UNIT 6 INTRODUCTION TO TRAVEL AGENCY AND TOUR OPERATION

BUSINESS

Structure

6.0 Objectives
6.1 Introduction
6.2 Historical Overview
6.3 Travel Agent-Meaning & Definition
6.3.1 Travel Agent Association of India
6.4 Tour Operators
6.4.1 Indian Association of Tour Operators
6.5 Types of Travel Agency
6.5.1 Retail Travel Agency
6.5.2 Wholesale Travel Agency
6.6 Types of Tour Operators
6.6.1 Inbound Tour Operators
6.6.2 Outbound Tour Operators
6.6.3 Domestic Tour Operators
6.6.4 Ground Tour Operators
6.7 Functions of Travel Agent
6.8 Functions of Tour Operators
6.9 Let Us Sum Up
6.10 Further Readings
6.11 Answer to Check Your Progress ‘Exercises’
6.12 Questions for Practice

6.0 OBJECTIVES

After reading this unit you will be able:

 to know the meaning of travel agency and tour operation
 to understand the different types of travel agencies
 to explore the concept of retail and wholesale travel
 to know the different type of tour operators
 to explain the functions of travel agency and tour operations

6.1 INTRODUCTION

Business uncertainties owing to the impacts of Covid-19 pandemic have thrown challenges to
the tourism industry including tour operators and travel agents as service intermediaries to
work withnew procedures and new normal. The expectations of tourists are rising, and they
want a complete travel solution from travel agents and tour operators. As a result, the
workings and activities of a travel agency/tour operator are evolving many alternative
business models due to the Covid-19 epidemic. As such the business of travel agency and
tour operation has seen considerable upheaval in recent years since the tourism business
environment is volatile. Crises bring business opportunities that many travel companies have
adopted the situation to survive and continue the business. Many travel agencies have moved
out of the business without finding solutions. In this Unit, the historical background of travel
agency business along with the types of travel agency and tour operators and their functions
have been presented with examples.

6.2 HISTORICAL OVERVIEW

Travel intermediaries assisted merchants who traveled for commerce and religious reasons.
According to the contemporary history of the travel industry, two well-known travel
companies, Thomas Cook and Cox & Kings have redefined the modern travel agency
business.Cox & Kings founded in 1758 was a pioneer in the travel industry dedicated to
arranging travel for India’s armed troops and regiments in particular and other colonies ruled
by the British Administration in general. In the field of contemporary travel, the German
travel companies were known as immigration agents, and they mostly dealt with the sea
travel. However, Thomas Cook led the first large-scale tour of England in 1845,
incorporating some related activities into the itinerary. Importantly, Mr. Thomas Cook is
widely regarded as the Father of the Travel Agency Industry by establishing it on 1841.

6.3 TRAVEL AGENT- MEANING &DEFINITION

A travel agent is a firm or proprietor orcompany or corporation that arranges travel-related

needs. A travel agency is a workplace that all services are coordinated and assembled for the
seamless travel.
A travel agent is familiar withthe dynamics of tourist industry, including destination(core
and peripheral), mode of accommodation &mode of transport, itineraries, and other travel-
related services such as passports, visas, insurance, and currencies as essential documents. A
travel agent works for corporate houses andindividual customers. Travel agentsdo
counselling customers and provides travel consultancy to reduce the cost of travel, maximize
value for money and penetrate the market with innovative products and services.

Travel agents and tour operators are regarded as image builders for a place and play a
significant role in the tourism industry. They act as intermediaries between suppliers and
customers to provide travel assistances for a pleasant travel and a relaxing stay. The meaning
of a travel agent is explained in different ways.
  A travel agency is a private or public retailing firm or company that provides travel
related facilities and services to customers/tourists as an agent of suppliers.
 A travel agent is licensed or recognized to sell primary touristic services owned by
transport, lodging,cruise line and tour operators with the help of qualified, trained and
experienced professionals.
 A travel agency assists a customer with planning of tour, reservations of tickets and
rooms, costing of all travel-related services and mediating with insurance companies,
consulate offices, foreign exchange agents, ground handling arrangements, and other
special service providers.

