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travel agency management

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How to run travel agant

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travel agency management

  1. 1. Page 1 Travel agencies were and remain relatively easy to established for the following reasons: a. No product or raw material inventory is required b. Offices can be leased, often in lower-rent areas c. Office equipment can be leased d. Business can be operated at a comparatively lower “break event point” e. Licensing requirements are far less stringent than for many professions (for example medicine, dentistry, law, accounting) Given these factor and the perceived benefits of working in the industry, it little wonder that, despite fierce competition, growth in the number of travel agencies has remained close to 10 percent per year over the past two decades. Travel Agency Management
  2. 2. Page 2 Need for a business plan Planning is a major key to success for any travel agency, particularly a newcomer. A business plan is essential for several reasons. A financial backer assumes willingness to accept risk based on a. The reputation of the applicant and his or her experience in the travel agency industry b. The applicant’s success and reliability in previous business undertakings c. The personal financial net worth of the applicant d. Assessment of the applicant’s business plan. Anyone planning to open a travel agency is likely to be optimistic about future success, but often the decision is based on emotional reasons rather than objective analysis. A business plan forces the entrepreneur to analyze the opportunity from a business perspective and possibly avert potential disasters. After analyzing the situation, some may decide not to enter the travel agency business.
  3. 3. Page 3 Rantai Pasokan untuk Roti Bakar
  4. 4. Page 4 The business plan is essentially a plan of operation, providing all the information necessary to run the business. Specific components of the business plan include:  Name of agency  Ownership  Location and building  Philosophy and mission statement  Industry and market analysis  Strategic plan  Sales forecast  Licenses and certification  Conference appointment
  5. 5. Page 5 Name of Agency It is important to select a name that has the following attributes:  It is easily remembered by clients.  It is easily pronounced  It is easily spelled and written  It looks impressive in print and on signs  It reinforces the desired image  It has permanence and is no trendy  It does not infringe upon the name of others and is not the same name as previous unsuccessful agency On this last point, it is important to ensure that the proposed name can be legally used and is not already the possession of another person or business. This requires checking with the state’s incorporation department.
  6. 6. Page 6 Ownership Serious consideration must be given to the issue of ownership, which may be in the form of an individual proprietorship, a partnership, a limited partnership, or a corporation Location and Building A business plan includes a description of the location and the building where the agency will be housed. Location can be critical factor if walk-in traffic is expected. A ground floor location with a good window area for displays, as well as location in a busy commercial area, is essential to attract walk-in (it is mandatory in some countries). If walk- in traffic is not an issue, allocation that requires lower rent and maintenance may be suitable. Other factor to consider include adequate parking, the number of other travel agencies located in the immediate area, and proximity to business and middle and upper class neighborhoods. Both location and the building itself must match the objectives of the agency
  7. 7. Page 7 Philosophy and mission statement Successful business ventures operate under a statement of what the business is intended to be and philosophical statement concerning how the business will be operated, and these need to be clearly thought out and written as a guide. A. Industry and Market analysis The business plan should include a description and analysis of the travel agency industry. A good analysis requires interviews with knowledgeable persons from associations that represent travel agencies, suppliers such as hotel and airlines, government agencies, and competitor. The analysis of the industry will provide a “macro” perspective and enable an entrepreneur to understand important trends and possible opportunities.
  8. 8. Page 8 An analysis of the local market should contain the following: a. Competition, all competitors, including nontraditional travel agents such as discount travel agencies and department store travel club, should be describe. b. Market Trends. It is critical to have a clear understanding of the local market and how it is changing. c. Market Segments. Travel agency are increasingly being forced to find market niches rather than attempting to serve the entire general public as well as the commercial sector. Travel agencies have been successful in selecting specialized market niches such as an ethnic market or the religious market. d. Barriers to entry, Barriers to entry exist in some markets. The existence of too many large travel agencies or lack of affordable office space in good location might prove to be significant barriers and should be considered in the local market analysis.
  9. 9. Page 9 Strategic plan Based on the industry and market analysis and the overall goals for the agency, a business strategy must be selected. Strategy entails how best to utilized limited resources to maximize profits and obtain other agency goals given the environment and the competition. Strategic planning then can be defined as the determination of the future status of the business with specific reference to its product, its profitability, its size, its rate of innovation, and its relationship with owners, managers, employees and so on. The process of planning assists travel agency management in reaching better decision regarding all aspect of operation : Product-Market Matrix, The product-market matrix is a major component or outcome of the agency’s strategic planning. The matrix identifies which product the agency will be selling and whom they will be sold.
  10. 10. Page 10 Environmental Forecast. Forecast of the future environment are a major basis of planning and should be made explicit during the planning process. Forecasting of collecting data can be measured by Delphi method, Regression or other. Growth Directions. For both short-term and long-term planning, agency management should determine future growth directions and the resources this will require. There are basically three options available to agencies seeking growth: market expansion, product expansion and vertical integration. Market expansion involves selling existing products to new market. Product expansion means adding new product compatible with the agency’s existing product line. For a strictly retail agency, vertical integration involves expanding beyond retailing activities.
  11. 11. Page 11 Sales forecast A travel agency business plan should include an estimated sales forecast for each month of the year. Sales are likely to fluctuate quite drastically between months and seasons, depending upon the location of the agency and its clientele. Financial projections and determination of future cash flows are based on these monthly estimates; therefore, the sales forecast must be realistic. Sales forecast should include revenues from all possible sources. Licenses and Certification To open a travel agency, individuals are not required to hold a college degree or a professional certification. But must follow the rules which has been stated by local government (ASITA). There are some requirements for whom that work as a clerk or front liners (staff) in Travel Agency. The requirement is the staff must have a certification standard that issued by ASITA.
  12. 12. Page 12 Conference Appointment Travel agencies are required to obtain appointment from associations representing international and domestic airlines. Appointment authorize travel agencies to serve as sales agents for carriers and allow the agencies to write tickets and collect commission from the carriers.

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