Introduction of Travel Agency and Tour Operation

The business of travel agency has undergone significant changes in the last two decades. Gone are the days
when there were no formal travel intermediaries to help travellers visit places of interest. Several travel
obstacles discouraged people to travel distance places. Only a selected few managed to travel due to their
own curiosity, motivation and spending ability. Many could not make it due to the lack of communication
network along with facilities and amenities. Leaving behind the job of a travel agent, a destination did not
even have minimum facilities to hold the visitors for an hour long. So many changes have taken place over
the centuries. Tourism destinations are connected by modes of transport and visitors find a place of stay at
the destinations.
When modern communication system came into existence in 18th and 19th centuries, the world could
witness mass travel leading to the demand of luxury transport and advance arrangement of stay and
sightseeing. Those advance bookings of train, ferry, bus, airlines, theatre hall, entry fees, etc were organized
by a person with sound experience and information. In the beginning of travel agency business, travel agents
could help their own community members or fellow members travel safely. Later, it became a formal
business with all professional practices. Gradually, the business has grown in such a scale that competitive
multinational travel companies have entered into this travel business. This lesson will explain the origin of
travel agency business in the world with reference to the contribution of Richard Cox and Thomas Cook for
having set up professional travel agency in the 18th and 19th centuries respectively.
Origin of Travel Agency Business
The nature of travel agency business is to provide holiday-related services such as ticket booking, transfer
arrangement, hotel room booking and arrangement of ground transportation, venue selection and booking
for MICE activities. The scope of business of travel agents was narrow and confined to selected services.
Moreover, the business was managed with small investment. It was risky business as it was depending upon
the natural and socio-political along with cultural factors.
The amount of profit was too little to attract new entrants to do this business. A number of restrictions were
imposed by the government on travel agents and tour operators for entry into tour operation business. Tour
operators had no choice, but to deal with other problems like confirmation of hotel rooms, safety in travel,
quality of foods, travel documents, volatile political system, language differences, cultural differences,
cumbersome and tedious travelling, long journey, etc. However, invention of railways and steamship as a
common mode of transport changed the perceptions of people on travelling distance places.
Thus, Thomas Cook could emerge as the first professional Travel Agent in the wake of introduction of
affordable railway services in the United Kingdom. However, prior to Thomas Cook, Cox & Kings
introduced travel business in UK. You will read about the contributions of these two big travel agents along
with a couple of other travel agents in Europe, USA and India in this lesson
Cox & Kings
Cox & Kings in the second half of eighteenth century became pioneer in providing travel logistics to British
Army stationed at various locations in the world. It claims to be
The oldest travel agency in the world. The origin started from the appointment for making arrangements of
auxiliary services to the First Foot Guards as Regimental Agent. Richard Cox worked under the mentor of
Colonel Lord Ligonier for providing necessary services to the Army Officers in the overseas. The Company
became the most reliable military agents for British Government. In the subsequent period, business got
expanded to banking, shipping and tour operation business.
Being a 250-year old company serving leisure and business travelers, it maintains business and operational
networks across the world. Over the years, the company has created a huge brand and credibility in the
outbound travel market. Its international offices and representatives are located in UK, USA, Japan,
Germany, Spain, South Africa, Russia, Italy, Sweden and Australia.
Cox & Kings was renamed as the Eastern Carrying Company Limited as per the Indian Companies Act, VII
of 1913. Fortunately, the company got back its generic name as Cox & Kings in 1950. It was registered as
Private Limited Company in 2001 and an enlisted company of National Stock Exchange of India. It is a
premium brand in offering all travel related services in the Indian subcontinent. About 5000 trained staff
members are working at 14 offices, 25 associated offices and 44 associate offices in India. In addition to its
headquarters in Mumbai, 12 branch offices are located in New Delhi, Chennai, Bangalore, Kolkata,
Ahmadabad, Kochi, Hyderabad, Pune, Goa, Nagpur and Jaipur.
The company offers competitive tour packages to suit all segments of Indian customers. Its areas of
operation include leisure and corporate holidays, insurance and frontier formalities. Its outbound package
tours are promoted in the brand name of Duniya Dekho. This particular package has become so attractive
due to packaging, pricing and marketing strategies. It is a group tour comprising destinations in Australia,
New Zealand, Europe, US, Canada, Far-East, Middle East, South Africa and Mauritius.
Cox & Kings is a professionally managed Public Limited Company working for FIT and GIT travel as one-
stop travel solutions point. Other services include charter flights, cruises, foreign exchange and MICE. The
Flexihols is an outbound holiday for FIT customized for independent travellers wishing to travel to Europe,
Far East, America, Australia, New Zealand, and Africa. At the same time, many trade fare packages are also
promoted for traders, exporters, importers and manufacturers to organize technical visits, factory visits, and
buyer-seller meets. For example, Cox & Kings organized package tours for 75 corporate houses in 2006.
It is a recognized active member of TAAI, IATA, PATA, ASTA, IATO, ICCA and ICPB Charter. The
Government of India, Ministry of Tourism conferred on Cox & Kings as the Best Conference Agent for
consecutive seven years. Radius is a business associate to maintain its operations across 4,640 branches
around the world. The company acquired Holiday Break PLC for GBP 323.43 million in 2011 and the CVCI
private equity investment has been made in Cox & Kings Ltd.’s UK Subsidiary 2012. Reserve Bank of India
(RBI) has granted the Company as Category II Foreign Exchange License. It works with authorized dealer’s
foreign exchange nominated banks.
Thomas Cook and Its Origin
Thomas Cook is known to have aroused interests to help people in England undertake travel within the
country or neighbouring country. The 9th June, 1841 is a red letter day in the history of travel trade in the
world. On this day, Thomas Cook walked from Harborough to Leicester to attend a temperance meeting and
he stumbled upon with an idea of arranging train tickets for the members of Temperance Society where he
was serving as an evangelist and Baptist book seller. He started his carrier as a Cabinet Maker. A 32-year
old cabinet-maker could become world’s founder professional travel agent. He achieved many milestones
during his lifetime and many were achieved by his son John Mason Cook.
Thomas Cook was much worried about the Victorian social problems due to the consumption of heavy
alcohol. He thought of bringing some changes with the travel that could be possible due to invention of
railway system. Thomas Cook was the first travel agent who introduced hotel coupons, circular notes, credit
cards and advance reservation as part of its travel innovations. Thomas Cook showed the path of travel
business to other contemporary travel agents with his organized package tour for leisure tourists. His
pleasure and continental travel are now being studied by many new-age entrepreneurs in travel trade.
First Excursion
The history of professional travel agency business started with a day-long excursion tour for his 570 friends
in the Temperance Society from Leicester to Loughborough in 1841. He took the services of the British
Railway. All his friends were charged one shilling for this excursion. That excursion tour was accompanied
with a band to play typical hams and a picnic lunch of hams along with the afternoon tea for refreshment.
Thus, the successful conduct of the first excursion tour by Thomas Cook led to introducing all-inclusive
package tour. Subsequently, a series of trips were conducted between Leicester, Nottingham, Derby and
Birmingham on behalf of Local Temperance
Societies and Sunday Schools to provide experience of train travel. Thomas Cook described the first
excursion as Enthusiastic Philanthropy as he did not have any intention of making money. He was printing
posters and hand bills to facilitate people to travel comfortably.
Establishment of Modern Travel Agency
The beginning of the establishment of modern travel agency in the world started with the railway journey
from Leicester, Nottingham and Derby to Liverpool. He made some profits from this trip. The first mass
tour across England with entertainment activities began in 1845 to provide value-for-money package.
Sir Joseph Paxton, architect of the Crystal Palace, persuaded Thomas Cook to devote himself to bringing
workers from Yorkshire and the Midlands to London for the Great Exhibition of 1851. The untapped
opportunity was grabbed by Thomas Cook with a lot of determination and enthusiasm.
Thomas Cook conducted tours for 150,000 people to visit the Great Exhibition in Hyde Park from Yorkshire
and the Midlands in 1851 followed by the first continental tour in 1855. He accompanied two landmark
tours to the International Exhibition from Harwich to Antwerp, Brussels, Cologne, Frankfurt, Heidelberg,
Strasbourg and to Paris.
Travel Innovations
Thomas Cook introduced Hotel Coupons in 1868 to help customers check in hotels without any hassle.
Hotels also honoured the hotel coupons issued by Thomas Cook. It reduced the cumbersome procedures of
payments through cash. Hotels accepted the coupons for providing rooms and other allied services such as
food, entertainment, transport etc. Hotels were benefited from the coupons as bulk numbers of rooms were
booked in advance and it was only transaction. Thomas Cook in turn received commission from hotels as
both maintained the accounts of their periodic transactions.
