, some companies still give them a set

percentage for selling their product. Major tour companies can afford to do this,

because if they were to sell a thousand trips at a cheaper rate, they still come out

better than if they sell a hundred trips at a higher rate. This process benefits both

parties.

Other commercial operations are undertaken, especially by the larger chains. Thesecan include the sale of in-house insurance, travel guide books and timetables, car

rentals, and the services of an on-site Bureau de change, dealing in the most

popular holiday currencies.

The majority of travel agents have felt the need to protect themselves and their

clients against the possibilities of commercial failure, either their own or a

supplier's. They will advertise the fact that they are surety bonded, meaning in the

case of a failure, the customers are guaranteed either an equivalent holiday to that

which they have lost or if they prefer, a refund. Many British and American

agencies and tour operators are bonded with the International Air Transport

Association (IATA), for those who issue air tickets, Air Travel Organisers'

Licensing (ATOL) for those who order tickets in, the Association of British Travel

Agents (ABTA) or the American Society of Travel Agents (ASTA), for those who

sell package holidays on behalf of a tour company.


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A travel agent is supposed to offer impartial travel advice to the customer.

However, this function almost disappeared with the mass-market package holiday

and some agency chains seemed to develop a 'holiday supermarket' concept, in

which customers choose their holiday from brochures on racks and then book it

from a counter. Again, a variety of social and economic changes have nowcontrived to bring this aspect to the fore once more, particularly with the advent of

multiple, no-frills, low-cost airlines.

COMMISSIONS:-

Most travel agencies operate on a commission-basis, meaning that the

compensation from the airlines, car rentals, cruise lines, hotels, railways,

sightseeing tours and tour operators, etc., is expected in form of a commission

from their bookings. Most often, the commission consists of a set percentage of the

sale.

In the United States, most airlines pay no commission at all to travel agencies. In

this case, an agency usually adds a service fee to the net price.

TYPES OF AGENCIES:-

There are three different types of agencies in the UK: Multiples, Miniples and

Independent Agencies. The former comprises a number of national chains, often

owned by international conglomerates, like Thomson Holidays, now a subsidiary

of TUI AG, the German multinational.[3]

It is now quite common for the large

mass-market tour companies to purchase a controlling interest in a chain of travel

agencies, in order to control the distribution of their product. (This is an example

of vertical integration.) The smaller chains are often based in particular regions or

districts.

In the United States, there are four different types of agencies: Mega, Regional,Consortium and Independent Agencies. American Express and the American

Automobile Association (AAA) are examples of mega travel agencies.


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Independent Agencies usually cater to a special or niche market, such as the needs

of residents in an upmarket commuter town or suburb or a particular group

interested in a similar activity, such as sporting events, like football, golf or tennis.

There are two approaches of travel agencies. One is the traditional, multi-destination, out-bound travel agency, based in the originating location of the

traveler and the other is the destination focused, in-bound travel agency, that is

based in the destination and delivers an expertise on that location. At present, the

former is usually a larger operator like Thomas Cook, while the latter is often a

smaller, independent operator.

CONSOLIDATORS:-

Airline consolidators and other types of travel consolidators and wholesalers arehigh volume sales companies that specialize in selling to niche markets. They may

or may not offer various types of services, at a single point of access. These can be

hotel reservations, flights or car-rentals, for example. Sometimes the services are

combined into vacation packages, that include transfers to the location and lodging.

These companies do not usually sell directly to the public, but act as wholesalers to

retail travel agencies. Commonly, the sole purpose of consolidators is to sell to

ethnic niches in the travel industry. Usually, no consolidator offers everything,

they may only have contracted rates to specific destinations. Today, there are nodomestic consolidators, with some exceptions for business class contracts.

CAREERS:-

With the many people switching to self-service internet websites, the number of

available jobs as travel agents is decreasing. Most jobs that become available are

from older travel agents retiring. Counteracting the decrease in jobs due to internet

services is the increase in the number of people travelling. Since 1995, many travel

agents have exited the industry, and relatively few young people have entered thefield due to less competitive salaries.

