2 Current challenges Rise in on-line competition. Reduction on commissions. Tourism products selling directly. Change in consumer perspectives – want to do it themselves.
3 Travel Trade Sector Includes: Travel agencies Wholesale tour operators Tour operators Conferences ACTA = Association of Canadian Travel Agencies IATA= International
4 5000 agencies in Canada Most prominent travel in Canada sunspot stayput tour - round trip charter flight, transportation to and from resort 7 nights stay at resort
5 Commission- fees paid to book with companies Canadian travel agencies in 1998 – 80% revenues from commissions ---airline tickets 47% and tour packages 32%. Service fees = 1% Ontario and Quebec – 64% of total revenue More than 50% comes from leisure travel. Business travel = 43%
6 Service charges Past – commissions = 10% mid 1990s commissions reduced by 50% Between 195 – 2000 = declined by 33% After Sept. 2001, Air Canada more commission caps Spring 2002 Delta Airlines – no commissions Led to service charges Travel agencies focusing on tours
7 Terms Service charges – charged to consumers for services such as: preparation of long itinerary, making non-commissionable hotel reservations, obtaining visas, sending telegrams, long distance calls.
8 Types of Travel Agencies General – full service agencies. Corporate – specializes in business travel Vacation and Leisure – do more counselling All-Cruise – I.e. Cruise Holidays Specialty – Adventure, Eco-tourism, Seniors, Singles, Ethnic, Physically disabled, Student (Travel Cuts)
9 Facts Most agencies owned by women Most travel agents are women 2/3 of all agencies have revenues over $2 million per year
10 On-Line Agencies Cheap Tickets http://www.cheaptickets.ca/ Ebookers – Europe www.ebookers.com Expedia – subsidiary of Microsoft www.expedia.ca
11 To Open a Travel Agency 1. Must be appointed or approved by industry conferences. Conferences – regulatory body Conferences in Canada: Air Transport Association of Canada ATAC International Air Transport Association IATA Cruise Lines International Association CLIA VIA Rail
12 2. $ 25, 000 capital 3. Accessible to public and clear visible sign 4. Actively involved in the promotion of travel
13 5. Provincial regulations Some Canadian provinces – Ontario, BC, Quebec, must register with provincial registrar.
14 Items also sold Flight insurance Accident and health insurance Insurance for baggage and personal possessions Trip cancellation or interruption insurance Bad weather insurance
15 Travel Clubs Specialize in sale of unsold travel products to vacation and leisure travellers. Pay an annual fee to be a member. www.lastminuteclub.com
16 Organization numbers Countries AAA, CAA 1100 US, Can Carlson Wagonlit 3000 141 Giants 2100 US, Can Thomas Cook 2000 International Flight Center 600 World Wide
17 The Travel Agent - Perks Free or inexpensive trips