This section describes the major players who make up the four pillars of travel product distribution.

Suppliers

Companies that offer original travel products are known as suppliers. These include the hotels, bed and breakfasts, and vacation rentals that supply overnight accommodations. These also include the museums, historical sites, amusement parks, and zoos that offer admission tickets and the airlines, trains, buses, and car rental companies that offer transportation services. The travel products sold by suppliers may be distributed through the travel trade before reaching the consumer.

DMOs are considered suppliers as well. Some DMOs have travel products that they sell. For example, purchase of a Tucson Attractions Passport from Visit Tucson provides the buyer with admission to over 100 Southern Arizona attractions for one price. However, most often DMOs do not sell anything. Rather, they act as a middlemen between buyers and suppliers. DMOs are considered suppliers because they often “sell” their destination to tour operators, travel agents, and consumers through sales and marketing activities. DMOs market their destinations to tourists and business travelers, represent their suppliers in meetings with buyers, and package suppliers’ travel products together into itineraries, which they, in turn, promote to tour operators and consumers.

When suppliers provide the elements of travel to wholesalers or retailers, they must negotiate a rate that both buyer and seller can agree upon. In order for the travel product to be viable in the marketplace, the retailer must be able to sell it at a rate that travelers will accept. In turn, the supplier, the wholesaler, and the retailer must all earn revenue on the sale. Therefore, the role of negotiating the contracted rate with the original supplier proves a vital first step in the distribution chain.

Travel products can be sold to a retailer, such as a tour operator, travel agent, or online travel agent. Or, travel products can be sold to a wholesaler and then resold to a retailer. Alternatively, travel products can be sold directly to the consumer. Therefore, the distribution chain can be short, or it can entail multiple steps to reach the consumer.

With the digital revolution, the travel trade distribution chain has radically changed. Travelers are no longer limited to purchasing travel products through travel agents, as they often had been prior to the internet. Now travelers can purchase directly from hotel, airline, and attraction websites, through travel agents and online travel agents like Expedia, or they can purchase packaged travel products through tour operator websites.

The chart above shows travel product distribution beginning with the supplier. Yet, the consumer affects this chain. Suppliers sell their travel products based on where and how consumers purchase. If suppliers find that their travel products are ultimately not being purchased by the consumer through one of these channels, they will alter their sales approach.

Wholesalers

Wholesale travel trade businesses sell their travel products to other companies, not to the consumer directly. A wholesaler works with travel product suppliers to negotiate a net rate (also known as bulk, consolidator, or private rate) for the travel product. A net rate is a discounted, bulk rate that wholesalers add a markup to when they resell the product to retailers (tour operators or travel agents). Because wholesalers have increased buying power due to the volume they purchase, they typically obtain heavily discounted rates for travel products.

Wholesalers typically resell travel products in mass quantity, prompting travel product suppliers to offer more heavily discounted rates. The travel product will go through a retailer before it is sold to a consumer, meaning that another markup will be added to the rate. In order to keep the product competitive, the rates for wholesalers are usually lower than for retailers. Wholesalers typically purchase travel products with discounted rates between 25%–30%, whereas retailers receive discounts of around 15–20%. For example, a travel product worth $100 will be sold to a wholesaler for $70–$75 and to a travel agent for $80–$85. The wholesaler may sell that travel product to the consumer through a travel agent who, in turn, adds a markup. Either way, the total rates for the consumer remain comparable.

Many travel product suppliers, especially hotels, are concerned with rate parity, which denotes the practice of maintaining consistent rates across all distribution channels. As a result, the rates offered to wholesalers are not publishable, which means they cannot be displayed to the public on a website, in a brochure, or via other means of communication. Known as “opaque pricing,” this strategy allows for travel product suppliers to offer wholesalers cheaper rates without undercutting their general public rate.

B2B Tour Operators

Tour operators, B2B or B2C, package the elements of travel together for resale to the traveler either directly, through other tour operators, or through a travel agent. Tour packages combine two or more travel elements, such as accommodations, entertainment, meals, travel insurance, entertainment, car rentals, flights, and other forms of transportation, which are sold for an all-inclusive price.

Wholesale, or B2B tour operators, do not sell to the general public but rather sell their packages through the travel trade, which includes travel agents, or B2C tour operators, corporations, affinity groups, and other intermediaries.

While B2B tour operators do not deal directly with the consumer, they must keep the end-user—the traveler—in mind in order to develop packages that will appeal to the consumer. For example, their tours can cater to certain audiences like seniors or youth or they can specialize in particular types of experiences like adventurous activities or luxurious recreations. The business of tour operating is similar whether wholesale or retail. The main difference is that B2B tour operators do not deal directly with the traveler but instead sell through the retail travel trade.

Receptive Tour Operators and Ground Operators

Tour operators that specialize in a specific home region and sell those tours to other tour operators that are not as familiar with that region are called Receptive Tour Operators (RTOs). For international travel, RTOs act as national liaisons for customs and translation services and domestic booking agents. This prevents potential issues that might arise due to language barriers or lack of familiarity with a specific region (Berry, 2018; Brand USA, 2023).

Some tour operators sell tours to travelers directly and also develop tours for other tour operators. Therefore, they play the role of a B2B tour operator at times and a B2C tour operator at other times.

The term, ‘ground operator’, is sometimes used interchangeably with receptive tour operators. A ground operator usually lives in the destination and acts as the receiving agent to assist with local execution of a tour. Ground operators are knowledgeable about the best routes, local history, exclusive experiences, and local culture, and they often act as step-on guides (tour guides that “step onto” a tour bus to provide guide service). They are typically well-connected with the local DMO as well as with suppliers, such as transportation companies and attractions. Ground operators are also referred to as handling agents because they take care of the local vendor arrangements and negotiations, coordinate arrivals and departures, and escort tourists.

