Travel agency

A travel agency is a private retailer or public service that provides travel and tourism related services to the public on behalf of suppliers such as activities, airlines, car rentals, cruise lines, hotels, railways, travel insurance, and package tours. In addition to dealing with ordinary tourists, most travel agencies have a separate department devoted to making travel arrangements for business travelers; some travel agencies specialize in commercial and business travel only. There are also travel agencies that serve as general sales agents for foreign travel companies, allowing them to have offices in countries other than where their headquarters are located.

Origins
The modern travel agency first appeared in the second half of the 19th century with its root in 1758 as establishment of Cox & Kings Ltd. In the year 1970, Cox & Kings the longest established travel company centered its focus on its business of travel and tourism. Lately Thomas Cook also established a chain of agencies in the last quarter of the 19th century, in association with the Midland Railway. They not only sold their own tours to the public, but in addition, represented other tour companies. Other British pioneer travel agencies were Dean & Dawson, the Polytechnic Touring Association, and the Co-operative Wholesale Society. The oldest travel agency in the United States is Brownell Travel; on 4 July 1887, Walter T. Brownell led ten travelers on a European tour, setting sail from New York on the SS Devonia.

Travel agencies became more commonplace with the development of commercial aviation, starting in the 1920s. Originally, travel agencies largely catered to middle and upper class customers, but the post-war boom in mass-market package holidays resulted in the proliferation of travel agencies on the main streets of most British towns, catering to a working class clientele looking for a convenient way to book overseas beach holidays.

Features
Most travel agencies do not just sell airline or train tickets; Their services vary and many of them sell more cruise packages than airline tickets, as well as services related to hotels. Most travel agencies also carry out car rentalfor your clients or concentrate on organizing trips for groups to different destinations. For this, they work with regular airlines, although in many cases they do it with charter companies. Many travel agencies exclusively represent a small group of providers: airlines, cruise ships and car rental companies, so, often, the logos of these companies are displayed in the windows of the agency’s offices. Some travel agencies provide a house exchange service. In most agencies you can also offer tour services, mainly in commercial destinations, depending on the destination you can offer with transfers included where the client leaves from the comfort of your hotel, you can also include food and drinks, certified guides to give more information of the sites that are being known, when traveling as a family you get preferential prices. The tourism is wide in all the extension of the word can be found for all the tastes and budgets, in season of vacations and in regular season, always the people will find a good option for their vacations and thus to have a pretty vacations.

Operations
A travel agency’s main function is to act as an agent, selling travel products and services on behalf of a supplier. Consequently, unlike other retail businesses, they do not keep a stock in hand, unless they have pre-booked hotel rooms and/or cabins on a cruise ship for a group travel event such as a wedding, honeymoon, or a group event. A package holiday or a ticket is not purchased from a supplier unless a customer requests that purchase. The holiday or ticket is supplied to the agency at a discount. The profit is therefore the difference between the advertised price which the customer pays and the discounted price at which it is supplied to the agent. This is known as the commission. In many countries, all individuals or companies that sell tickets are required to be licensed as a travel agent.

In some countries, airlines have stopped giving commissions to travel agencies. Therefore, travel agencies are now forced to charge a percentage premium or a standard flat fee, per sale. However, some companies pay travel agencies a set percentage for selling their product. Major tour companies can afford to do this, because if they were to sell a thousand trips at a cheaper rate, they would still come out better than if they sold a hundred trips at a higher rate. This process benefits both parties. It is also cheaper to offer commissions to travel agents rather than engage in advertising and distribution campaigns without using agents.

Other commercial operations are undertaken, especially by the larger chains. These can include the sale of in-house insurance, travel guide books, and public transport timetables, car rentals, and the services of an on-site bureau de change, dealing in the most popular holiday currencies.

A travel agent is supposed to offer impartial travel advice to the customer, as well as coordinating travel details and assisting the customer in booking travel. However, this function almost disappeared with the mass market package holiday, and some agency chains seemed to develop a “holiday supermarket” concept, in which customers choose their holiday from brochures on racks and then book it from a counter. Again, a variety of social and economic changes[which?] have now contrived to bring this aspect to the fore once more, particularly with the advent of multiple, no-frills, low-cost airlines.[which?][when?]

