MP

Travelsite

A BUSINESS PORTFOLIO
Presented to the Faculty of the School of Business and Management
Xavier University – Ateneo de Cagayan

In partial fulfillment of the requirements for
BA 23 – Strategic Management
SY 2019 – 2020


Submitted by:
Moneia Brae E. Casas
Mae Joy M. Gallenero
Precious Nicah V. Campaner
Bianca Rae D. Villaroya
Suzfinzi Rafaello Q. Yema
BS Management Accounting 2 – MA


Submitted to:
Dr. Jimbo A. Fuentes
Professor


October 3, 2019

1
 INTRODUCTION
MP Travelsite is a small-sized travel company, committed to the highest standard of
business as a travel agent. The plan of the strategists is to suggest alternatives to specific
challenges the company faces, particulary in its HR and Sales Departments. MP Travelsite
offers airline and boat tickets, VISA application assistance, pre-arranged and customized
tour packages, have a strong customer base, and is a reputable travel agency accredited
by the Department of Tourism, and has a significant position in the industry after
operating for 10 years. However, it has internal difficulties concerning its staff, digital
marketing strategy, and credit policy.

The primary objective of this paper is to recommend practical solutions on the

following: (1) Incompetency of staff; (2) Trustworthiness of staff; (3) Insufficient digital
presence to support sales efforts; and (4) Uncollectible accounts using the problem
analysis tool, the cause and effect analysis, which is a straightforward method in
analyzing problems. Different alternatives are discussed, as well as their advantages and
disadvantages in the company’s point of view, and after such review of these pros and
cons, solutions are recommended.

2

TABLE OF CONTENTS
CONTENT PAGE
I. Background of the Business
A. History 4
B. Vision 4
C. Mission 5
D. Goals 5
II. Departments
A. Background of the Supervisor 6
B. Human Resource 6
C. Sales 6
III. Problem Statement
A. Problems in Human Resource 7
B. Problems in Sales 8
IV. Problem Analysis
A. Problem 1 10
B. Problem 2 10
C. Problem 3 11
D. Problem 4 11
V. Discussion of Alternatives
A. Problem 1 12
B. Problem 2 13
C. Problem 3 14
D. Problem 4 15
VI. Conclusion and Recommendations
A. Conclusion 16
B. Recommendations 16

Appendix A: Curriculum Vitae
Appendix B: Documentation

3
 PART I

BACKGROUND OF THE COMPANY

History of the Company

MP Travelsite is a small-sized travel company, committed to the highest standard of

business as a travel agent. It was first established in May 8, 2009, in Iligan City, with the
goals of achieving new levels of service excellence and providing a comprehensive range
of travel services. Apart from the traditional services of airline and boat ticketing, the
company also offers pre-arranged and customized tour packages in top tourist
destinations, both local and international. It has partnered with top airline companies,
such as Philippine Airlines, AirAsia, and Cebu Pacific, and other travel companies to
provide its clientele with the most competitive rates, along with utmost customer service.

To strengthen its capacity in service, the company joined the Iligan City Travel Agency
Association organized by the Iligan City Tourism Office. It has also completed several
trainings, such as Travel Agency Operation Course conducted by Asia Pacific Tourism
Training Institute in Manila. It has been invited in several business-to-business events;
for instance, as Buyer Agent for Cebu Travel Exchange in Marriott Hotel. Furthermore,
the company has been attending travel expositions, such as the Travel Tour Expo. Its
positive standing in the travel industry has also led it to expand to Cagayan de Oro. The
Department of Tourism recognizes the company as one of the accredited travel agencies
in the Philippines.

Mission

MP Travelsite is steadfast in providing its clients with best value solutions to their travel
needs. With the principles of respect, integrity, and trust, the company aims to satisfy its
clients’ needs by offering authentic, hassle-free, and unforgettable travel experiences.

4
Vision

The company envisions to become the leading travel agent and customers’ travel partner
of choice in Iligan City and Cagayan de Oro City by 2028. MP Travelsite strives to
continuously develop its most sought-after qualities – good customer relations and
exceptional customer service.

Goals

The following are the goals that MP Travelsite wishes to accomplish:

1. To be the top travel service provider in the regions it operates

2. To provide good customer relations and exceptional customer service
3. To enhance the lives of its employees

5
 PART II

DEPARTMENTS

Background of the Supervisor

Ms. Darling A. Rico, the supervisor of the company, has been serving the company for
almost 6 years. She was first employed in 2014 as assistant to the senior travel consultant.
She was then promoted to junior travel consultant in 2015. The company saw her
potential and decided to sponsor her training and tertiary education. She enrolled in the
course Business Administration at St. Peter’s College, majoring in Operations. She
graduated Cum Laude in 2018 and was immediately promoted to supervisor.

