Car Rental Services

PREFACE Car rental agencies primarily serve people who have a car that is temporarily out of reach or out of service, for example travelers who are out of town or owners of damaged or destroyed vehicles who are awaiting repair or insurance compensation. Because of the variety of sizes of their vehicles, car rental agencies may also serve the self-moving industry needs, by renting vans or trucks.

INTRODUCTION TO THE INDUSTRY CAR RENTALS Car hire in British English is a company that rents automobiles for short periods of time (ranging from a few hours to a few weeks) for a fee. It is an elaborate form of a rental shop, organized in numerous local branches, primarily located near airports or busy city areas. Car rental agencies primarily serve people who have a car that is temporarily out of reach or out of service, for example travelers who are out of town or owners of damaged or destroyed vehicles who are awaiting repair or insurance compensation. Because of the variety of sizes of their vehicles, car rental agencies may also serve the self-moving industry needs, by renting vans or trucks. Car rentals are subject to many conditions, which vary from one brand to another. The vehicle must be returned in a good condition and must not exceed a maximum driven distance, otherwise extra fees may be incurred. Additionally, some companies set up a minimum age for the vehicle driver, which in some cases is as high as 25, even in countries where the age of majority is much lower. Recent conditions have utilized GPS technology to limit maximum speeds or driving to specific regions.

Major car rental companies • Cendant:

Avis - Budget

• Vanguard:

Alamo - National

• Dollar-Thrifty: • Independents:

Dollar - Thrifty

Auto Europe - Beneluxcar - Hertz - Europcar –

Enterprise - Kemwel - Rent-A-Wreck - Sixt There was a time in India when the portly Ambassador was India's most coveted and popular car. The Indian car buyer had to wait for months on end and even years before he could lay his hands on an ambassador or a Fiat Padmini, which was usually handed over by nonchalant, supercilious salesmen. It was the Maruti 800, a product of the Japanese car giant Suzuki collaborating with Indian carmaker Maruti which became a veritable watershed in the Indian auto market. It became the small car, which Indian nuclear middle class families aspired to, it was compact and traffic-friendly, it also was easily maneuvered through Indian by-lanes and ‘gallis’ with ease. But now that too is history. India has become one of the world's fastestgrowing car markets with scores of models plying the city roads and highways, from the home-grown Tata’s and Maruti’s to Volkswagens and Rolls Royce’s. Indians have emerged as avid car enthusiasts sporting their prized possessions as status symbols and speed machines. Foreign car companies have discovered the Indian consumer as well as the R & D potential in the Indian technical fraternity and are setting up manufacturing plants right and left across the country at lower costs. The growing desire for cars also is a sign that Indian roads are finally good enough for international cars to ride on. There are many four to six lane highways in India now and the Golden Quadrilateral, which passes through New Delhi, Calcutta, Madras and Mumbai proves that the Indian government takes infrastructure development very seriously.

Millions of Indian families will enter the car boom bracket in the next two years according to surveys. The auto boom in 2004 was with a 29 per cent growth rate was followed by a lull in 2005 due to meteoric fuel costs and more stringent anti-emission policies implemented by the Indian government. Increasing Auto Loan interest rates from the bank also added to the slowdown. But all indicators in 2005 say that household income in India is galloping towards a double-digit pace and 24 million households should be able to ride in a new car by 2007. The Indian automobile market is projected to grow by 7% next year. The economy is booming and the middle class is getting easy finance schemes to upgrade to four wheelers from scooters and motorcycles. In postliberalization India, backward linkages into the manufacturing of auto components have enabled many Indian vendors to foray in to core manufacturing. Trends in new-age Indian auto industry The Customer is King: The most obvious aspect is the proliferation of new manufacturers and the extension of demand in to all sub-segments like mid-size, premium mid-size and super-luxury car segments instead of being limited to the small car segment. The entry of foreign companies and the emerging stiff competition has enabled the setting up of a firm manufacturing foundation, which are allowing companies to develop new products from Indian soil. The Indian government is embarking on setting stringent standards on emission and safety related parameters for the auto industry and this has in turn elevated the general standards in a crowded market. Features like antilock braking systems, common rail injection, airbags and tiptronic transmission are now becoming customary in most mid-size and first-rate small cars. To speed things up, the average Indian car buyer is increasingly savvy with his auto-facts and is a highly informed buyer, networked via the internet and a spate of foreign and local journals and cable channels keeping him up to speed on the what, when, where and why of the auto world.

Small car to dominate The small car is still the best suited to Indian city roads and will see more competition in future. But, extremely attractive interest rates for car financing and competitive market policies do forecast that the mid-size car will be increasingly affordable in the long run. CAR RENTAL COS ADOPT NOVEL WAYS TO LURE CUSTOMERS

Renting a car is no longer about just plain hiring a cab. With more and more international players jumping into this fast-growing business, car rental companies are coming up with innovative strategies ranging from packages targeted at women to promoting the self-drive concept to even auctioning rent-a-car packages online to push sales. Rental packages European rentals major Sixt, for instance is planning to auction car rental packages online starting at Re 1 in addition to marketing pre-paid vouchers for both in-bound and outbound travelers. They have tied up with leading travel Web sites for auctioning the packages. In addition, with the popularity of travel Web sites increasing, we are increasingly leveraging upon these tieups to offer facilities such as airport transfers. According to estimates, over 5000 air tickets are booked daily on the top domestic travel Web sites. Sixt is also planning to market rentals packages for lady corporate travellers, which among other safety/convenience features provides lady chauffeurs.

Self-drive biz Meanwhile, with the concept of weekend getaways gaining popularity, car rental companies are increasingly betting on the self-drive business as well. Sixt would be focusing on Goa and Kochi for its self-drive business. Sixt, which is rapidly expanding its presence across the country, is targeting its fleet to over 5,000 cars over the next 18-20 months.

The Sona group, a leading automobile components maker, is all set to foray into the car rentals and leasing domain through a new division called Sona Mobility Services. The group has tied up with SIXT, one of Europe's largest firms in the car rentals space, for the same. They will initially be investing about $15 million. While they have already acquired a fleet of cars and appointed 50 chauffeurs, this would be scaled up to 500 cars in the first year. They are looking to achieve break-even in a year. The fleet would consist of cars ranging from Indica's to Toyota Camry's. The company has already appointed a COO - who has joined from SIXT in the Netherlands - for the new division. The company will formally launch the new operations during the forthcoming Auto Expo in Delhi, which is starting on January 12. The Sona group would be looking to leverage upon SIXT's global tie-ups and would initially be targeting German companies familiar with SIXT. The $3-billion SIXT has alliances with companies such as Lufthansa, KLM, and Siemens, among others. Being the master franchisee for SIXT in India, the Sona group would also be developing its own sub-franchisee network in all other regions excepting the North. The car rentals space in India is currently worth Rs 9,000 crore, with 90 per cent in the unorganized segment. People are increasingly demanding premium, standardized service, which is missing right now. They have inhouse etiquette training programmes for the chauffeurs. They are also investing in IT in a big way, including implementing GPS and allowing realtime booking of vehicles. Hertz, for instance, is looking to significantly expand its self-drive business. The firm is expanding its fleet to include sports utility vehicles for the holiday traveller and also to include cars such as a stretch limo. They are promoting the self-drive concept aggressively. We have, for instance, made the initial paperwork such as insurance much easier. Further, they are offering high-end SUVs and even customised vehicles for the customers. Hertz the global car hire giant is stepping on the accelerator. For more than a decade after coming to India it has crawled along in the slow lane. Now, it's looking at expanding its fleet of 500 vehicles to over 5,000 in the next three years. That's only one part of Hertz's route map for the future. In India Hertz cars have always come driven by chauffeurs. Now it believes the Indian market is ready to get behind the steering wheel with self-drive vehicles.

So customers will be able to walk into Hertz offices and drive away with a car of their choice. Self-drive is what distinguishes a taxi service from a car rental company. World over Hertz is the largest car rental company and we plan to make it the number one in India. The company will invest Rs 225 crore (Rs 2.25 billion) over the next three years to buy vehicles and the infrastructure to back it. Talks are on with a financial institution for the cash. Hertz has its route map clearly charted out. It's looking at four major areas -chauffeur-driven cars for corporates, travel desks at hotels, self-drive and fleet management. In 2002, Hertz conducted a survey and found that around 150,000 cars were registered as taxis. The industry is estimated to be around Rs 3,000 crore (Rs 30 billion). Of this only around 10 per cent is organised and includes around 20 players across the country. The big names are Avis, which has tied up with the Oberoi Hotels, Travel House, which has a tie-up with ITC WelcomGroup Hotels, and Orix, which has a tie-up with IL&FS. Most of the other players treat car rental as a secondary business meant to promote another business. Hertz also plans to cater to small and medium enterprises and professionals. It initially plans to strike deals with companies with which it already has a working relationship. Currently, Hertz provides chauffeur-driven cars to nearly 400 companies including IBM, Sony, KPMG, Compaq, etc. Hertz is looking at customers who feel a driver is a hindrance and he divides customers into three different types. One is the fuel-conscious customer who hires a car to go on a holiday with his family and would like a fuel-efficient car. Second is a person who may be driving an Ikon or Esteem, but would like to try an SUV. Thirdly, there's the person who may on special occasions like to go all out and drive a Mercedes or some other luxury car. Around the world Hertz has agreements under which vehicle manufacturers buy back cars. In India too it has similar deals and the manufacturers buy back cars after three years. It has taken Hertz a long time to get into high gear. Now it's getting ready to move at high speed.

