CHAPTER 2

INTRODUCTION TO TRAVEL
AND TOURISM BUSINESS
GROUP 2
 Why Tourism is a
great contributor in
the world economy?
In this chapter we will provide information about:

• Travel Agency
• Travel Agent
• Types of travel agency
• Tour Operators
• Types of Tour Operators
• Benefits of Travel Agency and Tour Operators
• Market Trends and Travel Agency Business Scenarios
History of Travel Agency-
First Steamship Agent
Robert Smart

• In year 1822, Robert Smart who hails from

Bristol, England has declared himself as
the first steamship agent of all time.

• His first operation was booking passengers

on steamship to various port in Bristol
channel and Dublin, Ireland. The first travel
agency to organize a train tour.
History of Travel Agency-
First Steamship Agent
Thomas Cook
• In 1841, Cook embarked on a special train from Leicester to
Loughborough (England). It was 12-miles trip journey. In the
same year on 5th January, he has arranged a train which
carried 570 passengers on a trip.The train trip cost 1 shilling
per passenger. In 1943, He organized a trip from Leicester
to Derby in England; he carries 3000 school children.

• Thomas Cook was the first representative of a train travel

agent. His idea and effort has alarmed to organize a train
tour and to spread across the world.He is remembered as
the world’s first organized travel agent but also a founder of
the travel and tourism business as it today .
The History of a Travel Agency-
Individual Inclusive Travel

Thomas Bennett

Thomas Bennett was the first person to specialized in individual

inclusive travel. Born in 1814 and lay down his last breath in
1898. He’s from Oslo, Norway. He often organized an individual
tour in Norway. He established the business as a “Trip
Organizer” in 1850. the main aim of the business was to
provide individual tours.
The Tour includes:

• Travel Plans
• Carriages
• Traveling kit

Bennett arranges in advance for the

horses and hotel; toms for his customers.
Travel Agent
It is the person whose job it is to arrange travel for end
clients (individuals, groups, and corporations) on behalf
of suppliers (Hotels, airlines,car rental,cruise lines,
railways, travel insurance,package tours).
His task is to simplify the travel planning process for
their customers in addition to providing consultation
services.

An agent can be self-employed, work for an

independent travel agency, or be part of a Travel
Agency Consortia. Agents may specialized in leisure,
business and other niche travel markets. Typically
they received a 10% - 15% commission from
accommodations according to the booking of travel.
Features of Travel Agents

It serves as a link between It combines various

01 the leading travel suppliers 03 elements of travel such as
hotel, airplanes, trains and
and travel agency.
land travel to create a
package trip

The travel agents research the

Negotiates with travel visitors preferences to
02 suppliers at the best prices 04 determine the changing trends.
for most reservations. It markets and promotes its
products through advertising
and to increase sales volume.
FUNCTIONS OF TRAVEL AGENCY

1. It provides travel-related information

The travel agent provides information about hotels,

tourist places, transport etc.
FUNCTIONS OF TRAVEL AGENCY

2. Planning tour itineraries

Once the travel agent receives all the travel preferences made by the
client, the travel agent designed the tour to meet the desire of the client.
 FUNCTIONS OF TRAVEL AGENCY

3. Connection with tourism suppliers

Travel agent build a good relationship with tourism suppliers.

FUNCTIONS OF TRAVEL AGENCY

4. Tour costing

After the travel agent negotiate for the

services provided by the tourism
suppliers the next step is tour costing.
 FUNCTIONS OF TRAVEL AGENCY

5. Ticketing
Ticketing is the one of the
most challenging function
of travel agent.
FUNCTIONS OF TRAVEL AGENCY

Documentation
The travel agent must know about the visas,
passport, insurance and all travel related documents.
FUNCTIONS OF TRAVEL AGENCY

Reservation

Once the client made an initial payment, the travel agent

books the airline seat for their client.
EXAMPLE OF TRAVEL AGENCIES

The following are the top 5 travel agencies in the world.

