A travel agency is a private retailer or public service that provides travel and tourism-related services to the general public on behalf of accommodation or travel suppliers to offer different kinds of travelling packages for each destination. Travel agencies can provide outdoor recreation activities, airlines, car rentals, cruise lines, hotels, railways, travel insurance, package tours, insurance, guide books, VIP airport lounge access, arranging logistics for luggage and medical items delivery for travellers upon request, public transport timetables, car rentals, and bureau de change services. Travel agencies can also serve as general sales agents for airlines that do not have offices in a specific region. A travel agency's main function is to act as an agent, selling travel products and services on behalf of a supplier. They do not keep inventory in-hand unless they have pre-booked hotel rooms or cabins on a cruise ship for a group travel event such as a wedding, honeymoon, or other group event.
The examples and perspective in this article may not represent a worldwide view of the subject. (August 2018)
Travel agencies often receive commissions and other benefits and incentives from providers or may charge a fee to the end users. Hotel owners and tour operators typically pay a higher commission rate to travel agencies, whereas airlines typically pay a low commission. The customer is normally not made aware of how much the travel agent is earning in commissions and other benefits. A 2016 survey of 1,193 travel agents in the United States found that on average 78% of their revenue was from commissions and 22% was generated from fees.
Travel agencies use the services of the major computer reservations systems, also known as global distribution systems (GDS), including: Amadeus CRS, Galileo GDS, Sabre, and Worldspan, which is a subsidiary of Travelport, which allow for comparison and sorting of hotel and flight rates with multiple companies. Bookings made via travel agents, including online travel agents, may or may not be confirmed instantly. Unlike online travel agencies, metasearch engines and scraper sites, such as Skyscanner, Kayak.com, Rome2rio, and TripAdvisor, may or may not have their own booking engine, and instead provide results for search queries and then divert traffic to service providers or online travel agencies for booking. Travel agents may also work with airline consolidators.
Types of agencies
Booking Holdings and Expedia Group, both online travel agencies, are the largest travel agencies on the list of top earning travel companies. Travel agencies can be multinational companies, referred to as "multiples" in the United Kingdom. They can also be medium-sized organizations, referred to as "miniples" in the United Kingdom, or can be independent, small companies. They can be structured as a limited liability company, a sole proprietorship, or can be set up as a host, franchising, or consortium structure, such as in the case of CWT. A traditional travel agent may work for a travel agency or work freelance. Helloworld Travel is an example of a franchised travel agency, giving agents access to internal systems for product and bookings. While most point-to-point travel is now booked online, traditional agents specialize in niche markets such as corporate travel, luxury travel, cruises, complicated and important trips, and specialty trips. Other niche markets include travelers with disabilities, travelers over the age of 60, women traveling alone, LGBT tourism, the needs of residents in an upmarket commuter town or suburb, or a particular group interested in a similar activity, such as a sport. Examples include StudentUniverse and STA Travel, which specialize in youth travel, or CWT, which caters to corporate travel. Many use telecommuting to reduce overhead or provide concierge services. Agents can act as "travel consultants" with flawless knowledge of destination regions and specialize in topics like nautical tourism or cultural tourism. Many traditional agents prefer the term "travel advisor" as opposed to "travel agent" to emphasize their advice, expertise, and connections that are of great value. Outbound travel agencies offer multi-destinations; inbound travel agencies are based in the destination and deliver an expertise on that location.
In many countries, all travel agencies are required to be licensed by the International Air Transport Association (IATA). Many are also bonded and represented by IATA, and, for those that issue air tickets, the Air Travel Organisers' Licensing (ATOL) in the United Kingdom, and the Airlines Reporting Corporation in the United States also serve those purposes. ABTA – The Travel Association and the American Society of Travel Advisors (ASTA), represent travel agencies in the United Kingdom and the United States, respectively.
In 1758, Cox & Kings became the first travel agency in modern history.
In 1840, the Abreu Agency was established in Porto by Bernardo Abreu, becoming the world's first agency to open its services to the public.
In 1841, Thomas Cook, a Baptist preacher who believed that alcohol was to blame for social problems, reached an agreement with the Midland Railway to organize the transportation of 500 members of his temperance movement from the Leicester Campbell Street railway station to a rally in Loughborough in exchange for a commission. He formed Thomas Cook & Son, which later became The Thomas Cook Group. It filed bankruptcy and underwent liquidation in 2019.
In 1871, Dean and Dawson was founded in the United Kingdom and in the 1950s, it was acquired by Thomas Cook.
In 1886, the Polytechnic Touring Association was founded in the United Kingdom.
Originally, travel agencies largely catered to middle and upper-class customers but they became more commonplace with the development of commercial aviation.
The industry suffered during World War II. However, the Post–World War II economic expansion in mass-market package tours resulted in the proliferation of travel agencies catering to the working class.
In 1905, Nippon Travel Agency became the first travel agency in Japan.
In 1989, with the liberalization of travel for South Koreans, Mode Tour became the first travel agency in the country.
In 1991, Hotel Reservations Network, the precursor of Hotels.com, was founded. At first, hotels did not pay much in commissions.
At the same time, Cheapflights started as a listing service for flight deals from consolidators.
In 1998, Lastminute.com was founded in the United Kingdom.
In 1999, European airlines began eliminating or reducing commissions, while Singapore Airlines did so in parts of Asia. In 2002, several airlines in the United States did the same, which led to an unsuccessful lawsuit alleging collusion among the airlines, that was decided on appeal in 2009.
In 2011, the launch of HotelTonight highlighted instantaneous same-day hotel room booking.
