Types and Functions of Travel

Agents and Tour Operators (BTM

203)
Hamza Khan
Research Scholar
Department of Tourism and Hospitality
Jamia Millia Islamia, New Delhi
 Contents

• History of Travel Business

• Types and Organizational Structure of TA and TO

• Functions of TA and TO

• Difference Between TA and TO

 Evolution of Travel Business

• In 1670, Grand Tour was developed for Educational Purpose

• In 1730. Health Expert suggestion for sea route

• In 1815, Steamboat services from London to Gravesend

• In 1820, European cultural centers were opened to British travelers

• In 1830, rail link between Liverpool and Manchester

• Founder Richard Cox

• Oldest Travel Agency

• Outbound Travel

• In 2001, Private Limited Company and NSE

• 5000 trained staff members are working at 14 offices, 25 associated

offices and 44 associate offices in India

• It specializes in Destination Management, Leisure Travel MICE, and

Holidays
• Founded in 1841

• Founded by Thomas Cook

• In 1845, set up the World’s First Travel Agency

• The Father of the Travel Agency Business

• Thomas Cook arranged tour from Harborough to Leicester to attend a

temperance meeting

• 1881, Started operation in India

Travel Agency History- India

• The Jeena Tours and Travels was established in 1920

• Thomas Cook and American Express used to operate the inbound tour

with the help of Jeena and Co

• Pre-independence

• In 1961 the Company was merged into Travel Corporation (India) Pvt

Ltd.

• Post Independence

• TAAI established in 1951

Meaning and Concept Of Travel Business

• Economic activity, buying and selling of travel related services

• Tourism is a single industry but it is made of different industries such

as hotel, airlines, travel agency, trekking agency etc.

• Tourism is related to broader economic and social issues including

commodification and globalization of culture, hospitality, friendship,

pleasure, and place and its attractions.

Travel Agent/Agency

A Travel Agent/Agency may be an individual , a business firm, or company

which acts as an intermediary in the sales and promotions of different
travel related services , such as accommodation , airlines, railways, road
transport , cruises on behalf of the suppliers and earns commission
received on selling services to its clients
Types Of Travel Agencies
Retail Travel Agency- It sells tourists products directly to the public on
the behalf of the products suppliers and in return get commissions

According to SARC (1967), ” retail travel agency business consists of the

activities involved in selling tourism products/services directly to the tourists

and performs normal functions such as issuing air tickets, making

accommodation and transportation reservation, providing specialized services,

and accepting and making payments.”

Wholesale Travel Agency- A wholesale travel agency
purchases tourists’ product components in the bulk and designs
tour packages.

Wholesale travel agencies assemble package holidays and

sell them to the clients by retail travel agencies. A typical
package tour includes – air ticket, accommodation and
sometimes other services may also be included in it such as
entertainment, sightseeing and sports activities etc.
Other Types of Travel Agencies
Travel Agencies can be classified as follows:

❖ Size and Geographic Presence

• Multinationals or Multiples with offices worldwide (MNCs)
• National with offices throughout a country
• Independents
• Consolidators
❖ Types of Client/Purpose
• Leisure Travel Agents
• Business Travel Agents
❖ Location and Type of operation
• Online Travel Agency (OTAs)
• Implant Travel Agency
Multinationals or Multiples (MNCs)

● Setting up offices all over the Globe - more than single country
● E.g. Carlson and Wagonlit , FCM Travel Solution
National

● Operating many offices within the country or locality

● They have better understanding about the local market
● Have coordination at local level
● E.g. Travel Corporation of India (TCI)
 Independents

● Single Location of few outlets in one or two cities

● They Cater to Niche markets
● They can offer more specialised service
● E.g. The Blue Yonder - Pondicherry and Kochi
Consolidators

● Buy in Bulk from the supplier

● B2B Sales to their agents
● Give credits and take the risk of bulk buying
● E.g. Akbar Travels, Riya Travels
Leisure Travel Agents

● They Handle only Holiday packages

● Handle both FITs and GITs
● E.g. Thomas Cook
Business Travel Agents

● Handle Only Corporate or Business Travel

● They handle MICE business of the corporate
● They act as the Travel Management Company of the partner firm (TMC)
● E.g. Carlson and Wagonlit, FCM Travel Solutions
Online Travel Agency

