Travel Agency

A travel agency is a retail business, that sells travel related products and services, particularly package tours, to customers, on behalf of suppliers, such as airlines, car rentals, cruise lines, hotels, railways, sightseeing tours and tour operators. 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.

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. 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. A British travel agent would consider a 10-12% commission as a good arrangement.

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 airlines.

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