Thomas Cook introduced Circular Note in 1874 to help customers travel safely. Circular Notes were
accepted across the hotels, restaurants and transport operators at several tourism destinations and cities in the
Europe and the USA. The Cook’s Circular Note got circulated in New York and it was treated as an early
invention of traveller’s cheque in the world. More particularly, the circular notes were easily exchanged
against the local currency that provided much relief to the travellers in meeting the contingency expenditures
like shopping, tips, transfer, extra services, etc.
Package Tour for Middle Class
The massive industrialization in the mid-19th century made massive impact on the increase in income and
consumption. It created sizable middle-class people with much disposable income. Taking the advantage of
the trends, Thomas Cook took the benefits of rising middle-class customers when customized package tours
were designed to suit their travel needs. Those middle-class customers demanded for visiting destinations in
Switzerland and Italy. He negotiated with innkeepers and hoteliers to provide rooms and meals at good
prices.
Tour Across Intra-Continental
Thomas Cook continued to expand his business in Europe too. He conducted Grand Circular Tours to
Brussels, Cologne, the Rhine, Heidelberg, Baden-Baden, Strasbourg and Paris, with return trip to London
via Le Havre or Dieppe. He undertook the familiarization tours to Switzerland in June 1863 to visit the
places of interest, contact hotels and innkeepers. He accompanied sixty affluent class clients and conducted
the tour to Geneva. Thomas Cook organized trips in the Northern and Western Europe in 1863.
With the co-operation of the Paris, Lyons and Mediterranean Railways, Thomas Cook began to issue
Circular Train Tickets (in both English and French) between Paris and the Alps. He then conducted the first
circular tours to Switzerland, after having made an immediate success. He also arranged the package tour
across the Alps. The first Italian tours organized in the summer of 1864 during which Thomas Cook escorted
two large groups. One group was taken to Florence and parts of central Italy and the other one was
accompanied to Rome and Naples.
Intercontinental Tour
Thomas Cook conducted the tour to the USA in the North American continent. He introduced the ready-
made package tour to London, Paris, Rome and Geneva. In the subsequent time, the Atlantic Ocean was
crossed for conducting outbound tours to North America. It was Mr. John Mason Cook (son of Thomas
Cook) who conceived the operation and management of the first-ever American tour.
Thomas Cook undertook an exploratory trip to the North America in 1865 for the sake of gathering
information about the transport, accommodation, food, sightseeing, safety and security, etc. The Company
extended its operation to Egypt and Palestine in the year 1869 in order to cater the demand for visiting
Pyramids in Egypt and religious visit to Jerusalem. He managed to develop a system of tours that covered
4,000 miles of railways journey. The objective of aligning with the AMTRK helped in conducting safe and
affordable package tour in the USA.
Great Journey
That trip was practically possible to travel to Egypt via China in 1869 following the opening of the Suez
Canal and the completion of a rail network linking the East and West coasts of America. Finally, Thomas
Cook and his small party managed to travel across the Atlantic Ocean by steamship to discover a new route
of world. In 1869, he conducted his first party up the river Nile with the help of two steamers. He set out for
the Round-the World-Tour from Leicester in 1872 when he reached at the age of 63.
They travelled from New York to San Francisco by rail. They cruised to Japan followed by to China across
the Inland Sea. He visited Singapore, Ceylon and India. While leaving Mumbai (then Bombay), they crossed
the Indian Ocean and the Red Sea to Cairo. He travelled back to London from Cairo, Egypt.
Thomas Cook alone set off on an extended tour of Egypt and Palestine. Finally, he reached back home after
traveling through Turkey, Greece, Italy and France. It was a 222 - day World Tour. He was speechless after
seeing the Great Wall of China, the Taj Mahal and the Pyramid. The world tour was a great achievement for
expansion of business to different parts of the world. He gathered information about the people, culture,
political systems, economic systems, facilities, amenities, transport connectivity, etc.
Free Independent Travelers (FIT) started buying packages from Thomas Cook. There were more demands of
FITs to buy the Round-the-World Package Tour. Independent travellers visited those places explored by
Thomas Cook and his party. Some of them travelled to Asia via Australia and New Zealand rather than
China and Japan.
Second Generation Thomas Cook Business
Thomas Cook was very fortunate to have his son John Mason Cook as an able successor to manage
promotion, marketing and administration of company affairs. Mr. Cook could manage the Thomas Cook’s
business empire during the World Tour. His son took the control of Thomas Cook business after the head
office got shifted to Ludgate Circus.
Mr. Cook went for expansion of business to different countries and he took the decisions at a time when
telegraphy was in the beginning and telephone was not invented.
Mr. Cook set up overseas editions of “The Excursionist”. It was the newspaper launched by Thomas Cook in
1851 to educate customers about the places interest in France, Germany, India, Australasia, America and the
Far East in the package tour. The newspaper was renamed as “The Traveller’s Gazette” in May 1902. It
continued to be published until 1939.
John Mason Cook’s Remarkable Contribution
The British Government appointed John Mason Cook in 1884 to organize a relief expedition up the Nile to
rescue General Gordon from Khartoum. Arrangements were made for the movement of 18,000 troops,
nearly 40,000 tons of supplies, 40,000 tons of coal and 800 whale boats. Mr. Cook undertook The Gordon
Relief Expedition for the British Government as a part of social service to the nation. Mr. Cook and his
Egyptian managers supervised the entire operation. Despite all the efforts, Khartoum fell in January 1885
and Gordon was killed.
Merger and Acquisition
Thomas Cook and John Mason Cook died successively during the 1890s when the company got
consolidated its operations worldwide. Mr. Cook’s three sons Frank Henry, Ernest Edward and Thomas
Albert could manage the operation.
They introduced winter sports holidays, tours by motor car and commercial air travel. The company was
registered as Thomas Cook & Son Ltd in 1924. The office headquarters was shifted from Ludgate Circus to
the aristocratic residential area at Berkeley Street in Mayfair in 1926 Later, the headquarters of Thomas
Cook and Son Ltd was used as the Centre of London Society.
Thomas Cook & Son Ltd was sold to the Belgian Compagnie International edes Wagons Lits et des Grands
Express Européens in 1928. The Wagons Lits was a leading operator of most of Europe’s luxury sleeping
cars, including the Orient Express.
The Wagons-Lits headquarters in Paris was seized by British forces and Mr. Cook’s British assets were
requisitioned by the British Government immediately after the outbreak of World War II. A deal was struck
to sell the company to Britain’s Four Mainline Railway Companies.
Thomas Cook & Son Ltd struck a deal with Wagons-Lits to hold 25% stake in overseas business. The
Nationalized British Railways has taken over the company in 1948. In 1972, Thomas Cook & Son Ltd was
taken over by a consortium of Midland Bank, Trust House
Forte and the Automobile Association. A new standardized corporate logo was conceived and introduced.
Fortunately, Thomas Cook managed to overcome that period and survived the recession in 1970. As a result
of which, Thomas Cook enhanced its reputation for providing excellent service by launching a Money Back
Guarantee scheme in 1974.
Thomas Cook began to concentrate on its long-haul tours program by acquiring Rankin Kuhn Travel in
1982. It closed the operation of short-haul travel market in 1988. The company made a comeback to the core
short hauls package tour market in 1996 after it acquired Sun world.
Thomas Cook family members celebrated 150 years of its long journey in 1991. The company was acquired
by Westdeutsche Landes bank (West LB). It is the Germany’s third largest bank and the LTU Group became
the Germany’s leading charter airline in 1992. Thomas Cook Ltd. became a wholly-owned subsidiary of
West LB in 1995.
Thomas Cook & Son Ltd. got benefited from the Post-World War holiday boom, which witnessed one
million British nationals travelling abroad by 1950. The Company set up a Business Travel Service (BTA)
and renovated the holiday camp at Prestatyn (which had opened shortly before the outbreak of war).
Although Cook’s remained the largest and most successful company in the industry, but its dominance in the
ravel market was subsequently being contested by the emergence of new travel firms.
The First German Travel Agencies
The first German Travel agencies in the line of modern travel agencies were known as Immigration
Agencies. These agencies were engaged in booking ship’s passages and sometimes group journeys from a
collection point to the point of embarkation. The oldest of such agencies was Reiseburo Rominger in
Stuttgart in 1842. This agency subsequently extended its activities to the whole range of travel services in
Europe. To make traveling simple for the individual, the concept of tickets for means of transport were
introduced and issued by these larger agencies in Europe.
The First Indian Owned Travel Company
Pallonji Katgara & Jamshedji Dastoor created the Jeena and Company (a shipping and export company)
with a seed capital of US$ 75 in 1900. The Jeena Tours and Travels was established in 1920 with the
privilege of being the first Indian - owned travel company. In 1961 the Company was merged into Travel
Corporation (India) Pvt Ltd to become India’s largest travel company under the leadership of the Katgaras.
Later in 1951 Travel Agents Association of India (TAAI) was established to represent the issues of travel
agency business to the government and protect the interest of its members. Prior to TAAI, travel business in
India was in the hands of Jeena &Company, Lee and Muirhead India Pvt. Ltd. and N. Jamnadas and Co. Ltd.
The Jeena and Company had entered into outbound tours as well. Along with the Indian travel companies,
Thomas Cook and Sons and Cox & Kings and American Express came to India for inbound and outbound
tour operation.

