CHAPTER 7: Laws of Regulating Travel and Tour Services

CHAPTER 7:
Laws of Regulating Travel and Tour Services

LEARNING OBJECTIVE
After the completion of the chapter, students should be able to:

1. define and the nature of business of tourism intermediaries;

2. identify the liabilities and legal obligations of tour operators & travel agencies;
3. enumerate the laws & regulations governing the travel and tour services operations in the Philippines;
4. review the new normal guidelines for travel & tour services; and
5. develop and update local knowledge on laws regulating travel and tour services

TRAVEL SALES INTERMEDIARY (TSI)

• Tourism intermediaries are distribution agents that participate in a tourism-product sales process
from its creation until the time it is consumed by final clients. Most intermediaries are wholesalers,
tour operators, bed banks, booking centers, DMCs and OTAs (online travel agencies).
• 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. This do not hold airline agency appointments or issue airline tickets.

Thomas Cook was the first tourism intermediary. a famous English businessman and founder of Thomas
Cook & Son (later Thomas Cook Group), the first travel agency as we know it.

Examples of Travel Intermediaries

Some of the most popular travel trade intermediaries are Booking, Expedia, Viator, Hotels, Trip.com,
Despegar, and Travelocity. Those are some of the top online travel agencies worldwide that hundreds of travel
and tourism suppliers have partnered with.

LEGAL DUTIES AND OBLIGATIONS OF TRAVEL INTERMEDIEARIES

Duty to Warn the Consumer: A travel intermediaries has a duty to reveal any negative
information they know about a certain destination that the traveler is traveling to.

Duty to Investigate and Disclose: Travel intermediaries have a duty to investigate travel plans
and be knowledgeable about the area the consumer is going to and whether there are certain
conditions that would affect the consumers travel plans.

Duty to Inform: Travel intermediaries have a duty to inform clients about critical travel
information. Travel agents must inform clients about limitations on tickets changes, the types of
travel documentation needed to travel, whether a certain country have certain requirements, and
the availability of travel insurance.

Duty to Make Reservations: If the consumer requests reservations to be made, then the travel
intermediaries has a duty to make those reservations and follow up to confirm the reservations.

Duty to Confirm Reservations: When a travel intermediary makes travel reservations and travel
schedules, the travel agent has to confirm that the reservation went through and is ready for the
consumer.
 CHAPTER 7: Laws of Regulating Travel and Tour Services

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 product of inbound tours whether or not
for a fee, commission, or any form of compensation.
TRAVEL AGENCY
Article of the Tourism Code of 1990 Defines a Travel Agency: As an entity engaged in the business
of extending to individuals or groups travel services and assistance to include documentations, ticketing,
booking for transportation and/ or accommodation arrangements, handling and/ or conduct of tours within
or outside the Philippines whether for a fee, commission or any form of monetary consideration.

PHILIPPINE PASSPORT ACT OF 1996 (RA 8239). renewal of application for the issuance of passport 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.

TOUR GUIDE
Tour guides shall mean an individual who guides tourist both foreign and domestic for a fee,
commission, or any other form of lawful remuneration. They are experts on the history of the location and
offer their tour groups interesting or enlightening information about points of interest at nature attractions,
historic sites, museums, scenic locations, and other travel destinations

DIFFERENCE BETWEEN TOUR OPERATOR & TRAVEL AGENCY?

CHAPTER 7: Laws of Regulating Travel and Tour Services

DUTIES AND RESPONSIBILITIES OF TRAVEL INTERMEDIARIES

CHAPTER 7: Laws of Regulating Travel and Tour Services
CHAPTER 7: Laws of Regulating Travel and Tour Services

RULES AND REGULATIONS TO GOVERN THE ACCREDITATION OF

TRAVEL AND TOUR SERVICES

PURSUANT TO THE PROVISIONS OF EXECUTIVE ORDER NO.120 IN RELATION TO

REPUBLIC ACT NO.7160, OTHERWISE KNOWN AS THE LOCAL GOVERNMENT CODE OF
1991.

Chapter II. Requirements for Accreditation of Tour Operators/Travel Agency

Section 2. Who May Apply for Accreditation? The following may apply for accreditation
as tour operator/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 application:

a. In case of a single proprietorship, a business name certificate, and all amendments thereto, in
the case of partnerships 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 guides 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:

1. 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.