● Sell through online portals using Internet

● Marketing their services through online platforms including social media,
blogs and PR campaigns
● OTAs does not mandatory to have their office or overhead, some time they
work as per the comfort of their own. But some OTAs keep a single set up
office for their entire operation
● Some OTA website allow visitors to create, customize and cost own itinerary
with the help online platform and compare the best possible price as per the
preference.
● E.g. Expedia, Makemytrip, Pickyourtrail
Implant Travel Agency

● Setting up an office inside the client's office

● A dedicated travel staff working for the Corporate and at times 24 X 7
support
● Implants handle all the travel related queries of the Company and are also
responsible for billing and payments
● E.g. Travel Implant of Carlson and Wagonlit at Amazon Corporate Office in
Hyderabad
 Roles and Responsibility
● It works as a retailer and sells package tours on behalf of wholesaler. The sale of
package tours involves the rate of commission fixed on the agreement.
● It ensures horizontal integration for the purpose of achieving bumper sale.
● It is an intermediary between tour operators and tourists in terms of selling
package tours in case of outbound tours and conducting sightseeing tours in
case of inbound tours.
● It follows tour itinerary and it does not have anything to do with itinerary.
● Travel agents also provide destinations transfer services to the clients as per the
tour itinerary.
● It acts as a local agent to confirm and reconfirm the services reserved by the
tour wholesalers.
Roles and Responsibility (Cont’d)

● It sorts out problems as per the directions of tour wholesalers.

● It prefers to become the member of national bodies like TAAI and IATO.
● It negotiates the terms and conditions for commission with principal
suppliers.
● It recruits trained manpower from time to time.
● It procures advanced technology for operation of business.
● It subscribes publications like TIM for travel documentations.
● It distributes the work in the office for optimization.
Tour Operator

• Tour operator links between customers (tourists) and primary service

providers
• An organization, firm or company which buys individual travel components,
separately from their suppliers and combines them into a package tour,
which is sold with their own price tag to the public directly or through
middlemen is called a tour operator
• Tour operator is largely responsible for delivery of services as per the
contract in tour itinerary
• A tour operator buys a high volume of travel services like carriers,
accommodation and services
Following services are provided by the tour
operates in the package tours

● Airport and hotel transfer.

● Arrangements for traditional reception at the arrival points.
● Arrangements of luggage transfer in the airport and railway stations.
● Arrangements of guided sightseeing tours.
● Options and selection for worldwide destination.
● Comprehensive itinerary planning
● Appropriate hotel selection & reservation
● Meeting, conference and meeting arrangements
● Exhibition and factory visits
● Theme parties, events & sightseeing
 (Cont’d)

● Air tickets & travel documents like passport, VISA, health certificate and
currency, insurance and permits for entry into the restricted areas
● Foreign Exchange & Travel Insurance
● Experienced and professional tour guides, escorts, interpreter and tour
managers
● Personalized services at destination
● Coordination with local tourist organizations at destination
● Domestic and international air travel
● Hotel reservation and car rental
Types of Tour Operators

• Inbound Tour Operator

• Outbound Tour Operator
• Domestic Tour Operator
• Ground Operators
• Special Interest Tour Operator
 Inbound Tour Operator

● Inbound Tour operators handle foreign tourists coming into the country from
their home country.
● They are the ‘image builders of a country'.
● They bring the valuable foreign exchange into the country.
● E.g. La Passage Tours, Namaste India.
Outbound Tour Operator

• Promoting tours for all the countries outside their country.

• They arrange for travel documents like (Air Tickets , Visas, Health
Documents, Travel Insurance, Foreign Exchange )
• It can be FIT or GIT
• E.g. SOTC, Cox and Kings, Pickyourtrail
Domestic Tour Operator

• Package together all the tour components like Transportation,

accommodation, sightseeing for the domestic market.
• The Domestic Tour operate within the country
• Domestic Tour operator can be group or special tour operators
• E.g. India Tourist Bureau
Ground Operators

● Ground Operators are also known as Destination Management Companies

● They provide - All local land arrangements , Local sightseeing tours and
local guides and escorts
● They are also a source of market information of the destination or a country
● Destination Management companies generally do not take bookings directly
from passengers
● E.g. Aussie Tour Planner is a DMC for Australia tour packages
Special Interest Tour Operator