Agency income
Traditionally, travel agencies’ principal source of income was, and continues to be, commissions paid for bookings of car rentals, cruise lines, hotels, railways, sightseeing tours, tour operators, etc. A fixed percentage of the main element of the price is paid to the agent as a commission. Commissions may vary depending on the type of product and the supplier. Commissions are not paid on the tax component of the price. Travel agencies also receive a large variety of bonuses, benefits, and other incentives from travel and tourism related companies as inducements for travel agents to promote their products. The customer is normally not made aware of how much the travel agent is earning in commissions and other benefits. Other sources of income may include the sale of insurance, travel guide books, public transport timetables and money exchange.

Since 1995, many airlines around the world and most airlines in the United States now do not pay any commission to travel agencies. In this case, an agency adds a service fee to the net price. Reduced commissions started in 1995 in the United States, with the introduction of a cap of $50 on return trips and $25 on one way. In 1999, European airlines began eliminating or reducing commissions, while Singapore Airlines did so in parts of Asia. In 2002, Delta Air Lines announced a zero-commission base for the U.S. and Canada; after a few months United Airlines, American Airlines, Continental Airlines, Northwest Airlines, US Airways and American Trans Air all followed suit.

Insurance
The majority of travel agents have felt the need to protect themselves and their clients against the possibilities of commercial failure, either their own or a supplier’s. They will advertise the fact that they are surety bonded, meaning in the case of a failure, the customers are guaranteed either an equivalent holiday to that which they have lost or, if they prefer, a refund. Many British and American agencies and tour operators are bonded with the International Air Transport Association (IATA), for those who issue air tickets, Air Travel Organisers’ Licensing (ATOL) for those who order tickets in, and the Association of British Travel Agents (ABTA) or the American Society of Travel Agents (ASTA), for those who sell package holidays on behalf of a tour company.

Types of agencies
There are three different types of agencies in the UK: multiples, miniples, and independent agencies. Multiples comprises a number of national chains, often owned by international conglomerates, like Thomson Holidays, now a subsidiary of TUI Group, the German multinational. It is now common for the large mass market tour companies to purchase a controlling interest in a chain of travel agencies, in order to control the distribution of their product. (This is an example of vertical integration.) The smaller chains are often based in particular regions or districts.

Five different types of agencies exist in the United States: independent, host, franchise, consortium, and mega agencies. American Express and the American Automobile Association (AAA) are examples of mega travel agencies. Carlson Wagonlit Travel is an example of a consortium agency consisting of various types of specialty agencies. An example of an independent travel agency, is one that is started by a sole proprietorship, or partnership between individuals that have no business partnerships with competition agencies. Each type of travel agency has its pros and cons.

Independent agencies usually cater to a special or niche market, such as the needs of residents in an upmarket commuter town or suburb, or a particular group interested in a similar activity, such as sporting events, like football, golf, or tennis.

Travel agencies choose between two approaches. One is the traditional, multi-destination, outbound travel agency, based in the traveler’s originating location; the other is the destination focused, inbound travel agency, that is based in the destination and delivers an expertise on that location. At present, the former is usually a larger operator while the latter is often a smaller, independent operator.

There are two different types of travel agencies:

a) According to its operational nature and point of view:

Commercial:
Tour Operators: those who organize trips by contracting directly with the service providers.
Wholesale or Wholesaler: those that elaborate projects, offer and distribute tourism products and services through retail agencies. Normally they do not contract with the final client. They usually make reservations to meet the demands of retailers, wholesalers earn a commission on retailers’ sales.
Retail, Retailer or Retailler: those that sell directly to the consumer, services and products organized by other agencies or themselves.
Mixed or Organization and provision of services: has the capacity to prepare and organize trips and services for clients and agents.

Geographical:
International: has worldwide coverage.
National: has coverage within a country.
Local: Has coverage in a town or city and its surroundings.