[7]However, others have abandoned the 'brick

and mortar' agency for a home-based business to reduce overheads and those who

remain have managed to survive by promoting other travel products such as cruise

lines and train excursions or by promoting their ability to aggressively research and

assemble complex travel packages on a moment's notice, essentially acting as a


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very advanced concierge. In this regard, travel agents can maintain competitive, if

they become "travel consultants" with flawless knowledge of destination regions

and specialize in topics like nautical tourism or cultural tourism.


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RESPOSIBILITIES AND ETHICS FOR TRAVEL AGENCY

We live in a world in which travel has become both increasingly important and

complex in its variety of modes and choices. Travelers are faced with a myriad of

alternatives as to transportation, accommodations and other travel services.

Travelers must depend on travel agencies and others in the industry to guide them

honestly and competently. All ASTA members pledge themselves to conduct their

business activities in a manner that promotes the ideal of integrity in travel and

agree to act in accordance with the applicable sections of the following Principles

of the ASTA Code of Ethics. Complaints arising under this Code should be filed in

writing with the ASTA Consumer Affairs Department.

ASTA has the following categories of membership: Travel Agent, Premium,

International Travel Agency Company, International Travel Agent Associate,

Allied Company, Allied Associate, Travel School, Senior and Honorary.

Responsibilities of Travel Agent, Premium, International Travel Agency

Company and International Travel Agent Associate Members:

1. Accuracy. ASTA members will be factual and accurate when providing

information about their services and the services of any firm they represent. They

will not use deceptive practices.

2. Disclosure. ASTA members will provide in writing, upon written request,

complete details about the cost, restrictions, and other terms and conditions, of anytravel service sold, including cancellation and service fee policies. Full details of

the time, place, duration, and nature of any sales or promotional presentation the

consumer will be required to attend in connection with his/her travel arrangements

shall be disclosed in writing before any payment is accepted.

3. Responsiveness. ASTA members will promptly respond substantively to their

clients' complaints.

4. Refunds. ASTA members will remit any undisputed funds under their control

within the specified time limit. Reasons for delay in providing funds will be givento the claimant promptly.

5. Cooperation. ASTA members will cooperate with any inquiry conducted by

ASTA to resolve any dispute involving consumers.


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6. Confidentiality. ASTA members will treat every client transaction

confidentially and not disclose any information without permission of the client,

unless required by law.

7. Affiliation. ASTA members will not falsely represent a person's affiliation with

their firm.

8. Conflict of Interest. ASTA members will not allow any preferred relationship

with a supplier to interfere with the interests of their clients.

9. Compliance. ASTA members shall not have been convicted of a violation

of any federal, state and local laws and regulations affecting consumers. Pleas of

nolo contendere, consent judgments, judicial or administrative decrees, or orders,

and assurances of voluntary compliance and similar agreements with federal or

state authorities shall be deemed convictions for purposes of these provisions.

Responsibilities of All Members:

1. Notice. ASTA members operating tours will promptly advise the agent or client

who reserved the space of any change in itinerary, services, features or price.

2. Delivery. ASTA members operating tours will provide all components as stated

in their brochure or written confirmation, or provide alternate services of equal or

greater value, or provide appropriate compensation.

3. Credentials. An ASTA member shall not, in exchange for money or otherwise,

provide travel agent credentials to any person as to whom there is no reasonable

expectation that the person will engage in a bona fide effort to sell or manage the

sale of travel services to the general public on behalf of the member through the

period of validity of such credentials. This principle applies to the ASTA member

and all affiliated or commonly controlled enterprises.

THE PASSENGER AGENCY PROGRAMME:-

The IATA Passenger Agency Programme is a global programme designed tofacilitate the secure distribution and sale of airline tickets through a network of

financially vetted and reliable accredited sales locations. The Programme is

administered by IATA on behalf of its Members. Policy development and changes

to the operating Passenger Sales Agency Rules and the rules governing reporting

and settlement of sales are controlled by the Passenger Agency Conference The

Programme incorporates two main features namely:


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Accreditation whereby any person may seek approval to promote and sell

international air transport on behalf of IATA Members, by satisfying

specific basic criteria and entering into contractual relations with those

airlines.

Billing and Settlement Plans (BSPs),

which provide to both airlines and Agents the benefits of standardization and

automation in the issuing, reporting and accounting of passenger air

transportation using neutral standard electronic tickets.