Operations in a large travel agency are often segmented into many functional areas such as
reception/front desk, client information, and assistance, business travel or corporate travel,
visa services, foreign exchange, ticket booking, hotel reservation, and so on. A smaller travel
agency, on the other hand, is responsible for a variety of tasks relating to the travel and tourist
industry. Many travel agencies are working in coordination with tour operators. The
importance of a travel agency business can be described as: -

 Image building
 Mediator between principal suppliers and clients/customers
 Travel information provider
 Travel facilitator
 Link amongvarious stakeholders
 Assistance to customers
 Support services to the vendors and clients/customers

6.3.1 TRAVEL AGENT ASSOCIATION OF INDIA: -

The Travel Agent Association of India (TAAI) is a well-known trade association for travel
agents in India. It is one of the largest associations in India, with over 2400 members spread
over more than 70 locations. The primary goals of TAAI are as follows:
1. To safeguard the interests of Indian travel agents.
2. To organize a Capacity Building Programme for its members.
3. To give a collaborative platform and important information to its members.
4. To promote and enhance tourism and ethical practices.

Check Your Progress A

1. What is Travel Agency?

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2. Briefly discuss the functions of a travel agency.

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3. What do you mean by retail travel agent?

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4. What is the role of travel agent association of India (TAAI)?

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5. Activity: Make casual visit to any nearby travel agency.

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6.4 TOUR OPERATORS

Tour companies are an important backbone of tourism industry. Their professional

approaches and techniques in tour operation bring considerable contentment and revenue to
all tourism company stakeholders.

In certain circumstances, tour operators deal directly with clients/tourists, while in others,
tour packages are sold through travel agents. As a result, a tour operator is also seen as an
intermediary that manages the various components of a trip package on behalf of their
suppliers.

A tour operator is an individual or a corporate entity that purchases travel components from
various primary service providers like hotel, car rental, bus company, airline, rail company,
cruise liners, entertainment company, etc separately and sells them through travel agencies or
middlemen. A tour operator is a wholesaler who provides different organized packages with
attractive price. Sometimes tour operators combine the various travel components and sell
them to consumers at their own pricing.
Tour operators play a significant role in providing and conducting activities and giving
services for a given tour package.Tour operators may possess their own travel modes such as
buses, vehicles, hotels, guides, escorts, and so on, or they may outsource them from suppliers
or owners/principals.

Normally, tour operators have more activities/functions than travel agencies. They are known
as tour package manufactures, planners, owners, promoters, sellers, and distributorssince they
purchase travel components in bulk in order to prepare various tour packages. They are also
known as wholesalers at times to their packages to clients/customers through travel brokers
or occasionally directly as retailers, depending on their needs. Tour companies design various
tour packages to meet the needs of individual customers or corporate houses. Some of the
popular package tours are named as wildlife, cultural, culinary, adventure, rural/agri-tourism,
ecotourism, etc.

In the changing business scenario of the Covid-19 epidemic, the success of a tour operation is
determined by how creative and original ideas for holidays and vacations are used to develop
tour packages and itineraries with research-based information to meet customized needs.

Characteristics of a tour operator

 As a backbone of tourism business

 As a middle man
 As a wholesaler
 As a mediator with travel agents and suppliers
 As an instrument for economic growth of a country
 As a facilitator for revenue earning, foreign exchange earnings and
employment generation
 To keep the clients happy by providing different tour packages

For example, if you want to purchase a car, you have two options. You may either go straight
to the factory, where one particular firm manufactures the automobile, or you may buy from
the supplier of the car. From the same manufacturer, you might have multiple versions of the
same automobile.
When you go to a city centre car showroom, you may pick from a variety of cars produced by
several manufacturing companies, but none of the cars are manufactured by a city centre car
retail outlet. In the travel industry, the tour operator is the manufacturer, and the city centre
vehicle retailer is a travel agent.

6.4.1 INDIAN ASSOCIATION OF TOUR OPERATORS:-

The Indian Association of Tour Operators (IATO) founded in 1982 is an apex body of over
1600 recognized tour operators and other members from various sectors of the tourism
industry. This association has earned international recognition.It encourages, assists, and
protects tour operators' interests. The IATO has since evolved into the national body for tour
operators and it is affiliated body of the Ministry of Tourism, Government of India.

The operations of IATO are governed by an executive committee, and it has five membership
categories: Active, Allied, Associate, International, and Honorary. Its active members are all
accredited by the Ministry of Tourism, Government of India.