Tour Operative:
Egressive tourism agency or export: serves the supply and demand of foreign tourism abroad.
Receptive tourism agency: serves within the country tourist flows from abroad.
Internal tourism agency: serves the internal movement of tourism in a country.

b) According to the Argentine legal regulation: On November 6, 1970, Argentina Law No. 18,829 was enacted, which normalizes the activity of Travel Agencies. The law seeks that the activity of the agencies be developed within a framework of dignity, under a fair control of quality and honesty of the services they provide.

Article n ° 4 of Regulatory Decree N ° 2182/72, 2 classifies Travel Agencies into three categories, namely:

1) Travel and Tourism Companies: they are those that carry out all the activities mentioned in article n ° 1 of law 18829, for their own clients, for other agencies in the country or abroad or for third parties.
2) Tourism Agencies: are those that carry out all the activities mentioned in article n ° 1 of law 18829, for their clients, including receptive tourism on their own.
3) Passage Agencies: are those that can act in the reservation and sale of tickets in all authorized means of transport or in the sale of services programmed by the Travel and Tourism Companies and the aerial, aquatic and terrestrial transporters.

Consolidators
Airline consolidators, tour operators, and other types of travel consolidators and wholesalers are high volume sales companies that specialize in selling to niche markets. They may or may not offer various types of services, at a single point of access. These can be hotel reservations, flights or car-rentals. Sometimes the services are combined into vacation packages, that include transfers to the location and lodging. These companies do not usually sell directly to the public, but act as wholesalers to retail travel agencies. Commonly, the sole purpose of consolidators is to sell to ethnic niches in the travel industry. Usually no consolidator offers everything; they may only have contracted rates to specific destinations. Today, there are no domestic consolidators, with some exceptions for business class contracts.

Travel agencies in the 21st century
With general public access to the Internet since the mid-1990s, many airlines and other travel companies began to sell directly to passengers. As a consequence, airlines no longer needed to pay the commissions to travel agents on each ticket sold. Since 1997, travel agencies have gradually been dis-intermediated, by the reduction in costs caused by removing layers from the package holiday distribution network. However, travel agents remain dominant in some areas such as cruise vacations where they represent 77% of bookings and 73% of packaged travel.

In response, travel agencies have developed an internet presence of their own by creating travel websites, with detailed information and online booking capabilities. Travel agencies also use the services of the major computer reservations systems companies, also known as Global Distribution Systems (GDS), including: Amadeus CRS, Galileo CRS, SABRE, and Worldspan, which is a subsidiary of Travelport, allowing them to book and sell airline tickets, car rentals, hotels, and other travel related services. Some online travel websites allow visitors to compare hotel and flight rates with multiple companies for free; they often allow visitors to sort the travel packages by amenities, price, and proximity to a city or landmark.

All travel sites that sell hotels online work together with GDS, suppliers, and hotels directly to search for room inventory. Once the travel site sells a hotel room, the site will try to get a confirmation for this hotel. Once confirmed or not, the customer is contacted with the result. This means that booking a hotel on a travel website will not necessarily result in an instant confirmation. Only some hotels on a travel website can be confirmed instantly (which is normally marked as such on each site). As different travel websites work with different suppliers, each site has different hotels that it can confirm instantly. Some examples of such online travel websites that sell hotel rooms are Expedia, Orbitz, and Priceline.

The comparison sites, such as Kayak.com and TripAdvisor, search the reseller sites all at once to save time searching. None of these sites actually sells hotel rooms.

Often tour operators have hotel contracts,[clarification needed] allotments,[clarification needed] and free sell agreements[clarification needed] which allow for the immediate confirmation of hotel rooms for vacation bookings.

Mainline service providers are those that actually produce the direct service, like various hotels chains or airlines that have a website for online bookings.[original research?]

Portals serve as a consolidator of various airlines and hotels on the internet. They work on a commission from these hotels and airlines. Often, they provide cheaper rates than the mainline service providers, as these sites get bulk deals from the service providers.[original research?]

