Printer Friendly

Chapter 13 Consolidators, charters, group sales, and travel insurance.

OBJECTIVES

At the conclusion of this chapter, you should be able to

* explain the pros and cons of using consolidators.

* describe the positives and negatives of charter travel.

* understand the sales potential for groups.

* define the general steps of making a group sale.

* explain the importance of travel insurance.

* understand the agency's liability when travel insurance is declined and the importance of an insurance waiver.

KEY TERMS

American Society of Travel Agents (ASTA)

bulk rates

consolidator

Cruise Lines International Association (CLIA)

dry lease

insurance waiver

National Tour Association (NTA)

passenger contract

preexisting conditions

preferred vendor list

private charter

public charter

rider

socialized medicine

trip protection

United States Air Consolidators Association (USACA)

United States Tour Operators Association (USTOA)

vacation protection

vendor bankruptcy

waiver of responsibility

wet lease

CONSOLIDATORS

A consolidator, is a company that purchases inventory from travel vendors at reduced rates and offers them for sale to travel counselors and the traveling public.

The consolidator can obtain these reduced rates, also known as bulk rates, because it enters into a special agreement with the travel vendor. The agreement between the vendor and consolidator identifies the rates, obligations, responsibilities, and a minimum sales volume. The vendors are not interested in working with a consolidator unless the consolidator can sell a substantial volume.

Another way a consolidator obtains seats, rooms, and cabins is by purchasing unsold inventory, usually close to the departure date. As you might imagine, an airline would not assume that the inventory on a flight, for example, would not sell out six months in advance. However, the airline may want to release unsold inventory two weeks before departure because there is less chance of this inventory being sold through regular channels.

Consolidators can handle any travel products: airline seats, hotel rooms, cruise cabins, rental cars, and even space on tours. However, most consolidators concentrate on air travel and do not offer other types of travel products. The vast majority of air consolidators offer international destinations only, but a few companies handle flights within the United States as well.

It is also possible for a travel agency to become a consolidator. Agencies that have high international air sales may contact one or more airlines. Negotiations take place and topics covered include fare, sales quotas, liability, responsibility, booking procedures, and so on. Because most travel agencies cannot commit to the sales volumes required under these circumstances, most travel agencies simply use existing consolidators rather than becoming one themselves.

Although having the potential for substantial savings, using consolidators may also have a negative side. Consider the following:

* Consolidators usually have cancellation or change penalties in addition to those of the airline being used.

* Advance seat assignments may not be allowed.

* Tickets may not count toward the client's frequent flyer membership.

* The client may have to use an airline with which he is not familiar.

* An unusual routing may be required, possibly with more than one plane change.

* Refunds may not be possible if the consolidator goes out of business.

* The airline on the ticket may not accept the ticket if the consolidator goes out of business.

Does this mean that it is a good idea to avoid consolidators? No! There are many reputable consolidators, ones that have been in business for many years and consistently provide value and service, and using a consolidator makes it possible for a small travel agency or independent agent to compete with the larger agencies in offering low fares for international travel. Most travel agencies have a preferred vendor list and certain consolidators are included. This list identifies companies the agency deals with on a consistent basis because these vendors offer value, quality, and service. However, if the travel counselor is considering a new consolidator, the counselor must do appropriate research on the company.

A reliable consolidator reference source can be found at http://www.jaxfax.com. This reference includes information such as departure frequency, type of transportation (scheduled air or charter), minimum and maximum fares, and booking information.

One of the most important indicators of a consolidator's stability is the length of time the company has been in business. Obviously, a company would not still exist if it failed to offer products at a good value and provide customer service along the way. The length of time the consolidator has been in business should not be the only criterion the travel counselor uses, but it is certainly an important one.

Travel counselors should also take into consideration a consolidator's annual sales volume and sales policy. A large sales volume indicates that many agencies are using the consolidator, which would not be the case if the product or service were not acceptable. Some consolidators sell to the general public as well as through travel agencies. In other words, these consolidators are in direct competition with travel agencies. Most travel experts agree that travel agencies should avoid consolidators that sell to the general public and support consolidators that work with agencies exclusively. Following is a list of a few of the largest consolidators:
                  Year    Sales in  Web
Consolidator      Begun   Millions  address