IATO has 12 different committees that address various specialized areas such as adventure,
civil aviation, domestic tourism, tour guides, grievances, hotel relations, railway
coordination, surface transport, and so on. The main objectives of IATO are:-

 To encourage national integration

 International well-being and goodwill.
 Promotion, Encouragement, and Development of Tourism in the Country
 To foster good relations among tour operators and travel agents.

6.5 TYPES OF TRAVEL AGNECIES

Travel agencies are mostly business firms that sell package tours and induvial element of
services of primary service providers as a middleman between tourists and suppliers
(Transporter, Hotels, Excursions etc.) and tourists and tour operatorsThese travel agencies are
categorized into two groups.

6.5.1 RETAIL TRAVEL AGENCY:-

Suchtravel agency offers their services directly to consumers or the general public on behalf
of tourism product suppliers and earns a commission. Profits can be earned in two ways: first,
as a commission, and second, as a markup price. A marked-up price usually happens when
theagent sells the primary services at a higher price by adding price. Actually, the markup
price is the difference between the sales cost and the retail price.
The commission from vendors may be regarded the primary source of revenue for a retail
travel agency; though this commission varies from vendor to vendor, travel companies often
get more than 80 per cent of their revenue in the form of commission for selling airlines
tickets, cruise tickets, lodging rooms, package tours, car rental, transport operators, escorted
tours, insurance firms, traveller’s cheques, and foreign exchange, etc.A travel agency is a
commercial enterprise. A retail travel agency is described by Airlines Reporting Corporation
(ARC) as a business that quotes fares, tariffs, arranges reservations, provides travel tickets
and lodging, offers travel insurance, foreign currency, documentation, and payment
processing.

6.5.2 WHOLESALE TRAVEL AGENCY:-

Wholesale Travel Agencies deal with customers who require a substantial number of travel
components, especially Business/Corporate clients. These clients demand bulk purchases of
airline tickets, hotel rooms, cars, coaches, and so on.

A wholesale travel agent purchases various tourism components in bulk from a supplier or
distributor, like airlines, hotels, car rental, destination or ground handling agents and escort
services and resell the same products acquired in bulk. Because an agency buys in volume,
suppliers offer discounted price. For a wholesale travel agent, it is essentially a cost to which
the agent adds profit and sells to end consumers in one price.

You are occasionally perplexed by the distinction between wholesale travel agent and tour
operator. Wholesaler travel agents do not create the services such as accommodation,
transportation, and car or coach services, so on, whereas tour operators combine the products
and occasionally own components such as car rental, forex, insurance, and hotels, conference
halls, and so on. They can act as consolidators of services created and owned by primary
service providers.

6.6 TYPES OF TOUR OPERATORS

6.6.1 INBOUND TOUR OPERATORS:-

Inbound tour operators is otherwise known incoming tour operators. Planning itineraries and
making selection, reservation and confirmation of elements of services are fundamental areas
of business. A tour operator primarily coordinates with primary service providers at tourist
destinations and makes payment to the primary service providers. Tour operators welcome
guess upon arrivals at airport, railway stations and seaports directly or get the guests received
through ground operators. All functions of tour operators are applicable to inbound tour
operators which take responsibility of assembling services like rooms, car, coach, tickets,
entry tickets, toll fee, pickup and drop at the airport/railway station seaport/bus terminus.
Inbound tour operators sell tour packages directly or indirectly through retail travel agents
located in the overseas countries.

6.6.2 OUTBOUND TOUR OPERATORS

Outbound tour operators promote international vacation destinations comprising overseas

tourism destinations for leisure, business, or other interests. Outbound tour operators
make travel arrangements for Indian nationals who wish to travel to foreign countries.
Outbound tourists are those who travel outside of the country for the purpose of leisure or
business.All functions of a tour operator for planning, designing and conducting tours are
applicable in respect of outbound tour operators. Outbound tours are prohibited in the third
world and under developed countries for stopping revenue leakages. For example, Singapore,
Thailand Malaysia, Hong Kong, Fiji, Maldives, Sri Lanka, Dubai, etc are some of the
outbound tourism destinations for Indian nationals. Outbound tour expenditures by Indian
nationals was increased by 7 per cent in 2019, i.e. from $23.7 billion in 2017 to $25.4 billion
in 2018.