2. 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.
CHAPTER 7: Laws of Regulating Travel and Tour Services

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

h. 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.

b. It must be easily identifiable and shall be used exclusively for the tour operation business.

Section 6. Accreditation Fee.

After compliance with all the requirements under these Rules, a certificate of accreditation shall
be issued to the applicant upon payment of an accreditation fee of ONE THOUSAND ONE
HUNDRED (P 1,100.00) PESOS per annum for main office and FIVE HUNDRED FIFTY
(P550.00) PESOS for each branch.

Section 7. Validity of Accreditation.

The certificate of accreditation shall be valid for a period of one (1) year from the date of issuance
thereof.

Section 8. Access of Department Representatives to Agency's Records.

The representatives of tile Department shall have access to agency's records for verification of
compliance with the requirements of the Department.
CHAPTER 7: Laws of Regulating Travel and Tour Services

CHAPTER III
REQUIREMENTS FOR ACCREDITATION OF TOUR GUIDES

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
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.

Section 10. Issuance of Accreditation and Identification Card.

Upon compliance with all the requirements of the preceding section, a certificate of accreditation
and an Identification Card shall be issued upon payment of EIGHTY-TWO PESOS & FIFTY
CENTAVOS (P82.50) and TWENTY-TWO (P22.00) PESOS, respectively, and shall be valid for
a period of one (1) year from the date of issuance thereof.

CHAPTER V
STANDARD REQUIREMENTS FOR TOURIST LAND TRANSPORT VEHICLES

Section 16. Requirements. For purposes of accreditation the following are the basic
requirements for the operation and maintenance of a tourist land transport:
CHAPTER 7: Laws of Regulating Travel and Tour Services

a. Registered capacity. A tourist land transport operator shall only be allowed to apply for
accreditation for the number of units covered by its franchise from the LTFRB.

b. Roadworthiness. To be registrable, every tourist transport must be found roadworthy upon

inspection by a team from the Department, in the case of bus or coaster, it shall not be more than
ten (10) years, nor more than five (5) years for a tourist car reckoned from the year of manufacture;

c. Left-hand drive. Every tourist transport shall be provided with a left-hand drive.

d. Ventilation. Every tourist transport shall be properly equipped with adequate air-conditioning
units.

e. Fire-fighting facilities. A tourist transport shall be provided or installed with at least one portable
fire extinguisher for the protection of its passengers.

f. Imprint of company's name and logo. The company's name and logo shall be imprinted at the
rear and sides, respectively, of the tourist transport unit.

g. Public address system. For tourist buses or coasters, a public address system shall be installed.

h. First-aid kit. Every tourist transport unit shall be provided with a first-aid kit and an adequate
supply of emergency medicines.

i. Seats. Every tourist transport shall have clean and comfortable seats.

j. Storage Space. A tourist transport shall have enough leg room and sufficient
storage space; and

k. Garage. Every tourist transport operator shall provide an adequate garage and repair shop for
the maintenance of its equipment, as well as a parking space sufficient to accommodate all its
registered units.

Section 17. P.N.P CLEARANCE.

In case of original registration and/or transfer of ownership of tourist transport, the necessary
clearance from the appropriate unit of the Philippine National Police shall be secured prior to
registration.

Section 18. Department Stickers.

After registration and issuance of accreditation by the Department, it shall be mandatory for all
tourist transport operators to put the Department stickers on the front and back windshields of
their vehicles for proper identification.
CHAPTER 7: Laws of Regulating Travel and Tour Services

CHAPTER VI
STANDARD REQUIREMENT FOR TOURIST WATER TRANSPORT VESSELS

Section 19. Minimum Requirements. For purposes of accreditation, the following

are the minimum requirements for the operation and maintenance of a water transport.

a. Restrooms -There shall be at least one restroom each with toilet and washing facilities for male
and female located at the passenger accommodation area. In addition, there shall be a common
toilet and bath at the cabin area.

b. Reception -A receptionist shall be available to usher in guests.

c. Refreshment and Dining Area -There shall be a refreshment area which shall be well-stocked
at all times. In case of long-haul trips, a dining area capable of seating, at least, one-fourth (I/4)
of the total passengers at one serving shall be provided with appropriate and well-maintained
furniture.