Destination Management Companies (DMCs) are also vitally important to the travel industry. The term is often used interchangeably with the terms ‘receptive’ or ‘ground tour operator’. DMCs focus on the travel experience within a destination and coordinate airport pickups, accommodation bookings, vehicle rentals, and more. They are often hired by internationally focused travel agents and tour operators who are planning travel for clients to foreign destinations for which they are not as familiar. DMCs also provide a wide variety of professional services primarily focused on assisting corporations in planning destination events in addition to travel. For example, they may assist a large corporation in planning an annual conference in a city, using their local destination knowledge to coordinate venues, transportation, and itineraries.

Consolidators

Travel product consolidators, sometimes referred to as airline wholesalers or bed banks, negotiate net rates for travel products for resale to travel agents, online travel agencies (OTAs), travel management companies, and tour operators. Consolidators are truly intermediaries, negotiating and distributing travel products behind the scenes. Consolidators have historically not sold to the public. However, with changing technology today, many consolidators have a public facing website as well, such as TravelHUB and Wholesaleflights.com.

Airline wholesalers are brokers that negotiate and sell blocks of airline seats at a steeply discounted rate of 30–60%. Airlines utilize consolidators to sell seats that they consider hard to fill. This practice came about in the 1970s when airlines had more seats on their planes than they could possibly sell at retail (Altexsoft, 2022). The need of airline companies for consolidators has diminished since the rise in traveler access to airlines. Arlines, however, continue to partner with consolidators to offload excess inventory.

Airline consolidators hold contracts with dozens of airlines, some specializing in certain destinations. In addition to the discounted rates for airfare, they often serve as travel consultants and tech providers for travel resellers, offering a call center and a booking tool. The booking tool allows for complex itinerary building, enabling resellers to book hotel rooms, car rentals, cruise passage, tours, and more. Examples of airline consolidators include Mondee, Picasso Travel, and Gateway Travel and Tours (GTT).

The term bed banks denotes companies that negotiate for net rates for travel services. They primarily negotiate net rates for hotel rooms, but also negotiate net rates for attractions, tours, car rentals and other modes of transportation, and more. Bed banks, which might offer a  portfolio of travel services, will contract directly with hotels and other travel suppliers to lock in a rate. The reseller then adds a markup or commission of its own for resale to the traveler. Examples of bed banks include Hotelbeds, WebBeds, and GRNconnect.

Retailers

Retailers include B2B tour operators, travel agents, destination management companies (DMCs), and online travel agents. Retailers also deal directly with the consumer, who might be an inividual traveler, group leader, or corporation. Retailers often sell their own travel products, tours they have packaged themselves, and travel products for which they have negotiated rates with travel suppliers. They may also resell travel products on behalf of wholesalers.

B2C Tour Operators

As stated above, tour operators package two or more elements of travel together into tour packages. These tour packages can be organized as escorted group tours or packaged holidays. They can also be customized upon request for group leaders. B2C tour operators sell directly to the traveler through a website or tour brochure.

Tour operators come in all shapes and sizes, from individuals to large multinational corporations. Some tour operators specialize in specific target audiences, such as Women Traveling Together, a tour operator that arranges women-only group tours. Some tour operators specialize in particular types of travel, such as Bicycle Adventures, which operates cycling tours around the world. Each B2C tour operator adds its own nuance to packaging and reselling travel.

Inbound Tour Operator: An inbound tour operator packages travel to their home country and sells the packages to people. Inbound tourism can bring great economic benefit to a country because foreign tourists typically spend more than domestic tourists. Inbound tour operators have the cultural and linguistic understanding needed to craft tours for international travelers. Inbound tour operators often work with travel agencies or other tour operators within the country they sell. Regional tour operators (RTOs) are inbound tour operators.

Outbound Tour Operator: An outbound tour operator packages travel for international destinations and sells those packages to people that reside within their own country. Outbound tour operators work closely with ground operators in the countries that they package tours to.

Domestic Tour Operator: A domestic tour operator packages travel within their home country and sells the packages to people who also reside within their home country. Domestic travel is more common than international travel, with over 60% of Americans traveling domestically one to two times annually (Mulliner, 2017).

Packaged Travel Products

Tour operators develop tour packages from travel products such as hotels, attraction tickets, restaurants, and more. From these travel products, the tour operator creates a new travel product—the packaged tour. Packaged tours can be developed for groups or individuals and are distinguished from other travel purchases in that they are sold as a bundle for a set price. Packaged tours fall into two categories—group tours and holidays.

Packaged Group Tours

Group tours are escorted by a tour guide, typically utilizing a motorcoach to transport the tour group to itinerary locations. They are often referred to as escorted group tours or motorcoach tours. Escorted group tours can be created and sold for retail or custom-designed for a specific group. Retail tours will have a fixed departure date or multiple departure dates, where individuals book “seats” on the tour. Or, tour operators will work with groups, such as schools, corporations, or reunion groups, to determine interest, budget, and travel goals. EDU Trips, for example, offers focused educational experiences and itineraries to complement classroom curriculum. Student band groups, also known as performance groups, often utilize tour operators to arrange for tours that include multiple performance locations so that the students gain experience.

Packaged Holidays

Packaged holidays are independent tours, sometimes known by the acronym “FIT” travel. FIT used to stand for “foreign independent travel” and referred to leisure trips abroad without an escort. However, today FIT commonly refers to “flexible independent travel” or “fully independent travel” where an itinerary and the airfare, air transfer, accommodation, sightseeing, car rental, and other travel services are pre-arranged by the tour operator and sold to the individual as a package (Quinby, 2009). When a package includes car rental and a road trip itinerary, it may be referred to as a “Fly-Drive'' package. Fly-drives are very popular in the United States with inbound travelers.

