Travel agency: Difference between revisions
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The recent development and growth of travel comparison sites(also known as travel search engines or metasearch engines), such as Kayak.com, TripAdvisor, [http://www.BestTravelCoupon.com BestTravelCoupon.com] - New travel search engine launched in (2012)<ref>{{cite web|url=http://finance.boston.com/boston/news/read/21684693/BestTravelCoupon.com_Successfully_Launches_New_Travel_Search_Engine|title=BestTravelCoupon.com Launches New Travel Search Engine|date=June 2012|accessdate=June 28, 2012}}</ref>, and SideStep have moved sales away from traditional travel agencies. These sites work as a search engine by searching the travel resellers site all at once. The benefit to users is easy of use, time saved searching, as well as, getting discounted prices. None of these sites actually sell hotel rooms. However, they have made booking of travel easier for users. This is reflected in the drop in travel sales with traditional travel agencies. |
The recent development and growth of travel comparison sites(also known as travel search engines or metasearch engines), such as Kayak.com, TripAdvisor, [http://www.BestTravelCoupon.com BestTravelCoupon.com] - New travel search engine launched in (2012)<ref>{{cite web|url=http://finance.boston.com/boston/news/read/21684693/BestTravelCoupon.com_Successfully_Launches_New_Travel_Search_Engine|title=BestTravelCoupon.com Launches New Travel Search Engine|date=June 2012|accessdate=June 28, 2012}}</ref>, and SideStep have moved sales away from traditional travel agencies. These sites work as a search engine by searching the travel resellers site all at once. The benefit to users is easy of use, time saved searching, as well as, getting discounted prices. None of these sites actually sell hotel rooms. However, they have made booking of travel easier for users. This is reflected in the drop in travel sales with traditional travel agencies. |
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The growth of smartphones has also impacted travel booking in the United States. In 2012, nearly 25 million mobile users in the United States will research travel information on their mobile devices in 2012. Analysts expect this number to rise over 300% in the next 4 years to over 74 million annual mobile users researching and booking online travel. <ref>{{cite web |title=2012 Trends: Online Travel Booking Rises With Mobile|url=http://travel-search-engines.com/online-travel-booking-rises-with-mobile/|year=2012|publisher=Travel-Search-Engines.com|accessdate= |
The growth of smartphones has also impacted travel booking in the United States. In 2012, nearly 25 million mobile users in the United States will research travel information on their mobile devices in 2012. Analysts expect this number to rise over 300% in the next 4 years to over 74 million annual mobile users researching and booking online travel. <ref>{{cite web |title=2012 Trends: Online Travel Booking Rises With Mobile|url=http://travel-search-engines.com/online-travel-booking-rises-with-mobile/|year=2012|publisher=Travel-Search-Engines.com|accessdate=July 2012}}</ref> |
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Despite the growing popularity of online travel sites, mobile users, and the [[internet booking engine]] sites, traditional travel agencies still accounted for nearly US$95 billion in travel sales in 2011, or one third of the $284 billion U.S. travel market, according to the publication PhoCusWright's Travel Agency Distribution Landscape 2009-2013.<ref>{{cite web |title=PhoCusWright's Travel Agency Distribution Landscape 2009-2013|url=http://www.phocuswright.com/products/4110|year=2012|publisher=phocuswright.com|accessdate=June 2012}}</ref> |
Despite the growing popularity of online travel sites, mobile users, and the [[internet booking engine]] sites, traditional travel agencies still accounted for nearly US$95 billion in travel sales in 2011, or one third of the $284 billion U.S. travel market, according to the publication PhoCusWright's Travel Agency Distribution Landscape 2009-2013.<ref>{{cite web |title=PhoCusWright's Travel Agency Distribution Landscape 2009-2013|url=http://www.phocuswright.com/products/4110|year=2012|publisher=phocuswright.com|accessdate=June 2012}}</ref> |
Revision as of 18:56, 31 July 2012
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A travel agency is a private retailer or public service that provides tourism related services to the public on behalf of suppliers such as airlines, car rentals, cruise lines, hotels, railways, and package tours . In addition to dealing with ordinary tourists most travel agencies have a separate department devoted to making travel arrangements for business travelers and some travel agencies specialize in commercial and business travel only. There are also travel agencies that serve as general sales agents for foreign travel companies, allowing them to have offices in countries other than where their headquarters are located.
Origins
The British company Cox & Kings is sometimes said to be the oldest travel agency in the world, but this rests upon the services that the original bank, established in 1758, supplied to its wealthy clients. The modern travel agency first appeared in the second half of the 19th century. Thomas Cook, in addition to developing the package tour, established a chain of agencies in the last quarter of the 19th century, in association with the Midland Railway. They not only sold their own tours to the public, but in addition, represented other tour companies. Other British pioneer travel agencies were Dean & Dawson,[1] the Polytechnic Touring Association and the Co-operative Wholesale Society. The oldest travel agency in North America is Brownell Travel; on July 4, 1887, Walter T. Brownell led ten travelers on a European tour, setting sail from New York on the SS Devonia.[2]
Travel agencies became more commonplace with the development of commercial aviation, starting in the 1920s. Originally, travel agencies largely catered to middle and upper 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 to a working-class clientele, looking for a convenient way to book overseas beach holidays.