THEIR FLEET AMBASSADOR (Standard Car) (Non Air Conditioned) Spacious, safe and good value for money and most popular car used by tourists. Passengers : 4 (Including Driver) Luggage : 4 (Incl. roof top carrier) (Air Conditioned) Spacious, safe and good value for money and most popular car used by tourists. Passengers : 4 (Including Driver) Luggage : 4 (Incl. roof top carrier)

TATA SAFARI (4X4) (6 seater / suv)(Air Conditioned)India's best 4 wheel drive and safest vehicle with dual air-conditioning and is most suitable for small group and families. Passengers : 6 (Including Driver) Luggage : 3 (Incl. roof top carrier) TATA SUMO (6 seater standard)(NonAir Conditioned)India's best 4 wheel drive and safest vehicle most suitable for small group and families Passengers : 6 (Including Driver) Luggage : 5 (Incl. roof top carrier)

TATA INDICA (Standard Car)(Air Conditoned) Compact car from Tata's, one of the most experienced automobile manufacturers in India. Passengers : 4 (Including Driver) Luggage : 3 (Incl. roof top carrier) MITSUBISHI LANCER (Luxury Car) (Air Conditioned)Most Successful car in its class in India manufactured by Japanese car manufacturers Mitsubishi Motors. Passengers : 4 (Including Driver) Luggage : 3 (Incl. roof top carrier) TOYOTA QUALIS (6 seater) (Air Conditioned) By Toyota Japan offers best A/c and comfort in its class. Recommended for small groups or large family. Passengers : 6 (Including Driver) Luggage : 5 (Incl. roof top carrier)(Air Conditioned) TOYOTA QUALIS (8 seater) By Toyota Japan offers best A/c and comfort in its class. Recommended for small groups or large family. Passengers : 8 (Including Driver) Luggage : 5 (Incl. roof top carrier)

Chevrolet Tavera Manufacturer - General Motors India Ltd. EnginePower- 2.6L Direct Injection Turbo Diesel Number of cylinders 4, inline, traverse mounted Piston Displacement 2489 cc Max. Power 84 PS @ 3800 rpm Max. Torque 18 Knm @ 1700 rpm Dimensions - Length 4335 mm Width 1690 mm Height 1775 mm Ground Clearance 194 mm Boot Space: Four normal size suitcase Toyota Innova Manufacturer - Toyota Kirloskar Motors Ltd. Engine- No. of Cylinders - 4 cyls.in-line, Diesel Displacement(cc) - 2446 CC Maximum Power(bhp/rpm) - 75 bhp /4200 rpm Maximum Torque(Kgm/rpm) 15.4 kgm / 2400 rpm Dimensions: Overall Height(mm) 1880 mm Overall Length(mm) 4425 mm Overall Width(mm) 1655 mm Ground Clearance(mm) 178 mm Kerb Weight 1540 kg Boot Space : In Build Covered Carrier at the roof with a capacity of 7-10 Normal size Bags/ Suit cases

TRAVEL AGENCIES This industry comprises establishments primarily engaged in furnishing travel information and arranging tours, transportation, rental cars, and lodging for travelers. Travel agents have been significantly affected by two factors in the early 2000s. First, travelers are increasingly using the Internet to book their travel, bypassing traditional agents. Second, the terrorist attacks of September 11, 2001 brought all travel—both business and leisure—within the United States to a screeching halt. In the aftermath of the attacks, security concerns and a depressed economy left agents with few customers. Just as travel agents were looking for consumers to regain confidence in the safety of travel and as the economy showed the first signs of recovery, the United States entered into the Second Persian Gulf War in early 2003, once again leaving Americans feeling the need to stay close to home. Although experts agree that the economy as well as the travel industry will eventually rebound, even if consumers overcome their cautionary feelings regarding air travel, the future role of travel agents is made murky by the every-growing use of the Internet to plan and book travel arrangements. Agents will also have to deal with less-than-perfect relations with airlines, cruises, and tour groups—all of whom are themselves struggling to stay afloat. ORGANIZATION AND STRUCTURE The travel agency industry is young, dynamic, and in a relatively constant state of transformation and growth. While no longer expanding at the explosive rate (almost 20 percent annually) of the early 1980s, the industry continues to grow—in terms of the number of locations—by nearly 6 percent every year. During the 2000s, mergers and acquisitions are expected to substantial, and the mega-firm is expected to be an increasing important facet of the industry. Regional Distribution. Travel agencies can be found in virtually every community in the United States. The greatest share of travel agency locations has been in the eastern United States (30 percent), with the western United States close behind (28 percent). The South has a 22 percent share,

and the Midwest has 19 percent. Central city locations account for more than 50 percent of the total, and the uneven growth of the 1980s—with the suburbs and small towns gaining disproportionate numbers of locations—not only subsided, but reversed itself. The share of rural and town locations dropped quite significantly to 9 percent, from nearly 12 percent in the late 1980s. With the emergence of Satellite Ticket Printers (STPs), automated ticket distribution machines began to replace branch offices altogether, a trend that may well continue. Consolidation. In examining location revenue trends in the travel agency marketplace, the pattern seems somewhat obscure. Not only is the proportion of larger agencies (those with more than $5 million in revenue) growing rapidly, but also the proportion of smaller ones (grossing under $1 million) is increasing at an equally conspicuous rate. The percentage of the industry's large locations has risen steadily to 11 percent, and their share of total industry revenue has risen to more than 33 percent. At the same time, small locations make up almost 30 percent of the industry. While seemingly contradictory, these trends are, in fact, results of the same overall movement of the industry toward consolidation into a number of "mega-agencies," or regional and national branch and franchise networks. Such firms have the resources to set up large offices in prime locations and to establish small branch agencies that are run in coordination with the main offices. Whether or not these smaller branches are profitable, they do augment name recognition, which is of utmost importance to any agency in this increasingly competitive market. The steady expansion of the industry in the 1990s had a completely different character than the boom period advances of the 1980s. The segment of the industry that expanded most in the 1980s—comprising the majority of the independent, single-location agencies with between $1 million and $5 million in revenue—came under pressure. The majority of agency locations still fell into this category in the 1990s, but it was a dwindling majority. Especially significant was the decrease in agency locations at the lower end of this group—those grossing between $1 million and $2 million—which were not as eagerly pursued by the acquisition-minded mega-agencies as were those locations with greater revenues.

The high level of consolidation activity in the travel agency industry is best assessed through the steep upturn in acquisitions. Almost a third of all agencies have acquired another agency already, and there are no signs of the buying spree slackening. In 1991 American Express Company purchased Lifeco of Houston, a firm whose airline ticket sales exceeded $1 billion annually. This acquisition provided a new scale for the already highly charged marketplace environment. Many smaller agencies also felt they had much to gain in terms of access to the latest technological innovations and overall support than they had to lose in giving up their autonomy. For this reason, they pursued buyers. Typically, the cost of purchasing an agency location is set at between 3 percent and 7 percent of its latest annual sales. Smaller Agencies. Despite the industry's consolidation, it remains first and foremost an industry of small businesses. Even in the face of intensifying competition, single-location firms still make up the vast majority of agencies, and in addition, they have successfully developed alternative business strategies to stay afloat. One common tactic is to seek out corporate clients—89 percent of all agencies handle at least one corporate account. While only large agencies can manage the travel accounts of most mediumsized and large corporations, these accounts make up about only 28 percent of all the corporations that use travel agencies. The rest (those with fewer than 100 employees) compose a huge market for the services of smaller agencies. The average number of corporate accounts an agency manages dropped to 38 from a high of 43 in 1989, proof that small agencies have made inroads into the realm of business travel. Quite simply, more agencies are attracting fewer business clients: certain companies may feel better served by an agency without too many other commitments. The particularized service that a small agency can provide has proven to be an effective selling point in building an agency's business travel base. Promoting themselves in terms of the unique, personal service that they offer, small agencies have also secured a place in the leisure travel market, a market in which the travel agent is often solicited as an advisor to the traveler. Although not widespread, there has been some noteworthy fragmentation of the leisure market into agencies specializing in travel niches (e.g., student travel, or travel to a certain part of the world).

