Topic 2 INTERPRET PRODUCT INFORMATION

Read and interpret general and specific details about the product and use information to meet the sales or operational need

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Interpret any special jargon or specifications in product information and accurately apply these to the sales or operational activity

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Identify and assess any customer, sales or operational risks that relate to the product

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Record and store information for future use.

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Airline Alliance

A co-operative agreement between airlines which may include both marketing and operational synergies. The airlines work together to provide better customer services and reduced operating costs over a route. 
e.g.   Qantas and Emirates between  Sydney and Europe (via Dubai).

Accreditation

Official process by which a principal provides approval for an agency to sell its products.

Add-ons

Extras for which an additional charge is required, e.g. meals on a tour

Adjoining rooms

Two or more room immediately adjacent to each other but without a connecting door.

Agent’s code

When an agency becomes accredited by a principal it is often provided with an identifying code to use when making bookings.

Allotment

Block booked airlines seats, hotel rooms, or services used by a tour operator or wholesaler. For example an allotment of hotel rooms means that the tour operator can sell those rooms without having to refer to the hotel each time. There is an agreement between the hotel and the operator for room tariff, sell back and room release dates. 

Amendment

When a change is made to a booking

Amendment fee

A charge that may be levied by a tour operator or by a travel agency for changes made to a previously confirmed booking.

Availability

When a client wants to make a booking for a tourism/event product or service you will need to check the dates that are available with the supplier. This is called checking availability. 

BBR

Bank Buying Rate.  
The rate at which a bank or currency exchange business will BUY foreign currency from you.

BSR

Bank Selling Rate. 
The rate at which a bank or currency exchange business will SELL foreign currency to you. 

Berth

A bed – a term usually used in sea travel i.e. 4 berth cabin

Booking Conditions

These are the conditions of the holiday/event booking i.e. payment conditions, advance purchase conditions, amendment conditions, cancellation fee s and conditions, refund conditions, liability exclusions etc. 

Consolidator

A company who negotiates net/net rates with a variety of airlines and on-sells them to travel agents and tour wholesalers at net rates. The volume of sales they generate means consolidators air fares are often very attractive in price. 

Booking File / Client File

The file (either paper or electronic) where a client’s details (either personal or company) and travel or event arrangement information is stored. It can be kept on computer or in a manual file in a filing cabinet, or both. 

Child

Usually classified as being over 2 years, but under 12 years for airlines. 
Many hotels, however, classify children as being Under 16 years – always check, never assume. 

Commission 

The money paid to a travel agent or events manager for selling a product or service usually calculated as a percentage of the total sale (e.g. 12%). 
Occasionally some companies will negotiate a dollar $ amount instead of a percentage; it will depend on the product /service being sold and the overall value. 

Commission at Point of Sale

When travel arrangements are being PRE-PAID  (paid in advance) BEFORE departure (or before the event)  the travel agent/ events management company deducts their commission from the gross selling price paid by their client,  then sends the residual amount to the wholesaler / supplier. 
The ability to deduct commission at the point of sale would be an agreed upon and negotiated in the contract between the travel agent/events management company and the supplier.  For example:- 

Agent collects gross price for a travel arrangements from customer:           $10,000
Agent deducts 10% of this price as their commission:                                      $ -1,000
Agent then sends the balance  (net amount) to the supplier:                         $  9,000

Commission 
on Completion

Or
Refund of Commission

When the agent / events management company receive their commission from their suppliers AFTER the travel /event arrangements have been provided, usually in the form of a refund payment, or perhaps as a credit on their account towards future payments, depending on how it was negotiated in the initial contractual stages.   

Contract Rates

Rates that have been negotiated between a travel or events supplier and the company whom you are working for, i.e. either a travel agency, wholesaler, or events management company.  A legally binding contract is drawn up between the two parties. 

Credit Card Fees

Fees charged by either a supplier, or by your company, to cover the cost of merchant fees the company will incur when accepting payment by credit card. Usually the amount is between 1 ½ -2% for accepting Visa or MasterCard, and 2 ½ to 3 ½ % for accepting Diners or American Express cards.  Often called an Administration Fee or part of a Service Fee and can either be shown as a separate item on an invoice, or included in the total. 

Exclusions

Products or services NOT included in the price of the holiday / event quoted.  

Familiarisation
(a.k.a. “famil”)

Term used for trips given to industry personnel to educate themselves about a destination / product/ service providing valuable first hand personal experience. 

F.I.T.  

Fully Independent Traveller   - A term used to describe a passenger who is not part of a group tour, but travelling on customised individual and independent pre-booked and pre-paid arrangements.  (E.g. a package holiday including air fare, accommodation, transfers and/or sightseeing). 

Fly/Drive package

A combination of products consisting of a flight and a rental vehicle, popular in Tasmania and New Zealand. 

F.O.P. 

Form of Payment – the method in which payment will be made – e.g. Cash, invoice, account, credit card, EFTPOS, company cheque, B-Pay, Direct  electronic deposit, etc. 