Travel Agency
Travel agency is an organised service provider in the travel industry. It means a travel agent is responsible
for organising travel. It provides a link to the suppliers of services with the tourists. It acts as a retail store
for both suppliers and clients. It plays the role of an active connector for delivery of end service. Thus a
travel agent can be considered to be a useful intermediary (retailer) as he has accumulated knowledge
expertise and contacts with providers (wholesaler) of services
Types of Travel Agencies
There are two types of travel agencies viz., retail travel agency and wholesale travel agency.
Retail Travel Agency
A retail travel agency acts like any other retailer selling tourist products directly to the tourists on behalf of
the supplier and gets commission for selling. Commission is the main source of its revenues. A two way
selling method is also practised which is on commission and mark-up price. A marked-up price refers to
marking-up of the cost of the tour and selling it on a higher price. The difference between retail price and the
wholesale cost is known as mark-up price.
A retail travel agency is defined as ‘a business that performs the following functions: quotes fares, rates,
makes reservations, arranges travel tickets and accommodation, arranges travel insurance, foreign currency,
documents and accepts payments.
The role of retail agencies has become even more crucial as most principal service suppliers get their
products promoted, pushed and sold through retailers in order to have a better market reach.
Wholesale Travel Agency
A wholesale travel agency, unlike retail agency, assembles various components of services to form
packages. Later, it depends on retailers to market and sell its products to the tourists. It may also directly sell
to the customers through its own retail outlets. It buys service components in bulk from different suppliers,
designs, packages and sells or resells these components. Wholesale travel agency specialises in designing
and selling package tours.
It generates revenues through volume discounts from principal services providers such as hotels, airlines,
railways, car rentals, ground handlers etc.
A wholesaler doesn’t earn on commissions but through discounts on bulk reservations from primary or
principal suppliers. There is always an element of market risk as it blocks seats in airlines, or rooms in hotels
in bulk and might make partial advance payments.
Other than the regular services, it also renders services like consultancy, travel documents processing,
currency exchanges etc. for its clients.
Other types of travel agencies
Commercial Agency
It is a category of unconventional travel agency that deals with business travel. It books convention centres
and stalls in exhibition centre. It also arranges venue for conducting small and large meetings.
Implant Agency
It is a type of travel agent that is located in the premises of corporate offices to make travel arrangements of
employees. It is a registered travel agent appointed as per the agreements.
Group / Incentive agency
It is an emerging form of travel agency business that a specialized category of agent acts as intermediary to
deal with bulk bookings for employees and clients of corporate houses.
Online Travel Agency
It resembles an offline travel agency in all its services. It operates on the internet through a website
connected to a global distribution system. The OTAs apply the operational mechanisms of e-commerce and
transact online with their customers. The OTAs offer information, bookings of hotels, cars, reservation of
seats in airlines, railways, ships and
buses. They sell package tours; customize tours and take enquiries. Transaction of payment is also done
online using online payment modes such as credit/debit cards, internet banking, pay-pal etc. Some of the
major OTAs in India are cleartrip, goibibo, travelocity, traelguru, [Link]. [Link] etc.