A great deal of research goes into the packages tour operators put together. Tour operators will determine their target audience, analyze which destinations will sell best to that audience, and assess the suitability of the travel products, including accommodations, transportation, attractions, and restaurants. They will also compare their products with other companies in the marketplace and undertake other market research to ensure the profitability of each tour.

New tours will be planned two to three years in advance. The tour operator will develop an itinerary based on their research on the destination, which identifies the starting and ending locations for the tour as well as the activities, meals, accommodations, and rest stops. Tour operators may work with a DMO to understand the destination better and to learn about suggested itineraries. They may appoint a ground operator to ensure the travel services run smoothly at the destination. Often, tour operators will conduct site visits to a destination and walk through the itinerary they are suggesting for their guests.

Once the tour operator has designed the itinerary and determined the dates, duration, and number of clients to be accommodated, the tour operator will then begin negotiations with the travel product suppliers to establish the rate for admission to attractions, for rooms at hotels or on cruise ships, and for meals at restaurants.

Tour operators contract with suppliers (hotels, airlines, attractions, etc.) usually a year or more in advance and contractually guarantee a certain level of sales. This is advantageous to the supplier because it provides them with an opportunity to sell their capacity in advance. In exchange, the supplier provides a discounted rate so that the tour operator can earn profit by reselling the package with a markup.

Establishing the price of a tour package can prove tricky. The tour operator must be able to offer a tour at a rate lower than or close to what a traveler could assemble on their own, especially nowadays when the internet has made the cost of tour products so transparent. If the total price of the tour is more than what a traveler would spend if they were to purchase the elements individually, then the traveler must receive an additional service that increases the value of the tour. From the traveler’s point of view, this service could be security and the feeling that someone with more knowledge of a destination will lead them, or it could be the convenience of having a planned tour package so that the traveler does not have to spend time researching, organizing, and booking their trip. Or, the tour could include an activity a traveler cannot do on their own, such as a behind-the-scenes experience.

With the target audience segment in mind, many tour operators utilize multiple means of reaching potential customers, including distributing e-newsletters, mailing their tour catalog directly to potential customers and travel agents, or placing ads in print, social, and digital media. Tour operator staff will also conduct group presentations to travel agents, school boards, senior groups, and other potential customers and exhibit at traveler and travel agent trade shows.

Tour operators typically market their tours by producing a catalog detailing their packaged trips. This practice began with Thomas Cook, whose printed catalog was introduced in the 19th century. It was made to resemble a woman’s magazine in order to capitalize on the important role women play in decision making (Page, 2019). These physical printed catalogs are increadingly being replaced by, or at least accompanied by, online brochures and websites. Some tour operators have embraced technological advancements by providing more imagery, virtual tours, testimonials, and more storytelling on their websites to inspire travelers.

Historically, tour operators only resold their packaged travel through travel agents. However, this relationship changed in the 1980s when tour operators began selling directly to the traveler and cutting out the middleman (Page, 2019). Reaching the traveler became increasingly easy due to the internet, social media, and digital marketing opportunities. Many tour operators still sell through travel agents, but they prefer to sell direct due to the travel agent commission required for the sale.

Tour operators have been accused of being slow to accept emerging technology (Jorden & Dawes, 2023). Only recently has there been widespread utilization of immersive technology, mobile applications, and other innovations. Softrip, a software program that automates and simplifies many aspects of the business of tour operating, was originally developed by tour operator Gate 1 Travel. The company has provided escorted tours, river cruises, and vacation packages for over 40 years. It developed the software program to meet its own company needs. As the program developed, Gate 1 Travel began selling the previously internal technology to external tour operators. Tour operators can use the software to build travel packages, create reservations, manage bookings, take and make payments, manage customer information, confirm rooming lists and reservations with suppliers, and view data reports. The mobile application can be used by the tour guide to communicate with travel product suppliers and manage guests.

Destination Management Companies

Destination management companies (DMCs) are experts on their own destination. As discussed previously, DMCs plan events and travel as well as coordinate experiences in their own market. They do not sell their services to individual travelers. Rather, they work within the retail travel trade segment with B2B tour operators and travel agents, with the consumer segment, and with group leaders and corporations. DMCs often offer a wide array of services and customize the travel and event experience based on their client’s needs.

A typical point of confusion is with the difference between a DMO and a DMC. DMCs are destination experts that specialize in local resources, much like DMOs. They function, however, quite differently. While DMOs will often assist companies, travel agents, and tour operators in navigating travel and events within their destination, they will not typically negotiate rates or manage contracts like a DMC would. In addition, DMOs are typically non-profit, not-for-profit, or governmental entities and do not typically charge the tourist or planner for their services. DMCs are for-profit enterprises and will charge a company for their assistance.

The Association of Destination Management Executives International (ADMEI), a membership association for DMCs, explains that a DMC “is a strategic partner to provide creative local experiences in event management, tours/activities, transportation, entertainment, and program logistics” (n.d., para. 8). A DMC can manage all aspects of a meeting or event and will have ample relationships within and knowledge of the destination to offer informed recommendations and advice. Many DMCs will find a venue for an event, provide marketing services to brand and promote an event to potential attendees, assist with catering arrangements, order audiovisual equipment, and manage details such as gift sourcing, event security, and guest and speaker coordination.

Companies as well as those in the travel trade needing to plan travel to an unfamiliar location can rely on an RTO, ground operator, or DMC as a valuable resource, whose knowledge of the destination means they know the best event venues, travel experiences, and vendors. This knowledge can help make a memorable destination experience.

Travel Agencies

Travel agencies sell travel-related products to the public on behalf of the travel product suppliers. Such products include accommodations, airline tickets and other transportation bookings, cruise passages, packaged tours, travel insurance, and attraction tickets. Travel agents may also be referred to as travel professionals, travel counselors, travel designers, travel brokers, or travel advisors.