Foreign Currency

The money, or currency, of another country other than your own. 
e.g. US Dollars, Euros, Rupiahs, Pounds, Francs etc. 

FOC

Free of charge. 

Freesale

When a supplier can confirm the product to a client without the need to check availability.  Often a hotel will give a tour wholesaler a freesale facility which allows them to keep selling rooms until the hotel notifies them to stop, or up until a certain time prior to check in date.

Gratuities and tips

An amount paid for service, usually paid to porters, waiters, bell boys, cabin stewards etc. where service has been good.   Some cruise lines automatically charge a one off fee to cover gratuities. 

Gross price

The SELLING price.  Commissions and/or mark-up have already been added. 

Host Community

The people (community) living in the destination that is being visited, or where the event will be held. 

Inclusions

Products and services that are included in the total overall price being quoted. 

Infant

Classified as any child aged from 0 – 23 months, or under 2 years of age.
Infants are travel for free on domestic Australian carriers, but pay 10% for international travel. NOTE: Infants do not get a guaranteed seat – in many instances the baby is nursed on the lap of the parents for the entire trip. 

Itinerary

A sequential day by day description of a client’s travel arrangements, spelling out booking information for products and services such as flights, hotels, car hire, sightseeing  tours, transfers, events & attractions etc.  

Mark Up

An amount (either a flat dollar amount OR a percentage amount) which is added to a net price to allow a profit to be made. 
e.g.  Net price $5000  + $1000 mark up = Sell price (Gross price) of = $6000

Or   Net price $5000 + 10%      mark-up = Sell price (Gross price) of = $5,500
The way you work out your mark ups will depend on your own company’s procedures and policies. 

Maximum Stay

The maximum amount of time allowed to stay at a destination – occasionally a rule for the cheaper promotional fares, but slowly being phased out. 

Maximum stay periods also apply to many Visa applications, i.e. Maximum stay on a Cambodian tourist visa is 3 months from the date of entry.

Maximum Numbers

The maximum number of people allowed on a tour. This may be the capacity of the coach or some other capacity restrictions. 

MICE

Meetings Incentives Conventions & Exhibitions

Minimum numbers

The minimum amount of people required to run a tour at the given (advertised or brochured price). 

Net Price

There are 2 meanings for NET PRICE, but both mean an amount which does not have any commission or mark ups included in it. It is the cost price required by the wholesaler/supplier for provision of their product/ service. 
 
1)  Many wholesalers and suppliers will quote a NET price, which is non commissionable to you as the travel agent/events manager. You have to add your own mark up on top of the net amount to make a profit.  The amount of mark-up you add on t the net price will be dictated by your own company procedures and policies, and by what your competitors are selling the same product for. 
OR: 
2) The amount the travel agent/ events manager pays to a wholesaler/supplier for a product or service, AFTER they have deducted their commission from the gross price.    E.g. 
Wholesaler charges travel agent a gross price of $7,000 (including commission) for travel arrangements, which the travel agent collects from their client.  The travel agent and wholesaler have previously negotiated a contract whereby the travel agent receives 10% of the gross total at the point of sale. Therefore the travel agent deducts their $700 commission and then sends the residual left over balance to the wholesaler / supplier of $6,300.  This final figure, the $6,300 is the NET PRICE.  

Net Net price

The amount the wholesaler pays to the local suppliers on the ground in the destination / event region,  after they have deducted their mark ups.  

E.G.   for example - the “food” chain in the travel/ events industry is complicated.   Sometimes there can be 3  “middle men” or “intermediaries’ between the client and the end supplier who will eventually provide the product or service in the destination or event region:   .i.e. 
(1) Travel Agent            (2) Wholesaler           (3) Local ground Operators                          

Optional tour

The extra cost “non-compulsory” tours that a traveller can choose to select whilst on an extended coach tour. 
e.g.  When in Venice they may decide to purchase an optional tour that would include a gondola ride on the Grand Canal.   
E.g. When in Las Vegas they may decide to purchase an optional side trip to the Hoover  Dam. 

Optional extras

Additional costs for individual “non-compulsory” components of a trip/ holiday that a customer can opt to have provided as part of their arrangements.  

Optional extras are designed to give the customers more choice, and as an extra source of revenue for the travel agent/ event company. 

e.g.  Meal Plans,  Sightseeing packages,  Upgraded hotel rooms, additional sightseeing tours,  pre-paid Attractions , upgraded transfers from coach to limousine , travel insurance,  upgraded air fare,  Use of a “Club” room at the airport,  etc. 

Override Commission

A bonus commission paid by suppliers to travel agents for exceeding sales targets.  
(This is normally negotiated into their contract with the supplier). 

e.g. – a travel agent might receive 10% commission if they make their normal sales targets, and if they exceed their sales target they might receive 15% commission. 

Per Person
( P.P.) 

The cost of travel arrangements for each person, either as a single component (item) price, or as a total price. 

Per Room
(p.r.). 

The cost for a room in a hotel for a night.  
To get a per person rate, the per room price is then divided by the number of people sharing the room: e.g. 
e.g. If the rate for a hotel room is $300 per room per night: 
1 person having a room to themselves (i.e. Single) will pay for the whole room: $300 p.r.

