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Figure 2
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2.2 Evaluating alternative methods of tour distribution and recognize the importance of new forms of electronic reservations
TAXES, INSURANCE FEES, SERVICE CHARGE
Contracted rates must indicate whether fees, taxes, and any other charged
are included. The commonly used term for a rate that includes all charges is
“net inclusive.” Contracted rates that do not include these charges are
commonly referred to as “plus-plus” (Net ++), the first “plus” being the taxes
due, and the second “plus” being the service charge. These are normally a
percentage of the base rate.
BOOKING AND RESERVATION PROCEDURES AND CONDITIONS
Each supplier has its own reservations policies and procedures. These musts
be and are usually clearly spelled out in the contract agreement. The
conditions to keep in mind are: option dates, cancellation penalties,
amendment policies, cut-off period, deposit payments and revisions.
An option date is a date preset by the supplier, by which time the tour
operator must firm up or cancel a confirmed reservation.
Cancellation penalties are levied by the supplier when confirmed
reservations are cancelled.
Amendments refer to a change of dates for a specific reservation. Some
suppliers consider amendments as cancellations and levy penalties
accordingly,
CUT-OFF PERIOD
Some suppliers grant tour operators free sale facilities. Free sale means that
a number of seats, beds, rooms and the like are allocated to a particular tour
operator to sell within a period of time leading to a cut-off date. Upon
reaching the cut-off date, the unsold seats, beds, rooms and the like
automatically revert to the control of the supplier. The tour operator may no
longer sell these after the cut-off date. Unlike an option date/time which is
given at the time of booking, the cut-off date is preset when the negotiations
for allocations are undertaken.
DEPOSIT PAYMENTS
Most suppliers will require a deposit payment to confirm reservations. If no
credit facilities exist between the supplier and the operator, the contract
agreement must specify this, including the refund policy and conditions in
case of non-utilization of confirmed reservations, subject to cut-off period
agreements.
Revisions refer to changes in number of seats, beds, rooms reserved or
changes in passenger’s names. Unlike amendments which refer to change of
date(s) for the delivery of a particular product or service, revisions maintain
the basic date(s) but the number of names of participants are revised.
FORM OF PAYMENT/CREDIT LINE
The contract agreement specifies the form of payment (e.g. cash, company
check, bank draft) and currency. It also specifies when payment is due (e.g.
“upon check-out”) and if credit lines are extended, the amount and time limit
to pay up is spelled out (e.g. P1000,000 or thirty days, whichever comes
first.)
When chartering equipment from transportations companies, the insurance
fee is normally included. However, in some instances, this fee appears
separately. The same applies to toll fees. Rates for passage on a per-person,
per-sector basis always includes the insurance fees. Terminal fees are taxes,
however, are reflected separately. The insurance fees and corresponding
coverage is more comprehensive for tourist vehicles than other commercial
vehicles.
It is very important to note here that violating the conditions of an insurance
policy, such as loading more passengers than those allowed by the nsurance
policy, or operating in sectors and areas not covered by the policy, renders
the insurance coverage null and void.
Cover charges in restaurants and discos are inclusive of tax. The minimum
charge policies of some disco houses, and pubs are subject to tax and, in
most cases, service charge.
APPLICABLE CONCESSIONS
Suppliers normally grant concessions to tour operators. Tour operators in
turn, pass these on to their clients. Transportation companies would
normally grant and free ticket for a specified number of full-paying tickets
issued, if these are travelling together on the same sector, flight and date.
Concessions when chartering transportation equipment may extend to one
hour of usage free, for every five full hours of usage.
In the hospitality industry concessions range from one (1) free bed for every
fifteen (15) paying beds, up to maximum four (4) beds, to free welcome drink
or breakfast included in room rate. As a rule of thumb, free meals are not
granted as concessions.
Each supplier will grant concessions in accordance to the perceived
potential or actual track record of the tour operator.
VALIDITY OF CONTRACTED RATES
Suppliers of services and products must indicate the validity of the
contracted rates, both in terms of time-year-round with peak/lean or high/low
seasons and markets. Some suppliers have different rates for different
markets. As a rule of thumb, rates are valid either 01 January through 31
December or 01 April through 31 March. For some European operators, the
season may be from 01 October through to 30 September. The following are
always considered peak seasons in the Philippines: Christmas, New Year,
Chinese New Year and Holy Week.
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