Roles and Services of Travel Agency

Important roles and responsibilities of a large travel agent
 It works as a retailer and sells package tours on behalf of wholesaler. The sale of package tours
involves the rate of commission fixed on the agreement.
 It ensures horizontal integration for the purpose of achieving bumper sale.
 It is an intermediary between tour operators and tourists in terms of selling package tours in case of
outbound tours and conducting sightseeing tours in case of inbound tours.
 It follows tour itinerary and it does not have anything to do with itinerary.
 Travel agents also provide destinations transfer services to the clients as per the tour itinerary.
 It acts as a local agent to confirm and reconfirm the services reserved by the tour wholesalers.
 It sorts out problems as per the directions of tour wholesalers.
 It prefers to become the member of national bodies like TAAI and IATO.
 It negotiates the terms and conditions for commission with principal suppliers.
 It recruits trained manpower from time to time.
 It procures advanced technology for operation of business.
  It subscribes publications like TIM for travel documentations.
 It distributes the work in the office for optimization.
 It arranges the vehicle in a systematic manner.
 It collects feedback from suppliers and consumers
 It shares information and knowledge
Nature of Primary Activities of Different Tour Operators
 Inbound – Describing places of important of the country
 Outbound – Highlighting holidays about other countries
 Domestic – Specializing on domestic holidays within country
 Specialist – Special interest travel to destinations
 Independent- Specialized in specific holiday
 Integrated – Business Conglomerate
 Mass-market- Targeting more sale

Services are provided by the tour operates in the package tours

 Airport and hotel transfer
 Arrangements for traditional reception at the arrival points
 Arrangements of luggage transfer in the airport and railway stations
 Arrangements of guided sightseeing tours
 Options and selection for worldwide destination
 Comprehensive itinerary planning
 Appropriate hotel selection & reservation
 Meeting, conference and meeting arrangements
 Exhibition and factory visits
 Theme parties, events & sightseeing
 Air tickets & travel documents like passport, VISA, health certificate and currency, insurance and
permits for entry into the restricted areas
 Foreign Exchange & Travel Insurance
 Experienced and professional tour guides, escorts, interpreter and tour managers
 Personalized services at destination
 Coordination with local tourist organizations at destination
 Domestic and international air travel
 Rail bookings in India, Europe, America & Japan
 Hotel reservation
 Car rental
 Travel documentation
 Airport facilitation
 Foreign exchange
 Overseas travel insurance
 Conference and seminar management
 Trade Fair/Exhibition visits
 Implant Operations- in-house travel consultant equipped with CRS system and satellite ticket printer
 Business/trade delegations
 Incentive travel in India and Worldwide
[Link]
Types of Tour Operators
Tour operators can be classified on the basis of nature of tour, business and their area of operation of
package tours. This helps in understanding the difference of meaning and function of each category. Thus,
the classification includes inbound, outbound, domestic and ground operator.
Inbound Tour Operators: Inbound tour operators are those operators who handle inbound foreign tourists
in the host country, provide them various services on their arrival and departure such as transfer,
accommodation, transportation, sightseeing, entertainment, currency, insurance services etc. They are also
called as incoming tour operators as they specifically operate for handling incoming foreign tourists or
guests.
For example, a group from France comes to India and it is handled by XYZ Travels in India for all their
travel requirements mentioned in tour package. Here XYZ Travels is an inbound tour operator.
Inbound tour operators design and make tour packages individually or in collaboration with foreign tour
operators. The packages may be marketed directly or through intermediaries. In fact, inbound tour operators
are the ‘image
builders’ of a country as they convert all touristic resources of a nation into a saleable commodity.
They also contribute valuable foreign exchange earnings to the economy of host country. Recognising the
vital role played by inbound tour operators in the healthy growth and promotion of tourism, governments are
encouraging them
by giving financial and tax concessions.
Outbound Tour Operators: They operate package tours to foreign countries/ overseas from a host country.
These operators are specialised in promoting and designing multi-national tours. The outbound tour operator
sells a package tour to an individual or a group of people of his own country to another country or a number
of countries for a specific pre-decided period and destinations.
The outbound tour operator arranges travel documents, transportation to a central point where the tour starts
and contracts with inbound tour operators/ ground operators to provide accommodation, transportation, local
sightseeing
and other services as needed throughout the tour.
Generally, these operators work in liaison with the inbound tour operators/ ground operators and offer
services involving meeting inbound tour group at the airport, transferring the tour group from the airport to
the arranged place
of accommodation in town hotel, arranging/organising local sightseeing that may be a single day or multi
days tour of the home state, region or area. These may be in the form of business or leisure oriented tours.
For example, a group of tourists want to visit Singapore. They buy a tour package from XYZ India. This
tour operator does all the travel document processing for the group and sends the group to Singapore and
takes care of all the needs till the tour is completed. Here, XYZ India is an outbound tour operator
Domestic Tour Operator: Domestic tourism in India is scaling up enormously. Domestic market has
witnessed attractive growth rates as large players in the travel industry are aggressively entering and
promoting this market. Leading tour operators usually focus on the international market where margins are
higher but now, in addition, they are floating new packages to create a niche in this segment to tap the vast
potential in the domestic market.
Generally, domestic tour operators operate within the boundary of home country and cater to the diverse
needs of individuals and group travelers. They promote tour packages both through their own outlets and
other retail travel agents. In fact, they are contributing to the cause of national integration and balanced
regional economic growth.
For example, a group of tourists from Chennai wants to visit Amarnath as part of pilgrimage. They buy a
pilgrimage package tour from Southern Travels. This operator organises the complete tour for these Chennai
tourists. Here in this
case Southern Travels is a domestic tour operator who operates within the boundaries of the country for the
visitors of the same country.
Ground Handlers/Operators: Ground operator is also referred to as, ‘reception operator’, ‘destination
management companies’, ‘reception operator or ‘handling agencies’. These operators are generally expected
to provide ‘land arrangements’ at a particular destination. Thus, a ground operator who provides the services
required by large tour companies where they do not have a local branch/office or are not dealing at the
source with the principal suppliers such as hoteliers, transport operators, car rentals, entertainment
organisations and so forth.
The reception operator secures, coordinates, supervises and handles accounts/ payments of all services
related to the tour in his region/area. His services are invaluable for an efficient and successful operation of
inclusive group as well
as foreign independent tours.