Travel agents are the brokers of travel. They are the middlemen between the buyers and sellers of travel products, playing an essential a role in the distribution chain for the packaged travel products that are developed by tour operators. They do not carry inventory or purchase products themselves, unless under certain circumstances (such as pre-booking rooms for a large group). Rather, they receive a commission on sales or add a fee to a client’s travel purchase. They are also not involved in the contract of sale, which is between the travel product supplier and the traveler themselves.

How Retail Travel Agents Operate

Travel agencies range from independent one-person businesses to large full-service agencies with many storefronts and travel agent employees. Some travel agents are generalists, meaning they sell a wide variety of travel products, while other agents specialize in high-end travel, low-cost travel, or travel to certain destinations, such as African destinations or Carribean cruises. Some agencies are leisure-focused while others specialize in corporate travel (to be discussed in more detail below).

An understanding of how travel agencies operate today requires knowledge of the International Air Transport Association (IATA) and International Airlines Travel Agent Network (IATAN) accreditation. It also requires knowledge of the Global Distribution System (GDS), commissions, and agency affiliations.

IATA/IATAN Accreditation

Travel agents must receive IATA certification to issue airline tickets on behalf of airline companies. IATA is the trade association for the world’s airlines, representing around 300 airlines and 83% of total air traffic (IATA, n.d). IATAN is a department of IATA that services the US travel and tourism industry exclusively.

In response to the sharp increase in air travel in the mid-20th century, IATA was established to support the aviation industry. One of their initial objectives was to design and implement industry standards, which required determining who would be allowed to distribute air travel products (IATA, n.d.). The IATA/IATAN travel agent accreditation program was developed to protect the airlines and to regulate the flow of revenue by certifying travel agents before they are allowed to access and sell airline inventory. Over the years, it has evolved to become an internationally recognized accreditation program charged with legitimizing travel agent industry credentials. An IATA/IATAN identification number is required for anyone wanting to receive commissions on bookings through the Global Distribution System (GDS), access educational travel programs, participate in travel events, and receive discounts on air travel, cruise passage, accommodation, and more.

Multiple levels of accreditation are shown in the chart below. The type of certification a travel agent chooses to apply for determines the requirements, which might include proof of general business operations and licenses, training and qualifications, adherence to a code of ethics, and financial viability.

In order for a travel agent to access the airline’s billing system and inventory to accept payments and issue tickets, a travel agent must be certified by IATA or IATAN. This prevents the airlines from having to do a background check with every booking and simplifies the booking process for both travel agents and airlines. A travel agent without an IATA/IATAN ID card can still arrange for airline tickets for their clients, but they would need to work with a wholesaler/consolidator or a bigger agency, referred to as the host agency, to do so (Altexsoft, 2023).

In addition, holders of an IATA/IATAN card are assigned a unique verification number that confirms their professional status within the industry globally. The card also entitles them to receive many concessionary benefits from industry suppliers, including premium travel deals, travel upgrades, VIP access across the hospitality industry, and  retail discounts on everyday shopping. Most travel agents travel often, experiencing first-hand the options available to their clients. Hotels, cruise lines, and other travel suppliers often invite travel agents to become familiar with their products by offering free or inexpensive rooms or by inviting them to participate in FAM (familiarization) trips, in which only valid IATA/IATAN card holders can participate. The ID also provides entry into industry conferences and social gatherings as well as discounts on select training courses.

In addition to IATA/IATAN accreditation, travel agencies often obtain additional certifications and memberships to be recognized as travel professionals. For example, an Airlines Reporting Corporation (ARC) accreditation, much like IATA/IATAN, enables travel agents to sell airline tickets and handle financial transactions and is an additional requirement for travel agents booking airline tickets through GDS in the United States.  Cruise Lines International Association (CLIA) offers a cruise-focused certification and exclusive travel agent perks and discounts for members. Each membership or certification requires fees, an application process, and proven business experience.

Global Distribution System (GDS)

Travel agents, as well as other travel retailers, often book travel products through Global Distribution Systems (GDSs), which provide a computer-based direct connection to the inventory and rates established by travel suppliers. GDSs enable travel agents to access the inventory and rates of the following:

• Hotels
• Airlines
• Railways
• Car Rentals
• Cruises
• Insurance
• Ground Handlers
• Tour Packages

Prior to the development of computer system technology in the mid-20th century, air and train seats were purchased from a ticketing counter or by calling a ticketing agent. When air travel became less exclusive and more people could fly than ever before, the manual nature of selling seats proved inefficient. Airlines soon began using a central reservation system for booking passengers on flights, which evolved into a GDS (Altexsoft, 2019).

The first GDS, Sabre (Semi-Automatic Business Research Environment) was developed in the late 1950s after a chance meeting between the president of American Airlines and an IBM salesman who got into a discussion on a cross-country flight (IBM, 2015). The joint venture that followed led to the first central reservation system that connected computers throughout a network and allowed people from around the world to book business. The system revolutionized the travel industry and e-commerce technology.

Sabre proved a huge competitive advantage for American Airlines, forcing other airlines to commission their own system. While GDS began as a booking system for airlines, it soon expanded to include rail tickets, car rentals, and hotel rooms. Whenever a GDS program is utilized, inventory can be researched and reservations can be made by travel agents in real time. The three GDS platforms operating today include Sabre, TravelPort, and Amadeus, with 1.2 million travel agent terminals worldwide. All-combined, GDS booking systems annually reserve over 79 million hotel reservations totalling over 180 million hotel room nights. They also reserve over 580 million air bookings annually (Amadeus, personal communication, October 5, 2023).