1. Thomson family adventures

Founded by Judi Wineland and

Rick Thomson. Thomson family
adventures was established in
1998.
EXAMPLE OF TRAVEL AGENCIES

2. Absolute travelers & tours

Established in 1992 , absolute

travelers & tours would give you
the chance to customize your trip
so that you can choose from the
option they provide.
EXAMPLE OF TRAVEL AGENCIES

3. Cox and kings

Known to be longest established

companies in the travel industry cox
and kings was established in 1758
which was founded by Richard cox.
EXAMPLE OF TRAVEL AGENCIES

4. Trek travel

Established in 2002, trek travel was

founded by john burke, who always
believes in seeing the world with a
whole new perspective.
EXAMPLE OF TRAVEL AGENCIES

5. Classic Journeys

Founded by Edward Piagza to follow

his passion to traveling. Classic
journeys was established in 1995.
 DIFFERENCE BETWEEN TRAVEL
AGENCIES AND TOUR OPERATORS
Travel agencies

Acts like an independent resellers its profit is the

commission for the sale of the operators tours to
customers. That is why the agents price is
usually higher, although there are moments
when agents deliberately understate their prices.

Travel agent is only a distributor, and typically

travel agents rarely own any travel assets (such
as car rentals or hotels) of their own.
 DIFFERENCE BETWEEN TRAVEL
AGENCIES AND TOUR OPERATORS
Tour operators

Is a company that buys certain services from

different companies and forms a single tourist
product out of them using its own pricing system.

Tour operators maybe a supplier ( meaning they

might own hotels or car rentals or both) and allow
to use their own inventory or their supplying
partner inventories for a fee.
 TYPES OF TRAVEL AGENCIES

RETAIL TRAVEL AGENCY

It is a retail travel agency that sells tourist products

directly to the public on behalf of the product
suppliers and in return gets a commission.

It is also defined as a business that performs the

quote fares and rates, makes reservations,
arranges travel tickets and accommodation,
arranges travel, insurance, foreign currency,
documents and accepts payments.
 TYPES OF TRAVEL AGENCIES

WHOLESALE TRAVEL AGENCY

Defined as an organization or a company that purchases tourist

product components in bulk and designs package tours.

These agencies are specialized in organizing package tours,

which are marketed to the customers or tourists through the
network of a retail travel agency or directly to the prospective
clients.

Package Tour- Air ticket, accommodation and sometimes

other services may also be included in it such as entertainment,
sightseeing, and sports activities, etc.
TOUR OPERATOR

Are sometimes called wholesalers, who sell package

tours. A tour operator who has his own one or more tourist
product components formulates a new tourist product for
example “inclusive tours”.

Generally, to meet the needs of various types of travelers,

tour operators provide a variety of package trips.
 TYPES OF TOUR OPERATORS

INBOUND TOUR OPERATORS

These are also known as incoming tour operators.
Technically, the operators who receive guests,
clients/tourists, and handle arrangements in the host
country are called inbound tour operators.
 TYPES OF TOUR OPERATORS

OUTBOUND TOUR OPERATORS

It refers to the tour operators, who promote tours to

foreign destinations, maybe business tours or leisure
tours.
 TYPES OF TOUR OPERATORS

DOMESTIC TOUR OPERATORS

Are those who put together all-inclusive tour packages

for domestic passengers and sell them to them. In
other words, they are tour operators who offer travel
packages and trips within a tourist's native country.
 TYPES OF TOUR OPERATORS

DESTINATION MANAGEMENT
COMPANIES/GROUND OPERATORS

It is a professional services company with local

knowledge, expertise, and resources, working in the
design and implementation of events, activities, tours,
transportation, and program logistics. Put very simply,
it is commonly known as handling agencies and their
main function is to organize tour arrangements for
incoming tourists on behalf of overseas operators.
TYPES OF TOURIST

BUSINESS TOURIST
Are a bit more difficult to stop.
Normally, traveling for meetings, conventions,
conferences, or for any other purpose which is
incidental to business and work.