Roles and Characteristics Tour Operator

Roles of tour operators are given below.

 It is a wholesaler as it assembles packages as per the trend of market and capacity of distribution
channel.
 It deals with customers directly as a principal agent or foreign travel agent without off-loading tours
to ground handling agents.
 Tour operator has liberty to amend the tour itinerary and program if it warrants.
 It invests much of time and resources to chart out delightful and value added tour itinerary for
meeting the demand and expectation of tourists.
 It gives much stress on selling the tour than the conducting the tour.
 Tour operators are mostly located in the mega cities or in the cities with the international airlines
services for the strategic advantage of controlling the package tours.
 It mostly provides international transfer from hotel to airport and vice-versa, if offices of tour
operators are located.
 It deals with both the tourists and primary service providers as direct intermediary.
 Tour operators design the tours in such a way that handling agents may not get extra excursion tours
directly from tourists.
 It accepts foreign currency for the tour package and gets accreditation from the Reserve Bank of
India money exchange dealer.
 It gives ample importance to become the professional member of national and international tourism,
travel, and hospitality and aviation associations.
 It is committed to work as a responsible partner in the tourism industry to popularize destinations and
explore new potential destinations through their package tours.
[Link]

Difference between Tour Operator, Retail and Wholesale Travel Agency

Tour Operator
 Is a wholesaler
 Is a principal agent or foreign travel agent
 Creates its own new products, designs new tour packages as it has its own resources
 Amends the tour itinerary and programme
 Prepares delightful and value added tour itinerary
 Is located in mega cities
 Arranges International transfer from hotel to airport and vice-versa
 Plans adequate excursion tours
 Has foreign currency exchange facilities
 Generate new ideas and attractions in the package
 Is more inclined to perform ground handling services
 Offers variety of travel programmes/services
 His size of business, operational area and multi-service capacity is high

Retail Travel Agency

 Works as a retailer and sells package tours on behalf of the wholesaler
 Is an intermediary between tour operators and tourists
 Follows tour itinerary
 Plans sightseeing tours and excursion tours, airport transfer, check in and check-out time in the hotel
 Acts as a local agent to confirm and reconfirm the services
 Works on commission from principal suppliers

Wholesale Travel Agency

 Does not sell package tours directly to clients
 Makes bulk purchase of services and assembles them to sell as package tours
 Is less inclined to perform ground services
 May deal with one specialised component of a travel product
 Size of business, operational area is limited and multi-service capacity is low