Better air connectivity with affordable airfare, e-visas, and visa-on-arrival and competitive
tour package with flexible price and services have resulted in an increase in the number of
Indian nationals traveling overseas.Outbound Tour Operators Association of India (OTOAI)
is one of India’s youngest travel associations in India, established to safeguard and assist
members participating in outbound tour operations. The OTOAI was formed with the goal of
bridging the gap between stakeholders such as International Tourism Boards, DMCs, etc.

6.6.3 DOMESTIC TOUR OPERATORS

Domestic tour operators plan and design package tour after assessing travel needs of people.
All functional areas of a typical tour operator are taken into account while assembling and
combining element of services or components of services offered by primary service
providers at tourism destinations. Domestic tours are often undertaken by the residents who
travel within theircountries or nations. Domestic tour operators operate inside the borders of
their native countries by selling and conducting package tours.India is a vast country with
diverse cultures, religions, geographical and climatic circumstances and visitors different
parts of the country want to see, enjoy and experiencethese tourist attractions by purchasing
tour packages from domestic travel operators.According to Tourism Statistics 2019, released
by the Ministry of Tourism, Government of India, domestic tourist arrivals were increased by
11.9 percent in 2018 as compared to 2017. Tamil Nadu, Uttar Pradesh, Karnataka, Andhra
Pradesh, and Maharashtra were the top five states in terms of receiving domestic tourists in
2018. Domestic tourism is providing alternative vacation or holiday optionsfollowingthe new
procedures and new normaldue to the Covid-19 outbreak.
The Association of Domestic Tour Operators of India (ADTOI) is a national body of
domestic tour operators established on August 7, 1996 to promote the interests of its
members and tourism in India.

6.6.4 GROUND TOUR OPERATORS

Ground Tour Operators are mainly handling agents at the destination region who are in
charge of organizing tours for inbound tourists on behalf of the overseas tour operators. They
are also known as destination management companies. They are essentially a local
organization that offers services such as transportation and guide services for tourists visiting
tourist destinations. These ground operators collaborate closely with international tour
operators as they are specialists in helping in itinerary preparation. These are specialized in
operating cultural tourism, heritage tourism, adventure tourism, yoga tourism, ayurveda
tourism, wellness tourism, wildlife tourism, rural tourism, agriculture tourism, spiritual
tourism, etc. The ground tour operators are otherwise known asexcursion agents or handling
agencies to deal closely with the guests. Tour operators entrust the services with local agents
at smaller cities and tourism destinations. Since the overseas tour operator or inbound tour
operators based outside the country and big metro cities, they are unfamiliar with the local
conditions, government rules, and land issues and they do have own branch offices for
ground handling. Thus, the success of a tour package is heavily reliant on the efficiency and
efficacy of ground operators. Size of business, professionally competent employees, business
experience, reputation, and networking with national and international tourism and travel
associations are the key factors being taken into consideration whilechoosing a ground
handling operator.

Check Your Progress B

1. What is the basis of classification for travel agencies?

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2. Why are retail travel agencies popular?

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3. Wholesale travel agencies are important for corporate houses. Comment.

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4. Activity: visit a wholesale travel agency and observe its functioning.

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6.7 FUNCTIONS OF TRAVEL AGENT

In today’s changing tourism scenario, the role of a travel agent is becoming increasingly
crucial and it plays a vital part in the travel industry. Tourists are becoming more demanding,
and the role of information technology has further complicated the tasks of a travel agent.
Nonetheless, more than 80 per cent of international travelers/tourists still use the services
arranged and provided by travel agencies. Travel agents have established expertise in a
specific segment of leisure and business travel. The structure and professionalization of
business of travel agency has undergone drastic changes in recent years. In addition, leisure
travel encompasses a wide range of activities, while business travel has become more popular
with the emergence of the MICE segment. A travel agency’s functions is determined by the
organization’s size and commercial scope and viability. Travel agents promote their
businesses by offering common and customized services and assistances with visas,
passports, insurance, and currencies, among other things. A travel agent is held responsible
for customers/clients to resolve grievances and crises, and deal with emergency situations.
Moreover, travel agent is responsible for recruitment, selection, training, and development of
employees. Important functions of a travel agent are presented in figure-6.1.