Commissions

Travel agencies earn commissionson travel products sold. Commission levels vary depending on a travel agency’s annual sales, how a booking was made, contractual agreements made between the supplier and the agency, and whether the agency is affiliated with a consortium, franchise, or host agency. Below is a representation of average commissions by industry.

Agency Affiliations

Independent travel agents, especially new agents, can often maximize sales and earnings by partnering with a larger network that can provide increased buying power and business support. Aligning with a host agency, purchasing a travel agency franchise, or affiliating with a consortiumoffer benefits that help travel agents grow their business.

Host Agencies

Host travel agencies are well-established entities that contract with smaller agencies, independent contractor agents, and home-based agents to provide the support they need to conduct business. In addition to providing accreditation numbers, host agencies also provide access to a GDS and to training on how to use the sometimes complicated system. They may offer continuing education, bookkeeping services, insurance policies, marketing services, technological solutions such as customer relationship management (CRM) software, booking tools, accounting software, and email marketing software. They may also generate leads for travel agents. Working with a host travel agent can also provide access to better deals and higher commissions due to the volume of business that the host agency conducts. In return, the host travel agency charges a fee to the travel agent in addition to a split-commission model.

Travel Agency Franchises

Purchasing a travel agency franchise provide an additional option for independent travel agents, especially those new to the industry. Travel agents who buy a franchise are granted access to an established brand name, marketing materials and plans, GDS and CRM software, and business operations and procedures. Some travel agency franchises offer accreditation numbers and some do not. The franchise owner (aka. the independent travel agent) pays a license fee for the right to use the brand and branded materials and in turn receives credibility for their business. Popular franchises include publicly known names such as Cruise Holidays and Expedia Cruises. While the initial startup costs of purchasing a franchise are higher than those required to join a host agency, travel agents retain all of their commission.

Consortiums

In travel, a consortium is a network of independent travel agents and other travel agencies, including host travel agencies, that team up to enhance their buying power and commission rates. It is essentially a co-op where each agency is an independent business, but they pool resources to provide products and services to agencies that might not have access on their own. A travel agency must reach a certain volume of sales in order to join the consortium and also pay a membership fee. Travel consortia can help agents and agencies market themselves through hosted websites and email. They also offer training through webinars and online courses, provide access to technology, including customer relations management systems and online booking software, and enable agents and agencies to leverage higher buying power when negotiating with suppliers. Consortia do not provide accreditation numbers or GDS platforms to agents. Travel Consortia include AAA, Virtuoso, Signature Travel Network, Travel Leaders Network, and Flight Centre Travel Group.

Leisure Travel Agencies

Even though many travel products can be purchased from an OTA like Expedia or Kayak or bought directly from a travel supplier through websites or ticket desks located at hotels, cruise operators, airlines, or attractions, some travelers prefer to work with a travel agent to guide them toward the best travel options. A good travel agent is well-educated on travel destinations and can recommend options that will align with the traveler’s needs, preferences, and budget.

A travel agent will often meet with their client to gather information on their desired dates, destination, and budget. Once in-person meetings took place at the travel agency’s office, but technology now enables them to be conducted virtually. As a result, travel agencies might operate from a central business center or be completely home-based. Many travel agencies do not have a store front at all and provide travel counseling services strictly through a call center.

Agencies with store fronts open to the public are sometimes referred to as brick and mortar travel agencies because of their physical presence. These store fronts help drive business and visibility to the agency. Frequently these offices are situated on the primary business street of a city, town, or village, which, especially in Britain, is often called “High Street.” Therefore, another term for a brick and mortar travel agency is “High Street travel agency”, whether or not they are actually located on a street called “High Street.”

Travel agents typically assist clients with a multitude of services. They begin by listening to their clients and researching a variety of tailored options. Agents also plan travel itineraries, make reservations, calculate costs, arrange logistics, and produce tickets. They may also act as intermediaries should their client experience travel disruptions or other problems on their journey. They will also advise their clients on insurance options, necessary vaccinations, and  passport, visa, and customs requirements.

The internet has enabled the public to compare and purchase most travel elements. However, the magnitude of travel options available combined with an increasing lack of trust in online offerings can make it difficult to navigate the best travel options. Therefore, a good travel agent will attentively listen to their client and establish trust. This client and travel agent relationship is key to repeat business and word-of-mouth referrals.

The role of the travel agent has evolved considerably over the years, leading some to question their place in today’s digital age (Rensburg, 2014; Sharma et al., 2020). Consumers can research travel destinations, hotel options, and flight schedules on their own. Social media, travel blogs, and online reviews provide a wealth of the knowledge once the sole purview of travel agents.

While the impending demise of travel agencies has been predicted for decades, their roles continue to have a place in the travel marketplace. Many agencies have evolved their business models to meet the needs of the traveling public. For example, some travel agencies and agents have differentiated themselves by specializing in specific destinations, types of travel, lifestyles, or industries. Specializations include the following:

• Destination niches—travel to Italy, African safaris, or tours through Iceland
• Types of travel—family trips, adventure travel, or Disney vacations
• Lifestyles—LGBTQ vacations, religious pilgrimages, accessible travel
• Industries—corporate travel programs, sports team travel, university student trips

Specialization enhances credibility while allowing smaller agencies to thrive alongside large brands. Unique experiences and local insights add value competitors can’t replicate. Specialists also foster strong repeat business and referrals within their niche. DMOs, cruise lines, and others have supported this specialization by developing educational courses, usually online, that travel agents can take to achieve accreditation in the destination or cruise experience. For example, Disney has developed Disney College of Knowledge, a website that offers complete specialized training on Disney destinations.