Air Tickets       1952    25 +      http://www.airtickets.com
American Travel   1946    25 +      http://www.amta.com
Abroad
C & H
  International   1982    25 +      http://www.cnhintl.com
DER Travel
  Service         1977    25 +      http://www.dertravel.com
Goway Travel      1970    25 +      http://www.goway.com
McAbee Tours      1988    25 +      http://www.mcabee.com
Overseas
  Express, Inc.   1985    10-25     http://www.ovex.com
Pacific Gateway,
  Inc.            1986    35 +      http://www.pacificgateway.com
Solar Tours       1984    25 +      http://www.solartours.com
Sunny Land Tours  1969    10-25     http://www.sunnylandtours.com
Trans Am Travel   1980    25 +      http://www.transamtravel.com
TraveNet, Inc.    1989    10-25     http://www.travnet.net


Another important indicator of a consolidator's stability is the organizations to which it belongs. Appointment by the Airline Reporting Corporation (ARC), International Air Transport Association (IATA), and International Airlines Travel Agent Network (IATAN) means that the consolidator has fulfilled and complies with a variety of strict regulations and policies.

To be a member of the United States Tour Operators Association (USTOA), the consolidator must comply with a specific code of ethics, maintain $1 million liability insurance, and $1 million bond for USTOA's Consumer Protection Plan. It is interesting to note that many consolidators hold individual bonds as well. Other organizations to which a consolidator may belong include the American Society of Travel Agents (ASTA), National Tour Association (NTA), United States Air Consolidators Association (USACA), Cruise Lines International Association (CLIA), and Pacific Asia Travel Association (PATA).

Profit from Consolidators

Using consolidators can, in many cases, save the client a great deal of money, but it can be very lucrative for the travel agency as well. Some consolidators state airfares as a net rate, not including commission. The travel counselor adds his profit and quotes the total to the client. Depending on the travel agency, the profit can be a fixed dollar amount or a percentage. How much the travel agency earns on a net consolidator fare is totally up to the travel agency.
Helpful Industry Web Sites

American Society of Travel Agents: http://www.astanet.com

Association of British Travel Agents: http://www.abta.com

Association of Retail Travel Agents: http://www.artaonline.com

Australian Federation of Travel Agents: http://www.afta.com.au

Canadian Institutes of Travel Counselors: http://www.citc.ca

National Association of Commissioned Travel Agents: http://
www.nacta.com

Outside Sales Support Network: http://www.ossn.com

Travel Agents Forum: http://www.travelhacker.com

United States Tour Operators Association: http://www.ustoa.com

Web Activity

Your clients, Matsuka Takahashi and Noriyuki Shigeru, will be
traveling from Los Angeles to Tokyo one month from today.
They have asked for business class and will be staying in Tokyo
for 14 nights. Research at least five consolidators' Web sites for
the lowest business class fare, additional costs, if any, and
credit card fees. If possible, list the airline, flight number, and
flight times. Also attempt to learn by what method and when
the tickets will be sent to your travel agency.


Other consolidators use airfares that include a commission. Depending on the consolidator and airline being used, the commission can be up to 10 or 15 percent.

Consolidator Policies

Typically, consolidators may have a variety of rules and policies that are different from simply selling an airline ticket through regular channels. A travel counselor who frequently sells the same consolidator is already familiar with this consolidator's policies. However, when a consolidator is used only occasionally or is being used for the first time, the travel counselor should ask about and be comfortable with several points including:

* Are agency checks accepted, and if so, is an escrow account used? An escrow account requires that funds remain on deposit until the service has been provided.

* Are all classes (e.g., first, business, and coach) offered?

* Does the agency receive credit with the airline for the sale? Future airline override commissions are dependent on the travel agency's sales volume.

* How far in advance of travel are the tickets sent to the agency?

* Is the fare net or does it include commission?

* Is there a delivery charge for tickets and what delivery method is used?

* Is there a fee for credit card transactions?

* Must travel originate in the United States?

* Of what organizations is the consolidator a member (ARC, IATA, IATAN, ASTA)? A non-ARC appointed consolidator probably obtains tickets from another consolidator.

* What fare amount is shown on the ticket (e.g., actual fare, full fare, zero, "bulk")?

* What methods can be used for booking (e.g., GDS, Internet, phone, fax)?

* When is the flight confirmed, at the time of booking or when payment is received?

* Which company's name appears on the ticket, the consolidator or the travel agency?

