Travel agency

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A travel agency is a business that sells travel related products and services, particularly package tours, to end-user customers on behalf of third party travel suppliers, such as airlines, hotels, tour companies, and cruise lines. In addition to dealing with ordinary tourists, most travel agents have a special department devoted to travel arrangements for business travellers. Indeed, some agencies specialise in that work. Some agencies also serve as general service agents for foreign travel companies in different countries.

Contents 1 Origins 2 Operations 3 Types of Agency 4 Criticisms 5 The Internet threat 6 Careers 7 Cargo 8 References 9 Bibliography 10 See also

[edit] Origins

The British company, Cox & Kings is sometimes said to be the oldest travel agent in the world, but this rests upon services that the original bank (established in 1758) supplied to its wealthy clients. However, the modern travel agent first appeared in the second half of the nineteenth century. Thomas Cook, in addition to developing the package tour, established a chain of agencies in the last quarter of the nineteenth century, in association with the Midland Railway. These not only sold their own tours to the public, but represented other tour companies. Other British pioneer agencies were Dean and Dawson, the Polytechnic Touring Association, and the Co-operative Wholesale Society.

Travel agencies became more common place since the development of commercial aviation from the 1920s. Originally, the agencies largely catered to middle-class customers, but the post-war boom in mass-market package holidays resulted in travel agencies on the main streets of most British towns, catering for a working class clientèle looking for a cheap overseas beach holiday.

[edit] Operations

As the name implies, their main function is to act as an agent, that is to say selling travel products and services on behalf of a supplier. Consequently, unlike other retail businesses, they do not keep a stock in hand. 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 them at a discount. Thus, the agent's profit is the difference between the supplier's price and the price at which the product is advertised or sold to the customer. This profit is called the agency commission, and varies a great deal. In Britain, 12% would be considered a good commission.

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

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. They will advertise the fact that they are bonded (posting a financial bond with an organisation). 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 agencies (and tour companies too) are bonded with IATA for those who issue their own tickets, ATOL for those who order tickets in, or ABTA for those who sell package holidays on behalf of a tour company.

Of course, a travel agent is supposed to offer impartial travel advice to the customer. This function almost disappeared with the mass-market package holiday, and some agency chains seemed to develop a 'holiday supermarket' concept, in which customers chose their holiday from brochures on racks and then booked it from a counter. However, a variety of social and economic changes have now contrived to bring this aspect to the fore once more, particularly the advent of multiple no-frills airlines.

[edit] Types of Agency

There are three different types of agencies: these are Multiples, Miniples and Independent Agencies. The former comprise a number of national chains, often owned by international conglomerates (Thomson Holidays is now a subsidiary of TUI, the German multinational). It is now quite 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.

Independent Agencies usually cater for a special or niche market. Some cater to the needs of residents in an upmarket commuter town or suburb, or concentrate upon a particular area or group (catering to the travel needs of Polish expatriates, perhaps), or an activity (servicing the needs of football supporters).

[edit] Criticisms

Travel agencies have been accused of employing a number of restrictive practices, the chief of which is known as 'racking'. This is the practice of only displaying the brochures of those travel companies whose holidays they wish to sell, the ones that pay them the most commission. Of course, the average customer tends to think that these are the only holidays on offer, and are unaware of possible alternatives.

Generally speaking, small or specialist tour companies do not sell their product through travel agents, since they could not afford to pay the rates of commission that would be demanded. There are a few exceptions to this rule. Independent agents might sell or take bookings for local tour companies (such as coach companies) or tour companies offering specialist holidays that fit into their target market.

Consequently, even before the advent of the internet, small niche tour companies ignored travel agents and sold direct to their customers.

[edit] The Internet threat

With the advent of general public access to the internet, 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 gradually became victims of disintermediation, the reduction in costs caused by removing layers from the package holiday distribution network.^[1][2]

Many travel agencies have developed an internet presence by posting a website, with detailed travel information. Full travel booking sites are often complex, and require the assistance of outside travel technology solutions providers such as Travelocity, Patheo and Open Fares. These companies use travel service distribution companies who operate Global Distribution Systems (GDS), such as Sabre Holdings, Amadeus and Worldspan, to provide up to the minute, detailed data on tens of thousands of flight, hotel, and car rental vacancies.

Some online travel sites 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 or proximity to a city or landmark.

Travel agents have applied dynamic packaging tools to provide fully bonded (full financial protection) travel at prices equal to or lower than a member of the public can book online. As such, the agencies' financial assets are protected in addition to professional travel agency advice.

All travel sites that sell hotels online work together with numerous outside travel agents. Once the travel site sells a hotel, one of the supplying travel agents is contacted and 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 get you an instant answer. Only some of the 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 together, each site has different hotels that it can confirm instantly. Some examples of such online travel websites that sell hotel rooms are Expedia, Travelocity, Tripadvisor, Excelloz and Venere.

[edit] Careers

With the many people switching to self service internet websites, the number of available jobs as travel agents is decreasing. Most jobs that become available are from older travel agents retiring. Counteracting the decrease in jobs due to internet services is the increase in the number of people traveling. Since 1995, many travel agents have exited the industry, and relatively few young people have entered the field due to less competitive salaries.^[3] However, others have abandoned the "brick and mortar" agency for a home-based business to reduce overheads, 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 a very advanced concierge).

[edit] Cargo

A small number of companies work with cargo airlines and ships which are connected to cargo business.

[edit] References

[edit] Bibliography

Renshaw, M B (1997), The Travel Agent, 2nd edition, Business Education Publishers Ltd, Sunderland

[edit] See also

• Computer reservations system
• Travel technology