Consortiums. Membership in travel consortiums is seen as a way of benefiting from consolidation without ceding direct control of the business. Through consortium membership, an agency develops close working relationships with other member agencies. An increase in purchasing power results in significantly higher override commissions from preferred suppliers and in cheaper access to expensive services that foster office efficiency. These immediate paybacks, however, are not the only focus. Many agencies feel consortiums, through annual meetings and newsletters, ensure that they remain up to date on broad developments in the industry. Consortiums also give travel agents a unified voice that increases their ability to influence supplier developments that affect them. In the 1990s nearly half of all U.S. travel agencies became affiliated with a consortium of some sort, and there are few signs of this trend slowing, since business travel consortiums have begun to catch up to leisure travel consortiums in membership numbers. Of course, consortiums are not only set up for small agencies, and the growing number of business travel associations are welcoming more and more mega-agencies. Access to consortium arrangements will ultimately serve to protect the travel agency industry from complete consolidation by ensuring that it retains some degree of its small-business character while still adjusting to the increasingly complex demands of the American traveler. Trade Associations. In seeking greater efficiency and better returns in the 1990s, an industry proliferated with independent operators, consortiums, and mega-agencies still sought a kind of uniformity. Market-driven joint ventures were not, however, the only coordinating mechanisms that served to integrate the industry. For example, several large trade associations act to influence government policy decisions on behalf of the travel complex as a whole. These associations also provide educational services for their members and promote the benefits of using travel agents. The largest of these trade associations, the American Society of Travel Agents (ASTA), boasted 29,000 travel agents in 170 countries in 1999. Seventy to 75 percent of this nonprofit organization's funding comes from its member dues, the rest from an annual conference. The second largest trade association, the Association of Retail Travel Agents (ARTA), has a much smaller membership—3,000 travel agents—and a more specific agenda of promoting their interests. Other important travel agent associations include the Travel and Tourism Research Association and the Alliance of Independent Travel agents. Related associations include the American Bus

Association, American Hotel & Motel Association, and Cruise Line International Association. While providing services for travel agents, such associations also legitimize the trade itself. Because only Rhode Island requires its travel agents to be licensed, an ASTA or ARTA membership offers assurance to both suppliers and consumers that an agent has some qualification beyond the easily obtainable agency accreditation, which is granted by the Airlines Reporting Corp. (ARC). In what has become a very technical field, there has been an increasing need for further standards of expertise, and educational bodies such as the Institute of Certified Travel Agents (ICTA) have begun to serve a crucial role. The ICTA, a 16,000-member association that seeks to improve the level of competence within the industry, offers a course through which agents can become Certified Travel Counselors (CTC), a title that already carries significant weight within the industry. Another certification which has come into demand with the growth of corporate travel is that of Certified Meeting Professional (CMP), which allows an individual to oversee every aspect of a business meeting. Nine states currently require some regulation, certification, or registration of retail sellers of travel services: California, Hawaii, Illinois, Ohio, Rhode Island, Washington, Iowa, Florida, and Oregon. Suppliers. Travel agencies rely entirely on commissions from their suppliers. Commissions, as a rule, are set at 10 percent of a booking, but slightly different arrangements can be made with each supplier. Travel agents may contact several suppliers to set up an appointment with each or use one of two coordinating bodies accepted by various suppliers as a kind of clearinghouse establishing the validity of agents. ARC agents are allowed to use standard ticket stock for more than 100 domestic and international carriers. ARC also provides weekly reconciliation of sales, refunds, exchanges, and commission payments to travel agents via a third party. While ARC appointment is not required of agents, it would be difficult to provide full services without it. A minimum of $20,000 is required to be appointed or retained by ARC. This acts as both a financial screen and a protection against default.

Airlines are the only suppliers who give significant commission overrides (marginally higher commissions) to agencies with which they have a preferred supplier relationship, whether negotiated through a consortium or through the agency itself. These overrides appear to be relatively effective in influencing agents' booking habits. More than two-thirds of all agencies book particular carriers in order to receive overrides, and these locations obtain overrides on about a third of all the air tickets they book. It is more common for overrides to be passed on to a business client than to a leisure client, mainly because the market for corporate accounts is highly competitive and, because of the higher prices a corporate traveler generally pays for last-minute scheduling, the commission will already be substantial. The use of overrides for leisure travel is on the rise, however, as it becomes an increasingly competitive sector. The industry's dependence on air travel resulted in a marked consistency of products offered by travel agencies. Airline tickets make up nearly 60 percent of a travel agency's business on average, more than all other "travel products" combined. This attachment to the airline industry poses problems for some travel agencies, and so has prompted an effort within the industry to decrease dependence on airline ticket sales. With air travel continuing to increase, however, this dependency may be unavoidable. The remainder of a travel agency's business comes from cruise bookings (which make up 16 percent of total industry sales), hotel bookings (12 percent), car rentals (8 percent), and rail travel and other bookings (4 percent). Tour and vacation packages, organized through tour operators with minimum arrangements, have increased in popularity. Packages allow for better control of costs in advance, and assure the customer that they will be taken care of in case of an emergency. For agents, they are easily put together and provide higher, more dependable commissions. Specialized tours (often called Foreign Individual Tours or FITs) are becoming confined to the luxury market, a welcome trend for agents because FITs are often time-consuming to organize. Car rental companies use a variety of strategies to lure travel agency business, including commission incentives, free client upgrades, low familiarization trip rates, and frequent contests. Regardless of what kind of inducement is offered, however, car rental bookings are still generally

viewed by agents as an added service for their clients. More often than not, an agent will make car reservations based on the efficiency and dependability of the car rental company's system rather than on what rewards are being offered. Payment of commissions has become less of a problem as car rental companies have begun to centralize their payment systems and have designated full-time agent assistants to deal with travel agent inquiries or commission payment concerns. In 1997 a New York State Court of Appeals ruled that rental companies cannot refuse to rent automobiles to drivers on the basis of age. Drivers under 25 or 21 were routinely denied rental because of higher accident rates. Since other states are considering similar legislation, this could, according to a Hertz Corporation spokesman quoted in ASTA Travel Industry Headlines, give car rentals "virtually unlimited exposure" to insurance liabilities. As more hotels acknowledge their dependence on travel agents for reservation bookings, the relationship between the two industries is greatly improving. Evidence of this is seen in the effort by many hotels to simplify and speed up the payment of travel agency commissions. In the past, commission payments could take anywhere from a few days to a couple of months and come with confusing statements from branch hotels. Now, a large hotel company, with a centralized commission payment system, issues payments and statements regularly from one office that deals with individual branch problems internally. Such centralization safeguards travel agents from having to spend valuable time chasing down commissions and makes agents far more comfortable in booking hotel reservations. STPs and On-Site Agents. In order to meet corporate demand for efficiency and specialized service, two strategies were adopted to better manage the travel accounts of large companies. Some agencies are offering to install satellite ticket printers in corporate offices so that a ticket and/or boarding pass can be distributed directly and immediately to the client. Some 13 percent of all agencies use such delivery systems, with the average number for an agency location being three. A smaller but growing number of agencies have gone so far as to set up on-site departments for their major clients (those who contribute more than $41 million in sales, for instance). Such departments, which are run and paid for by the agency but work in client-supplied office space, give the company more direct control over its travel arrangements and thus create savings and enforce travel policy On-site

agents also work in conjunction with in-house travel departments to set budgets, negotiate with vendors, and create travel expense reports. BACKGROUND AND DEVELOPMENT The Early Years. Because travel agency surveys have only been taken since the early 1970s, it is difficult to speak with much certainty about the state of the industry prior to this time, except to note that it bore little resemblance to the industry of the 1990s. ASTA was founded in 1931 as a society for steamship agents, at a time when steamships and trains were the predominant means of travel. A small group of agents booked tour packages and cruises in these early days. Later, with the spread of air travel, particularly with the introduction of larger passenger jets in the 1960s, travel agencies became much more prominent. Despite their prominence, travel agencies still remained a select group. For a long period of time, an agent actually had to be appointed by an airline commission in order to book airline tickets. In many ways this obstacle spurred the industry's expansion into car rentals and hotel bookings. For many years, however, travel agencies remained essentially unsustainable without inside connections to the airline industry. The Deregulation Watershed. In 1978 the Carter administration's airline deregulation legislation, designed by Alfred E. Kahn, chairman of the Civil Aviation Board, transformed the industry completely. In just three years the number of agency locations rose by 30 percent, from 14,804 in 1978 to 19,203 in 1981, and the average revenue per agency was up 23 percent, from $1.3 million to $1.6 million. Such broad-based, steep increases were, and remain, unparalleled and clearly point to deregulation as a watershed in the history of the travel agency industry. By eliminating fixed pricing and opening up air travel to competition, deregulation allowed more people to travel more cheaply. The benefits of travel agency services also suddenly became much clearer. With a floating market, and new airlines either popping up or going under with shocking speed, travel agencies were in a better position than anyone else to find the best ticket at the best price. Companies suddenly forced to trim budgets also came to be recognize travel agencies as the most cost-effective mode of ticket distribution Since the early post-deregulation years, travel agents' enthusiasm for airline competition has cooled somewhat. In particular, the frequent price wars