It is a difficult task in the present industry scenario to identify an individual operator with a single category
of operations. They act as retail agents, wholesalers, tour operators, specialty channelers and also as general
sales agents. Thus the scope of modern travel agency activities is difficult to limit and confine to one unit of
classification. This is very well visible in the operations of most travel companies in the country today. Yet
differentiation helps in understanding the fundamental characteristics of the categorisation.
Linkages for Effective Distribution of Services
Tour operator is a partner of a dynamic travel distribution channel through which buying and selling of
package tours is possible in a long-term basis. The vertical integration establishes continuous relationship
with many direct and indirect providers of services to tourists. Tour operators bring the principal suppliers to
a common network. These principal suppliers are transport operators, airlines and charter flights, cruise line
companies, railways and car rental companies, hotels and event mangers. They are selected on the basis of
location, existence, service quality, physical facility, credit facility, etc. Tour operators make the final
contacts with these service providers on the conditions that tourists are served at the destinations. It is
essential to have up-linking networks for arranging services and get the services delivered directly through
the primary service providers.
The relationship of tour operators with the producers of tourism products and services like transport
companies, accommodation providers and destinations agencies. These are the following services that tour
operates seek to strike integration with the principal service providers for deigning the conventional
package tours.
Airlines
Airline is a major segment in the tour operation business network. Tour operators maintain alliance with
domestic and internal airlines for the bulk reservation of seats for a particular season. The role of airlines in
the channel of distribution in tour operation business is significant. Air travel is an important component and
airlines prefer the sale of air tickets in bulk through tour operators. The sale of air tickets is done as per the
conditions. Airline companies offer special commissions to tour operators for sale of tickets. It is a
distribution network connecting airlines and tour operators for the sales promotion of airline tickets.
Tour operators work on a standard commission that is common for all tour operators.
Car Rental Companies
Tour operators procure ground transportation for the purpose of airport transfer and drop from recognized
car rental companies. Car rental companies provide luxury car services on the terms and conditions with tour
operators. They sometime work on the annual contact and fixed rate or sometime work on the fixed
commission.
Railways
Tour operators take the help of railway companies for booking seats and other amenities at the railway
stations. Journey in train gives different pleasure and experience than other modes of communication. Thus,
tour operators sign contract with railways companies for the reservation of special coach or issue of special
tourist pass. For example, Indrail, Euorail and Brital Pass are issued by respective railway operators for
tourists.
Railway companies give discount to tour operators for booking these passes in advance. In the travel trade
distribution network, railway companies contribute much for the growth of tour operation business. Many
tourist destinations not connected by air are highly preferred for train travel. For example, palace-on-wheels
and Royal Orient are uniquely designed trains for high-end tourists wishing to enjoy the holiday in train.
Tour operators promote the palace-on-wheels for which commission is obtained from Rajasthan Tourism.
Cruise Companies
The size of market of cruise travel is growing due to the preference of new-age tourists for experience.
Cruise package is now very affordable. Cruise companies have designed packages suiting the needs of
lower, middle and upper segment of customers. For example, India is a target market for cruise travel.
Leading Cruise Company like Star Cruise has authorized tour operators to sell cruise packages. Tour
operators block and book the seats in large numbers. They work on the commission and sometime special
discount also along with complementary cruise travel. In the travel trade distribution network, cruise
operators take direct help of tour operators and travel agents for bulk sales of cruise packages. Cruise
companies appoint tour wholesalers for the sale of cruise packages and provide commissions and other
incentives. The General Sales Agent (GSA) appoints retail travel agents to sell cruise packages in small
cities.
Car Rental Companies
Car rental operator is a primary service provider. Car rental service is an important part of travel trade
linkages. It is a type of ground operator that provides light transport service to tour operator for airport or
railway station transfer, sightseeing and excursion. Car rental companies own different luxury cars which are
customized for sightseeing and excursion tours. Maintenance and safety measures along with trained driver
can become a good car rental company.
Car rental companies provide luxury car services as per the terms and conditions with tour operators.
Conventionally, annual contract is signed with tour operator on the basis of fixed rate and commission too.
However, method of paying principal and commission differ from one operator to another. For example,
Easy cab is a reputed Car Rental operator with having more than 1000 different luxury cars and it provides
car rental services at various localities in big cities in India.
Luxury Coach Operators
A coach operator is a primary service provider in tour operation business distribution network. Tour
wholesalers appoint coach operators on the basis of competitive rates and quality of transport and services.
Coach operators send quotations for transfer, sightseeing and excursion trips to tour operators or wholesalers
during May and June every year. The luxury coaches are customized for sightseeing and excursion tour for
GIT. Each coach is equipped with gadgets for comfort and safety of visitors. Each tourist coach must have
elevated bucket seats, white window glass, micro phone, air condition system and refrigerator. The service
quality is measured in terms of punctuality, safety, flexibility, and adaptability. For example, KPN coach
service owns luxury coaches for foreign as well as domestic tourists plying across southern states of India.
Accommodation Operators
Accommodation operators maintain conventional and non-conventional type of accommodation. Tourists
may have choices of selecting accommodation depending on budget, facilities, locations and comfort. It
adds value in package tour. Room, restaurant and cocktail services along with duty-free shopping, doctors
on call, beauty parlour, fitness centre, etc make a guest feel at home. Cultural events in some occasions give
opportunity to guests to participate in the premises of hotel.
Christmas and New Years are two mega events that hotels organize a number of cultural activities.
Expenditure on hotel rooms and food & beverage services of a guest is estimated to one-third of total budget
of package tour. Hotels provide different types of rooms and provide complementary rooms for group
leaders and company executives during the tour. Tour operators align with hotels for the sale of rooms and
other services for which hotels remit the commission as per the contracts. Tour wholesalers work with
accommodation operators for the bulk sale of rooms. For example, the cost of hotel rooms and food services
is usually included in package costs.

Event Management Companies

Tour operator may be an event management company to deal with MICE activities. There are specialized
event management operators like Creative Tours and Travel in New Delhi. Booking venues, food,
conference kits and post & pre-conference sightseeing programmes are the functions of Event Management
Company. Tour operators negotiate with the event management companies on the flat rate basis. Even
management companies maintain the inventory of essential items for conduct of mega events for which tour
operators establish integration with them. In most of cases, event management companies send the
quotations and tour operator assign the contract to the lowest bidder. In this context, Event Management
Company is integrated in the dynamic process of travel trade distribution network.

Authorized Foreign Exchange Dealer

Tour operators also deal with foreign currencies as they receive for the sale of inbound package tours.
Payment is also made through foreign currency for booking of hotel rooms, transports, guide services and
other services in case of outbound package tour.
Authorized foreign exchange agents or authorized money exchangers deal with foreign currency is an
important part of travel trade linkage and integration. Endorsement of foreign currency, more importantly
Dollar or Euro or Great Britain Pound in passport of clients is mandatory in foreign travel.
For example, any Indian traveling overseas on leisure purpose is eligible to transact $10,000 or its equivalent
under the basic travel quota scheme. Moreover, as much as $2000 or its equivalent can be exchanged in the
form of currency notes and $8000 may be carried in the form of traveller’s cheques or foreign currency pre-
paid cards.
At the same time, outbound tour operators prefer to maintain good stock of foreign currencies for booking
and payment of hotel rooms, transportation, guide services and other services at the overseas destinations.
Foreign currency dealers in India are authorized by RBI for buying and selling foreign currency.

Insurance Company
Travel insurance is an important area of business for tour operators. Most of the package tours are insured
and insurance companies working with tour operator. Tour packages are insured for compensation to the
tour operators or guests in the event of cancellation.
Customers also prefer for insuring health and luggage insurance. Tour operators get commission from the
insurance companies. For example, TATA AIG, Bajaj Allianz, and Reliance have customized travel
insurance for customers traveling abroad on an organized tour.

Destination Management Operators or Ground Handling Operators

Ground handling operators work for tour operators to provide ground logistics services. It includes the
luxury car or bus services, guide and language interpreter services, entrance fees, reception upon arrivals,
etc. Ground operators are located at the major tourist destinations and they work as per the directions of tour
wholesalers or tour vouchers. However, adventure tour operators or special interest tour operators arrange
most of the ground services. Tour operators collect transport tariff and information about the destinations
from the ground operators during the off season.