There are many things to consider when using consolidators. However, consolidators can be a source of low-cost travel and increased travel agency revenue. Using consolidators simply requires a bit more thought and investigation to ensure the lowest risk and inconvenience to both the client and the agency.

As an added precaution for travel agencies, it is not uncommon for travel counselors to ask clients purchasing consolidator tickets to sign a waiver of responsibility. This waiver states that the client fully understands and agrees to all policies regarding purchase, payment, cancellation, and so on. The waiver of responsibility should protect the agency against loss from client litigation.

CHARTERS

All charters fall into one of two categories, public or private. A public charter is usually organized by a tour operator or airline and is then marketed to travel counselors or the general public. Space on the charter is booked on an individual basis and the selling price generally has the agency's commission built in. A private charter can be organized by the group leader, travel counselor, or vendor and is for the exclusive use of the group. Any type of transportation, air, motorcoach, rail, and cruise can be chartered.

Both types of charters have the possibility for reasonable fares and more convenient schedules than those offered by scheduled vendors. However, there are some drawbacks.

Charter airlines may offer a flight to any given destination only on certain days of the week or on a once-a-week basis. This feature allows little client choice or flexibility. Because there is usually only one flight each day, any flight delay means that passengers must simply wait. There is no option of taking a later flight. Sometimes a flight delay can easily run into the following day, especially if an aircraft must be replaced.

Generally speaking, charter airlines and scheduled airlines have no agreements to work together. This fact indicates that should a charter flight be cancelled or should the charter company go out of business, it is unlikely that scheduled airlines will transport the passengers without requiring the purchase of a ticket. When flight departures are delayed because of weather, scheduled airlines usually have priority over charter airlines. Thus, charter passengers will probably wait far longer for departure than those traveling on scheduled airlines.

Aircraft Charters

A private aircraft charter provides an aircraft and crew for a specific group that shares an affinity or common bond. The group leader can go directly to the charter or scheduled airline or can make arrangements through a travel counselor.

A private charter affords the group several distinct advantages. The group selects the departure time and the flight can be nonstop or direct, even to obscure destinations. The group can decide if in-flight meals and beverages are desired and select what is served. The group can have preassigned seating. Ground transportation at the destination for the group can be ready and waiting and hotels, sightseeing trips, and meals can be part of the charter package.

Under normal circumstances, each member of the group pays less than if regular scheduled air transportation were used. If, however, the group decreases in size, the perperson cost will go up. The price given by the charter or scheduled airline is for the aircraft without regard to how full or how empty it may be.

From a travel counselor's point of view, arranging a private aircraft charter may sound difficult; it isn't! Once the travel counselor has determined the client's needs and desires, a call to the charter or scheduled airline company for a price quote and to check availability is the next step. The company may have to do extensive calculations and call the counselor back with the quote. Remember, this quote is the net amount. If the travel agency intends to make any money for the services the counselor is providing, the counselor must mark up the quote. In other words, the counselor must add the agency's profit to the quote before giving the group the total price. Because charters are usually substantially less expensive than scheduled service, the markup can be 10 to 40 percent and still result in a savings to the client.

The airline prepares a contract that details all aspects of the charter, responsibilities and limitations between the airline and agency, and payment schedules. The travel counselor reviews, signs, and returns a copy of the contract to the airline.

On a date dictated by the airline, a deposit is required. The amount of deposit is set forth in the contract and is usually a flat dollar amount per person. The group prepares a check payable to the travel agency. The agency deposits the check and issues an agency check to the airline.

As departure day nears, the final payment is required. Again, the group writes a check to the agency and the agency deposits the check. Before the agency pays the airline, the agency's profits are deducted. Yes, it really is that simple and can be quite profitable.

A public aircraft charter is quite different from a private group. The charter company organizes and markets a flight to Cancun, Mexico, for example. Brochures are printed and distributed to travel agencies. The trip may have a price for air only, and a choice of hotel packages. Because this is a public charter, anyone may purchase a seat or package. The prices on the brochure have the travel counselor's commission built in--usually 10 percent.

Again, the advantages are price and convenience. In most cases, the flight is less expensive than scheduled service and the flight may often be direct or nonstop. This feature is especially nice if the passenger lives in a city where flights to Cancun (or other destinations) are all double connections.

Each public charter traveler is required to sign a passenger contract. The contract includes information about cancellation by the operator, cancellation by the passenger, deposit, final payment, liability, baggage allowance, and responsibility. It is the travel counselor's responsibility to advise the passenger of this information before obtaining his signature.

