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Travel agency

Thomas Cook, a now-defunct travel agency in the United Kingdom
Travel agents in Rio de Janeiro, Brazil
Allamanda Voyages travel agents in Paris
Travel agents in Taiwan

A travel agency is a private retailer or public service that provides travel and tourism related services to the general public on behalf of suppliers. Travel agencies can provide outdoor recreation activities, airlines, car rentals, cruise lines, hotels, railways, travel insurance, package tours, insurance, guide books, 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 and/or cabins on a cruise ship for a group travel event such as a wedding, honeymoon, or a group event.

Travel agencies often receive commissions and other benefits and incentives from providers and/or may charge a fee to the end users.[1] Smaller providers, such as boutique hotels, have often found it to be cheaper to offer commissions to travel agents rather than engage in direct advertising and distribution campaigns; however, many larger providers, such as airlines, do not pay commissions.[2] The customer is normally not made aware of how much the travel agent is earning in commissions and other benefits.[3] 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.[4]

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.[5] 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.[6][7][8]

Booking Holdings and Expedia Group, both online travel agencies, are the largest travel agencies on the list of top earning travel companies.[9] 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.[10][11][12][13] Helloworld Travel is an example of a franchised travel agency, giving agents access to internal systems for product and bookings.[14] 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.[15] Other niche markets include travelers with disabilities, travelers over the age of 60, women traveling alone, LGBT tourism,[16] the needs of residents in an upmarket commuter town or suburb, or a particular group interested in a similar activity, such as a sport.[17] Examples include StudentUniverse and STA Travel, which specialize in youth travel, or CWT, which caters to corporate travel. Many use telecommuting to reduce overhead, and/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.[18] 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.[19] Outbound travel agencies offer multi-destinations; inbound travel agencies are based in the destination and deliver an expertise on that location.[20]

In many countries, all travel agencies are required to be licensed by the International Air Transport Association (IATA).[21] Many are also bonded and represented by IATA, and, for those who issue air tickets, the Air Travel Organisers' Licensing (ATOL).[22] ABTA – The Travel Association and the American Society of Travel Agents (ASTA), represent travel agencies in the United Kingdom and the United States, respectively.[23][24]

The number of available jobs as travel agents is projected to decrease.[25] Few young people have entered the field due to less competitive salaries.[26] According to the Bureau of Labor Statistics, the number of full-time travel agents in the United States dropped from a high of 124,000 in 2000 to around 74,000 in 2014 and is projected to drop another 12% by 2024.[27][28]

Online travel agents have been gaining market share over direct booking websites, supplier websites, or "Brand.com" websites, websites of the company that actually produces the direct service, such as the websites of hotel chains, tour operators, or airlines.[29][30][31] Airline consolidators may offer lower fares than direct booking websites.

History

In 1758, Cox & Kings became the first travel agency in modern history.[32][33]

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.[34][35] He formed Thomas Cook & Son, which later became The Thomas Cook Group. It filed bankruptcy and underwent liquidation in 2019.[36]

In 1871, Dean and Dawson was founded in the United Kingdom and later acquired by Thomas Cook.[37]

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.[38]

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.[39]

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.[40]

In 1905, Nippon Travel Agency became the first travel agency in Japan.[41]

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.[42]

During the Cold War, travel agents were used by people from Western countries to travel behind the Iron Curtain.[43]

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.[44][45]

In the early 1980s, American Airlines' Sabre unit created a direct-to-consumer booking tool for flights, hotels and cars called eAAsySabre.[46]

In 1989, with the liberalization of travel for South Koreans, Mode Tour became the first travel agency in the country.[47]

In 1991, Hotel Reservations Network, the pre-cursor of Hotels.com, was founded. At first, hotels did not pay much in commissions.[46]

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.[48]

In 1994, Travelweb.com launched as the first online directory of hotels.[49]

In 1995, Internet Travel Network sold the first airline ticket via the World Wide Web.[49]

In October 1996, Expedia.com, funded with hundreds of millions of dollars by Microsoft launched as the first large online travel agency.[46]

At the same time, Cheapflights started as a listing service for flight deals from consolidators.[46]

In 1998, Lastminute.com was founded in the United Kingdom.[49]

In 1999, European airlines began eliminating or reducing commissions,[50] 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.[51][52]

In 2007, the launch of the iPhone and related mobile apps increased travel bookings made online.[49]

In 2008, the launch of Airbnb created an online marketplace for spare bedrooms and apartments.[49]

In 2011, the launch of HotelTonight highlighted instantaneous same-day hotel room booking.[49]