According to the United States Bureau of Labor Statistics, in 2019, there were 82,000 people who worked as travel agents for their full-time jobs. That number is projected to decrease by 26% over the next 10 years. However, job prospects should be best for travel agents who specialize in specific destinations or particular types of travelers. In 2019, the median salary was $40,660 per year, compared to the median annual wage for all workers which was $39,810.
- Morello, Robert. "How Does a Travel Agency Make Money?".
- "Travel providers which pay travel agency commission". Statista.
- "Five myths about travel agents". USA TODAY. 25 September 2014.
- Lock, S. (11 July 2018). "Travel agency industry - Statistics & Facts". Statista.
- McGee, Bill (11 February 2014). "What's the best airfare metasearch site?". USA TODAY.
- "Metasearch and OTAs: Do You Know the Difference?". Trivago. 7 April 2016.
- Grannell, Craig (10 April 2017). "The best flight search websites – tried and tested". The Daily Telegraph.
- Sorrells, Mitra (22 October 2018). "The metasearch model, part 3: The complexity of multimodal". Phocuswire.
- Blažić, Goran (3 October 2019). "10 Reasons: Why Travel Agents like to work with Airline Consolidators". Today.
- BURGESS, BONNIE (23 September 2019). "What Travel Agents and Customers Need to Know About Using Airfare Consolidators". TripSavvy.
- "Booking Holdings And Expedia Are Both Growing Steadily, But In Very Different Ways". Forbes. 26 August 2019.
- "Power List coverage". Travel Weekly.
- Khwaja, Ameen (1 February 2008). "How to Start a Travel Service". Entrepreneur.
- Wayment, Lucy (12 September 2002). "How to start a travel agency". Startups.co.uk.
- King, Christine (13 September 2005). Travel and Tourism. Heinemann. ISBN 9780435459475.
- "How Do I Set Up a Travel Agency and Tour Arrangement Company?". LegalVision. 28 April 2016.
- Weber, Rebecca L. (10 October 2013). "The travel agent is dying, but it's not yet dead". CNN.
- Petersen, Lainie (19 March 2019). "Impact of Technology on the Travel Agency Business". Houston Chronicle.
- LAM, BOURREE (22 June 2016). "Who Uses a Travel Agent in This Day and Age?". The Atlantic.
- Braga, Matthew (18 March 2016). "Why Are Travel Agents Still a Thing?". Vice Media.
- "How to Start a Successful Independent Travel Agency". Travel Planners International. 28 April 2014.
- Strauss, Michael (19 September 2010). Value Creation in Travel Distribution. Lulu. ISBN 978-0-557-61246-8.
- Olmsted, Larry (20 January 2012). "Why You Need A Travel Agent, Part 1". Forbes.
- Sheivachman, Andrew (5 October 2015). "Independent Travel Agents Look for Support to Master a Niche". Skift.
- "IATA - Become an IATA Agent". International Air Transport Association.
- "IATA - About Us". International Air Transport Association.
- "ASTA: Representing Travel Advisors and the Traveling Public for 85 Years". American Society of Travel Advisors. Retrieved 11 January 2021.
- "ABTA: About us". ABTA – The Travel Association.
- "Establishment of Cox & Kings".
- Turen, Richard (17 August 2008). "The world's oldest travel company". Travel Weekly.
- CAMERON, MIKE (7 October 2013). "A Brief Overview And Evolution Of The Travel Industry". Christopherson Business Travel.
- Kayleigh (16 August 2018). "The first travel agency organized train excursions". Medium.
- Cripps, Karla (23 September 2019). "Thomas Cook: A history of one of the world's oldest travel firms". CNN.
- "Dean and Dawson Limited 1871". Science Museum Group.
- "Brownell Travel: About Us". Brownell Travel.
- Junmian, Zhang (30 October 2011). "Top 10 influential businessmen of modern China". China Internet Information Center.
- "History of the Travel Agent Industry". 25 February 2015.
- "Japan Information". Nippon Travel Agency.
- "The vintage posters that lured travelers to Stalin's Soviet Union". The Daily Telegraph. 28 June 2018.
- Pedersen, Sune Bechmann (28 May 2018). "Eastbound tourism in the Cold War: the history of the Swedish communist travel agency Folkturist". Journal of Tourism History. Taylor & Francis. 10 (2): 130–145. doi:10.1080/1755182X.2018.1469679.
- Cottman, Michael (27 February 2018). "After six decades, black travel agency continues to help tourists 'embrace' Africa". NBC News.
- Jamison, Shantell E. (27 February 2018). "Black-owned Travel Agency Wants Tourists to 'Embrace' Africa". Ebony.
- Schaal, Dennis. "The History of Online Travel". Skift.
- Lee, Youjin (14 January 2019). "Why Are So Many South Korean Travel Agencies Closing?". Skift.
- Andal-Ancion, Angela; Cartwright, Phillip A.; George S., Yip (15 July 2003). "The Digital Transformation of Traditional Business". MIT Sloan Management Review. 44 (4): 34–41.
- May, Kevin (12 March 2014). "How 25 years of the Web inspired the travel revolution". The Guardian.
- COHEN, AMON (21 February 2000). "British Airways Eliminates Agency Commissions". Business Travel News.
- "In re Travel Agent Commission Antitrust Litigation". United States District Court for the Northern District of Ohio. 29 October 2007.
- "IN RE: TRAVEL AGENT COMMISSION ANTITRUST LITIGATION". United States Court of Appeals for the Sixth Circuit. 2 October 2009.
- "Occupational Outlook Handbook: Travel Agents". Bureau of Labor Statistics. Retrieved 11 January 2021.
- D'Ambrosio, Richard (9 August 2019). "Travel Agent Popularity on the Rise Yet Again". Travel Market Report.
- Shrikant, Aditi (21 September 2018). "How travel agencies avoided extinction and became a luxury service". Vox Media.