LEISURE TOURIST
Are a type of generalist travelers, who travel
for pleasure includes for vacations, sport,
family, education, health & fitness.
 THE THREE BASIC FORMS OF TOURISM

DOMESTIC TOURISM INBOUND TOURISM OUTBOUND TOURISM

refers to activities of a visitor
refers to the activities of a refers to the activities of a
within their country of residence resident visitor outside of
visitor from outside of the
and outside of their home, for no their country of residence.
country of residence.
more than 12 months for leisure,
business, or other purposes. (For instance, a Brit visiting
(For instance, a Spaniard an overseas country).
visiting Britain).
(For instance, a Brit visiting other
parts of Britain).
 ORGANIZATIONAL STRUCTURE OF
TRAVEL/TOUR COMPANY

The organization of a travel and tour

company largely depends on the size and
type of the business handled by it.
Generally, on a small and medium scale
travel agency and tour operator, one will
find a simple organizational structure
being limited in terms of operation, size,
division of labor, and so forth.
 AN ORGANIZATIONAL STRUCTURE OF A TRAVEL
COMPANY BRINGS THE FOLLOWING BENEFITS TO
THE TRAVEL BUSINESS INCLUDING:

Develop sound and up-to-date

01 management practices, 04 Optimum use of “human asset”.
systems, and strategies.

02 Develop effective leadership. 05 Stimulates creativity.

Effective coordination between

03 Growth and diversification. 06 various departments.
 Benefits of Travel Agency and
Tour Operators

Knowledge and Experience

One of the most important benefits of Travel Agencies and

Tour Operators is that they have an intimate knowledge of the
country you wish to visit and the activities you want to partake in.
 Benefits of Travel Agency and
Tour Operators

Buying Power

They have an advantage in buying in bulk due to their regular

bookings. Meaning, they can get discounted rates that would
otherwise be impossible for online individual bookings to achieve.
 Benefits of Travel Agency and
Tour Operators

Value

They are known to be a one stop tourism shop that can add
immense value to your holiday by providing you with all the
services you needed.

Travel Agencies and Tour Operators will be able to assist

you, making the holiday planning process that much simpler.
 Benefits of Travel Agency and
Tour Operators

Safety and Trust

Safety is perhaps one of the most important reasons for

using a Tour Operator and having a Travel Agent.

Tour Operators and Travel Agents are also situated in the

relevant country, which enables them to resolve any problems
within a moment’s notice, one more thing a computer cannot do
for you.
 Benefits of Travel Agency and
Tour Operators

Convenience

Having a tour operators and travel agents can make your

plans in traveling, hassle-free. They provide services such as 24-
hour support, info packs, itineraries, maps, recommended
restaurants and so forth. Processing of documents would also be
convenient since they are the ones who’s going to work on it.
 Market Trends & Travel Agency
Business Scenario
There has been a gradual decline in the number of travel agency business world which can be
attributed to some very tangible factors.

Shrinking airline commissions

• Beginning in 1995 and continuing until 2002, when they were

eliminated.

• Agents were no longer paid to process transactions.

 Market Trends & Travel Agency
Business Scenario

Internet

• Has impacted travel purchase behavior.

• Has changed the way commerce is conducted.

 Market Trends & Travel Agency
Business Scenario
Airlines now attempt to by pass travel agents
As more people have internet access and are willing to purchase over the
web, airlines have adapted the strategy of selling direct, diverting business away
from travel agents and dealing directly with the passenger.

ADVANTAGES:
1. Reduced distribution costs.
2. Increased control over passenger information.
 Market Trends & Travel Agency
Business Scenario
Due to world Pandemic COVID – 19, the majority of the countries
all over the world locked down due to rapid increase rate of
infections.
Several numbers of airline industry closed down because it became hard for
the operators to sustain the expenses incurred even during closure.

Travel agencies and tour operators are closing, tourism industry were greatly
affected. Also, restaurants were also closing down, the others even filed for
bankruptcy. This crisis resulted many people to stay home with no income or
perhaps no work at all.
 REPORTERS

SORIMA, MICHELLE ANN

SAN JOSE, ZYRAH JANE
SALVACION, JULIE
SIGALES, JULIANNE ASHLEY
THANK YOU!