Travel agency

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.

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.

 
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.

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 such as sports(servicing the needs of football supporters).

 
 
 
 

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