Payments by cash or check between the client, travel agency, and charter company are handled in the same way as for private charters. The travel agency's commission is withheld before the agency issues its check for final payment. When clients pay by credit card, the card type and number are given to the charter company. Usually the charter company obtains the approval code and processes the charge. Commission checks from the vendor are usually sent to the travel agency after the client has completed travel.

Motorcoach, Rail, and Cruise Charters

The same basic principals apply to motorcoach, rail, and cruise charters as with aircraft charters. Motorcoach, rail, and cruises are usually chartered by a private group and afford the group a good price, selected departure times, en route hotels, sightseeing, meals, and so forth.

Private charters of these modes of transportation require negotiation and contracts between the vendor and travel agency. Payment schedules are defined and all-included features, responsibility, liability, etc. are in the contract details.

The price quoted by the motorcoach, rail, or cruise company may be net, so the travel counselor must add on any profit the agency wishes to make. The percent of markup is up to the agency. Deposits and final payments are handled the same as with aircraft charters.

Yachts, sailboats, and barges can be chartered without a crew, commonly called a dry lease. A charter that includes the services of a crew is often called a wet lease. In fact, these two terms are used for any mode of transportation being chartered to identify the inclusion of crew services. For these charters, the client may have to produce a license to operate the boat or take a short training course from the charter operator. This type of charter company can be located through local tourist boards, visitor's bureaus, and chambers of commerce.

It is an excellent idea when dealing with charter companies to make sure the company is a member of the National Tour Association (NTA). NTA members are required to hold a $1,000,000 bond, which protects the passengers against financial loss. Members are also required to hold a $1,000,000 liability insurance policy, again protecting the passengers. By not verifying the financial reliability of the charter company, the travel agency is opening itself up to potential lawsuits from passengers who have suffered a loss. Membership in other organizations, such as USTOA, is a definite plus.

Travel Agency Charters

Some travel agencies organize and market their own charter trips. When this is done, the agency is gambling on the sale of the seats. If all seats are sold, the agency stands to make a handsome profit. On the other hand, the agency could lose a substantial sum of money if all seats are not sold.

Once the origin, destination, and departure date have been determined, the agency contacts one or more transportation vendors. All aspects of transportation, such as cost, included features, departure time, and payment schedules, are negotiated and decided. A contract is signed and returned to the vendor.

Arrangements with other travel suppliers may be necessary to complete the package. These include accommodations, ground transportation, sightseeing and entrance fees, and meals. Concluding these arrangements is much the same as for the transportation vendor.

After all arrangements are made and a per-person price is determined, the travel agency designs and produces brochures and arranges for advertising. As the travel agency receives bookings and payments, individual client information is compiled into master lists. At a date established by each vendor, the travel agency provides the vendors with specific client information and name lists.

As you can see, much work goes into a travel agency charter; however, the agency has greater control over its profit percentage, and if all seats are sold, the agency revenue is substantial.
Helpful Industry Web Sites

Charter Airlines: http://www.aircharternet.com

National Motorcoach Directory: http://www.motorcoach.com

United Motorcoach Association: http://www.uma.org


GROUP SALES

The potential for selling group travel is everywhere. Schools, churches, business organizations, athletic clubs, historical societies, and senior citizens are only a few of the hundreds of existing groups. Groups travel together for many reasons, but most often a common interest is the impetus behind a group's desire to travel. Travel for group members is an opportunity to explore their interest with others who share it. Most groups have one person, or perhaps a few people, who are given the responsibility for setting up the trip. For the travel counselor, selling to a group can be rewarding, both financially and personally.

Because of the enormous amount of work that goes into marketing to groups and making all of the travel arrangements, some travel agencies choose not to handle group travel, or if they do, they choose to work through a tour operator to make the actual travel arrangements. A tour operator works with groups all the time and has the necessary contacts to negotiate group rates and arrangements. A smaller group might be booked into an existing tour package. A larger group may have a "custom package." The tour operator takes care of hotel reservations, sightseeing, and other local arrangements. The travel agency handles the pretravel details such as making the group proposal to the group leaders, making a presentation to group members to sell the trip, and taking reservations, deposits, and final payments from group members.

Some travel agencies prefer to handle the entire group sales process themselves. This involves marketing to potential groups, making group presentations, putting together a proposal based upon the group's composition and interests, handling all travel arrangements, and may also involve personally escorting the group to its destination. As you can imagine, the potential for profit is greater, but so is the investment of time.