d. Promenade Area -There shall be a promenade or airing space at the upper deck for the
exclusive use of passengers.

e. Baggage Area -There shall be a baggage area provided with racks or similar convenient and
safe storage in the passenger accommodation areas.

f. Service and Staff -Adequate number of well-trained, well-groomed, experienced. efficient and
courteous staff shall be employed. They shall wear clean uniforms at all times. Front-line staff
shall have a good speaking knowledge of English.

g. Lighting -Adequate lighting arrangement and fixtures shall be installed in all levels of the vessel
in accordance with the Philippine Merchant Marine Rules and Regulations.

h. Life-saving equipment - Adequate life-saving device shall be provided in accordance with the
Philippine Merchant Marine Rules and Regulations.

i. Communication Equipment - Adequate communication equipment shall be provided in

accordance with the Philippine Merchant Marine Rules and Regulations.

CHAPTER VII
STANDARD REQUIREMENTS FOR TOURIST AIR TRANSPORT

Section 20. Minimum Requirements. - For purposes of accreditation, the following are
the minimum requirements for the operation and maintenance of an air transport.

a. Life-saving device -Adequate life-saving devices shall be provided in accordance with the
requirements prescribed by the Air Transportation Office.

b. Communication Equipment -Adequate communication equipment shall be provided in

accordance with the requirements of the Air Transportation Office.
CHAPTER 7: Laws of Regulating Travel and Tour Services

CHAPTER VIII
APPLICATION AND ISSUANCE OF ACCREDITATION

Section 21. Application for Accreditation.

Any person, partnership or corporation desiring to operate and/or engage in the business as
tourist transport operator shall accomplish in duplicate and file with the Department, the
application for accreditation prescribed for such purpose.

Section 22. Documents Required to Support Application for Accreditation to

Operate as Tourist Transport Operator. The application shall be accompanied by the
following documents:

a. Mayor's Permit and/or Municipal License

b. Business name certificate and all amendments thereto, if any, in the case of single
proprietorship. In the case of a corporation or partnership, a certified true copy of the Articles of
Incorporation, its By-Laws, or Articles of Partnership and amendments thereto, if any, duly
registered with the Securities and Exchange Commission.

c. Proof of ownership or contract of lease over an area adequate to serve as maintenance depot
and garage for all its units (not applicable to water transport).

d. A list of names of all officials and employees, and their respective designations, nationalities,
home addresses, certified correct under oath by the General
Manager/President; and

e. Such other papers or documents as may be required from time to time by the
Department.

Section 23. Documents Required to Support Application for Registration of Vehicle,

Vessel or Aircraft as Tourist Transport. The application shall be supported by the
following documents:

A. LAND TRANSPORT

1. A copy of the LTFRB certificate of franchise or authorization for tourist

car/bus service.

2. A copy of the transportation rates as approved by the LTFRB

3. Pictures of the vehicle showing the side, back and front views thereof
with the company's name and logo imprinted at its rear and sides,
respectively, and

4. Such other papers or documents as may be required from time to time by

the Department.
CHAPTER 7: Laws of Regulating Travel and Tour Services

B. WATER TRANSPORT

1. A copy of the Certificate of Public Convenience and Necessity issued by

Maritime Industry Authority.

2. A copy of the transportation rates as approved by the Maritime Industry

Authority.

3. Pictures of the vessel showing the side, back and front view thereof with
the company's name and/or logo imprinted at its sides.

4. A copy of routes to be served and schedules.

5. Such other papers or documents as may be required from time to time by

the Department.

C. AIR TRANSPORT

1. A copy of the Certificate of Public Convenience and Necessity issued by the Civil Aeronautics
Board.

2. A copy of the transportation rates as approved by the Civil Aeronautics Board.

3. Pictures of the plane showing the side, back and front views thereof with the company's name
and/or logo imprinted at its sides.

4. List of operations and maintenance officials and personnel with their ATO
licenses.

5. Copy of the routes to be served and flight schedules; and

6. Such other papers or documents as may be required from time to time by the Department.

Section 24. Accreditation Fee. Upon approval of the application, an annual accreditation fee
shall be collected from the applicant in the following schedule of fees per unit:

a. Bus Php 275.00

b. Coaster Php 165.00
c. Mini-Van Php 110.00
d. Car Php 82.50
e. Vessel Php 1,000.00
f. Aircraft Php l,000.00
CHAPTER 7: Laws of Regulating Travel and Tour Services

Section 25. Validity of Accreditation.