Human Resources Department

The Human Resources Department of the company is the support systems responsible
for sourcing and hiring, applicant tracking, skills development and tracking, benefits
administration, and compliance with associated government regulations. The
responsibilities of the HR include payroll, benefits, hiring, termination, and keeping up to
date with state laws. Working hand in hand with Ms. Darling Rico is Ms. Gina Fernandez.

Sales Department

The Sales Department of the company is the direct link between the company’s service
and its customers. It is responsible for making sales, growing the business, and retaining
existing customers. Ultimately, its most important function is developing and maintaining
relationships with customers. Sales are monitored by the clerks, supervised by Ms.
Darling A Rico, and reported to Ms. Erluina Casas, the proprietor.

6
 PART III

PROBLEM STATEMENT

Human Resource

1. Competency of staff
Competencies are abilities, behaviors, knowledge, and skills that impact the
success of employees and organizations. Some common competencies are
analytical thinking, communication, flexibility, integrity, and teamwork.

As a staff of a travel agency company, one is required to have good customer

service skills, excellent verbal communication skills, and a thorough knowledge of
the company’s products and services. The competency of staff has been pointed
out as problem in MP Travelsite because while verbal communication skills are
quite easy to develop, good customer skills are difficult. Attendants may be lucky
if they come across polite and understanding customers, but it cannot be denied
there exists a particular client population who are rude and difficult to deal with.
The staff may have a hard time developing their skills when it comes to relating
with difficult customers.

Another problem in competency is having a thorough knowledge of the company’s

products and services. MP Travelsite’s business operations runs a very quick pace
everyday as the prices of its main product, airline tickets, fluctuate from time to
time, and attendants need to catch up to give customers accurate prices. Due to
the fast pace and busy business hours, attendants have a hard time finding time
to go through the articles recommended by management that will enhance their
knowledge.

2. Trustworthiness of employees
Through its ten years of operation, MP Travelsite has experienced its fair share of
betrayals of trust from its employees. According the Ms. Rico, this was linked to
the vulnerability of the system. The standard procedure of issuing tickets is to (1)
check prices – these prices already include the company’s service charge, (2) issue
the tickets, and (3) print two copies of the tickets for the customer and the
company. The service charge has already been input through the system, however,

7
 this can be adjusted by anyone who logs on to the system. This option was made
available by the company due to the system recognizing only cash basis and
uncertainty of many accounts. For instance, credit payments have an additional
fee as per the company’s policy, but the system only recognizes the payment as
cash, therefore it cannot systematically account for the additional fee required by
the company, hence the adjustable feature of the service fee.

Another flaw of the system is that the document containing the issued ticket can
be modified. This modifiability feature was then abused by many passing
employees of MP Travelsite. They would raise the service fee after the ticket has
been issued, and two separate copies of the tickets would be printed as per
standard procedure, except that the customer’s copy has been modified. The
excess of the service fee goes to pocket of the employee. This has happened to MP
Travelsite on several occasions, the first crime being done by a certain operations
manager employed by the company last 2011. The deceit continued for until its
discovery in 2015 when many customers have started to complain directly to the
owner about the overpriced tickets. The recent one was only this year, wherein
the tickets were at least overpriced by 1000 pesos. Because of these events, the
company now has a difficult time entrusting the its daily sales activities to its
employees.

Sales

1. Insufficient digital presence that support sales efforts

Since the dawn of the internet, social media marketing has become an important
strategy to boost sales. The presence of digital platforms has given business access
to a wider audience. Promoting products and services has been significantly
easier. With a bigger customer reach, sales are expected to increase.

The problem with MP Travelsite is that it started off with its business using only
technology for daily operations, and not necessarily for marketing that would
support sales efforts. Ms. Rico says that it has continuously attempted and failed
several times in utilizing social media for the company. The business has largely
depended on returning clients, walk-in customers, and corporate customers to

8
 maintain sales. It may be apt to infer that the company does not have sufficient
digital presence that could positively improve its sales. It does not utilize social
media, and may be at a disadvantage from its competitors.

2. Uncollectible accounts
In a travel business where the prices of services are high, allowing credit to
customers will help the company gain customer loyalty and a competitive edge.
By letting customers pay later for services rendered at a particular time,
customers may be motivated to purchase more services. More buying power for
customers translates to more income for the business.

Ever since MP Travelsite gained a significant position in the local travel industry,
it has allowed credit to customers. Most returning customers are allowed to not
pay in cash immediately, and are given the option of paying through installments
or checks. To cater to its corporate customers, MP Travelsite allows deferred
payments without additional fees. The business has become stable enough to pay
its expenses in cash despite many receivables. However, because of this flexibility
in payment, the business has suffered from many uncollectible accounts.