Another trend toward modern-day relevance is that some agents have adjusted their business models and emphasize their consulting services over simply booking travel products. Some have adopted the terms “travel counselor,” “travel advisor,” or “travel designer” to highlight their service-oriented approach. These agents may charge a fee for their consultation services and downplay the role of commissions in revenue generation, although they will often still look for commissionable options. Some travel counselors and designers cater to tourists who wish to have a more unique and experiential travel experience and will put together travel programs that are more personalized to the tourist.

The travel trade realm, like the tourism industry at large, exemplifies a sector in flux. While predictions of the demise of travel agents and tour operators have echoed for decades, the roles continue evolving to deliver value and consultative services that empower today’s savvy travelers. By embracing key trends, from niche specialization to emerging technologies, the modern travel professional can continue to excel as curator, counselor and companion on the customer journey.

Corporate Travel Agencies

As stated above, some travel agencies offer corporate travel planning in addition to leisure travel services. The way corporate travel is negotiated, managed, and booked is very different from leisure travel. If a travel agency offers both, the corporate side is often a completely separate division.

Corporate travel agencies must understand the nuances of business travel. They will work with companies to manage their corporate travel arrangements. These include booking employee flights, car rentals, and hotel rooms, creating travel itineraries, arranging travel visas, and providing support to employees who are traveling for business. Corporate travel agencies will ensure that travel arrangements align with corporate travel policy and that the costs fall within the allocated budget. They will also track and report on the volume of travel spend (the amount spent on travel elements).

Maintaining a high volume of travel spend is vital to corporate travel management because it enables the agents to negotiate discounted rates for travel products. Due to the higher volume of products purchased for corporate business travel, their negotiated rates are typically lower than those purchased for leisure travel.

Corporate Travel Policies

Corporate travel policies tell employees how much they can spend, designate the rules and regulations of their travel activities, and outline a company’s Duty of Care. Policies mandate what types of accommodation empoloyees can book, how much they can spend daily, how travel is paid for, if airline miles and hotel points can be accrued by the employee or the company. Policies also determine whether employees should make their travel arrangements on their own or through the corporate travel agency exclusively.

Duty of Care denotes the company’s legal obligation to ensure reasonable care has been taken to maintain the physical and emotional well-being of their employees. Companies with travel policies will have a Duty of Care plan that evaluates risks to employees and potential legal ramification for the company. A corporate travel agent must be prepared to handle a number of risks to ensure that a company’s Duty of Care is upheld. These include an employee missing a flight, becoming ill, being involved in an accident, or being the victim of a crime. In sum, corporate travel agencies assist companies in making sure their employees are safe while traveling on business.

Travel Management Companies

Large corporate travel agencies that specialize exclusively in business travel are called Travel Management Companies (TMCs). TMCs offer additional services that smaller agencies do not, including more specialized tracking and booking technology, assistance with developing corporate travel policies, risk management evaluations, and extensive data collection and reporting (Christopherson Business Travel, 2023).

TMCs work closely with a company’s human resource and finance departments as well as internal corporate travel managers to ensure all trips are in line with employee policies and budgets. They charge a monthly or annual fee to the company, manage the corporate account, and conduct regular business reviews to analyze total spending and patterns of expenditure on air travel, car rentals, hotels, waivers, and favors. Their role is not only to manage a company’s travel but also to evaluate and report on employee travel data to ensure a healthy travel program.

TMCs utilize online booking tools (OBTs) for employees to use to make their travel arrangements. OBTs are visually much like OTAs such as Expedia or Kayak, but the travel products available on OBTs are curated based on negotiated rates and agreements that a TMC has made with the travel supplier. TMCs can often negotiate better corporate rates with travel suppliers due to the large volume of business they conduct working with multiple companies. The employee can make their own travel arrangements based on the options available on the OBT and are usually rewarded, sometimes financially, for choosing the options that will save the company money.

TMCs can also provide other services related to travel, such as consultation, reporting, and risk management. They can access research and advice on complex visa requirements or pre-trip medical needs, and they can support an organization’s meetings and events. Sometimes the software they utilize can automate the company’s approval process to increase employee compliance, track travel expenses, and manage cancellations and refunds. Some TMCs will track a company’s carbon emissions and provide solutions to offset the company’s climate impact. TMCs have knowledge working with visa services and will act as a liaison to seamlessly get employees visas. A TMC can act as an extension of a corporation’s staff and may even place their own employees onsite in the corporate business office due to the immense integration with leadership objectives.

About Ronda

Since the age of 10, Ronda Dean (personal communication, November 29, 2023) has been fascinated with the travel industry. She began her career after high school at a small, family-run travel agency where she booked leisure travel to Reno, Las Vegas, and Disney. She soon moved on to become an on-site corporate travel agent at Nike World Headquarters in Beaverton, Oregon.

As Dean explains, “The Nike Travel team was managed by a travel management company. I was their employee but working on site at Nike. Being in this position, I was able to be part of the day-to-day development of a globally renowned company, it was very exciting!”

After a decade at Nike, Dean became an account manager with Cathay Pacific Airways, where she managed airline contracts between Cathay Pacific and companies throughout the Pacific Northwest.

According to Dean

Learning the airline side of this business in this manner was fascinating. Cathay Pacific is based in Hong Kong and had routes throughout Asia so I became well versed in APAC [the Asia-Pacific region] both geographically as well as politically. I was also able to see how airline contracts were negotiated from the airline side as well as work closely with agency consultants.

After the COVID-19 pandemic wreaked havoc on travel, Dean became the U.S. Travel Manager for F5 Technology, a global data security company based in Seattle. At F5, Ronda oversees management of key supplier relationships, contract negotiations, CVENT administration and traveler communications.

As Dean explains the transition:

My years of experience on the TMC side, exposure to suppliers and online booking tools, and managing other companies’ travel translated very well into this position managing travel for this global organization!