A meta search engine, on the other hand, simply scrapes data from the internet on real time rates for various search queries and diverts traffic to the mainline service providers for an online booking. These websites usually do not have their own booking engine.

Internet
With the advent of general Internet access, many airlines and other travel companies began selling tickets directly to passengers. As a result, airlines no longer had the need to pay commissions to travel agents for each ticket sold. Since 1997, travel agencies have gradually had to adapt to disintermediation, the reduction in costs caused by removing the layers from the holiday distribution network. 3 4

The advance of the internet has caused that the travel agencies can make a more automated service through a web page, not only with detailed information of the tourist packages or services that they can offer to the public, but also with the option of making reservations. Real time. Full travel booking sites are often complex, and require the assistance of travel technology solution providers such as Travelocity, Pas, hotels, car rentals and occasionally being affiliated with IATA companies, an example of these companies being Saber Travel Network, which allows agencies to become direct issuers of airline tickets. 5 6

Some of the travel websites allow visitors to compare the rates of the multiple hotel and flight companies for free. They often allow visitors to order travel packages for services, price or proximity to a city or signal.

Travel agents have developed dynamic packaging tools to provide fully consolidated travel (full financial protection) at prices equivalent to or less than what a member of the public can reserve online. Thus, the advantages of financial agencies are additionally protected for the professional advice of travel agencies.

All online travel sites that sell hotel rooms online work together with numerous third-party travel agencies. Once the site sells a reservation, one of the extra travel agents is contacted and will try to get a confirmation for this hotel. When this is confirmed or not, the client is contacted with the result. This means that booking at a hotel on a travel site will not give you an instant response. Only some of the hotels on a travel site can be instantly confirmed (which are usually marked as such on the site). As different travel sites work with different alternates together, each site has different hotels that can confirm instantly.

The reasons for choosing an online agency 7There are many, accessibility and an almost instantaneous result, since whenever you have a computer or mobile with internet connection available, you can book the trip or hotel and all this from the comfort of the place where you are. In addition, the low prices compared to traditional agencies, because in an online agency the operating cost is almost zero. In addition, the user has at his disposal all the available offers, and with that, choose the one that brings the best benefits. The diversity of forms of payment is another reason why online travel agencies are having great acceptance. Credit or debit cards, payment in installments, payments with virtual purses and added to it the advantage offered by most airlines to accumulate points, affiliations to programs and discounts.

Sales and earnings development
Depending on their status, travel agents receive commissions from the respective service providers, which are between 4% and 13% of the travel price, and in exceptional cases can also be higher or lower (rail). At the end of the year, large sales volumes were additionally compensated by so-called overrides in the form of an increased commission rate.

In recent years, a development has also begun here that will lead to a drop in sales in one year with commission repayments or reductions in the next year, the so-called ‘malus system’. With it large tour operators try to control the sales on itself. This system also has disadvantages for the consumer, since the travel agency is forced to offer the products of one or less tour operators in order to be able to fulfill the sales and commission requirements. However, 2007 seems to be a turnaround again, since just customer wishes can not be controlled solely by punishment or reward on commissions.

Since the 1960s, sales and passenger numbers grew annually. This allowed travel agencies, such as the tourism industry as a whole, to expect good returns until the terrorist attacks on 11 September 2001. Since then, the industry is undergoing a profound change, with some significant declines in sales, but also a loss or even total loss of income (such as commissions on airline tickets).

This development is compounded by other factors:

Increase in unemployment
Consumer reluctance, uncertainty, fear of the future
the rapid growth of communication possibilities (internet, fax, telephony)
Changes in consumer buying habits – Loss of loyalty to the main travel bureau
Organizers and airlines are looking for new and cheaper distribution channels such as

Internet presences (customers can book directly from service providers)
Travel channels on the TV
Call center
Sales channels of travel z. B. about supermarkets
Thus, the tour operator business is partially past the travel agency.

Advantages and disadvantages of travel agencies

The increasing travel experience of the customers and the dwindling information advantage of the travel agency call into question the existence of many travel agencies in the medium term. Today, customers can find out more about the Internet, hotels, attractions and transport facilities around the world, which was once a classic core function of the travel agency.