Figire-6.1: Important Functions of Travel Agent

Research and
Linkages Tour Package
Development

Information MICE
Sightseeing
and Advice Management

Ticketing,
Itinerary
Reservation &
Preparation
Cancellation
6.7.1 Business Linkages

A travel agency is a service firm that provides complete travel solutions to travelers/tourists.
A travel agency fulfills the needs of the travelers/tourists. As a result, a travel agent must
collaborate with its extensive network in the travel industry. Airlines linkages provide tourists
with a variety of alternatives for domestic and international travel. Issues pertaining to the
seat booking & selection, leg space, and food preference, the cancellation policy, the date of
travel & departure,checked in luggage, hand baggage, and stopovers are solved silently for
protecting the interest of airline and customers when a travel agency intervenes.

On-board services and airline connectivity are crucial components that a travel agency
handles for the tourist/traveller. Networking with lodging companies such as hotels, motels,
bed and breakfasts, homestays, and resorts, among others is done professionally by travel
agents.
For hiring professional workforce, travel agents need qualified personnel through on-campus
places in the premises of educational institutions.Management Development Programmers
(MDP) are also conducted in association with academic institutions. Many senior managers
of travel agencies serve as the members of Board of Studies and Advisory Boards of
education institutions.

6.7.2 Information and Advice

Since the travelers/tourists are unfamiliar with the place, accessibility, climate, people and
culture,travel agency offers timely professional advice and information. While dealing with
tourists, travel agents must be well-versed in the technical and functional aspects of their
services. The information should be accurate, up-to-date/current, and relevant, with
assurance, so that the tourist can make a decision about his or her trip. Tourists may have a
variety of questions and concerns about their destination, travel mode, hotel, accommodation,
immigration, visa, passport, currency, customs & security, sightseeing, tourist guide,
shopping, activities, and so on. A travel agent must collect all such information from
principal agents or government travel advisories as this is extremely important when the
destination re-opens following the second wave of the Covid-19 epidemic. To minimize
further ambiguity, the information process should be kept as simple as possible, and it is
always recommended that the information be supplied in written or in printed form.

At the time of the tour, the travel agent is responsible for taking care of the tourists by
providing information and guidelines on what to do and what not to do at a tourist spot. This
is especially important when the location is socially and culturally sensitive. In Asia in
general, and India in particular, such information about the social, religious, and political
system is necessary. As a result, the travel agent must constantly work upon up-to-date
information.

6.7.3 ITINERARY PREPARATION

Itinerary is a vital component of the tourism business and travel agents must provide an
itinerary that satisfies the demands of the customers. An itinerary is comprised of many
elements such as the destination, transportation, hotels, day of travel, place of stay, places to
see, and so on. A travel agent accepts itineraries to fulfill the requirements of customerand to
adjust the itineraries basedon the components for a special interest. This combination of
diverse ingredients is created following a thorough market research. Itinerary can be prepared
for cultural tour, heritage tour, Eco tourism, rural tour, wild life tour, etc.
The most popular domestic and inbound itineraries in North India include Delhi-Agra-Jaipur,
Delhi-Agra-Orchha-Khajuraho-Varanasi, Jaipur-Udaipur-Jodhpur, Delhi-Sarnath-Bodhgaya-
Nalanda-Delhi, Agra-Mathura-Vrindavan, and so on. The most popular outbound tour
itinerariesinclude Singapore-Kulalampur, Hong Kong-Macau, Bangkok-Hong Kong, and
Bangkok-Pattaya-Phuket.

6.7.4 TICKETING AND RESERVATION

Despite the availability of Internet booking, airline ticketing and reservation have remained
an important function of a travel agency, with more than 65 percent of foreign travelers
reserving their tickets through travel agencies. In recent years, several airlines have ceased
the practice of commissions, but value-added services have imposed additional
responsibilities on travel agencies. In reality, routing and stopovers with connecting flights
need the intervention of travel agents. The Computerized Reservation System (CRS) has
accelerated the process, but it cannot replace the role of a travel agency.

