A travel agency is a private retailer or public service that provides travel and tourism related services to the general public on behalf of suppliers. Travel agencies can provide outdoor recreation activities, airlines, car rentals, cruise lines, hotels, railways, travel insurance, package tours, insurance, guide books, public transport timetables, car rentals, and bureau de change services. Travel agencies can also serve as general sales agents for airlines that do not have offices in a specific region. A travel agency's main function is to act as an agent, selling travel products and services on behalf of a supplier. They do not keep inventory in hand, unless they have pre-booked hotel rooms and/or cabins on a cruise ship for a group travel event such as a wedding, honeymoon, or a group event.
Travel agencies often receive commissions and other benefits and incentives from providers and/or may charge a fee to the end users. Smaller providers, such as boutique hotels, have often found it to be cheaper to offer commissions to travel agents rather than engage in direct advertising and distribution campaigns; however, many larger providers, such as airlines, do not pay commissions. The customer is normally not made aware of how much the travel agent is earning in commissions and other benefits. A 2016 survey of 1,193 travel agents in the United States found that on average 78% of their revenue was from commissions and 22% was generated from fees.
Travel agencies use the services of the major computer reservations systems, also known as global distribution systems (GDS), including: Amadeus CRS, Galileo GDS, Sabre, and Worldspan, which is a subsidiary of Travelport, which allow for comparison and sorting of hotel and flight rates with multiple companies. Bookings made via travel agents, including online travel agents, may or may not be confirmed instantly. Unlike online travel agencies, metasearch engines and scraper sites, such as Skyscanner, Kayak.com, Rome2rio, and TripAdvisor, may or may not have their own booking engine, and instead provide results for search queries and then divert traffic to service providers or online travel agencies for booking.
Booking Holdings and Expedia Group, both online travel agencies, are the largest travel agencies on the list of top earning travel companies. Travel agencies can be multinational companies, referred to as "multiples" in the United Kingdom. They can also be medium-sized organizations, referred to as "miniples" in the United Kingdom, or can be independent, small companies. They can be structured as a limited liability company, a sole proprietorship, or can be set up as a host, franchising, or consortium structure, such as in the case of CWT. A traditional travel agent may work for a travel agency or work freelance. Helloworld Travel is an example of a franchised travel agency, giving agents access to internal systems for product and bookings. While most point-to-point travel is now booked online, traditional agents specialize in niche markets such as corporate travel, luxury travel, cruises, complicated and important trips, and specialty trips. Other niche markets include travelers with disabilities, travelers over the age of 60, women traveling alone, LGBT tourism, the needs of residents in an upmarket commuter town or suburb, or a particular group interested in a similar activity, such as a sport. Examples include StudentUniverse and STA Travel, which specialize in youth travel, or CWT, which caters to corporate travel. Many use telecommuting to reduce overhead, and/or provide concierge services. Agents can act as "travel consultants" with flawless knowledge of destination regions and specialize in topics like nautical tourism or cultural tourism. Many traditional agents prefer the term "travel advisor" as opposed to "travel agent" to emphasize their advice, expertise, and connections that are of great value. Outbound travel agencies offer multi-destinations; inbound travel agencies are based in the destination and deliver an expertise on that location.
In many countries, all travel agencies are required to be licensed by the International Air Transport Association (IATA). Many are also bonded and represented by IATA, and, for those who issue air tickets, the Air Travel Organisers' Licensing (ATOL). ABTA – The Travel Association and the American Society of Travel Agents (ASTA), represent travel agencies in the United Kingdom and the United States, respectively.
The number of available jobs as travel agents is projected to decrease. Few young people have entered the field due to less competitive salaries. According to the Bureau of Labor Statistics, the number of full-time travel agents in the United States dropped from a high of 124,000 in 2000 to around 74,000 in 2014 and is projected to drop another 12% by 2024.
Online travel agents have been gaining market share over direct booking websites, supplier websites, or "Brand.com" websites, websites of the company that actually produces the direct service, such as the websites of hotel chains, tour operators, or airlines. Airline consolidators may offer lower fares than direct booking websites.
In 1758, Cox & Kings became the first travel agency in modern history.
In 1840, the Abreu Agency was established in Porto by Bernardo Abreu, becoming the world´s first agency to open its services to the public.
In 1841, Thomas Cook, a Baptist preacher who believed that alcohol was to blame for social problems, reached an agreement with the Midland Railway to organize the transportation of 500 members of his temperance movement from the Leicester Campbell Street railway station to a rally in Loughborough in exchange for a commission. He formed Thomas Cook & Son, which later became The Thomas Cook Group. It filed bankruptcy and underwent liquidation in 2019.
In 1871, Dean and Dawson was founded in the United Kingdom and later acquired by Thomas Cook.
In 1886, the Polytechnic Touring Association was founded in the United Kingdom.
Originally, travel agencies largely catered to middle and upper class customers but they became more commonplace with the development of commercial aviation.
The industry suffered during World War II. However, the Post–World War II economic expansion in mass-market package tours resulted in the proliferation of travel agencies catering to the working class.
In 1905, Nippon Travel Agency became the first travel agency in Japan.
In 1989, with the liberalization of travel for South Koreans, Mode Tour became the first travel agency in the country.
In 1991, Hotel Reservations Network, the pre-cursor of Hotels.com, was founded. At first, hotels did not pay much in commissions.
At the same time, Cheapflights started as a listing service for flight deals from consolidators.
In 1998, Lastminute.com was founded in the United Kingdom.
In 1999, European airlines began eliminating or reducing commissions, while Singapore Airlines did so in parts of Asia. In 2002, several airlines in the United States did the same, which led to an unsuccessful lawsuit alleging collusion among the airlines, that was decided on appeal in 2009.
In 2011, the launch of HotelTonight highlighted instantaneous same-day hotel room booking.
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