Dean, who enjoys her work because she is passionate about helping people, notes:

Travel is not always easy, and when you’re traveling for work, away from your family and the comforts of home, it can be especially difficult. If you’re not used to traveling it can be difficult. If you’re overwhelmed by people and change of any kind it can be difficult. I want to help anyone who is traveling, to make their travel experience efficient and most of all pleasant! It can be quite pleasant, productive, and even fun if you have a few tips and tricks up your sleeve and I am here to help with that!

Dean’s career path has provided her with many rewarding experiences, and she enjoys sharing her story with future business travel leaders. She explains:

I have had the great fortune to work with so many people around the world. I have been able to experience other cultures’ ways of life and learn that the world is not as immense as one may think! It has given me such great exposure and insight to be able to relate to others! If you have a heart to help people, a love of travel, interest in global economies and business, I can’t think of a better career path for you than business travel.

About Ronda Dean

Dean’s professional background includes experience in travel management company operations, account management and business development, international airline sales, travel program and policy consultation, booking tool assessment and implementation, as well as meetings and event planning. She has held numerous leadership positions with the GBTA (Global Business Travel Association) Oregon chapter as Director of Education, Director of Events, Vice-President, and chapter President.

Business travel, especially, is affected by new and emerging technology solutions because of the power corporations yield with the travel industry. In order to remain relevant to their clients, corporate travel agencies must present modern solutions that solve corporations’ present-day problems.

Multiple travel technologies exist in the marketplace today that support corporate travel management. These include existing OBTs and emerging iterations, meeting and event platforms, payment solutions, and AI data analytics among others. Some programs are meant to enhance and complement existing travel technology programs while others are designed to be complete end-to-end solutions (software that meets all travel management needs) for corporate travel programs. Here is a small sample of existing travel technologies, as provided by R. Dean (personal communication, September 22, 2023).

• Traxo: Provides travel data aggregation and technology solutions. Traxo captures all travel booked through the TMC and other booking methods such as OTAs
• Spotnana: Offers an end-to-end solution for corporate travel reservations, incorporating New Distribution Capability (NDC) fares
• Dinova: Dining program that integrates with corporate credit cards and offers an annual rebate to the corporation based on purchases
• Conferma: Pre-payment solution providing the ability to pay for hotels, car rentals, and other charges without a traveler having to present their own credit card
• Cerebri AI: Technology that sits on top of current programs and automatically applies analytical algorithms to data creating a live connection between human decisions and smart technology
• Deem, Concur, Expensify, Get There: OBTs and expense systems that integrate with OBTs
• Navan, Egencia: TMCs that only offer their own proprietary OBT
• TripBam: Technology that finds additional savings opportunities for currently booked hotel and airfare
• CVENT, Hubli, Planned: End-to-end meeting and event management systems
• Tripism: A one-stop shop for all business travel, managing travel and travel updates, consolidating intelligence from travel teams, travel suppliers, and business travelers

Online Travel Agents

With user-friendly online tools and inspirational marketing techniques, online travel agencies are huge players when it comes to reselling travel products such as hotels, transportation, and activities. In 2022, the global online travel marketplace totaled 475 billion in U.S. dollars and is expected to rise to over one trillion U.S. dollars by 2030 (Statista Research Department, 2023).

Most online travel agencies, such as Kayak, Expedia, and Booking.com, offer hotel rooms, airline reservations, car rentals, attraction tickets, and travel packages and allow travelers to search by destination and date of travel. They publish blog articles to heighten the anticipation of travel and offer deals to drive the urgency to purchase.

Four companies control 95% of the market worldwide (Hollander, 2023). They offer multiple websites that allow independent booking solutions for hotels, airlines, restaurants, vacation rentals, and more.

From a traveler’s point of view, OTAs allow for an element of independence, offering the opportunity for the traveler to do their own research, comparison shop, and make their own purchases. Much like with a live travel agent, the traveler can purchase the elements of their trip in one place instead of making multiple purchases. And even though the majority of the online travel marketplace is owned by four major companies (as referenced above), travelers are given the impression that they are comparison shopping rates to obtain the best deal.

From the travel product supplier point of view, OTAs are often seen as a necessary evil. Selling their products through OTAs allows them a massive reach to travelers but comes with a hefty commission payout of up to 30% of the room rate for a hotel. When a hotel contracts with an OTA, the OTA requires that the hotel not offer a rate lower than what is published on the OTA, restricting hotel revenue management. Many hotels actively encourage travelers to book directly with the hotel on the hotel’s own website so that they can avoid paying commission to OTAs and be more in control of their rate. The hotel may not recognize a traveler’s elite status if they book through an OTA, and any changes made to reservations can be difficult if booked through a third-party OTA.

The American Hotel and Lodging Association (AHLA) launched a consumer campaign called “Search Smarter” in June of 2017. “Smart Searcher aims to raise awareness of issues associated with OTAs in addition to fraudulent sites posing as hotels. Research supporting this campaign claimed that 55 million bookings worth nearly $4 billion were impacted each year by misleading marketing practices (AHLA, 2017). An organization that works to support hotel and lodging companies, AHLA has a vested interest in travelers booking directly with the hotel instead of through an OTA. Nonetheless, AHLA’s message is an important one for travelers to understand.

Concerns with monopolization, online privacy, and manipulative marketing practices have brought OTAs under the spotlight, leading to regulations in multiple countries and class action lawsuits. For example, Australia’s federal court found that Trivago was displaying hotel rates in a manipulative way, hiding lower rates and inflating claims on discounts. The UK implemented regulations in 2020 to combat pressure-selling tactics, which include statements about popularity or availability (Schaal, 2020).