2 people sharing a room (e.g. Twin or Double) will pay for ½ the room each:        $150 p.p.

3 people sharing a room (e.g. Triple) will pay for 1/3 of the room each:                  $100 p.p.

Per Night
(p.n.)

The cost, either per person or per room, for one night in a hotel. 
Hotels are always worked out on the number of nights a person will stay in it, rather than the number of days. 

Porterage

The service of carrying bags at airports and hotels.  Most hotels include porterage in their rates, however when planning events or doing group bookings it is always wise to check and see if there will be additional charge for porterage for large groups as often there is. 

Preferred Product

Travel Agents who sell large volumes of a particular supplier’s product receive an overriding commission.  A Preferred product arrangement is negotiated and generally contracted.   This involves particular techniques on the travel agent’s behalf to more aggressively “push” the preferred product partner’s products over its competitors. 

Principal

A main supplier of travel arrangements (wholesale) ... the brand names, or “big boys” of the industry that are wholly owned, the ones who put millions of dollars into their product / services each year and are at the top of their category. 
e.g.  Major airlines, major wholesalers,   major hotels, brand name car hire companies, etc. 

Product

Something a person buys to use, consume or experience. The product may be a service or the expertise of a person, a good, or a place or seat and it may have tangible or intangible attributes. The customer buys this product because they believe it will satisfy their needs in some way. 

Product Benefits

This relates to how the product features will benefit the individual client and their needs. E.g. a hotel room hair dryer or spa bath may be of great value to people who like to style their hair, but may be of no use or benefit to a bald man.  Product benefits are seen subjectively, i.e. everyone will view the feature’s benefits in a different way. 

Product Features

Those characteristics that make up the product. The feature helps a person decide if the product will satisfy their needs. Product features are objective....which means that everyone will see the same product attributes. 

Rack Rate

The published full undiscounted cost that a principal charges for its products or services.  The price the supplier will advertise to its retail customers, or to those who walk in off the street.  Usually refers to the rate a hotel will publish in its brochure which is put in a brochure rate at the tourist information centre.   Usually the most expensive way of purchasing the product or service, and more than the client will pay if they’d booked through a travel agent. 

ROE

Rate of Exchange

The rate at which the bank or money exchange business converts each of the foreign currencies into local currency.  i.e.  BSR and BBR.  The rate is decided by the bank on a daily basis and will fluctuate throughout the day, usually by a few decimal points. It may also fluctuate from bank to bank and money exchange business (e.g. Thomas Cook). 

Seasonal
Availability

Tourism products may only be available at a particular time of the year and are subject to seasonal availability.  There are often low and high demand seasons as well. 

Seasonal Factors

Availability can depend on seasonal factors such as – climate (snow season), summer (best climate, wet season (usually cheaper) – it can have an impact on a tourist’s holiday.  Other seasonal facts will include high demand factors – such as Europe in summer, Canada in winter) 

Selling Price

The price paid by the passenger / client. Usually the price printed in the brochures. Also called “brochure price”.  This is the price that includes the travel agents commission or mark ups.  

Single Supplement

Usually package tours, cruises, coach tours etc. are advertised on a per person share twin basis.  However, when you have a single person travelling on their own and they wish to have sole use of a room, they are required to pay an additional amount on top of the share twin price, as s supplement.  

e.g.  15 Day European Whirl tour with Contiki:  Advertised at:   $1,990  p.p. share twin. 
         + Single supplement for1 person to have single room:       $1,000 p.p. single supp.
         Total price to be paid by a single person in single room:    $2,990 total. 

Synergy

Working together to product greater results than could be possible by working alone. 

Target market

A group of customers usually with common characteristics to which a company focuses their marketing efforts. The intended customer group. (E.g. youth market, adventure market, luxury market, cruise market). 

Tour Wholesaler

A company that produces brochures with a variety of different travel products and services in it. They can sell through travel agents or directly to the traveller. 
They generally provide package tours including air fare and land arrangements and sell it for a single price. 

Transfers

Transport from one point to another in a tourist’s destination region.  The most common is to/from airport to hotel, railway station to hotel and wharf to hotel.  Most commonly they are provided as a coach transfer; however it is usually possible to upgrade and pay to have a private vehicle such as a car with driver, or even a chauffeur driven limousine. 

Triple Reduction

A discount given on the per person share twin price if 3 people occupy a room instead of the usual two.  Most tour wholesalers and tour operators do not offer much in the way of a 3rd person discount.    Usually 2 out of the 3 people in the room will pay the share twin rate, and only the 3rd person receives the discount – always be careful with this as it can vary from hotel to hotel.  Most hotels do not have a room with 3 single beds in it, or even 1 double and 1 single.   

Twin Share

When 2 people share a room they are often quoted in a twin share cost that is charged per person (this is regardless of whether they are 2 people sharing a double/king bed, or 2 people in twin (2 x single) beds. 

Validity

The time period that a rate, quote, or brochure is valid for.