Types of Travel Agency: The travel agencies play a pivotal role in the tourism & hospitality Industry. Significantly, travel agency is a crucial constituent of the tourism & hospitality Industry. As a vital component of tourism industry, travel agency has faced many operational and managerial changes over recent years and needs to constantly evolve in order to continue to meet the needs of tourists and diversity of distribution channels in the volatile tourism marketplace. Thus, understanding how a travel agency operates, remains competitive and meets the needs of customers is essential for any employee of a travel agency and those who want to join this vital sector as career. It is important that learners appreciate the complexity of working within a agency organisation and therefore the wealth of skills and knowledge needed to achieve success during this vital component of the industry. This module aims to develop an understanding about different types of travel agencies operating in the tourism industry. This module also appraises the students to know in brief activities and importance of different types of travel agencies.
Various types of travel agencies
The Travel agencies are classified on the following basis:
On the basis of distribution chain
According to the International Institute for the Unification of Private law (UNIDROIT), a travel agency can be of two types.
An Intermediary Travel Agency: This type of travel agency undertakes as intermediary to act for another, in obtaining either a journey or a sojourn possible in return for the price for the services.
An Organizing agency : An organizing Travel Agency undertakes to arrange for the general public , a journey or sojourn comprising a series of services.
On the basis of Functions
Retail Travel agency: Retailing mean to sell in small quantity of product / service to the end users. Retailing refers to all or any the transactions which involve sale of products or services to the last word consumers. A retail travel agency is a middleman between producers and tourists who procures goods from the producers /wholesalers and sells it to the final consumers. They form a vital link in the channel of distribution of products/ services because without travel agency the products/ services would not sell nor would it is possible for consumers to buy services of their choice. They have a way stronger personal relation with the consumers and deal directly with the people of various tastes and temperaments. They form the last link in the chain of distribution and give the final selling price to the product/ service. Thus, the retail travel agencies provide important services and solve the problems of the producers and wholesalers on one hand and the tourists on the other hand.
Wholesale Travel agency: As the name indicates, a wholesale travel agency operates at large scale and deals in bulk purchase of products/ services and retail through the retail travel agency. Wholesaler may be defined as the middleman who operates between the producers (from whom they purchase goods) and the retailers (to whom they sell goods). Wholesaler refers to any individual or business firm selling goods/ services in relatively large quantities to buyers (retailers) other than the ultimate consumers. Thus, the producers who sell their products directly to retailers may also be regarded as wholesalers. The specialized knowledge and skill of wholesalers increase the efficiency of the distribution network. The wholesalers provide important services and solve the issues of both the manufacturers and therefore the retailers.
On the basis of Tourism flows:
On the basis of tourism flow types of travel agency are as:
Outbound Travel Agency: The outbound travel agencies are those travel agencies which provide product and services to tourists want to visit abroad. Generally, these travel agencies provide convenient location for the purchase of travel product/ service besides offering expert product knowledge and ancillary services.
Handling Travel Agency / Inbound Travel Agency: This is very old form of travel agency which is specialized at a particular destination or location. This travel agency plans and executes of travel packages at destination level. In fact, a handling travel agency represents tour operators at a destination and supervises the delivery of local suppliers.
On the basis of Business or leisure
Travel agencies can be categories on the basis of business or leisure such as:
Leisure Travel Agency: These types of travel agencies manly serve holidaymakers with package tours.
Business Travel agency: Today, business travel has become core area for many travel agencies. Business travel agency arrange travel for business travelers and corporations and provide extra services such as reporting and travel management.
On Basis of Level of specialization
Niche Travel agency: Due to the emergence of new form of tourism like ecotourism, Niche travel agencies have evolved. Niche travel agencies and usually small independent travel agencies and specialized in certain products or certain suppliers.
Mass Travel agency: Mass travel agencies are big travel agencies often large scale/ multinational travel companies. These travel agencies generally offer wide range of destinations and products/services having large supplier network. These travel agencies operate on economies of scale.
On the premise of Geographical coverage
Travel agencies is categories on the idea of geographical coverage like
Multinational: Multinational travel companies present in many countries, either through own outlets or partnerships. A multinational travel company is one which is incorporated in one country (called the house country); but whose operations extend beyond the house country and which carries on business in other countries (called the host countries) additionally to the house country. Generally, multinational travel company has it’s headquarter within the home country.
National: agency is serving the requirementsof shoppers nationwide. In fact, when a travel company conducts its affairs in its home country is thought as national agency. A national agencyis commonly taxed differently than a distantagencyand should be required to pay duties or fees on the importation of its products/ services. Typically, a national agencyis in a positionto work business in other states or other parts of the country as per the articles of association.
Regional: when a agencyis working at regional level is usuallycalled regional agency. These travel agencies are specialized in certain countries and offer both leisure and business products/ services.
On the idea of Number of outlets
Travel agencies may be categories on the idea of number of outlets like
Multiples: Multiples travel agencies are those travel agencies which operate nationwide and owned by large agency. These travel agencies are large scale and think about package holidays. These travel agencies have a sequence of establishments spread throughout the country under one name. Thus, these travel agencies have a large number of clients.
