Pleasure International Travel Agency

Pleasure International Travel Agency (PITA) is engaged in booking reservations and ticketing for outbound passengers. It also offers local travel services that include hotel accommodations and transportation of inbound passengers to and from the airport and hotel. It earns income from commissions and mark-ups on airfares set by the airline companies, commissions from hotels and fees/charges on allied services. Its market is basically concentrated on overseas workers deployed by its affiliate recruitment/manning companies. The current market mix is 75 percent land-based/sea-based workers provided by its affiliate companies and 25 percent tourist air traffic and commercial accounts. Hence, it is highly dependent on only one market segment and thus, affects sales volatility. The company started earning income from the inception of the buy out scheme in 1990 from the former owners. However, it is currently experiencing problems due to outstanding uncollected receivables. PITA should adopt the competitive strategy to establish its presence in the niche market since it has to contend with competitors with large distribution network. It is recommended that PITA maintain a 60 percent-40 percent market mix. Sixty percent should come from its affiliate companies and the 40 percent from corporate accounts and tourist air traffic. Other recruitment agencies aside from its affiliate companies should be tapped. Large corporations known to sponsor seminars and conventions abroad for its employees should also be explored. Incentives can be given such as commissions, discounts and free tickets depending on the volume of passengers. Its present practice of advertising in the newspaper only during peak months should be continued but on a weekly basis. PITA must have an efficient credit and collection system otherwise, it will seriously cause cash flow problems that will affect operational efficiency. Client investigation must be done prior to credit extension in order to minimize the possibility of uncollected accounts. Billing statements must be regularly sent to customers for prompt payment. Demand letter follow-ups must be prepared for all accounts that remained outstanding for more than 30 days. Once PITA is able to establish a solid client base and strong financial position, it should consider the possibility of establishing a branch in Cebu or Davao after two years - 1996. This should coincide with the expansion of foreign tie-ups in the form of package tours in other countries such as Japan, Korea, Malaysia, Australia, etc