According to Airlines Reporting Corporation (1987), “a retail travel agency is defined as a business that performs the basic functions : quoting fares and rates, makes reservations, arranges travel tickets, books rooms, arranges travel documents, and acts on the behalf of tourism vendors.” Also, the Systems Analysis Research Corporation (SARC) (1967) opines that, “a travel agency business consists of the activities involved in selling tourism products/services directly to the ultimate consumers. It must perform all the normal functions of a business – issuing tickets, making reservations, providing personnel and counter space for the public, keeping accounts and records, making credit available, accepting payments and making payments”. 

 The above definitions conceptually reveal the fact that a competent retail travel agency is not merely a ticket seller. Practically, it is a specialist whose experience and knowhow enable him to counsel tourists on how to travel wisely and within the confined budget. The followings are the main services which are performed by a retail travel agency: Prepare travel itineraries; Arrange transportation; Transfer tourists; Arrange accommodation; Handle and advise insurance, currency, travel documents etc; Use professional expertise, know-how and imagination;  Arrange reservations for special–interest activities;  Provide one-stop convenience in planning and collecting payment for all services. 

Characteristics of Retail Travel Agencies 

The main characteristics’ of a retail travel agency are as under

  • Travel agency   provides selling outlets to tourism wholesalers and producers. 
  • Retail Travel Agenciessave the tourism vendors from the inconvenience and expenses of selling the services in small lots to a large number of tourists. 
  • Retail Travel Agencies   communicate the needs and desires of tourists to the tourism product suppliers such as hoteliers, airlines and transporters.
  • Retail Travel Agencies may   arrange for ground transportation to the ultimate consumers.
  • Retail Travel Agencies   anticipate the needs of consumers and accordingly assemble services/ products of different varieties. Thus they satisfy their demands and provide them a wide choice of services.
  • Retail Travel Agencies   sort out services supplied by the wholesalers and keep them in convenient tour packages for the benefit of the consumers.
  • Retail Travel Agencies even act as an advisor and guide to the tourists by bringing new products / services to their notice and educating them about its diverse benefits.
  • Retail Travel Agencies keep the consumers informed about the changing trends in the market about the different varieties of services/ products.
  • These also provide other services to the consumers such as insurance, currency, discounts/ offers, etc.

Functions of Retailer  

Retailer is a person who buys and sells the goods in small quantity. Retailer purchases the goods from wholesaler and sells it in the hands of a consumer. Retailer is a link between consumer and wholesaler. Following are the important functions of retailer:

Distribution of Goods:  A retailer plays very important role in the distribution of goods to various consumption centres has a direct contact with the consumer and wholesaler.

He establishes shops in villages, and towns to provide the supply of goods.

 Variety of Goods: Retailer provides the variety of goods produced by the different firms.

Consumer purchases the goods according to his desires from his nearest shop.

  Introduction of New Goods: Retailer introduces new items and also explains the merits of that product to consumer.

  Guidance to Wholesaler:  Retailer has direct contact with the consumer and wholesaler, so he tells the likes and dislikes of the customers to the wholesaler.

  Credit Facility: A retailer also provides the credit facility to the consumer. Generally consumer purchases the goods all the month on credit from the nearest shopkeeper and pays him at the end of month.

  Fresh Food Supply: A retailer provides the fresh food like meat, fish, milk, eggs, vegetables and fruits to the consumer. In the absence of retailer these cannot be provided fresh to the consumer.

  Selling in Small Quantity: Retailer normally purchases goods in bulk and sells it in small quantity. He also keeps the quantity in stock.

  Delivery Services: Some retailers also provide delivery services to the consumer. It is an additional duty.

  Guidance to Consumer: At the time of purchase, consumers rely on the advice and guidance of a retailer. For example one consumer goes to the shop of T.V. where the product of various firms is available. Now retailer will explain the qualities of the various products and generally consumer is impressed and acts upon the advice of a retailer.

