COURSE 2

Travel Agency &Tour Operations

1. The concept, role and functions of tourism/travel

agency
2. The Romanian concept of tourism/travel agency
3. The typology of tourism/travel agencies
 2.1. The concept of
travel agency
The specialized literature and the terminology of the World Tourism
Organization use the concept of travel agency.

The travel The travel A travel agency must be seen

agency agent as a commercial company
aiming at:
is an independent
firm or a network is the owner or Ensuring all services
of firms having as the manager of a regarding transportation,
an objective the company (firm) accommodation in hotels,
reservation and carrying out this motels or tourist actions of
the marketing of type of activity, any kind;
tickets for means as opposed to
Organizing individual or
of transportation the tourism collective travels, at lump
and the selling of agent, who is the price, with a program
the tourist employee
established either by the
products produced directly dealing
agency, or by customer’s
by the tour with customers. free choice.
operators.
 The role of travel agencies in the tourist
activity

They inform and offer consultation on

destinations, tourist services and travels;

They design, organize, market and distributes

services, travels and tourist products;
They stimulate the need and the demand for
carrying out the travel;

They canalize tourist flows;

They contribute to the development of tourist

destinations;

The represent a valuable source of information

on the trends and requirements mf the market
for different agents and tourist suppliers;

They create a broad network of sales of tourist

services and products.
 The functions of the travel agencies

The purpose of
is their social
the travel
usefulness.
agencies

consists in satisfying the requirements

The social role
of the tourist market, by understanding
of the travel
the converging market between
agencies
demand and offer.

The
functions of
the travel
agencies:

The function The function of The function of

The function of
of management of
mediation;
production and
consultation; tourist accounts; marketing.
 consists in informing and offering
consultation to tourists, with reference
to the characteristics of the
The function of
consultation
destinations, of services, suppliers
and offered travels and in offering
support in choosing the most
adequate travel for a concrete case.

is a derived form of the function of

The function of consultation. This function consists
management of in planning and managing the
tourist accounts customers’ tourist accounts, both of
individuals and of companies.
consists in the management and the
intermediation of the process of reservation,
distribution and selling of tourist services and
products. It is a function traditionally carried
The function of
mediation out especially by retailer travel agencies,
which is materialized by the offer, the
reservation, the renting or selling for the
tourist of the following groups of services and
products.
 The function of production and marketing

The function of production and marketing

consists in designing, organizing, marketing and operating travels

and tourist products achieved by combining different services offered at a
pre-set all-round price.

In the European Union these travels are known

as:

Combined travels. In the travelling

technical argot these travels are
known as packages, when they are
planned according to the offer and

voiaje forfetare sau la cerere, când

sunt organizate la cerinţa fiecărui
client.
 2.2. The Romanian
concept of tourist
agency
According to HGR no. 513/august 1998, the tourist agency is
defined as a specialized unit which organizes, offers and sells packages
of tourist services or their components.

A tourist agency must also

be considered a
commercial company
aiming at:

Ensuring all services
regarding transportation,
hotels or tourist actions of
any kind;
Organizing individual or
collective travels, at
lump price, with a
program established
either by the agency, or
by customer’s free
choice.
 Tour-operator travel agencies, having as
object of activity the organization and self
selling of packages of tourism services or of
their components, directly or through
intermediaries.

According to the G.D.

no. 513/1998,
Romanian travel
agencies are:

Retail travel agencies, selling or offering

for sale, on the account of a tour operator
tourist agency, packages of services or
components, contracted with this agency.
In the countries of the European Union, according to the
recommendations of the W.T.O. there are also two types of
tourist agencies:

• The retailer tourist agency provides information for

the public concerning the possibilities of travel,
accommodation and additional services, information
on tariffs and the conditions of giving these services.
In addition, they are authorized by their suppliers to
sell the respective services at the specified tariffs. In
the sales contract of the tourist product it is further
mentioned that agencies act as an intermediary.
• The wholesaler tourist agency conceives, prepares
and sells contractual tourist products intended for sale
either directly through its own offices, or through
retailer agencies.
• Among almost 70000 tourist agencies operating in the 27 countries
of the European Union, the most common type of agency is that of
small independent agencies involved in retail selling of tourist
services.
 2.3 The typology of
travel agencies
There are several
criteria for
classifying tourist
agencies: a) By their technical
denomination and
dimension there are: b) Depending on
tourist traffic, there
are:
- wholesaler - mixed
or tour travel
operator - retailer agencies
travel travel . - incoming - outgoing
agencies; agencies; travel travel
agencies; agencies.
 implant travel
agencies;
c) By the name of the
travel agencies in
distribution channel franchise system
there are:
virtual travel
agencies.

- agencies with an offer of complete

services;
- incentive agencies;

- commercial agencies;
d) Depending on the
products offered there are: - agencies for cruises;

- implant type agencies;

- circuit organizing agencies;

- agencies organizing travels by mail.

 Wholesaler travel agencies

Wholesaler travel agencies are those

companies contracting numerous and
various services and reselling each
service, through retailer travel agencies. In
practice, the terms tour operator and
wholesaler travel agency only differ as far
as the dimension of the company.
 Retailer travel
Outgoing travel agencies
agencies
Retailer travel agencies are small firms,
their main function being of mediating
These are travel reliable tourist services or packages
agencies giving or elaborated by wholesaler travel agencies.
sending tourists For these travel agencies, the practicing of
towards national the consultation function is essential,
and international because they are in direct contact with the
geographical areas, customer. This type of agency can also
other than the area produce its own packages, however, due to
where the travel the dimensions of the company, this activity
agency is situated. is carried out on a small scale.
The market of
these travel
agencies is made Mixed travel agencies
up of tourists This type of travel agency simultaneously
setting out and carries out the activities of a retailer and a
looking for wholesaler travel agency. These agencies
transportation or function as agencies for consulting, mediation
services in other and production of packages, which they can
places in the sell directly to the consumer or they can
country or distribute to other travel agencies, even if
abroad. these do not belong to their own network.
Incoming travel agencies
These agencies deal with attracting tourists from
other geographical areas. Incoming travel agencies can
be classified as:
a) urban and coast travel agencies;
b) great or average travel agencies with great incoming
departments and branch offices abroad dealing with
attracting the outgoing traffic.

Implant travel agencies

The implant travel agencies are situated within

the head office of important companies and
corporations; their customers, the employees of the
respective companies, can immediately and
personally obtain tickets and other arrangements.
They promote the so-called “affinity tourism”, for
more or less formal groups, established before the
beginning of the travel.
Virtual travel The franchise
agencies system travel
agencies
• The franchise is a system of
• The Internet is useful
collaboration between two parts,
to virtual travel legally independent, where a part
agencies offering, (the franchisor), the owner of a
selling and even brand, products or services, or
auctioning services marketing systems, yields up to
and travels in the the other part (the franchisee) the
network. Such an right to exploit the brand,
example is the following certain uniform
Travelocity agency commercial techniques. The
operating through franchisor places at the disposal
Sabre, Expedia and of the franchisee in exchange of
Worldspan, belonging a certain amount or percentage
to Bill Gates, the elements like:
creator of Microsoft. • The brand and the corporate
• Any current travel image;
agency can have its • The know-how;
own virtual form, by • Its own services or products;
creating a web site • Training;
and facilitating the on- • The management of the
line contracting of purchase;
 Travel agencies with a
Incentive travel agencies
complete offer of services

These agencies are specialized for

These agencies creating travel programs for groups,
deal with all firms and companies rewarding their
types of travels; employees with paid trips for them and
more than half of their families.
their turnover is
obtained from Although the incentive holiday
group and packages combine the same
individual travels. elements as the classic package
(transportation,
accommodation, trips,
recreation), closely related to
AMERICAN EXPRESS participants’ job, they are
and THOMAS COOK different from the holidays by
are two of the most free choice. As far as incentive
important agencies in holidays, the various elements
the world offering of the arrangement are selected
complete services, with depending on the life style and
offices in most countries the aspirations of the
in the world. participants.
Commercial travel agencies
They are specialized for business tourism and deal
less or not at all with customers. The agents deal with
putting customers in contact, over the phone, with the
reservation of airplane tickets, hotel rooms and with
renting cars. Very often they arrange meetings between
their customers. ROSEN BLUTH TRAVEL in Philadelphia
is an example of such a travel agency.

