8653.0 - Travel Agency Services, Australia, 2003-04  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 27/10/2006   
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GLOSSARY

Advertising and brochure expenses


Advertising expenses include all costs incurred by the business for promotional and publicity campaigns aimed at bringing the activities of the business to the attention of consumers for the purpose of increasing sales.


Airport handling fees


This item refers to fees received for airport handling activities on behalf on an airline. This generally occurs only in very small airports.


Bad and doubtful debts


Bad and doubtful debts are the amount of accounts receivable that are either written off, or estimated to be uncollectible during an accounting period, that are expensed in a period's profit calculations.


Businesses at end June


This is a count of Australian Business Number (ABN) units included on the Travel Compensation Fund (TCF) list which were operating at the end of June 2004.


Credit card commission expenses


This item includes charges to the business for credit card transactions.


Computer reservation system expenses


These are charges incurred by travel agencies for the use of computer systems and the lease of equipment used for booking and reserving travel.


Conference retailers


Conference retailers are retail travel agencies which sell travel services mainly to conference clients such as meeting planners and event managers.


Corporate retailers


This item refers to retail travel agencies which sell travel services on credit to corporate or business clients.


Depreciation and amortisation


This item refers to regularly recurring financial charges made in the accounts to reflect that part of the value of an asset which may be regarded as having been used up in producing revenue in a particular accounting period. Depreciation generally refers to physical (tangible) non-current assets, and amortisation generally refers to intangible non-current assets.


Electricity, gas and water charges


These charges relate to the consumption of electricity, gas and water during the normal operation of the business. They exclude costs of self-generation of electricity and any installation charges.


Employees


This includes working directors, and other employees working for a business during the last pay period ending in June 2004. Employees absent on paid or prepaid leave are included. Working proprietors and working partners of unincorporated businesses are excluded.


Employment at end June


This item represents all working proprietors and partners and employees on the payroll of the business during the last pay period in June 2004. Permanent, temporary and casual employees and employees absent on paid or prepaid leave are included. Non-salaried directors, self-employed persons such as consultants and contractors, persons paid by commission only and unpaid workers are excluded.


Franchise fees and licenses


These are fees paid to allow the business to operate under a particular franchise agreement.


Full-time employees


This item refers to persons on the payroll of the business during the last pay period ending in June 2004 who normally work 35 or more hours per week.


General sales agents


General sales agents directly represent travel principals, such as airlines.


Government funding


This item consists of payments for operational and capital funding purposes, received from federal, state and local government.


Gross profit from non-travel income


This item refers to gross profit earned from any other business activity, such as news agency or real estate agency activity, carried out by the same business entity.


Inbound tour operators


Inbound tour operators are businesses which link offshore buyers with the supply of transport, accommodation and tourism packages in Australia.


Income from ticket sales


This item is akin to commission income reported in the 1996-97 issue of Travel Agency Services Industry (cat. no. 8653.0). Since the introduction of the goods and service tax (GST) in July 2000 the method of operation of travel agency businesses has changed to facilitate the computation and payment of the GST component. Prior to July 2000 travel agency businesses, both wholesale and retail, acted as agents of service providers and sold travel packages and tickets on behalf of those service providers. Since July 2000, wholesale operators purchase travel services from providers and sell them to retailers with a mark-up on their purchase price. Retailers, in turn, add a mark-up on their purchase price and sell them to their customers. Income from ticket sales represents this mark-up component excluding GST. This also includes income received from the sale of businesses’ own travel products.


Industry value added


Industry value added is an estimate of the difference between the market value of the output of an industry, and the purchases of materials and expenses incurred in the production of that output. For market producers, it has been derived by determining the income associated with the production (in this case, sales of goods and services and operational funding from government), and subtracting the direct costs of producing these outputs (administrative expenses and selected expenses related to the sale of goods and services, exclusive of indirect taxes such as payroll tax and fringe benefits tax).


Insurance premiums


Insurance premiums are expenses incurred by a business in respect of different types of insurance policies but excluding workers' compensation and compulsory third-party motor vehicle insurance.


Interest expenses


These are outflows of funds related to the cost of borrowing money.


Interest, dividends and profit on sale of assets


This is income earned through the lending out of funds owned by the entity, including interest received from bank accounts, loans and finance leases and earnings on discounted bills.