create havoc for travel agencies. When special fare offers are made, for instance, not only are agents unprepared, but their reservation systems are rarely loaded with new fares fast enough to avoid problems. Despite the fact that agencies continue to handle nearly 80 percent of airline ticket sales, no true partnership has evolved between the two industries. As a percentage of all travel agency revenue, revenue generated by the airlines has, in fact, fallen moderately from 63 percent in the early 1980s to around 56 percent. Both sides have tried to reduce their co-dependence; the airlines have developed frequent flier programs as alternatives to preferred supplier relationships, and travel agencies have built closer ties to other suppliers. A number of travel agents and tour operators were upset when the U.S. Travel and Tourism Agency was eliminated in 1996 along with its $16.3 million budget. This made the United States the only major country without a national tourist agency. Private industry stepped in, and the new United States National Tourism Organization Act was passed by the United States Senate in September 1996. It is estimated to have an $80 million budget to promote the United States to foreign tourists. Patterned after the U.S. Olympic Committee, the National Tourism Organization is funded by business sponsors who pay an annual fee to use its logo in advertising and promotion. The organization's avowed goal is to put the United States back on top of the international tourism market. Despite a leveling off in overall growth, the U.S. travel agency industry remains vibrant and is well-placed to benefit from the promise of future increases in both leisure and business travel. Even in a prolonged recessionary period, cumulative agency revenues have remained up, and it appears that there is still some room for agencies to grow within the travel complex. While they have no real competition in airline ticket sales, tours, and cruises, their proportion of the car rental and hotel reservation markets show room for growth. Even without any marked improvement in their relationship with these two suppliers, however, the industry is so closely aligned to the airline and cruise industries that the years ahead, while they may show further consolidation and cost containment, will surely be prosperous. In addition, the recent focus on airline industry upheaval and the Clinton administration's commitment to airline industry reform was welcome news to agencies who continue to depend on that sector of the travel economy. With the outgrowth of consortiums and mega-agencies, travel agencies have more leverage than ever before, which will enable them to play a significant role in airline industry reforms. Finally, and perhaps

most importantly, travel agencies have proven themselves flexible enough to adapt to the ever-changing habits of American travelers. Travel is currently the leading services export in the United States, bringing in $93 billion (including water transportation) from 46.4 million international visitors in 1998, which was $18.7 billion more than U.S. travelers spent abroad that year. Travel and tourism is also the third largest retail industry, next to automobile dealers and food stores. Total 1998 output from both domestic and international travel was approximately $1.2 trillion, which was 13.6 percent of the Gross National Product (GNP). The entire industry employed 7.6 million people in 1998, up from 6.6 million in 1995. Travel within the United States continues to represent a large segment of the industry: in 1998, Americans spent $424 billion on travel away from home without leaving the country. According the U.S. Census Bureau, travel approximately $11.1 billion in receipts for 1998.

agencies

brought

in

Post-deregulation commissions continued to drop through the latter 1990s as commission caps, ticketless travel, and cost cutting all began to take their toll. In October 1999 airlines cut their commissions to travel agencies down to 5 percent, the third reduction since 1995. In effect were a $50 commission cap on round-trip domestic flights and a cap of $100 on international flights. Electronic ticketing and Internet booking remained the biggest threats to travel agency income. According to ASTA, however, travel agents were still booking about 80 percent of all flights in 1999 despite the continued threat of direct online purchasing. Some of the most frequented Internet travel sites in 1999 included BizTravel.Com, GetThere.com, Priceline.com, and Travelocity. Travel Weekly's "1999 U.S. Consumer Travel Survey" reported that travel agents ranked higher than doctors, lawyers, and stockbrokers with respect to the value provided for the work (they were out-ranked by teachers, pharmacists, and accountants). Notwithstanding, the Federal Trade Commission (FTC) reported that Americans lose $12 billion yearly in travel fraud, mostly from nonregistered agencies.

CURRENT CONDITIONS The entire travel industry was rocked by the events of September 11, 2001, when four commercial airplanes were hijacked by terrorists concurrently, with two crashing into the New York World Trade Center, one into the Pentagon in Washington, D.C., and another brought down prematurely in Pennsylvania by passengers on-board who struggled with the terrorists. The horrific events sent shock waves through the nation, and travel ground to a halt. Travel expenditures fell significantly. In 2000, U.S. consumers spent a total of $570.5 billion on travel. In 2001 that figure dropped to $537.2 billion and dropped again in 2002 to approximately $525.1 billion. Travel agents are attempting to cope with the stagnant travel industry by focusing less on air travel and more on cruises, vacation packages, alternative means of transportation (e.g., rail and bus), as well as revenueboosting vacation add-ons such as spa packages, shopping trips, or special evenings-out. However, even when the economy recovers and people begin to travel again, the Internet clearly will remain the agents' long-standing competition. Expedia.com, Priceline.com, Orbitz.com, Travelocity.com, and Cheaptickets.com are proving to be worthy opponents. Some predict that the future of travel agencies will involve a fragmenting into numerous small agencies that primarily handle upscale cruises, local travel, and cruises and large "mega-agencies," who will operate both offline and/or online to provide a mass marketing approach to consumers looking for discounted prices. The market arena is also changing for travel agencies regarding airline commissions. A trend beginning in 1995 when commission fees were reduced by Delta, in 2002 the major airlines finally pulled the trigger on what travel agents had expected: zero commissions. The move could save airlines up to $1 billion annually, and it is also intended to push travelers to book directly with the airline via online reservation options. With no commission-based revenues, most agencies were forced to increase services fees. Although a vast majority of agents were not pleased with the airlines' decision to do away with commissions, most had plans in place to accommodate a new fee-based structure.

RESEARCH AND TECHNOLOGY Travel agencies have provided fertile ground for the application of cutting edge computer technology. Computer reservation systems (CRSs) are used by all but 4 percent of the industry. Of the five CRS vendors, Sabre has the largest market share of the industry at 35 percent; the other vendors include Apollo (23 percent), System One (20 percent), Pars (17 percent), and Data II (9 percent). Agents have become very comfortable with using CRSs and have started to employ them in uses beyond airline bookings. More car rental companies and hotels can be accessed through CRSs than tour companies and cruises, and agents have responded by making the majority of both their car and hotel reservations (68 percent and 53 percent, respectively) by computer. The most important specialized software to appear in conjunction with CRSs is the fare-auditing scan, which checks a system for better fares and/or routing. Such software has already given many large corporate agencies an invaluable marketing tool. Other quality-control software, such as automated accounting systems (used by 51 percent of all agencies), should continue to proliferate within the industry. The U.S. Department of Transportation, in fact, expected to issue new CRS rules that will make it easier for agencies to buy third-party software and hardware for accessing their CRSs. The emergence of Satellite Ticket Printer Networks (STPNs) and Electronic Ticket Delivery Networks (ETDNs) promises to have a major impact on travel agency ticket delivery. Starting in 1986, STPNs allowed agencies to set up ticket machines on client premises. The advent of third-party ticketing networks, used by agencies that cannot afford to establish networks themselves, has given agents the ability to issue tickets through their STPNs at a number of different locations. New networks are being developed that are essentially the same manner as STPNs but are not agency accredited by the Airlines Reporting Corp. (ARC). The ARC is expected to approve them, however, and many envision ticketing locations popping up in much the same as automated bank tellers machines. Without agency accreditation, though, ETDN vendors will neither sell tickets nor offer any kind of travel counseling. Electronic ticketing and bookings via the Internet are revolutionizing the industry. Because of reduced personal interaction, electronic tickets promise to slash transaction costs.

