5 January 2021 SAM INSPIRE

Destination DMC vs Tour Operator & Travel Agent

What is DMC ?

The DMC stands for Destination Management Company. This is the modern term of the traditional Tour Operator and Travel Agency. However, DMC offers a broader ranges of services, not just tours, transportation, flight ticket, and accommodation. They offer special event venues, AV production, 100% crafted itinerary and event manager to support them the whole trip from planning to closing report etc.

Hereunder are a list of one-stop services that you could expect from most DMCs in Cambodia:

Customized Teambuilding Activities / Event
AV and Stage Production
Special Airport Pickup and Drop off with Surprise
Team Outing Program with Award and Incentive Event Organization
In style Accommodation and Event Venue
Chartered flights
24 hours Dedicated concierge consultant
Upscale dining venues
Experiential Learning Tours or Activities
Extraordinary Health and Fitness spa experiences
Specialized and personalized services
Stylized entertainments
Unexpected room-drops and home-gifts
Unique travel programmes with Wow and Wow moment as they move

The DMC came in place some time back in the second-half of the year 2000 and got popularized in the tourism and event business sector in 2010 especially in Cambodia. The Destination Management Company existed for a reason to serve mostly MICE travel and event Specialized Demands.

What is MICE?

By this 2021, MICE should not be new to any travel and event professionals as it has been discussed and transacted over the past 15 years. However, Sam Inspire would like to give the official definition of M.I.C.E. which is the abbreviation of Meeting, Incentive, Conference, and Exhibition.

According to ICCA (International Congress and Convention Association), the global community and knowledge hub for the international association meetings industry, giving the consensus in meaning of each MICE segments as following.

Meeting – general term indicating the coming together of a number of people in one place, to confer or carry out a particular activity. Frequency: can be on an ad hoc basis or according to a set pattern, as for instance annual general meetings, commitee meetings, etc.
Incentive – meeting event as part of a programme which is offered to its participants to reward a previous performance. (In travel DMC world, Incentive mostly comes with Travel, so make it a Travel Incentive which is a special all-inclusive trip designed to award a company staff or/and suppliers who has performed well to meet the target.)
Conference – participatory meeting designed for discussion, fact-finding, problem solving and consultation. As compared with a congress, a conference is normally smaller in scale and more select in character – features which tend to facilitate the exchange of information. The term “conference” carries no special connotation as to frequency. Though not inherently limited in time, conferences are usually of limited duration with specific objectives.
Exhibition – Events at which products and services are displayed. (In Event DMC, exhibition refer to the upscale level with lots of planning, POS Production, programmes, well decorated themed venue and more. For instance the ITB Travel Trade Shows the world largest travel fairs, and IMEX one of the largest MICE fair in Frankfurt.

What is Tour Operator and Travel Agent?

There is a reason for Sam Inspire article to group this Travel Agent-TA and Tour Operator-TO together here. The idea is now these two business terms are not well defined in differences by their business activities anymore. Both of them could be found do and offer the same services.

However, according to the article by DFDL Cambodia Legal Update, a new Prakas No. 113 was issued on July, 9, 2019 and come to affective on December 12, 2019 by the Ministry of Tourism of the Kingdom of Cambodia. MoT Cambodia has better identified the business activity type and its legal entities as following:

Tour Operator Consists of Three Types

Inbound Tour Operator: Legal entities offering package tours and services for overseas tourists who are traveling to visit in Cambodia.
Outbound Tour Operator: Cambodian legal entities offering package tours and travel services to local residents to visit other country outside of Cambodia.
Domestic Tour Operator: Cambodian Legal Entities offering package tours and travel services to local residents to visit inside Cambodia.

Note: Individuals or entities operating as Outbound Tour Operators and as Domestic Tour Operators must be Cambodian not foreign.

Travel Agent Consists of Two Types

Travel Agent: Cambodian Legal Entity selling tourism services such as travel tickets, accommodation services, package tours and other services offered by Tour Operators.
Domestic Travel Agent: Cambodian Legal Entity commercially operating as sales assistants of family tour services such as the arrangement of travel tickets, tourist accommodation services, and other services including package tours within Cambodia offered by tour operators.

Note: Individuals or Entities operating as Travel Agents or as Domestic Travel Agents must be Cambodian individuals or Cambodian entities.

Nevertheless, to be more special Sam Inspire would like to give some inputs of a general and practical definition to define the differences between Tour Operator and Travel Agent.

Tour Operator builds up the travel, tour and event products from scratch. They do all the researches, innovate ideas, contract suppliers, quote the package for different market prices. It could be retail, wholesale, online, walk-in and more… Tour Operator mostly legally registers and locates in the country of the hosted destinations.

Once they get their products ready, Tour Operators can either sell their products by themselves or Contract with corporate partners which is Travel Agent, Incentive House and Event Agency… And when it comes to Operating the products Tour Operator is the one who takes responsibility to execute and ensure the best service delivered to the end clients. Any further complaints arisen, Tour Operator will also has the responsibility to liaise with Travel Agent or the clients to find the appropriate solution.

Travel Agent, traditionally is the travel shop or individuals and a proper established company who sell the products contracted with Tour Operator on either commission based or markup pricing. Mostly Travel Agency took less responsibility, therefore once the products sold, they will pass everything on to the Tour Operator to run. Mainly, Travel Agents are located on the clients’ home destination. That means, they are the first contact of the end clients who will receive the services.

All in all, there is no Destination Management Company DMC listed in the official business classification above, therefore legally you will need to use your Inbound Tour Operator License to conduct the DMC services in Cambodia.

SAM INSPIRE family hope you find this information useful to your research. This article is the reflection of Mr. Sam’s knowledge and experience during his services at different companies from basic staff to top management.

If you need further support, please feel free to contact Sam, he will be so happy to do more steps to help you out.

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