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

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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. In Australia, all individuals or companies that sell tickets are required to be licensed as a travel agent. [3] In some countries, airlines have stopped giving commission to travel agencies. Therefore, travel agencies are now forced to charge a percentage premium or a standard flat fee, per sale.

However, some companies still give them a set percentage for selling their product. Major tour companies can afford to do this, because if they were to sell a thousand trips at a cheaper rate, they still come out better than if they sell a hundred trips at a higher rate. This process benefits both parties. Other commercial operations are undertaken, especially by the larger chains. These can include the sale of in-house insurance, travel guide books and timetables, car rentals, and the services of an on-site Bureau de change, dealing in the most popular holiday currencies.

The majority of travel agents have felt the need to protect themselves and their clients against the possibilities of commercial failure, either their own or a supplier’s. They will advertise the fact that they are surety bonded, meaning in the case of a failure, the customers are guaranteed either an equivalent holiday to that which they have lost or if they prefer, a refund. Many British and American agencies and tour operators are bonded with the

International Air Transport Association (IATA),[4] for those who issue air tickets, Air Travel Organisers’ Licensing (ATOL) for those who order tickets in, the Association of British Travel Agents (ABTA) or the American Society of Travel Agents (ASTA), for those who sell package holidays on behalf of a tour company. 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, low-cost airlines Current scenario With general public access to the Internet, many airlines and other travel companies began to sell directly to passengers. As a consequence, airlines no longer needed to pay the commissions to travel agents on each ticket sold. Since 1997, travel agencies have gradually been disintermediated, by the reduction in costs caused by removing layers from the package holiday distribution network. 9][10] However, travel agents remain dominant in some areas such as cruise vacations where they represent 77% of bookings and 73% of packaged travel. [11] In 2009, the market size for travel agencies experienced a sharp decline, dropping from $17 billion the previous year to $14. 5 billion. [12] In response, travel agencies have developed an internet presence of their own by creating travel websites, with detailed information and online booking capabilities.

Several major online travel agencies include: Expedia, Voyages-sncf. com, Travelocity, Orbitz, CheapTickets, Priceline, CheapOair, and Hotwire. com. Travel agencies also use the services of the major computer reservations systems companies, also known as Global Distribution Systems (GDS), including: SABRE, Amadeus CRS, Galileo CRS and Worldspan, which is a subsidiary of Travelport, allowing them to book and sell airline tickets, hotels, car rentals and other travel related services