LESSON 9: LAWS REGULATING TRAVEL AND TOUR SERVICES

As part of our tourism industry, the pivotal role of travel agencies is regarded as revenue
support of the nation's economy. Considering that our tourism industry has already become a
matter of public interest, it calls for its promotion and regulation by our government.
The laws regulating travel and tour services in this chapter involve implementing rules
and regulations by the Department of Tourism and Supreme Court decisions which define the
nature of the business of a travel agency and tour operator. Likewise, a background in the
validity of e-ticketing in booking customers by virtue of R.A. 8792, also known as the Electronic
Commerce Law is also included.
Under the Tourism Act 2009, travel and tour services which include inbound travel
agencies and tour operators, local tour operators, ecotour operators and tour guides are
periodically required to obtain accreditation from the DOT as to the quality of their facilities and
standard of services. In other words, accreditation shall now be mandatory for travel and tour
services.

Nature and Description of the Business

The Law
Tour Operator shall mean an entity which may either be a
single proprietorship, partnership or corporation regularly engaged in the
business of extending to individuals or groups, such services pertaining to
arrangements and bookings for transportation and/ or accommodation,
handling and/or conduct of inbound tours whether or not for a fee,
commission, or any form of compensation.
Tour Guide shall mean an individual who guides tourists, both
foreign and domestic, for a fee, commission, or any other form of lawful
remuneration.

A travel agency's covenant with its customers is to make travel arrangements in their
behalf. A travel agency's services include procuring tickets and facilitating travel permits or visas
as well as booking customers for tours. The relation of a travel agency with respect to a
common carrier is that it merely acts as an agent of the common carrier.
Under Republic Act No. 8239, also known as the Philippine Passport Act of 1996,
renewal of application for the issuance of passports may be filed by any licensed travel agency
duly accredited by the Department of Foreign Affairs, provided that the agent shall be
responsible for the authenticity of the supporting documents being presented to meet the
requirements for the application of passports.

Accreditation of Travel Agencies and Tour Operators

The Law
Section 2. Who May Apply for Accreditation. The following
may apply for accreditation as tour operator and travel agency:
a. A resident Filipino citizen.
b. A partnership organized under the laws of the Philippines, at
least 60% of its capital being owned by Filipino citizens; and
c. Corporations organized under the laws of the Philippines, at
least 60% of the subscribed common or voting shares of stocks of which is
owned by Filipino citizens and the composition of its Board of Directors being
at least 60% Filipinos.
Section 3. For purposes of accreditation, the following are the
supporting documents to be submitted with the applications:
 a. In case of a single proprietorship, a business name certificate
and all amendments thereto; in the case of partnership or corporations, a
certified true copy of the articles of partnership/incorporation and its by-laws
and amendments thereto, duly registered with the Securities and Exchange
Commission;
b. Complete list of its executive officers and employees, tour
guide and travel representatives, if any, indicating therein their nationality,
home address and experience, including names and establishments
previously or currently affiliated with, position and length of service showing
the following:
 in the case of the manager, proof that he has at least three (3)
years managerial experience in tour operations or has earned a degree in
Bachelor of Science in Tourism or has successfully completed a tour
operator's course; and
 Proof that, at least, two (2) of the permanent staff have at least
two (2) years experience in tour operations.
c. For alien officers and employees, valid visa from the Bureau of
Immigration and the proper permit from the Department of Labor and
Employment,
d. Contract of lease or contract to lease the office space intended
for the use of the agency, or in the absence thereof, a sworn statement by the
lessor that said agency is a lessee of his building stating the area thereof.
e. Mayor's permit/municipal license;
f. Latest Income Tax Return and Audited Financial Statements
reflecting a minimum working capital of Five Hundred Thousand
(P500,000.00) Pesos;
g. An annual performance report on the sales production and a
tariff sheet detailing services, rates validity, terms/conditions and
responsibilities; and Such other documents that the Department may require
from time to time.
Section 4. Additional Requirements for Tour Operator Using a
Motor Vehicle. No tour operator shall use any motor vehicle while conducting
tours or transporting tourists unless such motor vehicle is accredited with the
Department and sporting a tourist plate.
Section 5. Minimum Office Requirements. The tour operator
shall comply with the following office requirements:
a. It shall be located in a commercial district and not in a
residential district; and
b. It must be easily identifiable and shall be used exclusively for
the tour operation business.