Operations
As the name implies, a travel agency's main function is to act as an agent, that is to say, selling travel products and services on behalf of a supplier.[3] 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. The profit is therefore the difference between the advertised price which the customer pays and the discounted price at which it is supplied to the agent. This is known as the commission. In many countries, all individuals or companies that sell tickets are required to be licensed as a travel agent. In some countries, airlines have stopped giving commission to travel agencies. Therefore, travel agencies are now forced to charge a percentage premium or a standard flat fee, per sale. However, some companies still give them a set percentage for selling their product. Major tour companies can afford to do this, because if they were to sell a thousand trips at a cheaper rate, they still come out better than if they sell a hundred trips at a higher rate. This process benefits both parties.
Other commercial operations are undertaken, especially by the larger chains. These can include the sale of in-house insurance, travel guide books and timetables, car rentals, 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's. They will advertise the fact that they are surety bonded, meaning 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 and American agencies and tour operators are bonded with the International Air Transport Association (IATA),[4] for those who issue air tickets, Air Travel Organisers' Licensing (ATOL) for those who order tickets in, the Association of British Travel Agents (ABTA) or the American Society of Travel Agents (ASTA), for those who sell package holidays on behalf of a tour company.
A travel agent is supposed to offer impartial travel advice to the customer. However, this function almost disappeared with the mass-market package holiday and some agency chains seemed to develop a 'holiday supermarket' concept, in which customers choose their holiday from brochures on racks and then book it from a counter. Again, a variety of social and economic changes have now contrived to bring this aspect to the fore once more, particularly with the advent of multiple, no-frills, low-cost airlines.
Commissions
Most travel agencies operate on a commission-basis, meaning that the compensation from the airlines, car rentals, cruise lines, hotels, railways, sightseeing tours, tour operators, etc., is expected in the form of a commission from their bookings. Most often, the commission consists of a set percentage of the sale.
In the United States, most airlines pay no commission at all to travel agencies. In this case, an agency usually adds a service fee to the net price. Reduced commissions have taken place since 1995, when first commission reductions hit North America: a cap of US$50 on return trips and US$25 on one way. [5] In 1999 European airlines began eliminating or reducing commissions, while Singapore Airlines did so in parts of Asia.[6] In 2002 Delta Air Lines announced a zero commission base for USA and Canada; after a few months United Airlines, American Airlines, Continental Airlines, Northwest Airlines, US Airways and American Trans Air joined Delta.[7]
Types of agencies
There are three different types of agencies in the UK: multiples, miniples and independent agencies. The former comprises a number of national chains, often owned by international conglomerates, like Thomson Holidays, now a subsidiary of TUI AG, the German multinational.[8] 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.
In the United States, there are four different types of agencies: mega, regional, consortium and independent agencies. American Express and the American Automobile Association (AAA) are examples of mega travel agencies.
Independent agencies usually cater to a special or niche market, such as the needs of residents in an upmarket commuter town or suburb or a particular group interested in a similar activity, such as sporting events, like football, golf or tennis.
There are two approaches of travel agencies. One is the traditional, multi-destination, out-bound travel agency, based in the originating location of the traveler and the other is the destination focused, in-bound travel agency, that is based in the destination and delivers an expertise on that location. At present, the former is usually a larger operator like Thomas Cook, while the latter is often a smaller, independent operator.
Consolidators
Airline consolidators and other types of travel consolidators and wholesalers are high volume sales companies that specialize in selling to niche markets. They may or may not offer various types of services, at a single point of access. These can be hotel reservations, flights or car-rentals. Sometimes the services are combined into vacation packages, that include transfers to the location and lodging. These companies do not usually sell directly to the public, but act as wholesalers to retail travel agencies. Commonly, the sole purpose of consolidators is to sell to ethnic niches in the travel industry. Usually no consolidator offers everything; they may only have contracted rates to specific destinations. Today, there are no domestic consolidators, with some exceptions for business class contracts.
Travel agencies in the 21st century
![]() | This article needs to be updated.(March 2009) |
With 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 have gradually been disintermediated, by the reduction in costs caused by removing layers from the package holiday distribution network.[9][10] However, travel agents remain dominant in some areas such as cruise vacations where they represent 77% of bookings and 73% of packaged travel.[11] In 2009, the market size for travel agencies experienced a sharp decline, dropping from $17 billion the previous year to $14.5 billion. [12]
In response, travel agencies have developed an internet presence of their own by creating travel websites, with detailed information and online booking capabilities. Major online travel agencies include: Expedia, Voyages-sncf.com, Travelocity, Orbitz, CheapTickets, Priceline, CheapOair, Webjet, and Hotwire.com. Travel agencies also use the services of the major computer reservations systems companies, also known as Global Distribution Systems (GDS), including: SABRE, Amadeus CRS, Galileo CRS and Worldspan, which is a subsidiary of Travelport, allowing them to book and sell airline tickets, hotels, car rentals and other travel related services. Some online travel websites 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 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 GDS, suppliers and hotels directly to search for room inventory. Once the travel site sells a hotel, the site 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 necessarily result in an instant answer. Only some 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, Orbitz and WorldHotel-Link.