Amidst intense competition, low-cost airlines in India have further revolutionized the air
travel industry. Travel agents offer the greatest services to their clients by supporting them
with seat selection, space availability, and on-board meals. There are schemes that allow you
to fly today and pay for your flight tickets and hotel stay later. Travel agents may help
tourists in making travel arrangements for charter flights and helicopter services.To avoid
last-minute problems, the travel agency must make all reservations for the customers,
including airline tickets, hotel rooms, local taxis, and entry tickets. Seat reservations for
cultural shows and adventure trip activities are offered. For the religious tourists, visiting
Kedarnath Amarnath, Vaishno Devi temple, the Helicopter service and its ticket reservation
are also one of the prime functions of a travel agent.
6.7.5 SIGHTSEEING

Sightseeing is considered as visiting tourist attractions on a local, national, and international

level. This might begin with a visit to a special interest destination or a city tour in a special
automobile, taxi, coach, or hop-on-hop off bus service, or a tourist train, boat, or helicopter,
along with several other options. The travel agency clarify about sightseeing based on the
interests of the tourists and arrangement for a guideor a language guide, as well as a local tour
manager. The travel agency will prepare detailed information on the places and attractions
that will be visited.Other support services such as entry tickets, tea and coffee, and
opportunities for street shopping may also get arranged by the ground tour operators during
the sightseeing. The sightseeing can last a few hours, a half day, or a full day. The travel
agency clarify the route, timing, and cost aspects based on the tourist’s budget at the time of
selling package tours. Those routes and regions should be avoided as they are filthy and
notorious if travel agents receive feedback. Safety &securityissues at tourist destinations must
be clarified by the travel agents.

6.7.6 TOUR PACKAGE

It is a combination of all the components of tour that a tourist desires get included for the
customers to purchase by paying one price. The success of a travel agent is determined by
how efficiently and effectively tour packages ae sold in the local market. A travel agent
clearly understands the mode of travel, hotel, surface transportation, sightseeing, meals,
entertainment, and so on. Other factors that largely influence the price of a tour package
include market conditions and competition that the travel agent makes detailed assessment.

To maximize long-term profits, travel agents must promote and sell their tour packages.
When promoting tour packages, travel agents should avoid dishonesty and cheating. Travel
agents may offer ready-made tour packages or tailor-made vacation packages. It is projected
that following the Corona epidemic, individuals would prefer to purchase domestic travel
packages with hygiene and safety as top priorities.

6.7.7 Research and Development

A travel agent’s primary role is to investigate market trends and forecast tourist demand. In
the recent past, the travel industry has experienced challenges, particularly since 2019, as a
result of the Corona Pandemic, which has affected both domestic and international travel.
Travel agents get involved in the research and associated with the sale of vacation packages
based on market trends. After Covid-19 pandemic, travel agents should study consumer
behavior, as well as their changing demand.Since a new tourist is much aware of the market,
travel agencies must also operate smartly to segment the market through market research. A
travel agent can gather information from both primary and secondary sources. The market is
becoming more competitive and complex. A travel agent can retain and train its personnel
by enhancing their knowledge, skills, and attitude through training. Social media marketing,
app-based technology, and artificial intelligence are emerging areas in the tourist industry.

6.7.8 MICE Management

A travel agent is an expert in selling MICE packages such as upcoming meetings, incentives,
conferences and exhibitions tour. A travel agent is required to coordinate with
stakeholdersfor better coordination and logistics planning with accurate costing. In the
tourism industry, online meetings as well as its use in MICE operations are also on the
rise.Exhibitions are also enticing consumers to certain destinations within the country and
abroad, with clients preferring to use these tours for entertainment and sightseeing. Such
tourists would be satisfied with exhibition ticket purchases and a well-planned tour package.
A travel agent’s other significant job is to sell package tours for travel exhibition.

From the above descriptions, it is evident that the travel agency business is quite dynamic in
nature, and a travel agent performs a variety of functions in order to generate profit. To be a
successful travel professional, one must be creative and innovative in order to meet the
changing demands of the traveler or tourist. The use of modern technology and the provision
of value-added services would provide him breathing space in zero-commissioning
circumstances.

6.8 FUNCTIONS OF TOUR OPERATORS

A tour operator is a wholesaler of package tour business. It develops new package tours and
sells the package tours directly to the customers or through retail travel agents. It examines
the opinions, designs a package with components, and authorizes ground operators to
conduct tour at destinations. Important functions of a tour operator are presented in Fiigure-
6.2.

FIGURE-6.2: IMPORTANT FUNCTIONS OF TOUR OPERATORS

 Planning a Negotiation
Tour Idea Tour with Vendors

Tour
Itinerary Costing &
Brochure &
Preparation Pricing
Marketing

Handling of
A Tour
Diagram 2

6.8.1 Tour Idea

To create demand for different package tours, the tour operator must be creative and
innovative through continuous research after making critical analysis of customer feedbacks.
Frequently, it conducts primary research before giving a final shape to different package
tours.

