(Last updated on: 27/06/2022)
What does a travel agency do? You will almost definitely have heard of travel agencies if you have ever booked a holiday or have an interest in the tourism industry. But what exactly is a travel agency, and what do they do?
- What is a travel agency?
- Types of travel agencies
- Other types of travel agency
- Overall, what does a travel agency do?
- Big names in the travel agency industry
- Travel agency business model
- A brief timeline of travel agencies
- Further reading
What is a travel agency?
A travel agency is essentially the ‘middle man’ between travel companies and the general public i.e consumers. They book all sorts of travel-related experiences for customers on behalf of larger companies.
The main aim of a travel agency is to make the booking process simpler for the public, who might lack the time or confidence to book trips themselves.
Types of travel agencies
So what does a travel agency do? It mostly depends on what type of travel agency you’re looking at. This can be broken down into the following types…
Independent travel agents
An independent travel agent is the type you’ll see on Instagram or with their own Facebook pages, their feeds full of snaps from Amsterdam, Bali, or New York City. They tend to partner with a ‘host agency’, who will take a portion of the agents’ commission themselves in exchange for letting them use the company software and access their commission. Travel agents are also able to recruit other people, and in turn get a cut of their commission too. In this way, independent travel agencies tend to be a type of multi-level marketing scheme.
Online travel agencies
Online travel agencies are much more consumer-focused. They allow individual customers to book their own travel, but as a package or with the added protection from ATOL and ABTA. They act as a broker, allowing you to input your dates, desired destination(s), what board basis you wish to travel and so on. The site then pulls together a package deal, allowing you to book everything in one go with access to booking details so you can make amendments and keep up to date with any changes.
Visitor information centres
While these don’t offer flights and hotels generally, visitor or tourist information centres are found within cities or tourist destinations. They provide advice, maps, discounts and booking services for tours and excursions such as open top bus tours. These are usually run by local or national governments, or specific tourist boards. They are great for recommendations when travelling somewhere new!
Hotel concierge services work in this same way, often getting commission for booking trips for guests.
Other types of travel agency
I won’t go into too much detail here, but there are other types of travel agencies too. You can learn more in this post about the different types of travel agents.
Overall, what does a travel agency do?
A travel agency does a multitude of things. During non-peak times, they will mostly spend their days researching new or upcoming tourist destinations and what makes them so great, advertising them as somewhere people can book future holidays to.
Travel agencies are also required to keep up to date with safety information for various destinations. They do plenty of research meaning they can tell customers about the best places to go, what they can do while they’re there, what documents they need and so on. This is particularly important now, as travel advice is ever-changing with regards to political conflicts and public health.
But during peak times and in the run-up to these times, travel agents will be busy actually booking trips. Nowadays they mostly do everything via the computer, using the internet to put holiday packages together which include at least the basics – flights and accommodation – for one price. However, they also call travel companies directly in order to get better deals or to see if there are rooms or seats available which might not be showing online for whatever reason. Because of this, travel agencies and agents tend to have great relationships with particular brands.
What can a travel agency book?
Travel agents can book much more than just flights and accommodation. Not all of them can book all of these experiences or features, but it is definitely worth asking if you are using a travel agency to book your next vacation.
- Flights – short haul, long haul, & various classes
- Accommodation – hotels, apartments, and villas
- Airport transfers
- Executive airport lounges
- Airport parking
- Cruises – river and ocean
- Car rentals
- Travel insurance
- Excursions and tours
- Taxi services
- Currency exchange
- Train tickets
- Theme park & water park tickets e.g Disneyworld and Universal in Orlando, Florida
They will also advise on public transport services and timetables, as well as arranging for medical items to be delivered and any access requests you have.
Big names in the travel agency industry
Most travel agencies are actually online, and many of us use them regularly. There are still some in-store travel agencies, but with the impact of both modernisation and the Covid-19 pandemic the majority are online now. Below are some big names within the industry which you will likely recognise.
Expedia – founded by Microsoft in 2001
Cruise.com – specifically for booking cruises
American Express Travel – allows you to earn & use points when booking
Audley Travel – the largest operator in tailor-made travel
loveholidays – a British company founded in 2012
Lastminute.com – offering cheaper travel when you book last minute
Kiwi.com – specifically for booking air and ground transport
Booking Holdings – these are a travel technology company who own Booking.com, Cheapflights, OpenTable and more
Travel agency business model
Now we’ve looked at the question of ‘what is a travel agency’, let’s take a look at the generic business model. Generally, travel agencies work in one of two ways. The first way is by receiving commission from the companies they book experiences with for customers. For example, if you were to use a travel agency to book your next holiday which included flights, a hotel stay and a transfer to and from the airport this is three separate components which will be booked through three different companies. The travel agency will receive commission from each of the three companies. There may be other benefits and incentives offered by the travel companies. Commission rates and these benefits mean that travel agencies are more likely to use some companies more so than others who might offer them less in exchange.
Alternatively, travel agencies will charge a fee for their services. This makes it more expensive for consumers to book trips through travel agents and agencies than it would to book themselves. However, as some people don’t feel confident booking themselves, many are happy to pay this additional cost. Holidays booked through travel agencies often come with the added benefit of being ATOL and ABTA protected.
A brief timeline of travel agencies
- Cox & Kings were the first travel agency, was established in 1758
- Abreu Agency was the first public travel agency, was established in 1840
- Thomas Cook, one of the most famous travel agencies, was founded in 1841
- Brownwell Travel, the first travel agency in the US, was established in 1895
- Nippon Travel Agency was the first travel agency in Japan, established in 1905
- Intourist became the official state travel agency of the Soviet Union in 1929
- The first travel agency in Australia which went on to become Helloworld Travel, was established in 1951
- Henderson Travel Service became the first Black-owned travel agency, taking Black tourists to various African countries, in 1955
- American Airlines’ Sabre unit created a direct-to=consumer booking tool for flights, hotels and cars in the early 1980s
- Mode Tour became the first travel agency in South Korea, established in 1989
- Hotel Reservations Network, which went on to become Hotels.com, was established in 1991 – at this point, hotels didn’t pay a lot of commission so it didn’t take off
- Travelweb.com, the first online hotel directory, launched in 1994
- The Internet Travel Network sold the first airline ticket online in 1995
- Expedia launched in 1996, funded by Microsoft, and are now one of the biggest travel agencies
- In 2007, as the iPhone was released, more bookings were made online because mobile apps were now in use
- Airbnb was established in 2008
- HotelTonight, specifically for instant same-day hotel room bookings, was launched in 2011
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