2. Meaning and Concept of whole Travel Agency

   The wholesale travel agency   purchases travel components in large quantities from the tourism vendors such as airlines, hotels, and transport companies for selling to the retail travel agencies. Thus, wholesale travel agencies are the connecting links between the travel suppliers and the retail travel agencies. A Wholesale travel agency may be defined as “an organization/a company which assembles land arrangements from destination travel operators and combines them with air-travel/transportation to form a package with a view to suit the tastes of a specific tourist segment”.    Evelyn Thomas defines   “A wholesale travel agency is one which designs tour packages and markets them under his agency’s name”. 

Occasionally, a retail travel agency may develop tours on an ad hoc basis for a specific tourist or group of tourists. However, developing a tour upon a tourist’s request / requirement does not mean that an agency is engaging in wholesale operations, although some large scale travel agencies – Thomas Cook, American Express, TCI and Thomson do operate both as retail as well as wholesale travel agency. The concept of wholesale travel agency is different from that of retail travel agency. A wholesale travel agency is specialized in planning, organizing and developing package tours, which are marketed to the tourists through the network of retail travel agencies or directly to the clients if it operates a retail division.  The wholesale travel agency is the marketing intermediary who purchases travel components in large quantities from the travel vendors for selling to the retail travel agencies. Thus, these are the connecting links between the travel suppliers and the retail travel agencies. Generally, wholesale travel agencies contract for travel components from airlines, hotels, transportation, and other allied organizations in bulk volume in order to achieve low cost principle, and then repackage the components for resale through retail travel agencies. Thus, the success of a wholesale travel agency operation is dependent upon its creativity and ability to design and market tour package.


A wholesale travel agency may be defined as “an organization/a company which assembles land arrangements from destination travel operators and combines them with airtravel/transportation to form a package with a view to suit the tastes of a specific tourist segment”.  As stated by Evelyn Thomas (1984), “A wholesale travel agency is one which designs tour packages and markets them under his agency’s name”. Practically, wholesale travel agencies develop, and promote package tours (inbound, outbound, and domestic) that are offered with pre-determined features, price and dates. In this way, they are also referred to as ‘tour operator’ but these two terms can in no way be taken as synonymous as these are different. 

Characteristics of Wholesale Travel Agencies 

The main characteristics of a wholesale travel agency are as under:

  • Establishes a link between the travel vendors and retail travel agencies.
  • Conducts market research especially ‘Tour Testing’. 
  • Negotiates with destination travel operators for bulk quantities. 
  • Assembles tour ingredients from – Airlines, Hotels, ground transportations, and other tourism suppliers;
  • Undertakes exclusive advertisements for increasing the sales volume.   
  • Typically offers the largest range of products/services and covers maximum market segments. 

Function or Services of Wholesaler:  

    A wholesaler maintains link between the producer and retailer. He performs various functions for the producer and retailer. Following are the important functions of the wholesaler: 

  Advance Payment: Generally a wholesaler makes advance payment to the producer for the product. So a producer receives net cash and saves himself from financial crises.

  Purchase Large Quantity:  Wholesaler purchases the goods from the producer in large scale and sells the goods to the retailer in small quantity. It is an advantage for the producer that his total product is sold in few hands.

  Quick Return: A producer receives the payment before the disposal of product in the hands of consumer.

  Market Information: A wholesaler has direct contact with the producer and retailer. Wholesaler knows the demand and likings of the public. He guides the producer that which thing he should produce.

  Saving in Expenditure: In the absence of wholesaler, if producer sells the product in the hands of retailers, he will have to open the sale departs. He will also appoint the staff. But due to the wholesaler, he saves this expenditure.

  Concentration on Production: In the presence of wholesaler, distribution function is performed by him and producer pays full concentration on the production.

  Storage Facility: Wholesaler purchases the goods on large scale from the producer and keeps it in his store. So producers have no problem of storage.


