What Is A Travel Agency?

There is a growing trend in travel nowadays. Travel agencies have also increased proportionally since its inception. Number of travel agencies in recent years however shows the industry’s success is dwindling. You may wonder what is a travel agency exactly and how do they work?

During pre-war, mostly travel agencies catered to middle and upper class travelers. However, a boom in mass-market holidays was seen after the war.

The modern travel agency was first established in the second half of the 19th century. In addition to package tours, Thomas Cook started a chain of agencies in association with Midland Railway. The provided tour packages to the consuming public and represented other tour companies. Dean and Dawson, the Polytechnic Touring Association, and the Co-operative Wholesale Society are examples of other pioneering travel agencies.

Meanwhile, Walter T Brownell established the oldest travel agency in North America on 1887: the Brownell Travel. One notable travel is a European tour that set sail from New York on the SS Devonia. Today, there is a plethora of travel agencies that offers services in every corner of the globe.

Considered a retail business, a travel agency sells travel-related products and services to consumers. It is like a one-stop shop of travel-related concerns. It assists consumers with regard to air ticket, car rentals, cruise lines, hotel reservations, sightseeing tours, and package holidays.

Travel agencies come in varied purposes. There are agencies that deal only with ordinary tourists; some have other departments for business travelers, while others specialize in commercial travels.

The main function of a travel agency is to act as an agent. It sells travel services on behalf of a supplier. In general, there are two approaches of travel agencies. However, there are different types of agencies in various countries. Say for example the United Kingdom where there are three and United States has four.

In United Kingdome, there are Multiples, Miniples, and Independent Agencies. Thomson Holidays is an example of Multiples which comprise of several national chains owned by international conglomerates. In United States, there are Mega, Regional, Consortium and Independent Agencies. Examples of Mega travel agencies are American Express and American Automobile Association. Meanwhile, independent agencies cater to a special market such as a particular group interested in same activity—sporting activity, leisure travel, and adventure tours.

The operations of travel agencies are not equivalent to a retail business where it keeps stock. They only purchase package holidays or tickets from suppliers only if a customer has already bought one.

A travel agency gets profit from the discounted package holidays and tickets. Such profit is called the commission. Typically, a 10-12% commission is a good deal. But this is not true for all other countries. Some airlines do not give commission; hence travel agencies charge a percentage premium or standard flat fee per transaction.

While number of travelers continually increases, the Internet has somehow harmed the industry. The number of available jobs as travel agents is decreasing because of self-service websites. This led to a shift in home-based travel agencies.


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