Labour costs


Labour costs are staff related costs such as wages and salaries (including moneys paid directly to freelancers via the payroll), fringe benefits tax and payroll tax, employer contributions to superannuation funds, workers' compensation premiums, and provision expenses for employee entitlements. The cost of employee uniforms was also included.


Leisure retailers


Leisure retailers are retail travel agencies whose primary customers are holiday/leisure travellers.


Motor vehicle running expenses


This item refers to the costs incurred using 'on-road' vehicles owned by the business for business purposes. It excludes optional third-party and comprehensive motor vehicle insurance premiums which are reported under insurance premiums.


Operating profit before tax


This item is a measure of profit (or loss) during the reference period, taken before extraordinary items are brought to account and prior to the deduction of income tax and appropriations to owners (i.e. dividends, drawings). It is derived by subtracting total expenses from total income.


Operating profit margin


This represents the percentage of businesses' sales of goods and services which becomes profit after all operating expenses have been deducted. It is derived by expressing total operating profit before tax as a percentage of total sales of goods and services.


Other business expenses


This item includes expenses not separately identified such as travel, accommodation and conference expenses for employees, repair and maintenance expenses, consultancy fees and payments to overseas offices.


Other commission expenses


This includes payments to other businesses and self-employed persons for work done or sales made on a commission basis and payments to persons paid by commission without a retainer.


Other labour costs


Other labour costs are staff related costs such as fringe benefits tax and payroll tax, workers compensation insurance premiums/levies, non-payroll costs (e.g. medical costs) not reimbursed, uniforms and reimbursements or allowances for travel and accommodation.


Other management services


This item refers to payments made to other businesses for provision of management services such as human resource management.


Other travel related fees


This item includes income derived from providing travel related services such as arranging the issue of passports and visas.


Other travel income


This item includes income derived from the provision of travel insurance, travellers cheques, airport handling and other travel related services such as arranging the issue of passports and visas.


Part-time employees


This item refers to persons on the payroll of the business during the last pay period ending in June 2004 who normally work less than 35 hours per week.


Rent, leasing and hiring expenses


Rent, leasing and hiring expenses are the costs for the rent, leasing (excluding finance leases) and hiring of vehicles, land, buildings, machinery, equipment and any other property from other businesses or individuals.


Rent, leasing and hiring income


Rent, leasing and hiring income is revenue derived from the renting, leasing or hiring of assets such as land, buildings, vehicles, machinery or equipment to other businesses or individuals.


Retailers


Retailers are businesses which sell travel products directly to the end user such as leisure, corporate or business clients.


Telecommunication services


This item refers to all payments (of a non-capital nature) for telecommunication services which engage wire, radio or cable transmission. It includes the cost of leased lines for computer and Internet services, but excludes installation costs and the cost of leasing telecommunication equipment.


Ticket consolidators


These are businesses which sell airline tickets to retail travel agencies at a mark-up.


Tourist bureaux


These are businesses which provide tourist information services including the sale of travel products.


Travel Compensation Fund


The Travel Compensation Fund is a regulatory body requiring all travel agencies (except those operated by government or located in the Northern Territory) to furnish a range of data and certified information about their operations with the primary aim of ensuring the financial viability of licensed travel agencies.


Wages and superannuation


This item refers to gross wages and salaries (including capitalised wages and salaries) of all employees of the business. It includes severance, termination and redundancy payments, salaries and fees of directors and executives, retainers and commissions of persons who received a retainer, bonuses and payments made under incentive or profit sharing schemes, amounts paid through payroll to employees on workers compensation, employer contribution to superannuation funds and annual and other types of leave. Provision expenses for employee entitlements are also included (e.g. provision for annual leave and leave bonus, long service leave, sick leave, and severance, termination and redundancy payments). Payments to self-employed persons such as consultants, contractors and persons paid solely by commission without a retainer, are excluded. Also excluded are reimbursements or allowances to employees for travel and entertainment, fringe benefits and payroll tax, and drawings and other payments to or on behalf of proprietors of unincorporated businesses.


Wholesalers


This item refers to wholesale travel agencies which sell to travel retailers. Such sales involve publishing and distributing tour brochures and arranging travel packages which include travel arrangements.


Working proprietors and working partners of unincorporated businesses


A working proprietor operates his or her own business (a sole proprietorship), while a partner, along with one or more other partners, operates a partnership. Working proprietors and working partners are the owners of their business and as such, they are not considered to be employees of that business.