Mainline service providers are those that actually produce the direct service, like various hotels chains or airlines that have a website for online bookings. Portals will serve a consolidator of various airlines and hotels on the internet. They work on a commission from these hotels and airlines. Often, they provide cheaper rates than the mainline service providers as these sites get bulk deals from the service providers. A meta search engine on the other hand, simply culls data from the internet on real time rates for various search queries and diverts traffic to the mainline service providers for an online booking. These websites usually do not have their own booking engine.
The recent development and growth of travel comparison sites(also known as travel search engines or metasearch engines), such as Kayak.com, TripAdvisor, BestTravelCoupon.com - New travel search engine launched in (2012)[13], and SideStep have moved sales away from traditional travel agencies. These sites work as a search engine by searching the travel resellers site all at once. The benefit to users is easy of use, time saved searching, as well as, getting discounted prices. None of these sites actually sell hotel rooms. However, they have made booking of travel easier for users. This is reflected in the drop in travel sales with traditional travel agencies.
The growth of smartphones has also impacted travel booking in the United States. In 2012, nearly 25 million mobile users in the United States will research travel information on their mobile devices in 2012. Analysts expect this number to rise over 300% in the next 4 years to over 74 million annual mobile users researching and booking online travel. [14]
Despite the growing popularity of online travel sites, mobile users, and the internet booking engine sites, traditional travel agencies still accounted for nearly US$95 billion in travel sales in 2011, or one third of the $284 billion U.S. travel market, according to the publication PhoCusWright's Travel Agency Distribution Landscape 2009-2013.[15]
Careers
A travel agent may work for a travel agency or work freelance.[16]
With many people switching to self-service internet websites, the number of available jobs as travel agents is decreasing.[17] Counteracting the decrease in jobs due to internet services is the increase in the number of people travelling.
Since 1995, many travel agents have exited the industry, and relatively few young people have entered the field due to less competitive salaries.[18] 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. In this regard, travel agents can remain competitive, if they become "travel consultants" with flawless knowledge of destination regions and specialize in topics like nautical tourism or cultural tourism.[19]
Notes
- ^ "Great Central Railway hand bill advertising excursions to Hull". The Transport Archive. Record Office for Leicestershire, Leicester & Rutland. 1900. Retrieved 16 March 2011.
- ^ "About Us". Brownell Travel. 2011. Retrieved 16 March 2011.
- ^ "Indiatours".
- ^ "Travel & Tourism". International Air Transport Association. 2009. Retrieved 1 July 2009.
- ^ "The Fees Story in the Travel field". Nicola de Corato. 2011. Retrieved 27 October 2011.
- ^ "The Fees Story in the Travel field". Nicola de Corato. 2011. Retrieved 27 October 2011.
- ^ Nicola de Corato (ed.). "The Fees Story in the Travel field, at tobetravelagent.com".
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suggested) (help) - ^ "First Choice-TUI merger cleared". BBC News. 2007-06-04.
- ^ Andal-Ancion, Angela (15 July 2003). "The Digital Transformation of Traditional Business". MIT Sloan Management Review. 44 (4): 34–41. Retrieved 16 March 2011.
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suggested) (help) - ^ Edmunds, Marian (12 March 2002). "A wake-up call for the industry". Financial Times. Retrieved 16 March 2011.
- ^ "Travel Media Kit". Travel Agent. 2011. Retrieved 16 March 2011.
based on PhoCusWright's Travel Agency Distribution Landscape: 2006-2009
{{cite web}}
: line feed character in|quote=
at position 38 (help) - ^ Pell Research Report on Travel Agencies - cited with permission
- ^ "BestTravelCoupon.com Launches New Travel Search Engine". June 2012. Retrieved June 28, 2012.
- ^ "2012 Trends: Online Travel Booking Rises With Mobile". Travel-Search-Engines.com. 2012. Retrieved July 2012.
{{cite web}}
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(help) - ^ "PhoCusWright's Travel Agency Distribution Landscape 2009-2013". phocuswright.com. 2012. Retrieved June 2012.
{{cite web}}
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(help) - ^ "Occupational Outlook Handbook, 2012-13 Edition, Travel Agents". Bureau of Labor Statistics, U.S. Department of Labor. Retrieved 2012-24-06.
{{cite web}}
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(help) - ^ "Occupational Outlook Handbook, 2012-13 Edition, Travel Agents". Bureau of Labor Statistics, U.S. Department of Labor. Retrieved 2012-24-06.
{{cite web}}
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(help) - ^ Tobin, Rebecca (31 October 2002). "Wanted! Young agents". Travel Weekly. Retrieved 16 March 2011.
- ^ Strauss, Michael (2010). Value Creation in Travel Distribution. Lulu. ISBN 978-0-557-61246-8.
References
- Bottomley Renshaw, Mike (1997). The Travel Agent (2nd ed.). Sunderland: Business Education Publishers Ltd. ISBN 1-901888-00-2. OCLC 228287734.
External links
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