Mintiples: Mintiples travel agencies targeta selected region with multiple business line. These travel agencies have number of branches scattered throughout the local area but sometimes operate under different trade names. These have head offices and will acquire independent firms to show them into one in all their outlets.
Independent Agencies: Independent travel agencies usually cater for a special or niche market. Independent agencies have one outlet and frequently specialized in niche markets. These travel agencies and frequently small travel agencies and specialized in certain products or certain suppliers like eco-tour package, adventure tour package or others.
On the idea of Business Model
Travel agencies are often categories on the idea of business model like
Offline Travel Agency: the sort of agencyis that the oldest sort ofagency. Generally, offline travel agencies operate through physical offices and face to face customer service/product.
Online Travel Agency: Online agency serving customers through World Wide Web channels. Online agency (OTAs) could be a relatively recent innovation and may be a major growth sector within the global distribution system. OTAs are a style of distribution mechanism where an oversized number of sellers and buyers are connected via an online site provided by an independent third party. The leading international OTAs are:
• Travelocity, owned by Sabre. Travelocity includes the brands lastminute.com, World Choice Travel and Zuji. within the corporate market, Sabre operates through the GetThere.com and TravelocityBusiness.com OTAs
• Orbitz which operates the subsequent OTA leisure brands:
4. RatesToGo.comOn the premise of Size
On the idea of business size travel agencies are often categories like
Small Scale Travel Agency: the little scale travel agencies are those agencies which treat small scale, restricted to a little segment of the tourism market and to a narrow range of products. Small scale travel agencies are very large in number but account for atiny low portion of the overall retail tourism business.
Medium Scale Travel Agency: Medium-scale agency business is that the outgrowth of a successful small scale agency. A agency business with 50 or fewer employees is mostly considered small, while one with 50-150 employees is taken into account to be medium-sized.
Large scale Travel Agency: Large scale agency is that business operation whose operates at large scale, having an outsized segment of the market and have a good range of products/ services. .
On the idea of Form
On the premise of business forms travel agencies may be categories like
Sole Proprietorship: when a agency business is owned, managed and financed by one man, it’s known sole proprietorship agency. In fact, its debt, obligations and taxes, are the owner’s personal liabilities, and income from a proprietorship is taken into account the owner’s income. this kind of agency is straightforward to begin and simple to dissolve.
Partnership: agency being seen on a partnership basis is jointly owned by two or more individuals. In other words, when two or more persons agreed to contribute money or money’s worth and sharing profit/ loss as per the agreement is knowledge partnership. The partnership style of agency business organization enjoys the subsequent advantages:
a. easy formation: Partnership is easy to create, inexpensive to ascertain and straightforward to control. No legal formalities are involved and no formal documents are to be prepared. Only an agreement is required. .
b. Combined abilities and judgment: The skill and knowledge of all the partners are pooled together. Combined judgment of several persons helps reduce errors of judgment.
c. Direct motivation: there’s no difference between owner and management. In fact, ownership and management of business are vested within the same persons. Thus, every partner is motivated to figure hard and to make sure the success of the firm.
d. Close supervision: Every partner is anticipated to require personal interest within the affairs of the business. Different partners can maintain personal contacts with employees and customers.
e. Flexibility of operations: Partnership business is free from legal restrictions and government control. Partners can make changes within the size of business, capital and managerial structure with none approval. The activities of partnership business may be adapted easily to changing conditions within the market.
f. Corporate: Unlike a proprietorship or partnership a company is taken into account to own its own identity, break free its owners. a company agency is owned by shareholders/ stockholders who are represented by a board of directors. the company variety of agency is incorporated under the businesses Act. the company has differing types of merits like indebtedness perpetual existence, which implies it’s a separate person within the eyes of the law and simple to transfer ownership interests in an exceedingly corporation. The board of directors can authorize the problem of shares of stock in exchange for investors’ capital infusion into the corporate.
On the Bases of Services
On the idea of services travel agencies is categories like
Full-Service agency: A full-service agency could be a agency which offers s all services / products to both international and domestic tourists. Its operation includes every kind of tour packages like holiday and business travel on individual or group based. Further, a full-service agency is also small or large scale concentrating on both leisure travel and business travel.
Corporate/ Business agency: A Corporate/ Business agency are specialized solely in servicing the travel needs of the business or corporate clients. Generally, the merchandise line of corporate agency includes business / MICE and incentive travel.
In-House agency: In-House Travel Agencies are growing these days; and in house agency is simply diversification of product of the many large scale companies to help the corporate to prepare MICE / incentive travel. However, these travel agencies are differ from the company agency within the sense that they work with only 1 corporate account doing mainly business travel but also handling the leisure side for corporate clients. The Ashok Tour and Travel is that the best example of in-house travel of ITDC.
Speciality Agencies: A speciality Agency because the name indicates is specialised in an exceedingly particular market, destination or product. These travel agencies are the results of specific market needs, serving the wants of market segments like senior citizens, incentive groups or adventure travellers. Generally, these travel agencies are intermediaries between the retail travel agencies and also the tourists and are referred to as specialty channelers. These travel agencies may represent either the customer or the supplier and include incentive travel firms, MICE planners/ association executives, and company travel offices. Moreover, incentive travel companies put together and sell travel as an incentive to extend sales. Sometimes these travel agencies sell their ability to style, promote, and manage incentive travel programs.