However, the great future potential of travel agencies lies in the diverse product knowledge and consulting options. While usually a website only offers the product of a service provider, often also does not provide detailed country information and hardly any experience on these pages are conveyed, have employees in the travel agencies because of their personal experience and experience exchange opportunities here much better information.

Travel agencies will probably have to specialize, as knowledge in all areas and products is almost impossible today. But even here begins a development in the direction that allow specialized companies to pay for this advice.

All in all, it can be said that every type of distribution of travel has its advantages and disadvantages and its place in economic life. Also, the numbers show that in some parts of the sale on the Internet increases (airline tickets, hotel accommodation only) and in some parts of the sale of travel agents increases (high-quality travel, study trips, group travel).

Zero commission in air traffic
In 2003, Lufthansa became the first major tourism partner to announce traditional intermediary status to travel agencies. Broker status means for the reseller, he receives a commission from the merchant for his brokerage.

Thus, the travel agencies have since been forced to buy the plane tickets at the airline net (which means that the travel agency receives no more commission from Lufthansa) and with a surcharge (service charge, processing fee, booking fee, handling fee) to the customer to resell, The surcharge is necessarily to be levied so that the travel agency can continue to cover its own costs (telephone costs, rent for the computer terminals, etc.) and thus secure its continued existence in the economy. The original idea of the service fee was quickly introduced to online travel portals, especially in flight portals. While some EU countries impose sanctions on the lack of transparency in these fees, there is a lack of extensive regulatory regulation in Germany.

The fact that airlines offer their tickets in direct sales (call centers, the Internet) at a lower cost than is possible for a travel agency has great potential for conflict. The only restriction here is that they can only offer their own connections and prices and can not see at a glance in their computer systems like travel agencies, and also tariffs of other airlines.

In this development Lufthansa played only a pioneering role. 99% of the airlines have now joined this practice. Deutsche Bahn AG has also reduced travel agency fees with DB agencies to 6% since the beginning of 2005. Agencies collect part of the lost commission from the customer, in the form of service fees.

Computer Systems in the Travel Agency
Reservation systems: Important reservation systems on the German market are still Amadeus (formerly START – market leader in Germany) with the flight reservation mask “AMADEUS Air” and the tourist booking mask “TOMA”. There are also other booking systems, such as MySabre + merlin, Worldspan or Galileo.

Price comparison systems: In addition, there are auxiliary systems, such as Traffics Cosmo, Bistro Portal or LM-PLUS, run the price comparisons, filter out yet bookable deals and find the holiday needs of customers appropriate travel and travel modules at various organizers.

Careers
A travel agent may work for a travel agency or work freelance.

With many people switching to self-service internet websites, the number of available jobs as travel agents is decreasing.

Since 1995, many travel agents have exited the industry, and relatively few young people have entered the field due to less competitive salaries. However, others have abandoned the “brick and mortar” agency for a home-based business to reduce overhead, and those who remain have managed to survive by promoting other travel products, such as cruise lines and train excursions, or by promoting their ability to aggressively research and assemble complex travel packages on a moment’s notice, essentially acting as an advanced concierge. In this regard, travel agents can remain competitive, if they become “travel consultants” with flawless knowledge of destination regions and specialize in topics like nautical tourism or cultural tourism.

travel agents
Full travel office
Full licensing: IATA, Bahn, DER and at least one leading company. The full travel agency sells so in addition to the normal travel / package tours, also scheduled and train tickets. In addition, the full travel agency usually represents a major tour operator such as TUI, DER Touristik or Thomas Cook, as well as many smaller tour operators. Many full-time travel agencies also operate as tour operators themselves and sometimes have their own travel catalog.

Features: often chain travel agency, annual turnover depending on location and chain affiliation approx. 1.5 million euros, can also have high turnover share in the corporate business

Tourist Travel Agency
The placement service is limited to the offers of tour operators and other service providers such as hotels, airlines or travel insurance. You may also have an IATA (right to issue your own ticket).