The accreditation duly issued to any tourist transport operator shall be valid for a period of one
(1) year from its date of issue unless sooner revoked for cause by the Department.

CHAPTER IX
SUPERVISION OF OPERATION OF TRAVEL AND TOUR SERVICES

Section 26. Request for the Department identification cards.

The Department Identification Cards shall be issued to employees of tourist transport operators
upon request subject to payment of a nominal fee. Provided, that said employees are included in
the list of personnel of the operator concerned.

Section 27. Surrender of ID Card.

Officers and the employees who have ceased to be such shall immediately surrender their ID
cards to the Department.

Section 28. Service.

Operators shall provide service that is a safe, regular, comfortable and convenient as possible.

Section 29. Display of Certificate of Accreditation.

The certificate of accreditation shall be displayed in a conspicuous place of the establishment.

Section 30. Non-transferability of Certificate of Accreditation.

The rights over the accreditation shall be non-transferable.

Section 31. Periodic Inspection.

When necessary or when public good dictates, the Department may send an inspection team to
the establishment for the purpose of finding out whether they are being kept and/or managed in
a manner conformable to the standards set by the Department. The inspection shall be conducted
at a reasonable time of the day with due regard and respect accorded to the right to privacy of
parties concerned.

Section 32. Checklist to be Accomplished During Ocular Inspection of the

Establishment.

The DOT's inspection team shall provide itself with a set of checklists of the requirements for the
establishment. All deficiencies found as well as the requirements complied with shall be noted in
the checklist.
CHAPTER 7: Laws of Regulating Travel and Tour Services

Section 33. Defects and Deficiencies Found During the Inspection.

Where certain defects and deficiencies have been found in the courses or the inspection, the
Department shall give direction to the manager or operator to rectify the defects and deficiencies
within a reasonable period of time.

Section 34. Penalty for Failure to Remedy the Defects, Etc.

If the management fails to remedy the defects or deficiencies, the Department may revoke the
certificate of accreditation of the establishment.

CHAPTER X
GROUNDS FOR CANCELLATION OF ACCREDITATION

Section 35. Grounds for cancellation of accreditation. Any or the following acts or
omissions shall be sufficient ground for the cancellation of accreditation of the tourist
establishment:

a. Making any false declaration or statement or making use of any such declaration or any
document containing the same or committing fraud or any act of misrepresentation for the purpose
of obtaining the grant of accreditation.

b. Failure to maintain the standards and requirements for accreditation as prescribed in these
Rules.

c. Violation of or non-compliance with any of the provisions of these Rules, promulgated orders,
decisions and circulars issued by the Department and other concerned government agencies; and

d. Any other act or omission that works against the interest of the tourism industry.

CHAPTER XI
MISCELLANEOUS PROVISIONS

Section 36. Confidential Character of Certain Data.

Information and documents received or filed with the Department in pursuance of the
requirements of these Rules shall be treated as confidential and shall not be divulged to any
private party without the consent of the party concerned
CHAPTER 7: Laws of Regulating Travel and Tour Services

LAW ON E-TICKETING & 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 the paper and allow greater
flexibility to the passenger and the travel of agent to make changes on the itinerary.

Republic Act No. 8792 (June 14, 2000)

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 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. (Section 5. RA 8792)
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 to be usable for subsequent reference. For evidentiary
purposes, an electronic document shall be the functional equivalent of a written document under
existing laws.

PROHIBITION AGAINST ENGAGING IN RECRUITMENT ACTIVITIES

Labor Code of the Philippines (Article 26) 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

COMMON INSURANCE CARRIED BY TRAVEL INTERMEDIARIES

Professional Liability Insurance: Protects the travel intermediaries for any errors occurred in
business activities or services or is sued by a consumer for not providing the service that the
consumer was promised in the contract.

General Liability Insurance: is an insurance travel intermediary carry if they have any office
where they meet with client in order to protect against claims related to injuries such as a “slip
and fall” incident.