● This type of tour operator offers and promotes the special interest package
tours
● In the recent years, many specialist tour operators are moving towards
corporate travel, incentive travel, MICE travel, ecotourism, rural tourism and
cultural tourism.
● They are also called as personalized or customized tour operators as package
tours are made on the choice and suggestions of tourists.
● Example - Shikhar Tours and Travels, New Delhi is organizing adventure
tours in the Himalayas in India and Nepal. These are the wildlife and
ecotourism tour operators and they design wildlife and ecotourism packages
for group in the niche market.
Roles and Responsibility

● It is a wholesaler as it assembles packages as per the trend of market and

capacity of distribution channel.
● It deals with customers directly as a principal agent or foreign travel agent
without off-loading tours to ground handling agents.
● Tour operator has liberty to amend the tour itinerary and program if it
warrants.
● It invests much of time and resources to chart out delightful and value added
tour itinerary for meeting the demand and expectation of tourists.
● It gives much stress on selling the tour than the conducting the tour.
● Tour operators are mostly located in the mega cities or in the cities with the
● international airlines services for the strategic advantage of controlling the
package tours.
 Roles and Responsibility (Cont’d)
● It mostly provides international transfer from hotel to airport and vice-versa, if
offices of tour operators are located..
● It deals with both the tourists and primary service providers as direct
intermediary.
● Tour operators design the tours in such a way that handling agents may not get
extra excursion tours directly from tourists.
● It accepts foreign currency for the tour package and gets accreditation from the
Reserve Bank of India money exchange dealer.
● It gives ample importance to become the professional member of national and
international tourism, travel, and hospitality and aviation associations.
● It is committed to work as a responsible partner in the tourism industry to
popularize destinations and explore new potential destinations through their
package tours.
Difference between Travel Agencies and
Tour Operators
Tour operator Travel Agent
• Wholeseller • Retailler
• Principal agent • Intermediary between tour
• Amend the Itinerary operators and Tourists
• Located in mega cities • Follows the Itinerary
• International transfer from • Sightseeing Tours
hotel to airport • Acts as local agent to confirm and
• Excursion Tours reconfirm the services
• Accepts foreign currency • Problem related to tours is solved
by travel agents
Functions of Travel Agency

• Travel Information
• Itinerary Preparation
• Airline Ticketing and Reservation
• Tour Packaging and Costing
• Reservation
• Travel Insurance
• Forex
• MICE
• Travel Information - A travel agency must give up-to-date, accurate and timely
information regarding destinations mode of travel, accommodation, sight-seeing,
shopping, immigration, passport, visa, customs clearance and procedure, health and
security rules and about various permits required to travel in particular areas etc.
• Itinerary Preparation - The term tourists itinerary is used to identify the origin,
destination and all the stopping points in a traveller's tours. It is a composition of
various elements and designed after a detailed study of the market
• Airline Ticketing and Reservation - Airline ticketing and reservation is still a
major source of revenue. Travel agencies perform a function of airline ticketing
and reservation on the behalf of various airlines.
• Tour Packaging and Costing - Travel agencies prepare tour package and sell them
to tourists. The coasting and pricing of tour packages depend to a large extent on
the ability of travel agent as to how effectively he is able to negotiate with the
principal suppliers.
• Reservation - A travel agency consistently makes linkage with the
accommodation sector, transport sector and other entertainment organizations
to reserve rooms, and seats in the cultural programmes and transportation
• Travel Insurance - Travel insurance protects the travellers against the personal
as well as baggage losses resulting from a wide range of travel related
happenings and problems.
• Forex - Approved travel agency authorized by Govt. body provides currency
exchanges services to tourist
• MICE - Large-scale travel agencies offer a complete convention/conference
package which includes registration of the participants at the venue to be
picked up for dropped to the airport/hotel, overhead projectors, slide projectors,
TV, VCR, information counter, sightseen etc.
 DEPARTMENTS IN TRAVEL
AGENCY

FINANCE
MARKETIN
DOCUMENTA OPERATIO AND HUMAN
G AND
TION NS ACCOUNTI RESOURCE
SALES
NG

INBOUND
OUTBOUN
AND ADMIN
D
DOMESTIC