-The Passenger Agency Conference (also know as PAConf) takes action

on matters (excluding remuneration levels) relating to the relationships

between airlines and recognised passenger sales agents and otherintermediaries. PAConf is the body that supervises all policy development as

well as decides the rules governing the reporting and settlement of sales of

the IATA Passenger Agency Programme.

The Billing and Settlement Plan:-

The Billing and Settlement Plan (BSP) is a system designed to simplify the selling,

reporting and remitting procedures of IATA Accredited Passenger Agents on

behalf of BSP Airlines. The first BSP developed by IATA was launched in 1971 in

Japan. Today BSP is a worldwide system covering over 160 countries and

territories. In 2008, more than 58,000 Agents and 400 Airlines participated in the

BSP network, generating gross sales through the BSP of over USD 240 billion.

The BSP reduces Airline distribution costs and at the same time provides Agents

with a costeffective system for selling the products and services of those Airlines

that elect to participate in the BSP. The existence of a BSP enables Airlines and

Agents alike to save on administrative overheads, whilst streamlining their services

to the customer. It provides more time for BSP participants' selling activities sincethe administrative burden on management is greatly reduced by the simplification

of the issuance, controlling and reporting of sales and settling of monies due. For

further information on the BSP, please refer to the BSP Manual for Agents.


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AGENT/IATA RELATIONSHIP

The overall decision-making authority lies with the Passenger Agency Conference

(PAConf) composed of senior managers drawn from all Member Airlines of IATA.

The PAConf adopts Resolutions by unanimous vote which, upon receipt ofapproval from concerned governments, become binding upon all IATA Member

airlines and their appointed

agents. It meets regularly once a year but special meetings can be called at short

notice to deal with issues requiring immediate attention. The experience, views and

recommendations of these bodies and of individual airlines are

fed back to the PAConf which decides when adjustments in existing rules or new

rules are advisable. The PAConf also considers recommendations and proposals

from outside sources and is at liberty to act upon them within the limits of its

prescribed authority which is to take action on matters concerning relationships

between airlines and recognized passenger sales agents and other intermediaries

but excluding questions of remuneration levels.

To be meaningful and effective anybody of regulations must be seen to be

reasonable and fair to those who are subject to them. The IATA Agency

Programmed tries to meet those requirements through daily contact between some


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58,000 travel agency locations around the world and more than 260 airlines. It can

do it more effectively where travel agents communicate freely and openly with the

airlines and where they support their national associations. PAConf draws on a

variety of field support on an ongoing or ad hoc basis. The day-to-day operation of

the Agency Programmed which involves dealing with matters associated withseeking, obtaining and retaining IATA accreditation by travel agents is handled by

a local IATA Agency Services Office (ASO), generally one for a country or for a

group of countries. The activities of the ASOs are overseen and controlled by the

Agency Administrator through the respective Area offices (Beijing, Geneva,

Miami or Singapore, as appropriate).

It can be seen that most travel agents, through their representatives on the Agency

Programmed Joint Council (APJC), or through their national or international

Travel Agents' Associations, have the ability to provide input to the Passenger

Agency Conference. The Agency Programmed Joint Council is empowered by its

terms of reference to discuss items of interest and propose changes to the IATA

Agency Programmed, as described in the

Passenger Sales Agency Rules. Other IATA Passenger Conferences are:

- Passenger Services Conference having jurisdiction over such technical

matters as ticketing, reservations and baggage handling procedures.

- Passenger Tariff Coordinating Conferences

Having jurisdiction over passenger fares, excess baggage rates and levels ofagency commission.

DANGEROUS GOODS IN BAGGAGE

With few exceptions, passengers are forbidden from carrying dangerous goods in

or as checked or carry-on baggage or on their person. The exceptions include such

items as alcoholic beverages, perfumes, toilet articles, medicines, medical

appliances and limited amounts of ammunition. In addition, safety matches or a

cigarette lighter are permitted only when carried on one's person.

General

The following is the recommended layout of information about the articles or

substances that are not permitted to be carried by passengers or crew in their

checked or carryon baggage. It will be found in many airline tickets, ticket wallets,

timetables or on ticketing counters to warn passengers.