6.8.2 Planning a Tour

A tour operator’s most important function is tour planning. To plan a tour, a tour operator
collects information from different sources and, depending on the inputs, plans a tour and
prepares a tour itinerary. This process includes the origin destination, stopping destination, or
points of a tour. A tour operator can also advise and assist a potential tourist on tours. While
planning, a tour operator should consider the current market conditions as well as the
competition in a specific segment. After the Covid-19 pandemic, there will be a high demand
for domestic, inbound and outbound tourism.
6.8.3 Negotiation with Vendors
A tour operator must be a competent negotiator since it must bargain with many vendors or
suppliers that provide various components of travel packages. It must negotiate with airlines,
cruise companies, railways, and tourist coaches for modes of transportation for contracting
bulk services. Because tour companies purchase seats in bulk, it receives attractive prices and
special offers. Similarly, hotels, transporters, shopkeepers, event management organizations,
or vendors such as Jeep Safaris, Camel Safaris, and local boats are crucial components where
tour operators must negotiate for the best pricing. Sometimes it communicates about it over
the phone, and goes to the destination to negotiate with suppliers. Cancellation, Insurance,
Refund, Seat Reservations, and Room Arrangements are some of the significant aspects that
require personal discussions and negotiations. Vendors are sometimes known as local tourism
handlers or ground operators or ground handling agents or destination service providers.

6.8.4 Itinerary Preparation

Itinerary is associated with tour packages. It includes a time plan as well as information about
the place to be visited. Itinerary contains dates, time duration, attractions, and places of
interest around destinations and on the way to destination. It also explains how a visitor may
access various components of tour packages. Tour operators help in creating the tourism
product, and that is the itinerary. Itinerary includes details of tour, which includes both
tangible and intangible products and services.There are three types of itineraries:
 The Skeletal type refers to the preliminary calendar of activities.
 The Technical type comprises particular specifics of transportation, arrival and
departure schedules, duration of stay and sightseeing, air travel time, stay details, and
so on.
 Descriptive type refers to a detailed description of the planned activities and locations
and it is intended for marketing purposes.

In addition, itinerary is conventionally classified into two categories such as ready-made and
tailor made. All types of package tour like common interest or special interest can be
customized for free independent travelers or small group tours whereas all ready-made
itineraries are prepared for group inclusive tours.

Separate itineraries for tourists, tour managers, hotels, tour guides, bus drivers, and so on can
also be produced to ensure the proper operation of the trip.

6.8.5 Costing & Pricing

The cost of a package tour includes the airline ticket, a hotel room, car rental, processing
expenses, entertainment fees, and other promotional costs. The confidential tariff helps the
tour operator in the preparation of the cost sheet, which allows the tour operator to finalize its
pricing strategy. The cost of a package trip, whether escorted, independent, or hosted, is
frequently less than the cost of the components purchased separately from the suppliers. Cost,
competition, and demand are the three most significant price-influencing elements.Some of
the major components of the cost fall under the category of direct cost, such as
accommodation, air fare, other transportation costs, agent commission, and so on. Indirect
costs include promotion, administrative, and other charges. Profit margin may be calculated
based on the total cost. Large tour operators with unique goods may have greater price
freedom and may set prices based on the cost of the services acquired plus a fixed price tag
adequate to pay overhead and a satisfactory level of profit margins.

6.8.6 Tour Brochure & Marketing

The role of a tour operator also includes the creation of a tour brochure. The tour brochure
provides detailed information to the customers. It is a useful document for selling a tour
package. Because tourism is an intangible product, customers want to know specific
information about the tour package before purchasing it. The colors, design, content and
layout are given importance for the quality of printing of tour brochures. Brochure is the face
of package tour that gives first impression of services elements and capacity of tour operators
to conduct the tour. Thisattracts potential customers and converts them into actual customers.

Printing and distribution are also essential marketing elements. A tour operator must take
additional efforts to ensure the quality of tour brochure. Due to intense competition and
expertise, design of leaflet, folder, or compact booklet must be given adequate care and
attention. A brochure includes information such as the tour operator’s name, a brief
introduction, mode of transportation with duration of days and nights, destination details,
itinerary, accommodation, tourist attractions, details of overseas representatives, booking
procedures and cancellation conditions (including mode of payment), insurance, currency
exchange, travel documents required, and all-inclusive price.