References

  1. ^ Morello, Robert. "How Does a Travel Agency Make Money?".
  2. ^ "Travel providers which pay travel agency commission". Statista.
  3. ^ "Five myths about travel agents". USA TODAY. 25 September 2014.
  4. ^ Lock, S. (11 July 2018). "Travel agency industry - Statistics & Facts". Statista.
  5. ^ McGee, Bill (11 February 2014). "What's the best airfare metasearch site?". USA TODAY.
  6. ^ "Metasearch and OTAs: Do You Know the Difference?". Trivago. 7 April 2016.
  7. ^ Grannell, Craig (10 April 2017). "The best flight search websites – tried and tested". The Daily Telegraph.
  8. ^ Sorrells, Mitra (22 October 2018). "The metasearch model, part 3: The complexity of multimodal". Phocuswire.
  9. ^ "Booking Holdings And Expedia Are Both Growing Steadily, But In Very Different Ways". Forbes. 26 August 2019.
  10. ^ "Power List coverage". Travel Weekly.
  11. ^ Khwaja, Ameen (1 February 2008). "How to Start a Travel Service". Entrepreneur.
  12. ^ Wayment, Lucy (12 September 2002). "How to start a travel agency". Startups.co.uk.
  13. ^ King, Christine (13 September 2005). Travel and Tourism. Heinemann. ISBN 9780435459475.
  14. ^ "How Do I Set Up a Travel Agency and Tour Arrangement Company?". LegalVision. 28 April 2016.
  15. ^ Weber, Rebecca L. (10 October 2013). "The travel agent is dying, but it's not yet dead". CNN.
  16. ^ Petersen, Lainie (19 March 2019). "Impact of Technology on the Travel Agency Business". Houston Chronicle.
  17. ^ "How to Start a Successful Independent Travel Agency". Travel Planners International. 28 April 2014.
  18. ^ Strauss, Michael (2010). Value Creation in Travel Distribution. Lulu. ISBN 978-0-557-61246-8.
  19. ^ Olmsted, Larry (20 January 2012). "Why You Need A Travel Agent, Part 1". Forbes.
  20. ^ Sheivachman, Andrew (5 October 2015). "Independent Travel Agents Look for Support to Master a Niche". Skift.
  21. ^ "IATA - Become an IATA Agent". International Air Transport Association.
  22. ^ "IATA - About Us". International Air Transport Association.
  23. ^ "ASTA: Representing Travel Advisors and the Traveling Public for 85 Years". American Society of Travel Agents.
  24. ^ "ABTA: About us". ABTA – The Travel Association.
  25. ^ "Occupational Outlook Handbook: Travel Agents". Bureau of Labor Statistics.
  26. ^ Tobin, Rebecca (31 October 2002). "Wanted! Young agents". Travel Weekly.
  27. ^ LAM, BOURREE (22 June 2016). "Who Uses a Travel Agent in This Day and Age?". The Atlantic.
  28. ^ Braga, Matthew (18 March 2016). "Why Are Travel Agents Still a Thing?". Vice Media.
  29. ^ "Making the most of brand.com". Hospitalitynet.org. 21 July 2015.
  30. ^ Kelly, Martin (24 February 2017). "OTAs Increase Market Share at Supplier's Expense". traveltrends.biz.
  31. ^ "The World's Best Tour Operators". Travel + Leisure.
  32. ^ "Establishment of Cox & Kings".
  33. ^ Turen, Richard (17 August 2008). "The world's oldest travel company". Travel Weekly.
  34. ^ CAMERON, MIKE (7 October 2013). "A Brief Overview And Evolution Of The Travel Industry". Christopherson Business Travel.
  35. ^ Kayleigh (16 August 2018). "The first travel agency organized train excursions". Medium.
  36. ^ Cripps, Karla (23 September 2019). "Thomas Cook: A history of one of the world's oldest travel firms". CNN.
  37. ^ "Dean and Dawson Limited 1871". Science Museum Group.
  38. ^ "Brownell Travel: About Us". Brownell Travel.
  39. ^ Junmian, Zhang (30 October 2011). "Top 10 influential businessmen of modern China". China Internet Information Center.
  40. ^ "History of the Travel Agent Industry". 25 February 2015.
  41. ^ "Japan Information". Nippon Travel Agency.
  42. ^ "The vintage posters that lured travellers to Stalin's Soviet Union". The Daily Telegraph. 28 June 2018.
  43. ^ Pedersen, Sune Bechmann (28 May 2018). "Eastbound tourism in the Cold War: the history of the Swedish communist travel agency Folkturist". Journal of Tourism History. Taylor & Francis. 10 (2): 130–145. doi:10.1080/1755182X.2018.1469679.
  44. ^ Cottman, Michael (27 February 2018). "After six decades, black travel agency continues to help tourists 'embrace' Africa". NBC News.
  45. ^ Jamison, Shantell E. (27 February 2018). "Black-owned Travel Agency Wants Tourists to 'Embrace' Africa". Ebony.
  46. ^ a b c d Schaal, Dennis. "The History of Online Travel". Skift.
  47. ^ Lee, Youjin (14 January 2019). "Why Are So Many South Korean Travel Agencies Closing?". Skift.
  48. ^ Andal-Ancion, Angela; Cartwright, Phillip A.; George S., Yip (15 July 2003). "The Digital Transformation of Traditional Business". MIT Sloan Management Review. 44 (4): 34–41.
  49. ^ a b c d e f May, Kevin (12 March 2014). "How 25 years of the Web inspired the travel revolution". The Guardian.
  50. ^ COHEN, AMON (21 February 2000). "British Airways Eliminates Agency Commissions". Business Travel News.
  51. ^ "In re Travel Agent Commission Antitrust Litigation". United States District Court for the Northern District of Ohio. 29 October 2007.
  52. ^ "IN RE: TRAVEL AGENT COMMISSION ANTITRUST LITIGATION". United States Court of Appeals for the Sixth Circuit. 2 October 2009.

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