Several airlines are promoting direct self-ticketing. USAir Group Incorporated has provided its Priority Travelworks disks, which allow online reservations to 70,000 of the 19 million people in its frequent flyer program. United Airlines Incorporated sells its online connection for $24.95 a year but also provides for free drinks coupons and headsets. It also charges $2.50 per hour of connect time which is waived with the online purchase of a ticket. Northwest Airlines Incorporated's online registration is available through Compuserve. Delta, TransWorld Airlines Incorporated, and others plan to introduce their versions. The airlines are well positioned to capture online traffic because of their share in reservation systems such as Sabre, Apollo, and World-span, which are used by travel agents. Hotels, travel agents and quasi-travel agents have also taken to the Internet to allow do-it-yourself bookings to save costs, frequently providing access to databases previously reserved for travel agents and posting significant sales. For example, the Marriott hotel chain allows reservations over the Internet. The travel industry has embraced the Internet at a pace second only to the computer industry, but there are mixed reactions as to the impact of the Internet on travel agencies. Some feel that the ability to make one's own reservations and bookings will eliminate the need for a travel agent, but there is also the speculation that the fundamental role of the travel agent will remain unchanged; that is, they will continue to act as travel consultants because of their knowledge of the industry, although they may work inhouse for larger corporations. Tourism is the act of travel for the purpose of recreation and business, and the provision of services for this act. Tourists are people who are "traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes not related to the exercise of an activity remunerated from within the place visited" (official UNWTO definition). The distance between these two places is of no significance. A more comprehensive definition would be that tourism is a service industry, comprising a number of tangible and intangible components. The tangible elements include transport systems — air, rail, road, water and now,

space; hospitality services — accommodation, foods and beverages, tours, souvenirs; and related services such as banking, insurance and safety and

security. The intangible elements include: rest and relaxation, culture, escape, adventure, new and different experiences. Many countries depend heavily upon travel expenditures by foreigners as a source of taxation and as a source of income for the enterprises that sell (export) services to these travellers. Consequently the development of tourism is often a strategy employed either by a Non-governmental organization (NGO) or a governmental agency to promote a particular region for the purpose of increasing commerce through exporting goods and services to non-locals. Sometimes Tourism and Travel are used interchangeably. In this context travel has a similar definition to tourism, but implies a more purposeful journey. The terms tourism and tourist are sometimes used pejoratively, implying a shallow interest in the societies and places that the tourist visits. One of the earliest definitions of tourism was given by the Austrian economist Hermann Von Schullard in 1910. He defined it as, "sum total of operators, mainly of an economic nature, which directly relate to the entry, stay and movement of foreigners inside and outside a certain country, city or a region." Hunziker and Krapf, in 1942, defined Tourism as, "Tourism is the totality of the relationship and phenomenon arising from the travel and stay of strangers, provided that the stay does not imply the establishment of a permanent residence and is not connected with a remunerative activities." In 1976 Tourism Society of England defined it as "Tourism is the temporary, short-term movement of people to destination outside the places where they normally live and work and their activities during the stay at each destination. It includes movements for all purposes."

In 1981 International Association of Scientific Experts in Tourism defined Tourism in terms of particular activities selected by choice and undertaken outside the home environment. Tourism may be classified into the following types: • Inbound international tourism: Visits to a country by nonresident of that country • Outbound international tourism: Visits by the residents of a country to another country • Internal tourism: Visits by residents of a country to their own • Domestic tourism: Inbound international tourism + internal tourism • National tourism: Internal tourists + outbound international tourism There has been a discernible upmarket trend in tourism over the last few decades, especially in Europe where international travel for short breaks is commonplace. Tourists have higher levels of disposable income and greater leisure time. They are also better educated and have more sophisticated tastes. There is now a demand for a better quality product in many quarters. This has resulted in the following trends:• The old 'sun, sea, and sand' mass market has fragmented. People want more specialized versions of it, such as 'Club 18 -30', quieter resorts with select hotels, self-catering, etc. • People are taking second holidays in the form of short breaks/city breaks, ranging from British and European cities to country hotels. • There has been a growth in niche markets catering for special interests or activities. The developments in technology and transport infrastructure (particularly the advent of jumbo jets) have placed some types of holiday in the affordable mainstream:• The development of a mass cruise holiday market. • The advent of affordable holidays to long-haul destinations such as Thailand or Kenya.

• The phenomenon of the low budget airline, utilising a new generation of small regional airports. There have also been changes in lifestyle, which may call into question the current definitions of tourism. Some people (particularly the 45+ and retired) may be adopting a tourism lifestyle, living as a tourist all the year round eating out several times a week, going to the theatre, daytripping, and indulging in short breaks several times a year. Much of this results in impulse purchasing. This is facilitated by internet purchasing of tourism products. Some sites have now started to offer dynamic packaging, in which an inclusive price is quoted for a tailor- made package requested by the customer upon impulse. There have been a few setbacks in tourism, such as the September 11, 2001 attacks and terrorist threats to tourist destinations such as Bali and European cities. Some of the tourist destinations, including the Costa del Sol, the Baleares and Cancún have lost popularity due to shifting tastes. In this context, the excessive building and environmental destruction often associated with traditional "sun and beach" tourism may contribute to a destination's saturation and subsequent decline. This appears to be the case with Spain's Costa Brava, a byword for this kind of tourism in the 1960s and 1970s. With only 11% of the Costa Brava now unblemished by low-quality development (Greenpeace Spain's figure), the destination now faces a crisis in its tourist industry. Sustainable tourism is becoming more popular as people start to realize the devastating effects tourism can have on communities. Receptive tourism is now growing at a very rapid rate in many developing countries, where it is often the most important economic activity in local GDP.

In recent years, second holidays or vacations have become more popular as people's discretionary income increases. Typical combinations are a package to the typical mass tourist resort, with a winter skiing holiday or weekend break to a city or national park. On December 26, 2004 a tsunami, caused by the 2004 Indian Ocean earthquake hit Asian countries bordering the Indian Ocean, and also the Maldives. Tens of thousands of lives were lost, and many tourists died. This, together with the vast clean-up operation in place, has stopped or severely hampered tourism to the area. Special forms of tourism For the past few decades other forms of tourism, also known as niche tourism, have been becoming more popular, particularly: • Adventure tourism: tourism involving travel in rugged regions, or adventurous sports such as mountaineering and hiking (tramping). • Agritourism: farm based tourism, helping to support the local agricultural economy. • Ancestry tourism: (also known as genealogy tourism) is the travel with the aim of tracing one's ancestry, visiting the birth places of these ancestors and sometimes getting to know distant family. • Armchair tourism and virtual tourism: not travelling physically, but exploring the world through internet, books, TV, etc. • Audio tourism: includes audio walking tours and other audio guided forms of tourism including museum audio guides and audio travel books. • Bookstore Tourism is a grassroots effort to support independent bookstores by promoting them as a travel destination. • Cultural tourism: includes urban tourism, visiting historical or interesting cities, such as Berlin, Kathmandu, Lahore, Lima, Buenos Aires, London, Paris, Delhi, Rome, Prague, Dubrovnik, Beijing, Istanbul, Kyoto, Warsaw, and experiencing their cultural heritages. This type of tourism may also include specialized cultural experiences, such as art museum tourism where the tourist visits many art museums during the

tour, or opera tourism where the tourist sees many operas or concerts during the tour. • Dark tourism: is the travel to sites associated with death and suffering. The first tourist agency to specialise in this kind of tourism started with trips to Lakehurst, New Jersey, the scene of the Hindenburg airship disaster. • Disaster tourism: travelling to a disaster scene not primarily for helping, but because it is interesting to see. It can be a problem if it hinders rescue, relief and repair work. • Drug tourism: travel to a country to obtain or consume drugs, either legally or illegally. • Ecotourism: sustainable tourism which has minimal impact on the environment, such as safaris (Kenya), Rainforests (Belize) and hiking (Lapland), or national parks. • Educational tourism: may involve travelling to an education institution, a wooded retreat or some other destination in order to take personalinterest classes, such as cooking classes with a famous chef or crafts classes. • Extreme tourism tourism associated with high risk • Gambling tourism, e.g. to Atlantic City, Las Vegas, Palm Springs, California, [1], Macau or Monte Carlo for the purpose of gambling at the casinos there. • Garden tourism visiting botanical gardens famous places in the history of gardening, such as Versailles and the Taj Mahal. • Heritage tourism: visiting historical (Rome, Athens, Cracow) or industrial sites, such as old canals, railways, battlegrounds, etc. • Health tourism: usually to escape from cities or relieve stress, perhaps for some 'fun in the sun', etc. Often to "health spas". • Hobby tourism: tourism alone or with groups to participate in hobby interests, to meet others with similar interests, or to experience something pertinent to the hobby. Examples might be garden tours, amateur radio DX-peditions, or square dance cruises. • Inclusive tourism: tourism marketed to those with functional limits or disabilities. Referred to as "Tourism for All" in some regions.