Regardless of the way group travel is organized, communication is an extremely important part of the process. In order to avoid misunderstandings, contracts are required between the travel agency and the tour operator, and between the travel agency and the group. A group contract details all aspects of the group sale and establishes a payment schedule. Keeping meticulous records for a group is essential. Every transaction and conversation should be documented. A group sale, by its very nature, requires that hundreds of details must be handled efficiently and perfectly.

One of the things group organizers often look for are perks. A perk can be anything from a tote bag or passport wallet imprinted with the group's name to private receptions or tours for group members. Sometimes a travel agency will pay the cost of perks, but more often, a tour operator or other vendor may have special local arrangements for a list of perks that can be offered for little or no cost. The larger or more high-end the group, the more deluxe will be the perk.

INSURANCE

Demand for travel insurance has been steadily increasing due to such global happenings as terrorist attacks, natural disasters, and financial instability in the industry. The first ever study of the purchase of travel insurance by consumers was conducted in 2005 on behalf of the U.S. Travel Insurance Association. The survey revealed that 17 million travelers spent over $1 billion on travel insurance in 2004.

Travel insurance is one of the most important, and sometimes, most overlooked value-added products a travel professional can offer. There are some very important reasons to offer travel insurance to every client:

1. Insurance protects the client's travel investment against financial loss.

2. Insurance protects the travel professional against claims stemming from the client's financial loss.

3. Insurance commissions to the travel professional range from 10 to 40 percent.

Cruise lines and tour operators together sell 40 percent of travel insurance, usually called trip protection or vacation protection. Insurance offered by cruise lines and tour operators is usually based on the length of the trip and is quite reasonably priced. Some airlines offer "Ticket Protector" insurance that will, for about 4 percent over the ticket price, provide a refund of the ticket price if cancellation is for a "covered reason." Insurance companies offer a wide array of travel insurance policies that can be sold by travel agencies. Travel agencies sell about 35 percent of all travel insurance policies. These policies generally cover trip cancellation or interruption, health and accidents, baggage, flights, vendor bankruptcy, identity theft, and terrorist acts.
Helpful Industry Web Sites

Major Travel Insurance Companies

CSA Travel Protection: http://www.csatravelprotection.com

Travel Ex Insurance Services:
http://www.travelex-insurance.com,
http://www.totaltravelinsurance.com,
http://www.1travelinsurance.com

Travel Guard International: http://www.travel-guard.com


Trip Cancellation or Interruption Coverage

As you have learned, almost all travel products, including air, carry penalties for change and cancellation. Insurance that includes this coverage should be recommended for any travel product that carries a penalty, even an inexpensive excursion airfare. Typically, a client who purchases a $300 excursion fare (nonrefundable, $75 or more penalty for change) is not interested in insurance. However, a family of five buying the same type of ticket may look at insurance in a different light because they stand to lose a total of $1,500.

Generally, travelers are covered if they must cancel or interrupt their trip due to.... or the traveler's death, death of a traveling companion, an immediate family member, or business partner; or if the traveler is called for jury duty. It is interesting to note that some insurance covers trip cancellation simply if the traveler changes their mind and cancels the trip.

Medical situations that have existed prior to the purchase of insurance are called preexisting conditions. Insurance may not cover preexisting conditions so travel counselors must read the policy carefully. Of those insurance companies that do cover preexisting conditions, the purchase of the insurance must usually take place within one week of the trip purchase.

Health and Accident Coverage

While traveling inside the United States, most personal health insurance policies are effective. But, is the client covered while traveling outside the United States? In many cases, the traveler is not covered, not even by Medicare, unless he has purchased a special rider, which is added to his personal health insurance policy. Many U.S. corporations purchase this coverage for their employees who frequently travel internationally. However, the vast majority of travelers have no health insurance once outside the United States.

Almost all countries of the world have socialized medicine, where health care is free or available at a nominal cost to citizens of that country. There are usually reciprocal agreements between countries that have socialized medicine; that is, one country agrees to treat citizens of the other country, and vice versa. Because the United States does not have socialized medicine, the United States cannot have reciprocal agreements with other countries. This means that, legally, a U.S. citizen traveling abroad must pay for health care. However, as a gesture of good will, the country being visited may care for a U.S. citizen at no cost, but the government of that country is not legally bound to do so.