Travel agencies for cruises

These agencies sell tourist products for cruises,

on ships offering the best accommodation in cabins
with no noise or tossing. In most of the cases, the
cruise tickets are sold through common travel
agencies. Because they didn’t have enough
experience with cruises, they have been lately
replaced by specialized agencies.
 Circuit organizing agencies
These agencies exclusively organize circuit
trips which are sold directly to the public, acting
as travel agencies. The circuits are sold either
by mail, or by publicity in magazines like
Travel&Leisure and The New Yorker.
TheseAgencies
agencies do travels
organizing not have
by mail their own
headquarters, they operate by mail, especially for old
people and for special groups, like infirm persons or
the associations of handicapped persons. These
agencies offer travels for longer periods, as for
example for a month in Spain in a personal flat. Such
an agency is the American Association of Retired
Persons. These agencies allow discounts for
customers making their own reservations at airlines
or simply getting in contact with the agency over the
phone to issue the tickets they have reserved.
 2.3 The typology of travel
agencies networks
The agencies are small firms, with less than 50 employees
for 96% of them (including the tour operators). They are
either independent, or organized in networks.

A. Independent agencies
• They act as small and average firms or as
companies with limited liability.

B. Agency networks
• A network generally includes at least 10
points of sale. There are four categories of
networks: integrated, voluntary, franchised
and protected.

The franchised network
• In an integrated network the points
• The franchised agency is an
independent company, which
must obtain its own license and
the right to ticketing activities.
• The franchised agency complies
with the commercial policies of
the franchisor, benefitting by
common publicity, by the brand,
the brand image, he know how
of the franchisor and by the
commissions negotiated by the
franchisor.
• In exchange, the franchisee
must pay a due or percentage
shares of the turnover.
• An example of integrated network
The integrated network
of sale have no autonomy. They
are simple agencies distributing
the products selected by the
network management. The
commission is negotiated and
there is a list of privileged tour
operators, as their products must
be proposed with priority to
customers. The management and
the bookkeeping are centralized.
The publicity and promotion
expenses are divided among the
members of the network. Each
point of sale must be licensed. The
right to carry out ticketing activities
must be obtained separately for
each point.
is Havas Tourisme with a great
distribution network known as
“Havas Voyages”, implanted in
France and Belgium.
The voluntary network The protected network

• A voluntary network • This network is created

benefits from the same by an operator choosing,
advantages as the instead of his own points
integrated network, of sale, to look for
mainly the attainment of independent partners,
high commissions in owners of license. In this
exchange for a certain case, the tourist agency
sales volume. commits to resell with
• Each agency has its on priority the products of
brand, maintains legal the tour operator and
independence, but pays no due to the latter.
benefits from • The agency benefits of
advertising campaigns no exclusiveness, but
and centralized obtains a higher
payment systems commission than the
through the network. rest of the agencies. The
• By example, in France tour operator chooses its
there is only one great agencies on such
voluntary network, criteria as the location
SELECTOUR, created and the rate of turnover.
in 1971.
 SUMMARY QUESTIONS –YM (9)

1. Review the main stages and areas of tourism that emerged

and evolved income management
2. List the pros and cons of applying the concept of yield
management in the hospitality industry.
3. List and exemplified areas that can be applied yield
management in tourism
4. What are the strategies to optimize revenue and hotel
occupancy?
5. What are the peculiarities of application of his restoration
Yield Management
SUMMARY QUESTIONS – TRAVEL AGENCY (2)

1. What are the functions of travel agencies?

2. What types of travel agencies exist based on the
criteria of technical work?
3. What types of networks of travel agencies you know?
4. What are the basic services that we find in a tourism
package?
5. List the five IATA accreditation criteria for travel
agencies?