Destinations often employ Universal Design and Universal Destination Development principles. • Medical tourism, e.g.: - for what is illegal in one's own country, e.g. abortion, euthanasia; for instance, euthanasia for non-citizens is provided by Dignitas in Switzerland. - for advanced care that is not available in one's own country - in the case that there are long waiting lists in one's own country - for use of free or cheap health care organisations • Pop-culture tourism: tourism by those that visit a particular location after reading about it or seeing it in a film. • Perpetual tourism: wealthy individuals always on vacation; some of them, for tax purposes, to avoid being resident in any country. • Pilgrimage Tourism: pilgrimages to ancient holy places (Rome and Santiago de Compostela for Catholics, Temples and stupas of Nepal for the Hindus and Buddhist, Mount Athos or Painted churches of northern Moldavia for the Orthodox), religious sites such as mosques, shrines, etc. • Sex tourism: travelling solely for the purpose of sexual activity, usually with prostitutes • Solo Travel: travelling alone • Sport travel: skiing, golf and scuba diving are popular ways to spend a vacation. Also in this category is vacationing at the winter home of the tourist's favorite baseball team, and seeing them play everyday. • Space tourism • Vacilando is a special kind of wanderer for whom the process of travelling is more important than the destination. • Wine tourism, the visiting of growing regions, vineyards, wineries, tasting rooms, wine festivals, and similar places or events for the purpose of consuming or purchasing wine. DISTRIBUTION CHANNELS Distribution channels are different types and an organisation may adopt any one type a combination of or all the types of the distribution channels. All

this depends on the type of services being provided by the organisation. In this section various levels of channels will be discussed: 1) Single level channel : here service is directly distributed to the consumers. For examples Airlines directly booking the tickets for the customers or hotels directly books rooms for the customers. 2) One level channel: it implies a single where only type or category of middlemen is used. For example Airlines uses travel agents/ ticketing agentsfor bookinngs for air travel. There is only one intermediary between the service supplier and the service user: The following diagram gives the various options for using one level channel: Travel Agent

SERVICE SUPPLIERS

Ticketing Agent

SERVICE USERS

Tour operator Corporate Travel Department

iii) Two level channel: in this case the distribution of services is through two intermediaries. For example, in the airlines, General Sales Agent (GSA) and travel agents form two levels of distribution channel. iv) Multi level channels :Many time more than two categories of intermediaries are simultaneously used in service industry and this is particularly the case in tourism and travel industry. For example, the wholesale tour planner sells their services to travel agents and tour operators. INTERMEDIARIES IN TRAVEL AND TOURISM INDUSTRY Intermediaries basically play a very important role in travel and tourism industry. They are the resources for the organisastion . They provide important services in terms of financial support, information, and promotion. Information, promotion, selling, financing, and risk taking are the main functions of the intermediaries or channel members.

Intermediaries increase the selling capacity of the organisation by providing selling services at places close to the customers, increases the geographical coverage of the market. different intermediaries can be sold to outbound tour market segment through tour operators. For example, tour operators can sell the services of the carriers to the outbound tourist market, individual travelers through travel agent. The middleman also helps in minimising the cost of incidental services for procuring the core service. The various types of intermediaries in tourism industry as follows. a) Travel agents are one of the most important intermediaries in travel and tourism industry. As per the findings, travel agents accounts account for 75% of domestic air travel and 90% of international air travel, 95% of international tour packages, 80% of international hotel booking and of domestic tour booking. These travel agents are middlemen of carriers, hoteliers, tour wholesalers etc. they get commission around 10% of service cost no charges are levied on the customers. b) Tour whole dealer: tour wholesaler is the organisation which plans, prepares, markets, and administers vacation and travel packages. These packages are usually a combination of the services of various suppliers like carriers, hotels guides etc. c) Tour operator is a person or organisation which operates packages prepared by tour wholesalers. Sometimes tour operators themselves provide ground services like local transport, guides’ etc. d) Corporate travel managers these are in house travel departments of large corporations. Corporate travel department provides various benefits to the organisation. • Reduces business cost, • Enhanced services are provide, • Increased purchasing power through bulk buying, and • Maintains the level of quality.

e) Incentive Travel Planner often , potential travelers become confirmed ones, If they are offered some concessions. For examples in govt. or Pvt. Institutions offer leave travel commission (LTC) to make travel the employees. For these kind of traveler there are special kind of Incentive Travel Planners like I.T.D.C. in India. f) Consortium: many organisations distribute their services by interacting with other orgs. consortium is the practice of offering similar service by a group of suppliers. For example the preferred Hotel World Wide is an org. with a group of more than 100 hotels. The hotels booking can be done in any of others hotel from any individuals. g) Franchising: it is a hybrid form of entrepreneurship. A parent company customarily grants an individual or a company the right or privilege to do a business by using its name and by following a set of pattern of operation over a certain period of time, in a specified space. SELECTION OF CHANNELS AND INTERMEDIARIES Channel decision involves long term commitment and cost for the principal suppliers. In this regard the time and cost are highest as compared to any other marketing decision. Thus level of channels’ selection and selection of intermediaries are a very critical to the success of an enterprise. The following factors play important role in these decisions:  Intensity of distribution desired,  Access to end user,  Prevailing distribution practices,  Revenue : Cost Analysis, 

Time horizon required for development of channel,

 Degree of control desired, 

Availability of channel participants,

 Choosing the best intermediary,

 Capability of channel participant,  Geographical coverage desired,  Market standing of the channel participant, and  Financial status of the channel participant, etc. Level of channels, selection of channel member’s etc. can give results only when smooth and professional relation with intermediates are developed and maintained. There is strong interdependency between say airlines and its intermediaries like GSA ticketing agents etc.. the roles and responsibilities should be clear and specific. This Should properly spelt out in order to avoid any chances of conflict among the organisation and its intermediaries. For example the percentage of commissions or royalties mode of payment, credit time etc. are decide at the initial stage it self. It is also advisable to have contracts agreements signed in this regard. “The decision to use middle man involves the organisation in a number of further decisions. The first is the problem of choosing the best middleman from the large number who are available.. but might find that a desired distributor id not willing to accept the assignment. Or the distributor might handle the product only if given exclusive distribution. Or the distributor might handle the product only if it receives better financial terms than are being offered… the organisation must follow this up by carefully establishing the terms and responsibilities of the distributors. This is called the trade relations mix and consists of price policies, conditions of sale, territorial rights and specific service to be perform by each party” Philip Kotler COMMERCIAL VEHICLES IN INDIA All motorised road vehicles are tagged with a licence number in India. The licence plate number is issued by the district-level Regional Transport Office (RTO) of respective states - the main authority on road matters. The licence plates are placed in the front and back of the vehicle. By law, all plates are based on the Arabic (European) script, though many states violate this by writing the numerals in the local script. Other guidelines include having the plate lit up at night and the restriction of the fonts that could be used. In

some states such as Sikkim, cars bearing outside plates are barred from entering restricted areas. Plates for private car and two-wheeler owners have a white background with black lettering (e.g., DL05 M 5399). Commercial vehicles such as taxis and trucks have a yellow background and black text (e.g., DL 1Y 1985). Vehicles belonging to foreign consulates also have the same yellow and black colouring. The President of India and state governors travel in official cars without licence plates. Instead they have the Emblem of India in gold embossed on a red plate. Since June 1, 2005, the Government of India has introduced High Security Registration (HSR) number plates which are tamper proof. All new motorised road vehicles that come into the market have to adhere to the new plates, while existing vehicles have been given two years to comply. Features incorporated include the number plate having a patented chromium hologram; a laser numbering containing the alpha-numeric identification of both the testing agency and manufacturers and a retro-reflective film bearing a verification inscription "India" at a 45-degree inclination. The numbers would be embossed on the plate, rather than being painted for better visibility. The term "India" is to be in a light shade of blue. PERMITS FOR GOODS VEHICLES Goods Carrier Permits: Such permit is granted under Section 79 of the Motor Vehicles Act, 1988, to a goods vehicle operating within the state. Permits granted to a particular vehicle for carrying a particular load has to be plied for that particular area only. Counter Signatures of Goods Carrier permits: These are the permits which are initially issued by one state and later on endorsed in another state by the concerned State or Regional Transport Authority under section 88 of Motor Vehicle Act, 1988. In view of the Delhi Government Notification number F. PA/JCV/OPS/Tpt./1613/05/1447 dated 5th January 2006, counter signatures are not being done under section 88 of Motor Vehicle Act, 1988 for those goods vehicle registered in other states and having a gross vehicle weight upto 7500 kg. if not running on clean fuel.

National Permits: National permits are issued to goods vehicles to enable them to go outside the home state. National Permit is issued for a minimum of four continuous states (including the home state) under rule 86 & 87 of Central Motor Vehicles Rules, 1989. For obtaining such permits the maximum age of a particular vehicle should not exceed 12 years. However, maximum age in case of a multi-axle vehicle should not exceed 15 years. For the issue of National Permit, applicant has to apply on form 46 and 48 alongwith other formalities PERMITS FOR PASSENGER VEHICLES Auto Rickshaw and Taxi permits: Such permits are issued by MLO (AR) Burari for carrying passengers to various places within Delhi. Fare is charged as per the fare meter mounted on such Vehicles & as determined by STA. Prevailing fares are as under:a) Auto-Rickshaw-Rs.8.00 for first kilometer and thereafter Rs.3.50 for every additional kilometer. b)Taxi-Rs.10.00 for first kilometer and thereafter Rs.5.00 for every additional kilometer. Maxicabs: Such permit are issued by STA to vehicles carrying passengers to various parts of Delhi on a fixed route and as per the fare fixed by the STA. Total seating capacity of such vehicles should not exceed more than 12 excluding the Driver. Phat Phat Sewa : The operators using the three wheeled Harley - Davidson engine vehicles were issued Phat Phat Sewa permits.