A tour operator must take a proper decision on tour package promotion and marketing.
Keeping in mind the segment and efficient penetration into the market with wide distribution,
a proper strategy of diverse marketing mix encompassing product, place, packaging, price,
and so on must be developed and implemented to make the bumper sale. Apart from the
direct discounts, marketing activities should include non-monetary and psychological
incentives to attract non-users and existing clients.General Sales Agent (GSA), retail travel
agents, and consolidators can do marketing of package tours and destination marketing
organizations can be hired foraggressive marketing. If necessary, familiarization trips to
encourage potential buyers through travel writings and travelogues can also be arranged. All
these marketing exercises can increase the sale of package tours and create a competitive
brand through positioning and loyalty programmes. Tour operators should use creativity and
innovation in their marketing programme.

6.8.7 Handling of a Tour

The tour operation business is expanding due to the tour operator’s ability to put appealing
features in the packages. After the sale of a package tour, the most important duty of a tour
operator starts with tour handling. It entails administrative work in passenger handling, such
as reservations, payments, deposits, coordination with ground operators, client meetings at
the airport for final departure, travel formalities, handling of documents such as tickets,
passports with visa stamps, tour escort, tour manager, and tour guide, and coordination with
daily reports and feedback from tourists. Client feedback is essential at every stage to ensure
that the tour is operated as per itinerary and contracts. Problems and complexities would
come from a lack of adequate communication and coordination.

Therefore, tour operators must be competent in implementing a professional approach for

handling operations, which will contribute to the success of a tour. As such, the tour operator
is based at the origin of destination, whereas problems may arise at other destinations during
the trip. Hence, the tour operator needs adequate manpower to handle the process of package
designing, operating and analyzing feedbacks of customers. Having prior experiences, it may
take a great care during arrival and departure points, immigration, customs, and sightseeing.
In fact, the majority of Indian tour operators require more professional methods of handling
tour operations. Handling emergencies, crises, disagreements, and time management are to be
given priority by the tour operator to function the package tour business efficiently and
profitably.

Check Your Progress C

1. What do you mean by the linking with primary service providers a travel agent?
2. List out the function a travel agent.
3. Briefly discuss the tour handling function of a tour operator.
 4. Visit a nearby tour operator and observe its functioning.

6.9 LET US SUM UP

From the above descriptions, it is clear that travel agency and tour operation business are the
basic pillars of tourism industry. In the changing scenario of Covid-19 pandemic, the
expectations of tourist or travelers have been drastically changed. The difference between
travel agency and tour operators indicates that travel agents can broadly considered as
retailers whereas tour operator may be considered as wholesalers. The different types of
travel agent and tour operator have also been explainedThe functional dynamics of travel
agents and tour operators have also been presented as per the changing business scenario.

6.10 FURTHER READINGS

1. Bhatia A K , Travel Agency Operation & Tour Operation, Sterling Publications New
Delhi.
2. Chand Mohinder, Travel Agency Management, Anmol Publications New Delhi.
3. Negi Jagmohan, Travel Agency & Tour Operation, Concepts & Principles, Kanishka
Publishers, New Delhi.
4. Student Handbook, Travel Agency & Tour Operation Business, CBSE, New Delhi

6.11 ANSWER TO CHECK YOUR PROGRESS

Check your progress A

1. See sub sec. 6.3
2. See sub sec. 6.3 last part
3. See sub sec. 6.3
4. See sub sec. 6.3.1
5. Observe the functional areas of travel agency.

Check your progress B

1. See sub sec. 6.5
2. See sub sec. 6.5.1
3. See sub sec. 6.5.2
4. Select any nearby travel market/tour operator /travel agency.
Check your progress C
1. See sub sec. 6.7.1
2. See figure 6.1
3. See sub sec. 6.8
4. Visit at least two days to observe the functioning.

6.12 QUESTIONS FOR PRACTICE

1. Discuss the historical background of travel and travel agency.

2. Explain the mechanism of travel agency operation.
3. "Covid-19 Pandemic has changed the travel trends" comment with special reference to
travel agency and tour operation business.
4. Explain the futureof tour operation business.
5. Describe functions of tour operators.