Travel agency chains
As in other areas of the economy, co-operation also began in the travel industry years ago. The original purpose of these mergers was to improve the purchasing conditions of the service providers (“Together we are strong!”). However, for many, the financial reserves were not enough for survival, so part of the existing travel agency chains were bought out by the major tour operators and integrated into their distribution network and further expanded.

For example, three major travel agency chains in the private customer business share more than 2/3 of their sales. Market leaders include:

the sales brands of REWE-Touristik – approx. 600 travel agencies of the brands DER Reisebüro, DERPART and ATLASTRISEN plus approx. 1200 cooperation travel agencies
TUI Leisure Travel with travel agencies of the brands Hapag Lloyd, FIRST, TUI Travel Centers and their franchise and cooperation partners
Thomas Cook / Neckermann and their franchise and cooperation partners
Booking office
They are characterized by the fact that they primarily sell trips of their own organizer but have agency contracts with other tour operators. There are two types of booking offices:

The company-owned booking office of a tour operator
For example, the sales office of a sports travel company at the location of the company headquarters, here the services of the tour operator is distributed in direct sales.

Travel departments in non-sector companies
Gas stations, banks, book clubs, lottery shops and others.

Consolidator
The activities of a consolidator included, until a few years ago, among others, the sale of so-called gray market tickets. These are scheduled air tickets that are sold “unofficially” but with the connivance of the providers, at special rates below the state-approved fares.

Due to the rapid change in the price inflation market (the release of all prices means the elimination of the permit requirement within the entire European air traffic area), gray market tariffs have lost their significance. For long-haul services, they have been replaced by two new tariffs: net bargaining between consolidator or chain, or large companies on the one hand, and airlines on the other, and tariffs that only come with the sale of a land service (eg accommodation, rental car) be valid.

Nevertheless, consolidators still have their right to exist. More than two-thirds of all travel agencies do not have a license to issue airline tickets (they are not so-called IATA agencies). These travel agents must purchase their tickets from the consolidator. Most Internet portals do not handle their trips themselves, but hereby hire a consolidator or other service providers, one then speaks of fulfillment center.

For private customers with the idea of obtaining a cheaper air fare through the Consolidator, however, the attempt to find one will make no sense. First, the range of about 5 € is by now largely fully automated processing too small that it would be worth it, and secondly is no infrastructure for the necessary counseling available.

The consolidator is the interface between travel agencies and airlines

A consolidator occupies an intermediary position between travel agency and airlines. Essentially, the following tasks belong to the Consolidator business:

Contracts with airlines
Publication and maintenance of air fares in databases
Contracts with travel agents
Service, telephone advice for travel agents
Ticketing (Etix, ticket deposit, paper ticket…)
Shipping department, courier service
Accounting organization
Due to the manifold tasks in the wholesale business, it is usually not possible to provide support to private customers. A structure for end customer support is not provided and also not desired. Therefore, only the partners in the travel agency industry receive airline tickets at special rates, not the end customer.

For travel agents without an IATA license, connecting to a consolidator is particularly important. Without such a license, a travel agent is not allowed to create airline tickets. However, to cover this important area in the travel agency industry, a contract with a consolidator is required. For a basic fee, which is far below the commission of the travel agency, the consolidator creates the airline tickets, taking into account the tariff conditions.

But also for travel agencies with an IATA license is worth a contract with a consolidator. The high number of airline tickets issued gives a consolidator better conditions for purchasing from airlines than a travel agent. These prices are then passed on to the travel agents who can sell cheaper trips. Years ago, gray market prices were communicated to the travel agents with the airlines’ connivance. Meanwhile, a whole tariff jungle has emerged in addition to the published tariffs, such as Nego tariffs, bulk tariffs, corporate tariffs or unifares.

Despite the tendency for airlines to stop paying commissions and to sell directly to their direct customers through their own booking systems over the Internet, Consolidators cover a very important area in the travel industry. Since the airlines, due to their route network, can only publish their limited offers, the end customer often lacks an overview of the tariff diversity of the individual travel destinations. A travel agency with a consolidator behind it creates the necessary transparency here.

Source from Wikipedia