To be absolutely safe, additional health insurance for anyone traveling abroad is a must. Unfortunately, most people, including many travel counselors, do not seem to realize this fact.

Generally, most routine health matters are covered by insurance packages offered by vendors or purchased through major insurance companies. Typical exclusions include loss due to acts of war, suicide, armed forces training maneuvers, pregnancy, childbirth, and participating in dangerous activities.

The coverage of preexisting conditions must also be confirmed with regard to health and accident insurance. The travel counselor should read the policy carefully before attempting to explain the coverage to the client. Remember, each insurance company's policy on preexisting conditions varies.

Baggage Coverage

Common carriers, such as airlines, cruise lines, motor-coach companies, and so on, carry a certain amount of insurance on their passengers' baggage.

Generally, additional baggage coverage is included with insurance packages offered by travel vendors and major insurance companies. This coverage usually includes lost, damaged, or delayed baggage. Standard items not usually covered include cameras, jewelry, furs, money, credit cards, tickets, animals, and computer hardware and software. Additionally, baggage is not usually covered if the claim stems from acts of war, government seizure, or illegal transportation of goods.

Flight Coverage

As an added service to their clients, some travel agencies automatically provide flight insurance with every ticket or e-tkt they sell, at no cost to the client. Flight insurance is usually included in packages offered by major insurance companies, or it can be purchased as a separate item.

Generally, flight insurance covers the traveler while on a scheduled airline, military transport, transportation operated by a scheduled airline, and while on airport premises before boarding or after deplaning a scheduled airline's flight. If the client is traveling on a charter flight, the travel counselor should read the policy carefully because the client may not be covered.

Flight insurance does not cover loss due to acts of war, suicide, or participating in dangerous activities, such as parachute jumping. As you might imagine, the insurance is void if the client is committing or attempting to commit a felony.

Coverage for Bankruptcies and Defaults

The likelihood that a traveler will encounter difficulties resulting from a vendor bankruptcy or default seems to be increasing. Travelers who do not take out specific insurance are not protected. Although U.S. airlines are required to honor tickets for an airline that ceases operation, they can charge ticket holders up to an additional $50 each way, and flights are on a "space available" basis only. While some travel insurance covers bankruptcy or default, not all policies do. Be sure you know what coverage the customer is buying.

Coverage for Terrorist Acts or Identity Theft

According to the U.S. Travel Insurance Association, about 30 percent of leisure travelers purchase terrorism insurance. Incidents of terrorism in popular tourist destinations have created a demand for insurance. Many policies excluded terrorist attacks, but because of increased demand, have expanded their coverage to cover personal possessions, travel delays, and cancellation for a traveler caught up in a terrorist attack.

Identity theft and the personal expenses from the resulting turmoil are covered by a few travel insurance policies. Because identity theft has become much more of a concern for travelers, many more insurers are offering it. Policies include financial reimbursement as well as assistance to the traveler in untangling the damage that can result from having one's identity stolen. Coverage can be in effect for up to six months after returning home.

Other Means of Coverage

It is prudent to make any travel purchase using a credit card. Many credit card companies offer automatic coverage such as lost baggage insurance, flight insurance, or health and accident insurance just for using the card for purchasing travel. In addition, if a travel product is not delivered, such as in the case of a bankruptcy or default, the credit card company does not require its customer to pay for the product.

Sometimes personal homeowner's or renter's insurance will cover lost or damaged baggage while traveling. However, it is important to note that this coverage may extend only as far as the U.S. borders.

If travel is booked through a member of either the United States Tour Operator's Association or the National Tour Association, travelers may receive a refund for the cost of service not provided. The refund may be provided even if the member company does not declare bankruptcy or close its doors.

Insurance Waiver

Many travel agencies have learned, some the hard way, that they must protect themselves from client litigation that stems from financial loss. You can probably imagine a variety of sticky situations that could arise between a client and counselor. Some ways to accomplish this agency protection is to:

* require that all travel counselors fully discuss the vendor's policies regarding cancellation

* require that all travel counselors fully explain available insurance options

* require that all travel counselors obtain a signed waiver if insurance is declined

Generally, the insurance waiver states that the client has been advised of cancellation penalties, health care responsibilities, and so on; has been offered insurance; and has declined to purchase the insurance. The waiver includes space for the client's signature, counselor's signature, and date. As you might imagine, the insurance waiver can be the saving grace for the travel agency when a client is set on a lawsuit.
Case Studies

Marcus Tyler has purchased a cruise from you for himself and
his wife, Carlotta. After you have explained the cruise line's
cancellation policy and recommended insurance, Mr. Tyler mentions
that his father had a heart attack last year and still isn't
well.