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Dangerous goods that are forbidden in baggage

Dangerous goods that are not allowed in passenger or crew baggage include the

following:::

Fireworks, flares, briefcases and attach cases with installed alarm devices

and other explosive material.

Personal medical oxygen devices that utilize liquid oxygen as a primary or

secondary source of oxygen.

Camping gas, cigarette lighters and refills, gas powered appliances with

cylinder and refills for the same, cylinders containing compressed or toxic

gases.

Some adhesives, paints and thinners and other flammable liquids.

Matches, and other articles that are easily ignited, substances liable tospontaneous combustion and substances which on contact with water emit

flammable vapours.

Bleaching powder, peroxides, personal chemical oxygen generators,

polyester resin kits and other oxidizers. Arsenic, cyanide, insecticides and

weedkillers, live virus materials and other toxic

or infectious substances.

Radioactive materials.

Acids, alkalis, wet-cell batteries, mercury, other than that contained in a

small medical thermometer, and other corrosives.

Asbestos, flavourings and extracts, magnetized materials and other

miscellaneous dangerous goods.

Dangerous goods permitted in passenger baggage:-

Dangerous goods which are permitted in passenger and crew baggage are limited

to the

following:

Non-radioactive medicinal or toilet articles (including aerosols) which arenecessary or appropriate for the journey, carried in checked or carry-on

baggage. In addition, non-flammable, non-toxic aerosols for home or

sporting use may be carried in checked baggage only. The total net quantity

of all such articles carried by each passenger must not exceed 2 kg or 2

litres, and the net quantity of each single article must not exceed 0.5 kg or

0.5 litres.


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The term medicinal or toilet articles is intended to include such items as

hair sprays, perfumes, colognes and medicines containing alcohols.

Alcoholic beverages, carried as checked or carry-on baggage, when in

retail packaging, containing more than 24% but not more than 70% alcohol

by volume, in receptacles not exceeding 5 L. with a total net quantity per

person of 5 L. for such beverages. Alcoholic beverages containing 24% or

less alcohol by volume are not subject to any restrictions.

Small medical or clinical thermometer which contains mercury, for

personal use, when in its protective case, in checked or carry-on baggage.

Hair curlers containing hydrocarbon gas, no more than one per passenger

or crew member, in checked or carry-on baggage, provided that the safety

cover is securely fitted over the heating element. These hair curlers must not

be used on board the aircraft at any time. Gas refills for such curlers are not

permitted in checked or carry-on baggage. Note: These are not permitted to,from or through Switzerland.

One small packet of safety matches or a cigarette lighter that does not

contain unabsorbed liquid fuel, other than liquefied gas, intended for use by

an individual when carried on the person. Matches and lighters are not

permitted in checked or carry on baggage. Lighter fuel and lighter refills are

not permitted on one's person nor in checked or carry-on baggage. (Note:

Strike anywhere matches are forbidden on one's person, in checked or

carry-on baggage.)

CARD FRAUD

Card fraud is rapidly increasing. In addition to the recommended practices above,

Agents should be especially cautious if, amongst other things:

a)The order is made from a mobile phone and a business or contact number

(day and evening number) is not provided, or is refused;

b) the customer is not able to provide the security code which appears on

most Cards in issue, the location of it being dependent on the card type;

(c) the booking is made for a long haul destination with immediate departure

dates;


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(d) the booking is made by a new customer not known to the Agent,

especially if they are requesting tickets for a third party traveller;

(e) the booking is for immediate departure;

(f) the order is made by fax, or the customer offers to send a copy of the

Card by fax. Do not accept a copy of the Card as additional security as the

details may have been changed;

g) the customer calls in to collect the ticket but cannot present the Card. If

the Cardholder is present you must follow face-to-face Authorisation

procedures;

(h) The passenger name is changed after the original booking is made;

(i) The customer requests one ticket, then calls back to ask for additional

tickets. The total cost of the tickets issued and printed should be treated as

one transaction.

USE OF IATA LOGO:-

An IATA Accredited Agent may use the logo on its letterhead and publicity

materials exactly as illustrated here. No other forms of the IATA logo are

authorized for the Agent's use. The use of the logo is permitted only in connection

with activities of an IATA Accredited Agent's Approved Locations.