9
 PART IV

PROBLEM ANALYSIS

1. Human Resource – Competency of staff

Cause and Effect Analysis

Cause Effect
Ø One root cause of staffs having Ø If staff is unable to provide answers or
adversity towards dealing with hostile justify what the customers want, this
customers could be traced back to will lead to frustration among
ineffective problem-solving. Customers customers. Thereby, there will tend to
are anticipated to call or reach out to share their bad experience or simply
them for one reason: they want not doing business anymore with the
answers. company moving forward.
Ø Poor personal organization among Ø If staffs are not organized enough they
staff could also be the reason why they could not help keep up with company’s
could not catch up and assess tasks growth, productivity and efficiency.
ahead of time in a business that is fast-
paced and always forward bound.

2. Human Resource – Trustworthiness of employees

Cause and Effect Analysis

Cause Effect
Ø Company’s lack of internal controls or Ø Thus, improper enforcement of
enforcement thereof, or just misplace internal controls will continuously
trust could be the reason that causes beckons temptations to employees
an environment for employees to take especially if that employee has some
opportunity to fraud customers or pressing financial need.
take advantage in making ill-gotten
gains.

10
3. Sales – Insufficient digital presence that support sales efforts

Cause and Effect Analysis

Cause Effect
Ø Ineffective social media marketing Ø The ineffective social media marketing
strategy is perhaps what aggravated strategy will significantly not able to
the company’s existing problem make a profound brand
towards going digital. Despite recognition/company visibility. Thus,
attempting the use of social media in this could greatly affect sales and
enticing customers, the company customer loyalty considering also the
maybe wasn’t sure about what social fact that social interaction between
media tools to use which apparently businesses and customers is a growing
caused failure. trend.

4. Sales – Uncollectible accounts

Cause and Effect Analysis

Cause Effect
Ø Customer dissatisfaction with the Ø The selling to customers on credit, has
service could be a great anticipated an immediate effect on the company’s
factor why the company will likely cash flow since it involves credit risks.
incur bad debts on account because Thus, keeping up with uncollectible
these customers tend to refuse to pay accounts creates burdens as it require
when credit term end. employees to make calls or send out
past due notices. Thereby, could
Ø Lack of investigation towards apparently lead to higher potential of
customer’s creditworthiness or having bad debt because no matter of
customer’s credit reference causes a how well the employees check a
higher credit risk to the company. customer’s credit rating and
references, eventually there will be
someone who doesn’t pay.

11
 PART V

DISCUSSION OF ALTERNATIVE SOLUTIONS

1. Human Resource – Incompetency of staff

Alternative Advantages Disadvantages

1. Staff trainings • Employees will be able • Costly – both online
to familiarize and offline trainings
themselves with the are considered as
company, particularly additional expenses
its systems and for the business
procedures
• Too much of theory
• Properly trained staff may be boring for
means increased employees, and their
productivity, mastery ability to absorb
in their respective insights may be less
functions, and
reduction of mistakes
2. Performance • The business may be • Assessments are
evaluation able to clarify their subject to natural
expectations from biases that result in
their employees rater errors

• The process should • Evaluations are time-
motivate employees by consuming, especially
rewarding them with a if not done properly
merit increase and a
comprehensive
compensation

12
2. Human Resource – Trustworthiness of employees

Alternative Advantages Disadvantages

1. Background check • Results to fewer • Costly – thoroughly
applications with done background
serious discrepancies checks are expensive
due to scrutiny
• Increases the quality of
new hires due to an • Time-consuming – if
improved applicant the business is in a
pool and better hurry to hire new
selection process personnel, background
checks may not catch
up to the deadline
2. Development of a • Easy tracking of all • Costly – system
foolproof system activities done by the developments are
logged-on user traditionally expensive

13
3. Sales – Insufficient digital presence that support sales efforts

Alternative Advantages Disadvantages

1. Hiring of a social • The company has a • In order to successfully
media marketing credible source of implement social
expert marketing techniques media promotions, the
business must find
• The company gains a qualified personnel to
market insight – what manage accounts and
the customers need, have traffic under
their opinions and control
interest
• Costly – the business
• Establishing social has to invest in
media marketing apparatus (i.e.,
allows the business to computer software for
respond to a specific creating ads) and
customer at a time, salary for quality
without having to outcome (P15,000 per
worry about conflicts month)
that may arise in verbal
communication • No assurance of
significant
improvement in sales
2. Website optimization • Business information is • Development and
easily accessible in a maintenance is very
website costly (P30,000 per
month)
• Compared to social
media, websites • Poor webhosting may
provide better control lead websites to crash
in content organization or become unavailable
and updating

14
 • Exposure to
competitors – content
that customers may
find useful could be
used by competitors to
analyze techniques in
order to outplay the
business