Despite these controversies, the business of booking online travel continues to expand. The immense presence of the four established companies (Bookings Holdings, Expedia Group, Trip.com Group Limited, and Airbnb) makes it challenging for competitors to successfully enter the digital landscape. Regardless, more niche OTAs are gaining global attention. Wheel the World, for example, is an OTA that specializes in accessible hotel rooms, transportation, and activities. The travel product listings are detailed and include information that people with disabilities would want to know but are often illusive in the marketplace, including the width of the bathroom door or the height of the bed in a hotel room. Each travel product listed on Wheel the World is vetted by staff to ensure its level of accessibility. This example supports the trend discussed above in relation to traditional travel agents, who specialize in a more niche audience in order to remain relevant to the traveling public.

Consumers

Traveler

The ultimate consumer is the traveler who may be traveling domestically (within their own country) or internationally (outside of their own country). They may be traveling for pleasure (leisure travel) or they may be traveling in association with their job (business travel). The consumer may purchase travel directly from the travel product supplier by booking an airline seat on an airline company’s website, or they may purchase travel products from an intermediary, such as a travel agent, tour operator, or OTA. Alternatively, the traveler might be part of a group or the employee of a company and therefore purchase according to leadership direction. The reason behind their decision on how to purchase travel usually stems from the reason they are traveling, the complexity of their trip, or their familiarity with the destination they are visiting.

The term bleisure travel refers to travel activities that are primarily leisure pursuits undertaken while on a business trip. A business traveler might take part in a pleasurable tourist activity after a meeting, or they might add a few nights onto the trip to explore a city, either before or after their professional duties have been completed. A traveler might invite family and friends to join them on their business trip to make the experience more fun. The global bleisure travel market was valued at $315.3 billion U.S. dollars in 2022 and is projected to reach $731.4 billion by 2032 (Allied Market Research, 2023).

Group Leaders

Group leaders can be anyone managing travel for a group, including the family member who is planning a family reunion, the pastor who is planning a church trip, or the teacher who is planning a student trip. Many types of groups arrange to travel together, but a few of the most common include the following:

• Family and Friends: family members, friends, or a mix of both who travel for reunions, ‘girls getaways,’ destination weddings, or vacation
• Alumni: graduated college students who were members of a fraternity, sorority, club, or network
• Affinity Groups: people with a shared interest or goal, such as hiking clubs, women’s clubs, art clubs, or book clubs
• Students: these include band members, sports players, or learners attending courses or seeking hands-on experience for learning purposes
• Military: retired military personnel travel for reunions, typically gathering with members who served in the same unit
• Bank Travel Clubs: wealthier members of a bank, often retirees, who are invited by their bank to join tours to retain customer loyalty
• Chambers of Commerce: members of a Chamber of Commerce who travel to form professional bonds

Corporations

Many corporations and other organizations require their employees to travel often, whether for professional training, to develop business prospects, or to work at different locations. In fact, according to Zippia Research (Flynn, 2023), business travel accounts for about 12% of total U.S. air travel and for about 75% of airlines’ profits. Similarly, 40% of the average hotel’s guests are business travelers. Nearly 1.3 million business trips are taken in the U.S. daily, and 38% of all U.S. business travel is for meetings and events, which amounts to $139.3 billion of all business travel spending.

Travel managers are employed at large corporations or organizations that have employees who travel often. Even if travel arrangements for professional business trips are managed by a corporate travel agency, internal staff at the corporation play the role of liaison with the agency. The role of a travel manager varies widely depending on the scale of travel. With smaller programs, travel managers may also take part in other job duties, including meetings management, human resources, finance, or non-travel procurement. Larger travel programs are more likely to have travel managers who focus solely on travel management for their company. A company that spends less than $10 million annually on travel averages 2.8 employees who focus on travel management full-time, while a company that spends over $30 million on travel annually averages 8.8 employees who focus on travel management and procurement full-time (Global Business Travel Association [GBTA] & Cvent, 2023).

A 2023 survey found that among corporate travel managers who self-identified as being “involved in managing or procuring travel on behalf of [their] company” (as cited in GBTA, p. 3), only two in five deal with travel full-time in their role, while 61% spend some or most of their time on travel management or travel procurement while also performing job duties unrelated to travel.

On the job, travel managers negotiate with travel suppliers, communicate travel plans with travelers and answer their questions, analyze and report on data, implement or manage technology, develop travel policies, and manage risk or track employee travelers.

An important part of a travel manager’s job is to procure travel-related services, which involves negotiating and securing rates at hotels, with airlines, rental car companies, transportation services, and with other travel suppliers (Hernandez, 2002). A good travel manager will find good suppliers and then negotiate with them to secure a corporate rate, otherwise known as a commercial rate. These rates are discounted from the rate offered to the public and are based on the volume of business the travel supplier expects to receive from the company. A procurement management strategy can help businesses save money on travel by securing these corporate rates. Travel managers oversee the relationship with the travel suppliers, negotiate the rate and terms of the agreement between their company and the travel supplier, and evaluate and renew contracts regularly.

Attributions

1. Figure 4.3: 2024 Making Memories Tour Catalog © Making Memories Tours Used with permission.
2. Figure 4.4: n/a © Softrip Screenshot of Softrip review, granted by Softrip.
3. Figure 4.5: Untitled © IATA Used with permission.
4. Figure 4.6: IATA Accreditation Options by Ezra Leigh, for WA Open ProfTech, © SBCTC, CC BY 4.0
5. Figure 4.7: Travel agent commissions by supplier type © Host Agency Reviews Infographic reprinted with permission, https://hostagencyreviews.com/blog/travel-agent-commissions.
6. Figure 4.8: Two travel agents in High Street Chepstow by Jaggery is released under CC BY-SA 2.0
7. Figure 4.9: Ronda Dean, Corporate Travel Manager, F5 © Ronda Dean Used with permission.
8. Figure 4.10: image released under the Pexels License