Government Agencies
Tour operators arrange the valid travel documents for clients/customers for outbound or inbound travel.
Thus, tour operators take the help of Regional Passport Offices for issuance of passport, Foreign Consulate
Offices for Visa and the Ministry of Home Affairs for permission to conduct tours in the North-Eastern
region and the Andaman and Nicobar Islands. Tour operators participate in familiarization tours with the
State Tourism Board or corporation for road shows, press conferences and exchange activities. Thus, these
departments are integrated directly with the travel trade network system.
The specialized tour operators seek permission from Forest Department for conducting ecotourism or
wildlife tourism in the national parks and wildlife sanctuaries. Tour operators get permission to operate tours
with the vehicles and eco-guides for safari tours. The Archaeological Survey of India (ASI) is also aligned
with tour operation business when tour operators conduct special visit or documentary of any national
protected monuments or heritage sites.

National and International Travel Organizations

Tour operators are the members of national and international professional associations like PATA, Travel
Agent Association of India (TAAI), and IATO. It helps them gain visibility and acceptability in the market.

Local Representative Bodies

Community-based tourism or community-driven tourism is gaining more acceptability and tour operator
ropes in with local bodies for their support and cooperation in conducting tours in their localities. For
example, tour operators take the help of local community members during the tour to villages for witnessing
fairs and festivals or any special religious or community events.

Strategic Alliances
Tour operators maintain regular contacts with the principal suppliers for procuring various services through
its strategic alliances. Alliance is struck between the companies producing homogenous products. For
example, domestic airlines are making all possible efforts to increase the sale of tickets by offering attractive
incentives with additional discounts. Tour operators negotiate with the airlines to get cheapest fare for their
customers.
They collect information about promotional fares and schemes of the airlines. At the same time, airlines
organize promotional tours to familiarize tour operators. Hotels, resorts companies and transport operators
participate in tourism exhibitions. Alliance enhances efficiency and penetrates professionalism in tourism
operation business. These are the following benefits of strategic alliance in travel agency and tour
operation business.
 Better image building of tour companies
 Improvement of quality of services
 Enhancement of efficient of services
 Easy confirmation of sale and identification of potential buyers
 Reduction in costs of production and distribution
 Change in perceptions buyers
 Larger market share through joint marketing efforts

For example, Cox & Kings is a partner of Radius. It is a consortium of leading travel agents. As a result,
Cox& Kings has created its presence through its own offices as well as Radius partners in more than 80
source countries. This is obvious that customers are benefited from the strategic partnership between Cox &
Kings and Radius. Distribution is the means of increasing efficiency of delivery systems. The linkage
between producer and consumer becomes practical possible in a short period of time through a strong
distribution system. In the tour operation and travel agency business, the distribution system is managed by
trained and skilled personnel. The primary objective of an efficient and effective distribution system is to
send clients/ guests happy and delighted.
For instance, providing pickup and drop facility to visit Taj Mahal at Agra is a part of distribution system.
Figure presents the strategic alliance of tour operators with primary service providers.
Functions of Travel Agency and Tour Operator
Places of Tourist Interest, Connectivity, Climate
1. Provision of Travel Information Culture, Customs, Currency, Health and Security
Checks Permits and Immigration
Package tours
Market Research &
2. Destinations and Attractions & Other Services
Development
Market Study, Customer Purchase Behaviour
3. Reservation of Tickets Airlines, Railways, Buses, Passenger Ships, Events
4. Reservation of Hotel Rooms Hotels, Resorts, Motels, Home-stay
Cars, Coaches, Caravans, Entertainment Entries,
5. Reservation of Ground Services
Guides, Interpreters
Linking with Small Retail Agents, Negotiating
6. Selling Cruise Package
Commission with Cruise Company
7. Preparation of Itinerary Collection of First-hand Information
8. Costing Package Tour Estimation of Fixed and Variable Costs
9. Designing of Package Tour Assembling All Elements of Services
Uploading Services to Ground Operator
Conducting FIT, GIT & FAM Issue of Exchange Order to Clients and Service Providers
10.
Tour Collection of Feedback and Release of Final Payments
Participation in FAM Tours
11. Promotion & Publicity Marketing, Sales Promotion and Publicity
12. Reservation and Cancellation Booking Rooms, Airlines, Train and Coach Seats
13. Management of Ground Services Uploading Responsibility to Ground Operator
Handling Enquiries, Counselling, Travel and Destination
14. Travel Documents
Information Passport, VISA
Cost Estimation
Preparation of Annual
15. Allocation of Budget to Different Departments
Budget
Management of Finance and Accounts
Corporate Social Responsibility Corporate Social Responsibility towards
16. stakeholders, clients, community and quality
ethics
Training and Development Manpower Planning, In-house and Outhouse
17.
Training
Maintaining Relationship With
18. Members of Trade Associations
Tourism Ministry
19. Travel Insurance Personal, Baggage, Travel Break-up, Accidents, Insolvency
Transaction of Buying and Selling
20. Currency Exchange
Renewal of Authorization, Maintenance of Stock of Currency
Meetings, Incentive Travel Conferences, Conventions,
21. Operation of MICE
Exhibitions, Seminars Symposiums
22. Disaster Preparedness Contacting Police and Disaster Rapid Action Force
23. Use of Information Technology Hiring IT services and Purchas of Latest IT Gadgets
How to Start a Travel Agency
Breaking into the travel business is a good way to start a service-based business from home. You can
base your business on referring travelers to travel companies, or you can make money by booking their
reservations yourself. You also have options when it comes to how you will conduct your travel
business.

1. Educate and Upskill Yourself

Look for training opportunities before you start your own travel business. For example, you may take a
community college travel agent course that introduces you to different types of bookings, reservation
software and the legalities of running a travel business. Consider joining the American Society of Travel
Agents for webinars and other educational material specifically for your new industry.
2. Choose the Business Model
Decide whether you will start your business as a referral agent, sign on with a host agency, or start an
independent travel business from scratch. As a referral agent, you will refer clients to travel companies
and receive a referral fee for each person who makes a reservation. If you sign on with a host agency,
you will use the host agency's contacts to book reservations with a range of companies and receive travel
agent commissions for bookings. If you decide to start an independent travel agency, you will likely
have to make your own contacts and negotiate commissions for your bookings.
3. Evaluate the Benefits of Niching
Evaluate whether you want to sell all kinds of travel or start a niche travel agency. Sometimes focusing
on a specific area of travel, such as adventure travel or honeymoons, makes it easier to target a specific
type of customer and slims your competition.