4. Sales – Uncollectible accounts

Alternative Advantages Disadvantages

1. Impose a strict credit • Customers will be • This strategy does not
policy – charge forced to pay on time ultimately eliminate
additional fees for to avoid the additional the risk of losses,
deferred payments fees, which means because debts can still
more liquid receivables remain unpaid and the
for the business Philippines lacks
regulation regarding
unpaid accounts
2. Requirement of • Secured finance • This credit policy
collateral for high- represents lower risks involves charging fees
risk credits or those for the lender, because and putting the clients’
that exceed 100,000 the asset ensures assets on the line;
pesos repayments in case of clients may step away
default from availing the
company’s services

15
 PART VI

CONCLUSION AND RECOMMENDATIONS

Conclusion

The group concludes that the travel business is quite a risky business to run today. Travel
is particularly a luxury, and with the high prices of services, many may shy away from
availing these services, which put travel companies at a risk of losing profit. To add to
this, travel companies face many challenges in its internal environment. In the case of MP
Travelsite, the HR Department has difficulties in hiring competent and trustworthy staff.
Its Sales Department also admits that it does not utilize digital media to enhance sales.
More accurately, it fails in its attempts to use digital media. Furthermore, because of the
high prices, many customers request for credit, which the company allows most of the
time. This put the company in the danger of bearing uncollectible accounts, which
translate to losses. The group has addressed these concerns and has suggested staff
trainings and performance evaluations to solve the problem of incompetent staff, as well
as background checks to ensure hiring of trustworthy staff and developing a foolproof
system to replace the current vulnerable one. For the first problem in sales, the group has
suggested to hire a social media marketing expert to take care of the company’s online
presence, which will hopefully enhance sales. The problem in uncollectible accounts is
suggested to be addressed through stricter credit policies by charging additional fees for
late payments and the use of collaterals for high-risk credits. The recommended courses
of action for each problem are discussed in next section.

Recommendations

The following alternatives are recommended by the group on each particular problem:

Problem 1: Human Resource – Competency of staff

The group suggests that both alternatives should be employed by the company. First, staff
trainings are considered to be an investment for the business as no material offer could
equal to trained personnel with a variety of skills. Secondly, the company should conduct
performance evaluations at the end of each month. This should include honest feedback
from the management regarding the performance of the employees, as well as reiterating

16
the company’s objectives. This should remind everyone that there should be shared
prosperity in the company.

Problem 2: Human Resource – Trustworthiness of staff

Thorough background checks are a rare service in the Philippines, not to mention the
expensive cost that this method entails. Additionally, applicants who are aware of the
company’s procedure in doing background checks may be subject to this psychologically
valid phenomenon called the Hawthorne effect. When people know that they are being
observed, they systematically change their behavior. This is a loophole in the system, and
so the company will never be assured of the ethics and morals of its employees.
Therefore, the group suggests that the company develop a foolproof system as the current
one is vulnerable to crime, according to the company’s supervisor. Although this may be
expensive, the benefits outweigh the cost. With a more secure system, the company’s
management will be more confident that criminal activities such as thief and deceit by its
employees cannot endanger the business.

Problem 3: Sales – Insufficient digital presence that support sales efforts

In the digital age, the internet has become a commodity. Digital presence should now be
taken advantage by businesses if they wish to keep up with the trend, as well as reach a
wider audience. As of now, the group deliberates whether the company is ready to invest
in a social media marketing expert. Employing an online marketing management team in
the Philippines reportedly costs around P15,000 per month, half of which is to be used as
advertising budget and the other half as the service fee. On the other hand, website
optimization is also a slow-moving technique in improving sales, coupled with the
disadvantage that development and maintenance are very costly, with a rate of at least
P30,000 per month. It also runs the risk of poor webhosting, and exposure to competitors
due to the availability of information. The group therefore recommends that the company
hire an online social media expert and test the service for about 3 months to see if there is
a significant impact to sales. It suits the fast-paced environment of the business and is
much less expensive compared to website optimization.

17
Problem 4: Sales – Uncollectible accounts

Individual sales exceeding 100,000 pesos are not new to the business, thus the suggested
alternative of requiring collaterals for high-risk accounts. However, the disadvantage of
this credit policy involves charging fees and putting the clients’ assets on the line. This
could result into clients not availing the company’s services, which is a more dangerous
risk for the business. While this strategy does not ultimately eliminate the risk of losses,
a credit policy that provides for the charging of additional fees for deferred payments still
seems more logical in this line of business because it still gives the customers control over
their money, and is a much more flexible option compared to a credit policy that requires
collaterals, which appears aggressive to clients. The group therefore suggests that the
company impose a stricter credit policy by charging additional fees for deferred payments.

18


APPENDIX A:

CURRICULUM VITAE

19

20

21


22

23

24
APPENDIX B: DOCUMENTATION

25


26