These vehicles have since been replaced with vehicles having maximum seating capacity of 9. They ply on a fixed route and charge the fare as per S.T.A. approval. Eco Friendly Sewa: Transport Department has issued permits to battery operated 3 wheeled vehicles having seating capacity up to 10. CONTRACT CARRIAGE BUSES PERMITS (CHARTERED BUSES): This is the most common type of permit used for hire and reward purpose. The permit holder can operate under a contract with his client for a fixed destination within Delhi or outside Delhi. For this an agreement should be executed between the clients and the operators and the list of passengers should also be available with the driver of bus. The permit holder cannot pick passengers other than those mentioned in the list. Such type of buses are also known as Chartered Buses. These permits are issued under section 74 of Motor Vehicles Act, 1988. The applicant has to apply on form PCA alongwith other formalities. STAGE CARRIAGE PERMITS: State Transport Authority announces scheme for grant of stage carriage permit from time to time, depending upon the requirement of buses on different route of the city. These permits are issued under section 72 of Motor Vehicles Act, 1988. The permit holders can operate their bus under their allotted routes for picking up passengers from one place to another. All DTC and private stage carriage buses come under this category. The fares are fixed by STA. Prevailing fares are as under: a) Upto 4 Kilometeters Rs.2.00 b) From 4 to 8 Kilometers Rs.5.00 c) From 8 to 12 Kilometers Rs.7.00 d) From 12 to 16 Kilometers & above Rs.10.00 e) For Green Line and LTDs of DTC Rs.10.00

TEMPORARY PERMITS : A temporary permit is issued by STA under Section 87 of Motor Vehicles Act, 1988 to transport vehicle for a limited period, enabling the vehicle to go out side Delhi for the following reasons:a) For the conveyance of passengers on special occasions such as to and from fairs and religious gatherings, or b) For the purposes of a seasonal business, or c) To meet a particular temporary need, or d) Pending decision on an application for the renewal of a permit. The applicant has to apply on form P. TEMP. A. DLY/DLZ (ALL India Tourist Permits cab): This permit is given for motor cabs having seating capacity of five. The colour of the cabs are permitted as white only. The applicant for this permit should have an office having telephone at suitable tourist passengers booking place .The applicant should have authorised parking place to park these vehicles and adequate financial resources to purchase the vehicle. The road tax\passenger tax of vehicle is paid at state borders. DLZ permits are given to luxury cars. RENT-A-CAB PERMITS: With the increase in no. of multinationals Companies & tourists requirements Rent-A-Cab scheme was launched in India in 1989. Under this scheme the passenger drives the vehicle himself & fare is charged on no. of days the cab is used. The applicant should have a 24 hrs. accessible telephone, adequate parking space, experience of passenger transport business. The applicant in addition should have a fleet of 50 cabs of which 50% should be air-conditioned. The permit of these schemes are also valid throughout India provided the passenger taxes were paid to the corresponding states INSTITUTION/SCHOOL BUSES: The vehicles of Educational Institution registered under the Societies Act 1960 (21 of 1960) are issued contract carriage permit by STA. These vehicles are also exempted from road tax. For identification these vehicles are painted in golden yellow paint. Special provisions have been incorporated in Delhi Motor Vehicles Rules, 1993 for additional safeguards in respect of the safety of the children.

ALL INDIA TOURIST PERMIT (AITP): This permit is given to luxury buses which have white colour with a blue ribbon of five centimeters width at the center of exterior of the body and the word “Tourist” shall be inserted on two sides of the vehicle within a circle of sixty centimeters diameter. A tourist permit shall be deemed to be invalid from the date on which the motor vehicle covered by the permit completes 9 years in the case of Motor Cab and 8 years where the motor vehicle is other than a motor cab, unless the motor vehicle is replaced by another, the latter vehicle shall not be more than 2 years old on the date of such replacement. The seating layout shall be two and two or one and two or one and one on either side, all seats facing forwards. The Vehicles should also have other facilities like public address system, drinking water, push full back seats, fans, curtains, a separate driver cabin etc. The applicant has to apply on form 45 & 48 along with other formalities. CASE ANALYSIS OF BPO INDUSTRY Inefficient vehicle routing, ambiguity over transportation bills, rising transportation costs, real-time control of vehicles, and pressure to increase call engagement is affecting the bottom-line of BPO outfits. One solution they are looking at: vehicle routing optimisation software. The biggest challenge for BPO is how to arrange the pickup and drop of 4,500 employees who work in 48 shifts in a day. After HR and telecom, transportation is the third-largest expense head in a BPO outfit, amounting to 17 percent of total expenses and directly impacting its revenues. Additionally, a cab carrying four to five employees that reports 30 minutes late for duty costs the company $184 (at the rate of $80 per hour). Factors such as accuracy of employee pickup and drop, on time reporting and safety of employees ought to be measured by BPOs as they directly affect the bottomline. For example, the accuracy of employee pickup and vehicles reaching on time should be 97 percent. Wrong pickups directly affect revenues. • Hughes BPO Services prepares a roster (route plan) based on the employees’ locations that are given to the driver. This process gets further complicated if an agent falls ill, for then an immediate arrangement has to be made to pick up another employee as a replacement. Now consider this: a call centre is expecting calls to

peak at 7 pm because its client has advertised a new scheme in the papers, and instead of 100 they need 150 agents to handle the call engagement. An automated vehicle route optimisation solution completely automates the entire roster plan, then maps the shortest route the vehicles can take. • Cab utilisation ratio Cab (vehicle) utilisation was poor in most BPOs because they have manual vehicle routing systems in place. In an 8seater cab, the occupancy was found to be in the range of 2-3 people, leading to high running costs—Rs 4,000-6,000 per employee per month. Sharma says, “Ideally, the cab utilisation rate has to be in the range of 4-5 per cab. BPO firms should look at investing in a vehicle route optimisation solution if their cab utilisation rate is less than four. The routing should be such that there is maximum occupancy with minimum travel time. Optimise that route The vehicle route optimisation solution market has come into its own. It is a Rs 2 crore market, with companies such as Wipro Spectramind, Converges, Dell, Vertex, Hughes and American Express using these solutions. At present over 450 BPOs/call centres are operating across the country and over half a million employees are working in this sector. As nearly 30,000 to 35,000 vehicles are plying on Indian roads to meet requirements of this sector, transportation is the third major expense area of the BPOs.

FACTS & FINDINGS Travel and tourism is a true pioneer of international human interaction and trade. But this ancient human activity acquired the label of tourism only in modern times. Now tourism is acting as a catalyst of development process at the national and at the global levels. In India activities related to travel and tourism dates back to ancient times. Here travel for pilgrimage, visiting friends and relatives, attending fairs and festivals or trade is most ancient tradition. Even during vedic period religious travel was prevalent. The word “Tirtha” meaning pilgrimage occurs in the “Rigveda” at about eight places. There are a number of places where religious tourism is the backbone of the economy. Development of tourism is responsible for development of physical infrastructure, which is needed for development of all other activities. Cultural as well as human development includes development of languages, literature, built heritage, dance, drama and local arts and crafts etc. Another aspect related to tourism development is social development. Through tourism, intermingling of two different societies take place which creates cultural and social understanding. Tourism opens rigid societies to outside world and promotes education and broadmindedness. Women empowerment also an offshoot of such cultural interactions. Tourism is also responsible for creation of employment, flow of money from haves to have not, increase in the demand of local talents and creates a multiplier effect in the whole economy which helps in eradicating poverty. Tourism is not only a major social phenomenon of the modern society with enormous economic consequences but also the world’s largest export industry, which accounts for about 8% of the total world’s exports, more than 30% of international trade in services, 10.7% of the global work force and about 12% of world gross domestic product. It is also dubbed as the ‘largest smokeless industry’ and contributes towards preservation of clean environment. Looking back at the trend in the growth of international tourism we see that in the 1950s the total arrival was only 25 million, generating receipts of $ 2.1 billion. The absolute number of arrivals multiplied two and half times

between 1960s and 1970s. And thereafter it has almost double every decade. The receipts have grown even faster, $18 billion in 1970 increased to $ 105 billion in 1980. Today it is well known that as a contributor to the global economy tourism has no equal. Going by the figures we can say that advantage tourism is - Employs 10.6 percent of the global workforce; - Contributes 10.2 percent to world’s gdp; - Generates tax revenues of $655 billion; - Is the largest industry with $3.4 trillion gross output; - Accounts for 10.9 percent of all consumers spending; - 10.7 percent of capital investment in the world; and - -6.9 percent of all government spending. With all this growth, the total arrival of tourists represents only about 7% of the potential and capable travellers of the world’s population. Therefore, the future growth potentials are phenomenal. Travel and tourism is said to be the best industry of the 21st century. Even the microsoft head bill gates has mentioned tourism as one of the three sectors to merit priority attention in the future. The future projections given by the world tourism and travel council are extremely impressive. Travel and tourism in India is an integral part of Indian tradition and culture. In the olden days, travel was primarily for pilgrimage - as the holy places dotting the countryside attracted people from different parts of the vast subcontinent. People also traveled to participate in melas, fairs and festivals in different parts of the country. In such background developed a cultural tradition where 'atithi devo bhava' (the guest is god) and 'vasudhaiva kutumbakam' (the world is one family) became bywords of indian social behaviour. From ancient time, the rulers in different parts of india built luxurious palaces, enchanting gardens, marvelous temples, grand forts, tombs and memorials giving expression to the depth of one's feelings and sentiments. These remain today as testimony to the rich cultural heritage of this land. The beauty of india's cultural heritage and the richness of the nature's endowments make india a tourists' paradise. The enthusiasm to visit these places and explore new ones continues.