1. Do you immediately sell insurance to Mr. Tyler?

2. Do you explain to Mr. Tyler that a cancellation due to his
father's illness is not covered?

3. Do you learn more about insurance coverage for preexisting
conditions?

Your clients, Pamela Griffin and Paulette Newman, have had to
cancel their tour. Ms. Griffin and Ms. Newman purchased the
tour and insurance from you three months ago. Ms. Griffin has
been a diabetic since she was 10 years old and now she is in the
hospital. She had a cut on her leg that didn't heal and all of
the surrounding tissue is badly infected.

1. In what way, if any, is the current hospitalization related to
Ms. Griffin's diabetes?

2. Will insurance offered by the tour operator cover the loss
from this cancellation?

3. If you did not know about the diabetes when you sold the
insurance, can you be held liable if your clients suffer a loss
from this cancellation?


SUMMARY

Using a consolidator or charter for air travel can result in benefits to both the client and the travel professional. Consolidators and charters often earn the agency higher commissions than regular air sales, and the airfare offered by consolidators may be considerably less expensive than that found through regular channels. However, there are usually additional rules and limitations to travel sold by consolidators and charters, so it is extremely important that the travel professional be aware of all variations from regular airline rules. Because of these special features, many travel agencies require that consolidator and charter clients sign a waiver of liability.

Group sales can be a very lucrative niche for travel professsionals. For effective group sales, the travel professional must have excellent organizational, communication, and presentation skills. Successful group sales counselors know that this type of sale is a win-win situation.

An important factor of any travel product sale is insurance. Most of the lower-priced airfares, tours, and cruises usually carry penalties for change or cancellation, hence the need for insurance. Clients traveling outside of the United States may find that their health insurance is no longer valid, but fortunately, there is insurance for these circumstances. Understanding the various types of insurance coverage and the protection they provide gives travel professionals another way to be of service to their clients.

For additional Travel and Tourism resources, go to http://www.hospitality-tourism.delmar.com.

Review Questions

1. How are consolidators able to obtain low airfares?

2. What reference sources are available for travel counselors selling consolidators?

3. Identify some possible negative aspects of using consolidators.

4. Name as many indicators as you can that demonstrate a consolidator's stability.

5. Identify some fees or charges that may be in addition to a consolidator's airfare.

6. Why do some travel agencies require a waiver of responsibility for consolidator sales?

7. In what ways is a private aircraft charter beneficial to the client as well as the travel agency?

8. In what ways is selling a public charter beneficial to the client as well as the travel agency?

9. What modes of transportation can be chartered?

10. What is a passenger contract?

11. Explain the payment procedure between client, agency, and charter company when the client pays by check.

12. How does the agency receive its commission when the client pays for a charter package by credit card?

13. Why is the sale of travel insurance important to the client and the agency?

14. What does insurance offered by major insurance companies include that vendor policies do not?

15. What are preexisting conditions and how might they affect insurance coverage?
GROUP SALES CASE STUDY

Your agency is making a presentation to a large senior
citizens' group in your city. While talking to the club's
president, you have learned that most of the members are
quite active, and the group travels frequently. Many members
are interested in American history and enjoy gambling and
shopping. They try to travel economically but don't like to
be uncomfortable. Trips of five to seven days are the most
popular.

Your presentation must include two possible trips and
answer the following questions:

1. What two destinations would you suggest?

2. What mode of transportation do you suggest?

3. What activities would be included in a five- to
seven-day trip?

4. What type of lodging do you suggest?

5. What is the estimated cost of each trip per person?
COPYRIGHT 2007 Delmar Learning
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2007 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:Section IV Selling Other Travel Products and Services
Author:Gorham, Ginger; Rice, Susan
Publication:Travel Perspectives, A Guide to Becoming a Travel Professional
Geographic Code:1USA
Date:Jan 1, 2007
Words:6131
Previous Article:Chapter 12 Traveling by rail.
Next Article:Chapter 14 Tours of the world.
Topics:

Terms of use | Privacy policy | Copyright © 2019 Farlex, Inc. | Feedback | For webmasters