    Over the years, the role and contribution of travel agencies and tour operators have been changed. In the beginning travel agencies were ‘mom and pop’ organisations but today they are more professional and operating a large scale. The following points are clearly described the role and contribution of travel agency and tour operation business:  

  Production of Tourist Publicity Literature

Under its production programme, it has brought out a range of publicity material including shell folders on adventure, wildlife, South India, Agra and Rajasthan, tourist map of India and city maps of Delhi, Bombay and Agra and trekking maps of Himalayas. It also produced a general India brochure and those on various states and tourist destination in India.

Thus, they are exploring India at global level. 

 Promotion of Domestic Tourism

 Many tour operators and travel agencies in collaboration with central or states governments have launched major campaign on “Tourism Environment / Awareness”. These campaigns are being released in all leading magazines across the country in Hindi, English and other Indian languages. The themes of the campaigns are “We can and we will keep India beautiful”. Besides, the department also launches advertising campaigns to promote lesser known bill resorts called “Holiday Campaign”; to promote Orissa and a campaign to promote Andaman and Nicobar and Lakshadweep Islands.

  Tourism development   Planning

Travel agencies or tour operators are actively participating in tourism developmental process and tourism policy formulation.    There is vast potential for development of tourism in the country. Tourism should be accorded the status of an industry. Private sector investment will have to be encouraged in developing tourism and public sector investment should be focused only on development of support infrastructure. Thus, travel agency and tour operators are   focusing on the following states so that tourism may developed   such as states of Uttaranchal, Himachal Pradesh, Uttar Pradesh, Haryana, Meghalaya, Andhra Pradesh, Kerala, Arunachal Pradesh, Tamil Nadu, Bthar, Tripura, Manipur, Assam, Karnataka and Union Territories of Andaman arid Nicobar and Lakshadweep etc.   

 Promotion of Wildlife Tourism

To promote wildlife tourism, facilities are provided in the form of Forest Lodges and transport within the sanctuaries / national parks: Forest Lodges at Enjal (Gujarat), Manas (Assam), Dhangari (UP) and Parambikulam (Kerala) is in progress. The work of Forest Lodges Betla (Bihar) Simlipal (Orissa), Desert National Park, Ranthambhor, Ranakpur (Rajasthan). The tour operators are adding these destinations in their itineraries so that special interest tourism may be promoted. 

    Tourist arrivals and  Foreign exchange earnings 

Recent studies on tourism trends indicate that the year 2005 has been a highly successful year so far as tourism in India is concerned. India witnessed a positive growth in foreign tourist arrivals, reaching a level of 3.92 million against 3.46 million during last year. The growth rate of 13.2% during 2005 was achieved over and above a growth of about 26.8% witnessed during the year 2004; and that the expected growth the world over during 2005 is estimated to be about 5-6% only. With this growth, the share of India in world tourism, which was floating between 0.38%- 0.39% for number of years is expected to be around

0.49%. An important highlight of the Indian tourism during 2015 was an increase of 20.2% witnessed in the foreign exchange earnings in dollar terms. The estimated foreign exchange earnings during the year touched the level of US $29731 million during 2015 against US $ 14769 million during 2014, a growth of about US $960 million in one year. In absolute rupee terms, the increase in foreign exchange earnings during the year was to the tune of Rs.3570 crores. In the year 2016, the foreign exchange earnings reached to US$ million 15035.25. It is estimated that this will touch US $1 8572 million in the year 2020(Ministry of Tourism, 2017).

 Development  of New Products 

    Various strategies have been formulated and implemented for tourism to meet the diverse needs of the tourists. Such as cultural  tourism,   wildlife tourism, sports tourism, social tourism, mountains and beach tourism, promotion of fairs and festivals,  and  leisure tourism and development of travel circuits.  

  Employment generation Promotional

 Travel agencies and tour operators are the major players in the tourism industry. In fact, most of the tourism management students are employed in this vital sector of tourism industry.  More the 8 million people are working directly or indirectly in this sector. Event many tourism management students are establishing their own ventures.