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CODE OF RESERVATIONS ETHICS

To provide customers with a worry-free experience and to guarantee smooth

handling of reservations, travel agents, airlines, CRSs and other providers, must

keep accurate and complete records covering all reservations transactions. Alldealings should be conducted in a business like manner, keeping in mind at all

times the need for correct and efficient handling of each transaction.

The IATA Reservations Services Manual is designed to provide a central source of

reservations procedures and practices for use by all reservations staff. It should be

used for reference purposes by reservations operational staff and, equally

important, as a source of training instruction. The Manual promotes a much

broader understanding, usage and acceptance of standard reservations procedures,

and enables travel agents, airlines, CRSs and other travel industry organisations toconduct their everyday business in the most efficient and economical manner with

a more effective response to customers.

RESPONSIBILITY OF AIRLINES, CRSs and OTHER PROVIDERS

Subscribers, e.g. Travel agents, connected to an airline, CRS or other provider's

reservation system, shall adhere to the appropriate reservations procedures

contained in IATA Resolutions. These procedures shall be provided by the Airline,

CRS or other provider to the Subscriber. Whether working in an automated or

manual mode, always adhere to standard reservation message procedures, as

defined in ATA/IATA Reservations Interline Message Procedures

Passenger (AIRIMP). The following rules apply at all times.

Booking Space or Services

When it is necessary to contact a service supplier by telephone, in the interest of

efficiency and accuracy, always establish and pre-check the details of the required

service, such as, for airlines: the complete itinerary, minimum connecting time

intervals, flight number(s) and any special service information and requirements

before calling the service supplier. Never deliberately make duplicate reservations

for the same customer(s). When reservations

for a party or group are not confirmed, never attempt to secure the required service

by requesting this in smaller numbers in individual


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transactions.

Always try to obtain a telephone contact and/or address for the customer(s). Where

there is an indication that a customer already holds an airline ticket or has an

equivalent payment voucher for other services that are being booked, obtain from

the customer the name precisely as it appears on the ticket or voucher. Whenarranging flight bookings ensure that the actual operating carrier of the service(s)

booked is made clear to the customer. This is particularly important for code-

shared flights.

Cancelling Booked Services

Whenever a customer cancels a reservation, such cancelled services must be

immediately released back to the service supplier(s) concerned. When a customer

changes an itinerary, ensure that all space and supplementary services no longerrequired are cancelled at the time the new reservations are made.

RESPONSIBILITY OF TRAVEL AGENTS

The rules defined in Booking Space or Services and Cancelling Booked

Services apply equally to reservations originated by travel agents.

Additionally, travel agents should:

Where practical, always request or process all airline reservations for a specific

itinerary, and advise all subsequent changes, through one airline or CRS. Where

this is not practical, each airline or CRS with which reservations have been made

must be informed that the reservation is in connection with an itinerary;

Always provide the service supplier with which reservations are made with a

customer contact. This enables continuity of customer service during the hours

when the office of the travel agent is closed; request and/or sell airline space or

other services only at the specific request of a customer. Travel agents shall make

reservations transactions in accordance with the terms in the agreement with the

provider of the electronic system;

Ensure that the airline ticket or other accountable document is issued in

accordance with the actual status of the reservation for each element of the


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service(s) booked and within the applicable time limits specified or agreed for the

issuance of such accountable documents;

Never issue a ticket or other accountable document, or create a passive segment,

indicating a definite reservation for a particular service unless confirmation of suchreservation has been received from the service supplier either directly, or via a

CRS, or via another service supplier;

When making reservations for a group, strictly adhere to the time limits

established with the service supplier for the notification of individual customer

names and release back all unsold services at this time. Where appropriate, advise

the service supplier of the price or price level that is being offered to the

customer(s).


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REFERENCES

y http://www.asta.org/about/content.cfm?ItemNumber=745

y www.iata.org/agenthome

y http://www.travelagency-commissioner.aero

y https://www.pcisecuritystandards.org/

y http://www.visaeurope.com/aboutvisa/security/

y ais/aisprogramme.jsp

y http://www.mastercard.com/us/merchant/securi

y ty/sdp_program.html

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