The foregoing provisions provide for the minimum requirements for the accreditation and
operation of a travel agency and/or tour operator by the Department of Tourism note of the
investment limitation of foreigners in engaging as a travel agency or tour opera in the
Philippines.

Accreditation under the International Air Transport Association (IATA)

IATA accredits two distinctive types of travel agencies - Airline Appointed Agencies
holding ticket stock or capable of e-ticketing, and all other categories of travel agencies called
appropriate business standards that travel agencies must meet.
Airline Appointed Services
When a travel agency is appointed by the airlines through International Association of
Travel Agents Network (IATAN), the owner enters into an Agency Agreement with one or more
of IATAN's 79 customer airlines. Each airline sets its own standards for appointing travel
agencies and each airline may select any number of appointment criteria. Travel agencies
receive remuneration, generally in the form of commissions, on the sale of air transportation
services. The rate of commission is set between the individual agency and each airline.
Any travel agency holding standard and/or airline ticket stock or capable of e-ticketing
may apply as IATA Airline Appointed Agency. The standards for accreditation will be based on
the following:
a. Managerial Qualifier -a full-time person authorized to make managerial decisions and
exercise daily supervision of the location, and who has had:
 at least two (2) years full-time employment within the last ten (10) years in a
managerial position at an accredited agency or corporate travel department or in
a passenger air transportation sales capacity at an airline;
 or at least three (3) years full-time employment within the last ten (10) years as a
sales counselor at an accredited agency, or corporate travel department or in a
passenger air transportation sales capacity at an airline; or
 at least four (4) years full-time employment within the last ten (10) years in a
managerial position in a travel-related business (such as hotel, cruise line, or tour
operator) that offers travel services to the general public.
b. Technical Qualifier -a full-time person who performs or supervises the performance of all
technical aspects of selling commercial air transportation (ie, making reservations,
issuing tickets, assigning seats, generating other traffic documents, etc.). He must have
at least:
 one year full-time experience in this field within the last three years at an
accredited agency, or an airline, or a corporate travel department; and
 has successfully passed the Certified ARC Specialist (CAS) test administered by
the Airlines Reporting Corporation (ARC).
c. Premises
d. Financial Capability
e. Security Standards

Travel Sales Intermediary (TSI)

A Travel Sales Intermediary (TSI) is a business (proprietorship, partnership, or
corporation) that is engaged in the sale and/or brokerage of travel and travel-related services
such as cruises, tours, hotels, car rental, bus and rail transportation. TSIs do not hold airline
agency appointments or issue airline tickets.
Any business who wish to obtain accreditation by IATAN as a TSI is required to meet the
following standards:
a. The owner of the business has been registered with IATAN for two (2) of the past the (3)
years and was eligible for an IATAN ID Card and earned at least $20,000 in each of
those two (2) years from the sale of travel and travel-related services, or the business
considered a "Homebased Travel Agency" (operating from your residence in accordance
with local and state laws) and the owner has invested or has committed to invest
minimum of $10,000 in the travel business; or the business has been in operation for at
least one (1) year immediately prior to application and produced at least $20,000 in g
travel income or $200,000 in gross travel sales in the previous twelve (12) months; or
the business has been in operation less than one (1) year and the owner has invested or
has committed to invest a minimum of $25,000 in the travel business;
 b. That the gross travel income and gross travel sales represent no more than 15%
personal travel (applicant and family); of
c. Proof of legal form of the business and of a business bank account;
d. Two (2) letters of recommendation from national and international industry suppliers or
from a national travel association;
e. Proof of the business listing in a telephone or equivalent directory, website home page
advertisement showing how customers could contact the business;
f. Proof of a valid and relevant errors and omission insurance policy in the name of the
business;
g. Proof that the business and location are in compliance with all federal, state, country and
local laws, including but not limited to zoning, registration, and business license;
h. Proof of Sellers of Travel State Registration;
i. Certification that there are no pending or unresolved complaints at the state or local
consumer affairs office; and
j. Personnel Qualifier - Each TSI location must be managed by a person who devotes
substantially all of his time to the affairs of the business and has had at least two (2)
years (reduced to one [1] year if the person has successfully completed an
undergraduate degree in travel and tourism or has earned certification as a Certified
Travel Counselor, a Certified Travel Industry Executive, or as a Certified Travel
Associate) full-time or equivalent experience within the last three (3) years in a travel
sales capacity at an accredited agency, corporate travel department, airline, cruise line,
hotel, car rental, railroad, bus company, tour operator, or other travel-related business.