Pandit jawaharlal nehru's oft-quoted remark : "welcome a tourist and send back a friend" has been the essence of india tourism approach in the postindependence era. Tourism is seen as an important instrument for national integration and international understanding. Whatever may be the objectives of tourism, even in those initial yeas of economic planning, the importance of creating the infrastructure was recognized. The five star hotel ashok, the pride of the government in those days, came up in the 50s. Tourism industries are made up of groups of companies, which produce the same or allied products and services. In most of the cases there would be product differentiation. While in some countries industries producing goods and services for tourists are clubbed with other commercial and industrial activities, in others, standard industrial classifications are established according to homogeneous groups of industrial activities. There are a large number of primary tourist enterprises. Most of these enterprises are dependent on tourism for their survival. Examples of such enterprises are as follows : (a) Accommodation enterprises like hotels, motels, holiday homes, youth hostels, guest houses, camping grounds. Inns, etc. (b) Food and beverage services such as restaurants, cocktail bars, coffee shops, tea houses, coffee houses etc. (c) Transportation services including hire-cards, taxis, buses sigh-seeing vehicles, special tourist trains, ropeways, ferries, cruise-boats, airlines. (d) Travel agencies (e) Tour operators (f) Enterprises dealing with providing interpretation services, guiding services, escorting services. (g) Entertainment services such as sports programme, exhibitions, theatres, cinemas, nightclubs, dance-halls theme parks, and racing, casinos and gaming facilities. (h)Enterprises manufacturing guidebooks, etc.

art

products,

handicrafts,

souvenirs,

(i) Shopping establishments selling souvenir items. (j) Duty free shops selling items of tourist interest. (k) Agencies dealing with promotion and development of tourism financing of tourism and providing insurance cover. The Company of tourism functions as the nodal agency for development of tourism in the country by coordinating and supplementing the efforts of the state/union territory governments, catalyzing private investment, strengthening promotional and market efforts and in providing trained manpower resources. Tourism and its growth in any country depends to large extent on that country’s: • Economic Environment • SOCIAL ENVIRONMENT During the last decade india has witnessed a number of changes in the economic and social environment and it has clearly shown its impact on the tourism scenario of the country. Process of liberalization begun in india in early 90’s and has shown its impact on the indian tourism industry. Thee has been a number of significant changes in the indian tourism industry: • Liberalization brought improvement in the quality of services offered, because of increased competition in the market and shifting of focus towards consumer. improvement has been witnessed in fields like :1) Information and travel assistance 2) Transportation 3) Hospitality etc.

• Liberalization has also opened channels of information to the Indian consumer; the consumer came to know about the superior quality products and services available in the international tourism market. And has therefore started demanding same services matching the international standards from the Indian tourism industry. • Due to increased capital inflow and increased economic activity the income level among different sections of the society has increased significantly (but in a disproportionate manner) so they are in a position to demand and pay for best services possible. A number of changes have also taken place in the social environment of the country which has shown its clear impact in the tourism industry also. • Changes have taken place in the family structure from joint family to nuclear family structure. This has given more independence to the families comprising of basically 2-4 members. Because of this newfound freedom their urge to travel and enjoy their life has increased tremendously. • Shifting focus from savings to consumption because of the consistent and increased level of income, less responsibility and availability of cheap credit has changed mindset of consumer from higher savings to more consumption. People have realized the importance of spending on themselves rather than saving everything for their offspring, the repercussion of which can be easily seen in the tourism sector, which is now growing at an unprecedented rate.

SAMPLE CONTRACT To, M/s Subject:- Hiring of DLY Cars . Sealed rate quotations are invited for hiring of DLY Cars (as per list enclosed). If you are interested to undertake the contract on the terms and conditions specified in para 5 below, you are requested to send you quotations in sealed cover marked ‘quotations for hiring of DLY Cars. The sealed cover containing the quotations should be addressed to the undersigned by the name and sent to Room No. 910, Paryavaran Bhavan, CGO Complex, Lodi Road, New Delhi – 110003. 2. The quotations should be accompanied with an earnest money Rs. 10,000/- (Rupees ten thousand only) in the form of demand draft of any nationalized bank drawn in favour of the Pay & Accounts Officer, Company of Environment and Forests, New Delhi – 110003 without which the quotations will not be considered . No over-writing is allowed in the quotations. 3. The quotations will be accepted up to 3.00 p.m. on 5.9.2005 and the same will be opened at 3.30 p.m. on the same day at R.No. 910, Paryavaran Bhavan, CGO Complex, Lodi Road, New Delhi – 110 003. An authorized representative of your firm can remain present at the time of opening of quotations. Terms and conditions :(i) The firm bill have to provide nos. of DLY Cars and models as per requirements of the Company for which for quotations are accepted by the Company. (ii) In case the firm fail to provide of DLY Cars on a particular day on, the vehicle will be hired by the Company from the open market from authorised services taxi stand, the difference between the rate of the firms accepted by the Company and the market rate on which the vehicle is hired from the authorised taxi stand will be recovered/adjusted from the bills of the firm due for payment by the Company .

(iii) In case of default on the part of the firm to provide requisite number of cars for more than ten occasions during the contract period, the contract will be terminated and awarded to another firm at the risk and cost of the defaulting firm. (iv) For out station duty the vehicle will have provided at the short notice by the firms (v) The successful tenderer will be required to furnish a security deposit of Rs. 10,000/- (Rs. ten thousand only) within 10 days from the date of acceptance of his tender. The security deposit shall be in the for of fixed deposit, receipt drawn on any nationalized bank in favour of Pay & Accounts Officer, Company of Environment & Forests, New Delhi – 110003. The security deposit shall be refundable after the successful completion of the contract. (vi) The car would be insured in all respects by the firm. In case of any accident or theft etc. all the claims arising out of it will be met by the Agency and this Company shall not be liable in any matter whatsoever (vii) The car with the Driver would be placed at the disposal of this Company as and when required. This Company would be free to use the hired taxi in any manner for carrying officials. (viii) In case the car provided to this Company breaks down or arrive late, during the period of hire, the firm will immediately replace it with another car. In case firm fail to make arrangements, Company will hire car from market and actual expenses incurred on this account by Company, will be deducted from the subsequent bill of the firm. (ix) In case DLY Car do not report in time, a penalty of Rs. 1000/- per day (8 hrs) per car will be levied on the agency which will be deducted from the subsequent bill. (x) DLY Taxis are in good working condition. The firm will keep the car in neat and the seat covers should be in immaculate condition. (xi) The DLY Taxis should not be more than two years old in respect of Diesel and three year old in respect of the petrol. (xii) The firm should have at least two fixed telephone lines at office operational 24 hours and all drivers should be equipped with mobile telephone facilities for proper communication.

(xiii) The decision of the Company shall be final and binding on the firm. The Company also reserves the right to reject any quotation in full or in part without assigning any reasons thereof. (xiv) No dead mileage will be permitted. The meter reading would start from Paryavaran Bhavan. (xv) There should not be change in deployment of DLY Taxi and driver without prior permission of the Competent Authority in the Company. In case the car/driver is changed without prior permission, no payment will be made for the same. (xvi) The Drivers of the DLY Taxi should be well conversant with the Delhi routes. (xvii) DLY Taxi should comply all pollution control regulations and norms. (xviii) Firm should meet all statuary requirements like minimum wages, etc. Income –Tax, Service Tax, etc. Documents in this regard may be enclosed with the quotation. The HOD, MOEF reserves the right to reject any or all the tender without assigning any reasons thereof. (_________________) Transport Head