Retailer that provides tourism-related services
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.
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.
In 1887, Walter T. Brownell established Brownell Travel, the first travel agency in the United States, and led 10 travelers on a European tour setting sail from New York on the SS Devonia.
Originally, travel agencies largely catered to middle and upper-class customers but they became more commonplace with the development of commercial aviation.
In 1923, after being treated badly by a British travel agency, K. P. Chen formed what became the China Travel Service, the first travel agency in China.
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 1929, Intourist was formed as the official state travel agency of the Soviet Union, with the goal of convincing outsiders to visit the country.
During the Cold War, travel agents were used by people from Western countries to travel behind the Iron Curtain.
In 1951, the precursor to Helloworld Travel became one of the first travel agencies in Australia.
In 1955, Henderson Travel Service became the first black-owned travel company and the first to take large groups of black tourists to Africa.
In the early 1980s, American Airlines’ Sabre unit created a direct-to-consumer booking tool for flights, hotels and cars called eAAsySabre.
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.
With the advent of the internet, travel agencies migrated online and underwent disintermediation by the reduction in costs caused by removing layers from the package holiday distribution network.
In 1994, Travelweb.com launched as the first online directory of hotels.
In 1995, Internet Travel Network sold the first airline ticket via the World Wide Web.
In October 1996, Expedia.com, funded with hundreds of millions of dollars by Microsoft launched as the first large online travel agency.
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 2007, the launch of the iPhone and related mobile apps increased travel bookings made online.
In 2008, the launch of Airbnb created an online marketplace for spare bedrooms and apartments.
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.
Several reports show that the number of people using travel agents to book travel has been increasing.
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