Accreditation of Tour Guides

The Law
Section 9. Requirements for Issuance of Accreditation. An applicant for accreditation as
tour guide shall submit the following:
a. Proof that the applicant has passed a seminar for tour guides duly conducted by the
Department of Tourism or other agencies duly authorized by the Department to conduct
the seminar; provided, however, that this requirement may be waived by the Department
where the applicant possesses special academic or professional qualifications relevant
to tourism;
b. Certificate of good health issued by any duly accredited government physician
c. Clearance from the National Bureau of Investigation; In the case of alien applicants valid
visa from the Bureau of Immigration and the proper permit from the Dept. of Labor and
Employment;
d. Mayor's permit/municipal license;
e. Latest Income Tax Return; and
f. Such other documents that the Department may require from time to time.

The above are the minimum requirements for accreditation as a tour guide by the
Department of Tourism. It is vital that an accredited tour guide must have passed a seminar for
tour guides duly conducted by the Department of Tourism of its duly authorized agencies.

Responsibilities of Business Entities Engaged in Travel and Tour Services

Travel agencies need to take necessary precaution by exercising prudence and due
diligence at all times. Under the present state of the law, extraordinary diligence is not required
in travel or tour contracts. However, the travel agency, acting as a tour operator, must
nevertheless be held to strict accounting for contracted services, considering the public interest
in tourism, whether in the local or in the international scene.
 Moreover, a tour guide is supposed to attend to the routinary needs of the tourists, not
only when the latter would ask for the assistance but at the moment such need becomes
apparent. In other words, the tour guide, especially by reason of his experience in previous
tours, must be able to anticipate the possible needs and problems of the tourists instead of
waiting for them to bring it to his attention. While this is stating the obvious, it is the tour guide's
duty to see to that basic personal necessities such as soap, towels and other daily amenities
are provided by the hotels. It is also expected of such tour guide to see to it that the tourists are
provided with sanitary surroundings and to actively arrange for medical attention in case of
accidents, illness or discomfort.
Failure to exercise prudence and due diligence in the supervision of its employees may
hold the tour operator liable for moral and exemplary damages, by reason of the anxiety caused
to tourists, especially when misrepresentations were made on tour packages, or by reason of
incompetence or lack of experience of tour guides who have not traveled yet in places of which
tour packages are being offered.

Prohibition against Engaging in Recruitment Activities

The Law
Article 26. (Labor Code of the Philippines). Travel agencies
prohibited to recruit. Travel agencies and sales agencies of airline companies
are prohibited from engaging in the business of recruitment and placement of
workers for overseas employment whether for profit or not.

In addition, the Rules and Regulations Governing Overseas Employment provide for the
following who are disqualified to participate in the recruitment and placement of Filipino workers
overseas:
a. Travel agencies and sales agencies of airline companies;
b. Officers or members of the Board of any corporation or members in a partnership
engaged in the business of a travel agency; and
c. Corporations and partnerships, when any of its officers, member of the board or partner,
is also an officer, member of the board or partner of a corporation or partnership
engaged in the business of a travel agency.

E-Ticketing and E-Commerce

E-ticketing (ET) is one of the most significant opportunities to reduce cost and improve
passenger convenience. It reduces ticket processing charges, eliminates the need for paper and
allows greater flexibility to the passenger and the travel agent to make changes on the itinerary.
Under Republic Act No. 8792 (June 14, 2000), also known as the Electronic Commerce
Act, an "electronic document" refers to information or the representation of information, data,
figures, symbols or other modes of written expression, described or however represented, by
which a right is established or an obligation extinguished, or by which a fact may be proved and
affirmed, which is received, recorded, transmitted, stored, processed, retrieved or produced
electronically.
The confirmation document in e-ticketing constitutes an electronic document by which a
right is established or an obligation is extinguished. It is already equivalent to a passage or
airline ticket in a contract of carriage which can be classified as the best evidence in proving that
a contract of carriage exists.
Consequently, electronic documents shall have the legal effect, validity or enforceability
as any other document or legal writing provided the said electronic document maintains its
integrity and reliability and can be authenticated so as to be usable for subsequent reference.
For evidentiary purposes, an electronic document shall be the functional equivalent of a written
document under existing laws.
Online Tour Packages
Currently, there is no law regulating tour packages. However, fraudulent selling of bogus
tour packages and other forms of misrepresentation of tour packages online constitute
swindling, a crime punishable under Article 316, paragraph 5 (other forms of swindling) of the
Revised Penal Code.