SPTOUR 2101: TRAVEL AND TOUR MANAGEMENT

MODULE 3: ROLES AND RESPONSIBILITY OF TRAVEL AGENCY AND TOUR OPERATORS

A travel agency is a type of business that acts as an intermediary or middleman between the tourism
products' suppliers and the tourists/travelers. One of the main functions of this business is to market and
promote all types of tourism products and services which includes tour packages, accommodations,
transportations, and other components of the travel industry (Goeldner & Ritchie, 2003), Travel agencies
are private entities that could operate as a sole proprietorship, partnership, or corporation.

The travel agency is considered as one of the most essential businesses in the tourism industry. it plays an
important role in the entire process of developing and creating tourism products and services. It normally
creates itineraries for all-inclusive tours and offers them to tourists. With this, the travel agency is also
known as the “image builder of a country” (Tourism Notes, 2010).

Another service offered by the travel agency business, aside from offering package tours, is the service of
arranging tourism sectors such as ticketing and booking and reservation for air, rail, land, and sea travel.
They also assist and arrange travel documents such as passports, visas, and other documents required to
travel, They can also secure travel Insurance and foreign currency for their clients (Tourism Notes, 2018).

A travel agency is a commission agent, it makes agreements with different Our co service agencies and
develops products and sales for customers to gain profit or to collect commission. To facilitate the tour of
a traveler is the objective of a travel agency.

A travel agent is someone who acts as who is seeking assistance and planning to visit a certain destination
through a travel agency. He or she arranges tours according to the needs and wants of the tourists. In the
same as a tour guide, travel agents could also specialize in a certain type of tour such as adventure travel,
educational tour, cruising, pilgrimages, etc. Some travel agents work permanently and are associated with
a travel agency business while others work as freelancers (go2HR, 2014).

TYPES OF TRAVEL AGENCIES

1. Retail Travel Agency
• Retail travel agencies act as resellers of tourism products and services.
• They sell their products and services directly to the tourists and receive commissions from
the suppliers as their income.
• Aside from commission-based selling of tour packages, retail agencies could also do
markup price in which they add markup cost to the product and then sell it at a higher
rate. The markup price is the difference between retail price and wholesale cost.
• Functions of retail travel agencies are as follows: preparing tour quotations for the
tourists, booking and reservation of transportation, accommodation, food and beverages,
entertainment, visa assistance and other travel documents, foreign exchange, and arrange
travel insurance.
2. Wholesale Travel Agency
• Wholesale travel agencies purchase travel components in bulk from suppliers, assemble
tour packages, and sell them to the tourists through retail travel agencies.
• Assembled package tours are usually all-inclusive trips that include transportation,
accommodation, meals, entertainment and other activities and services required by the
tourists.
• In terms of function, a wholesaler travel agency that typically sells package tours can also
be known as a tour operator. However, technically there is a difference between a
wholesaler travel agency and a tour operator organization.

TOUR OPERATOR AND ITS NATURE

A tour operator is an organization, firm, or company that buys travel components individually and
combines them into a package tour to be sold to their direct customers or through a tourism channel. Tour
operators are also known as the manufacturers of tourism products and services as they are responsible
for delivering and performing all the products and services included in the packaged tour they offer to
their customers.

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Prepared by: Ms. Grace G. Cortes
SPTOUR 2101: TRAVEL AND TOUR MANAGEMENT

Tour operators are sometimes also called wholesalers because they buy goods and services in bulk to
prepare a tour package and then retail it through the travel agencies or directly to their clients. Tour
operators generally offer a variety of tour packages to provide the needs and wants of different types of
tourists and travelers.

FUNCTIONS OF TOUR OPERATORS

A tour operator provides the most convenient option for the tourists to travel to and enjoy the stay in their
chosen destination. A tour operator, most of the time, owns businesses within the tourism sector such as
transportation, accommodations, and food and beverage. As cited in Tourism Notes (2010), some of the
most important functions of the tour operators are the following:

1. Planning a Tour – The tour operators assist the travelers to plan the most memorable experience
that they could have during travel, which includes the making of an itinerary to their chosen
destination. They also offer different types of tour packages from which the tourists may choose.
2. Creating Tour Packages – One of the main functions of tour operators is the development of tour
packages. They purchase travel components separately from transportation, accommodation,
food and beverages to tourists attractions and assemble them to create now travel products
known as tour packages. This final product can be sold by the tour operator to the tourists directly
or indirectly.
3. Organizing a Tour – Tour operators can also arrange or organize a tour package based on the
preferences of the tourists. As their goal is to give tourists satisfaction with their travel, they can
arrange a tour package that would give a unique experience to the tourists.
4. Providing Travel Information – Another task of the tour operator to complete the travel
experience of the tourists is to provide them with the necessary information concerning their
travel to the chosen destination. This pertinent information includes the mode of transportation,
types of accommodations, tourists spots for sightseeing and other activities, immigration process,
health and security rules and protocols, and other documents required to visit a certain country
or destination.
5. Making Reservation – Tour operators are tasked to assist tourists in the reservation of the travel
components needed for their travel and stay in the chosen destination such as tickets for the
transportation, room for accommodation, meals, etc.
6. Managing a Tour – One of the responsibilities of the tour operator is to manage the entire tour
availed by the tourist. Tour operators should check every detail of the tour from the time of its
execution until its completion. Aside from the activities in the itinerary of the tour chosen by the
tourists, tour operators should also provide the services of a tour guide and other escorting
services.
7. Evaluating the Available Options – Tour operators usually assess and evaluate the tour packages
that they offer to the tourists. They make sure to consider all the possibilities and other options
to make the travel of the tourist a memorable and remarkable one.
8. Promotion – All tour packages and other travel products offered by the tour operation and travel
agency businesses are also promoted. They promote them to their target and regular clients, both
domestic and international.
9. Sales and Marketing – As part of the transactions in the tour operation business, tour operators
also do sales and marketing especially to their target markets to attract their attention and
eventually have them avail their products and services.
10. Taking Care of Problems that may Arise During the Tour – Since tour operators are in charge of
the entire tour travel of the tourists, they take charge of all the issues and problems that may arise
during the tour. They are prompt to fix identified glitches and provide the best solution.

TYPES OF TOUR OPERATORS

1. Inbound – Inbound tour operators are also known as incoming tour operators. Their role is to
receive tourists in the host country and handle all their land arrangements. They are based locally,
and they normally offer local destinations, attractions, events, and other services to the tourists.
2. Outbound – Outbound tour operators promote tours for foreign destinations. They normally
worked with international travelers and offer specialized tour packages in a particular country or
region.

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Prepared by: Ms. Grace G. Cortes
SPTOUR 2101: TRAVEL AND TOUR MANAGEMENT

3. Domestic – Domestic tour operators create and assemble travel components into all-inclusive
tours and market them to domestic travelers. They provide travel services within the country of
the tourist's residence.
4. Ground – Ground operators are also known as handling agencies, and their main role is to
organize and arrange tours for incoming tourists on behalf of overseas operators.

For better understanding the difference between Travel Agency and Tour Operator below is the simplified
interpretation of the role of the two:
TRAVEL AGENCY TOUR OPERATOR
Act like an independent reseller and receives Purchases travel components from different
commissions for the sale of the tour operators suppliers, forms a single tourist product, and sells
package tour them using its own pricing
Small to medium Usually, large companies
Acts as the distributor/reseller of the tourism Act as the supplier or manufacturer of tourism
products products
Deals with one component of travel products Offers a variety of tour programs

ROLE OF TRAVEL AGENCY AND TOUR OPERATION IN THE TOURISM INDUSTRY

The tourism industry is one of the fastest-growing industries in the world. With millions of people traveling
across different countries, it obviously favors the growth of its economy, especially those in developing
countries. Whatever purpose or reason people have, it is the role of the tour operators and travel agencies
to entice them to travel, thus having remarkable hold in sustaining the growth of the travel and tourism
industry all over the world (Jain, n.d.).

Mainly accountable for providing comprehensive packaged travel services, travel agencies and tour
operators act as experts who take charge of every aspect concerning the needs and wants of the travelers
every time they travel. Their role starts from the development and creation of a package tour and
continues during the entire travel of the tourists. They also provide a hassle-free travel experience and
make sure of the satisfaction of their clients by providing them with quality travel services.

EMERGING TECHNOLOGY IN THE OPERATION OF TRAVEL AGENCIES AND TOUR OPERATION

Travel agencies must embrace and adapt to the technological changes that may affect their business. They
have to reinvent themselves so that they can still compete and be profitable. Below are some of the
fundamental technological changes that have affected travel agencies and tour operation businesses (Key
fortravel, n.d.):
1. Internet usage - In the 21st century, the most powerful source of business is the Internet.
Everything has to do with the web. The internet helps create modern travel agencies and tour
operators. Every transaction involved in the process can be done over the internet; thus, to remain
in the business world, they have to go with the flow.
2. Use of social media - Travel agencies and tour operators need to have personalities of their own.
They can use social media as part of marketing and communications strategies.
3. Mobile technology - Nowadays, travelers have all the pertinent information about their trip in the
palm of their hand. Travel agencies and tour operators have to adapt to this swift change in reality
to be able to sustain their business.
4. Digitalization - helps travel agencies and tour operators to be highly competitive in the business
world. With this technological strategy, they can transform the experiences of the tourists into the
most convenient way.
5. Big data - A customer's database can help a travel agency or tour operator analyze its customers'
behavior patterns as well as guide it in forecasting based on their behavioral information.
6. Artificial intelligence - Artificial intelligence nowadays is incorporated into mobile devices and
applications. It is a great help for travel agencies and tour operators, offering convenient and
comfortable services in assisting their clients.
7. Virtual reality - Virtual reality can be used by travel agencies and tour operators as a marketing
tool to entice more people to travel as virtual reality allows them to explore their dream
destinations.

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Prepared by: Ms. Grace G. Cortes