CTC Business Management & Ethical Practices 2 — Questions and Answers
Question 1: A client asks a CTC to recommend a supplier that pays the highest commission rather than the one best suited to the client's needs. What is the ethical response?
- Recommend the supplier that best fits the client's needs regardless of commission (Correct answer)
- Always book the highest-commission supplier to maximize revenue
- Split the booking between both suppliers
- Let the client decide without any professional guidance
Correct answer: Recommend the supplier that best fits the client's needs regardless of commission
The duty of loyalty requires putting the client's interests ahead of the counselor's compensation.
Question 2: Which financial metric measures a travel agency's earnings before interest, taxes, depreciation, and amortization?
- EBITDA (Correct answer)
- Gross Booking Value
- Net Promoter Score
- Average Daily Rate
Correct answer: EBITDA
EBITDA reflects operating profitability by excluding non-operating expenses.
Question 3: A travel counselor discovers a data breach exposing client passport numbers. What is the FIRST obligation?
- Notify affected clients and follow breach-notification requirements (Correct answer)
- Delete the records to hide the exposure
- Wait to see if anyone complains
- Blame the supplier without investigating
Correct answer: Notify affected clients and follow breach-notification requirements
Prompt notification and compliance with breach laws protects clients and limits liability.
Question 4: What does 'errors and omissions' (E&O) insurance protect a travel agency against?
- Claims of professional negligence or mistakes in service (Correct answer)
- Damage to office property from fire
- Employee health costs
- Loss of physical inventory
Correct answer: Claims of professional negligence or mistakes in service
E&O insurance covers liability arising from professional errors or oversights.
Question 5: A supplier offers a CTC a free luxury trip in exchange for steering all clients to that supplier. This arrangement is best described as:
- A conflict of interest that must be disclosed or declined (Correct answer)
- A standard industry incentive with no concerns
- Required for maintaining supplier relationships
- A tax-free benefit with no obligations
Correct answer: A conflict of interest that must be disclosed or declined
Undisclosed inducements that bias recommendations create a conflict of interest.
Question 6: Which document outlines an agency's expected standards of conduct for employees?
- Code of ethics or code of conduct (Correct answer)
- Balance sheet
- Marketing plan
- Passenger name record
Correct answer: Code of ethics or code of conduct
A code of ethics sets the behavioral and professional standards staff must follow.
Question 7: In managing agency cash flow, why is monitoring accounts receivable important?
- Late client payments can create liquidity shortfalls (Correct answer)
- It has no effect on daily operations
- It only matters at tax time
- Receivables are always paid immediately
Correct answer: Late client payments can create liquidity shortfalls
Unpaid receivables tie up cash needed for supplier payments and payroll.
CTC Business Management & Ethical Practices 2
A client asks a CTC to recommend a supplier that pays the highest commission rather than the one best suited to the client's needs.
What is the ethical response?