4. Negotiate Fees and Commissions

Contact travel companies if you will start a referral business or an independent travel agency from home.
Negotiate referral fees if you will be a referral agent. If you will start an independent travel agency,
negotiate contracts that includes commission amounts for each booking you make.
Contact the Airlines Reporting Corporation to apply for wholesale rates and commissions on airline and
Amtrak bookings. For commissions on international flights contact the International Airlines Travel
Agent Network (see Resources).
5. Sign With a Host
Sign on with a host agency if you prefer to conduct your business under the umbrella of an established
agency. You will book reservations using the host agency's system and contacts. In most cases, your
business will split commissions travel companies provide with the host agency. You may be charged a
start-up fee and monthly fees to work with some host agencies.
6. Invest in a Reservation System
Consider paying for a computer reservation system if you will start an independent travel agency without
the help of a host agency. This may enable you to book a wider variety of reservations directly with
travel suppliers. Many travel companies will not require you to use a CRS to make reservations,
however.
7. Create a Business Plan
Create a business plan. It should include your start-up costs and how you will fund your business. Your
business plan should also include details about finding customers. In addition, your business plan may
better help you to stay on track if you include details about how you will keep your business running
until you start to earn a significant profit.
8. Get a Business License
Get a business license. Most states require this of all businesses, regardless of whether they are home-
based. Contact your local department of licensing and inspections or a similar agency to learn whether
you will need travel-specific licenses or permits to run your business.
9. Join Travel Associations
Secure membership with travel associations, including the National Association of Commissioned
Travel Agents. Travel association memberships may boost your image as a travel professional, and open
doors to commission and training opportunities.
10. Purchase Liability Insurance
Get error and omissions insurance for your home-based travel business. This will cover you in the event
that you make an error and your travel client sues you for it. You may have to reimburse clients for some
of your mistakes out of your own pocket, however, as error and omissions policies often have a
deductible. For example, your policy may require you to pay the first $1,000 of any claim out of pocket.
11. Set Up an Office
Set up a home-based office or area in which you can make reservations and handle other business tasks.
You will need a computer, printer, telephone and fax machine.
12. Spread the Word
Create a website for your travel business. You can use this website to let potential clients know about
your travel services and even book their own travel online. Spread the word about your travel business.
Advertise with fliers, print ads and online ads. Use radio and cable advertising opportunities to advertise
as well.

[Link]
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IATA Accreditation and Recognition from Government

International Air Transport Association is an apex organization to give approval to the travel agents to sell
the tickets of international airlines. As per the agreements of airlines, travel agents are authorized to issue
the tickets to passengers and collect the fare for the same. This has become a feasible way of increasing the
sale of tickets and help airlines fill the seats of aircrafts. The commission for the sale of tickets is settled
quarterly and the fortnight payments for the sale of tickets are made through the Billing Settlement Plan
(BSP). It was a profitable and attractive business and it was the target of each travel agent to get IATA
accreditation.
Thus, the Department of Tourism gives approval to travel agents after verifications of documents and
premises along with track record of business. Recognition is also a certification issued by the government
and it helps the agents in getting the travel documents issued. This lesson will present the need, procedures
and benefits of IATA accreditation and government recognitions.

IATA Accreditation
In the ear of Zero commission and easy accessibility of passengers to book the tickets through online travel
portals, many traditional IATA accredited agents are not finding it as lucrative as it was 10 years ago. Given
the amount of investments and manpower to deal with this business, it is no longer an attractive business
venture. However, many travel agents wish to have IATA accreditation as it increases the credibility of
selling the tickets in the market. At the same time, any travel agent or tour operator as a business firm
dealing with customers is required to abide by the rules and regulations of Ministry of Tourism, Government
of India to operate the business.

Full Accreditation
Full accreditation authorizes travel agents to sell international and/or domestic tickets on behalf of IATA
member airlines. It also allows access to IATA’s Billing and Settlement Plan (BSP). It is an efficient
interface for invoicing and payment between the agent, airlines and transport providers. The Travel Industry
Designator (TIDS) is a unique code to allow the bookings of travel agents and other tourism sales
intermediaries to be recognized by all industry suppliers.
Accreditation of IATA Agents
IATA accreditation greatly simplifies the business relationship between travel agents and airlines. Some
60,000 IATA travel agents worldwide currently benefit from IATA accreditation, selling US$220 billion
worth of airline tickets on behalf of some 240 IATA airline members.
Travel Agent Accreditation Benefits:
 Access to IATA airline members with a single Sales Agency Agreement which authorizes the sale of
international and/or domestic tickets.
 Access to IATA’s Billing and Settlement Plan (BSP), an efficient interface for invoicing and
payment between the agent, airlines and transport providers.
 Unique identification throughout the global travel industry with the “IATA Numeric Code”.
 Use of the IATA Accredited Agent logo providing visibility and credibility on premises and website.
 Agent staff eligibility for the IATA/IATAN ID Card, giving access to the special deals of over 1000
suppliers.
 Standardized procedures to ensure fair dealings with the airlines.
The IATA travel agent accreditation process is ruled by the Passenger Agency
Resolutions. IATA accreditation is a seal of approval recognized worldwide. IATA has
committed to working with all travel agencies to improve customer service and choice.

Approval for Travel Agency from Ministry of Tourism, Government of India

Guidelines for Recognition / Renewal as an Approved Travel Agent

 The aims and objectives of the scheme for recognition of Travel Agent are to encourage quality standard
and service in this category so as to promote tourism in India. This is a voluntary scheme open to all
bonafide travel agencies to bring them in organized sector.
 Definition: A Travel Agent is one who makes arrangements of tickets for travel by air, rail, ship,
passport, visa, etc. It may also arrange accommodation, tours, entertainment and other tourism related
services.
 The application for recognition shall be addressed to the Additional Director General, Ministry of
Tourism, Transport Bhawan, No.1, Parliament Street, New Delhi-110001.
 The recognition as an approved Travel Agent shall be granted by the Ministry of Tourism, Government
of India, New Delhi initially, for five years, based on the Inspection Report / Recommendations of a
Committee comprising of concerned Regional Director and a member of TAAI.
 The application for renewal/extension shall be addressed to the Regional Director of the concerned
region as per the following addresses.
 The Regional Director (East), India Tourism, “Embassy”, 4, Shakespeare Sarani, Kolkata
 The Regional Director (West), India Tourism, 123, M. Karve Road, Opp. Church Gate,
 The Regional Director (North), India Tourism, 88 – Janpath, New Delhi
 The Regional Director (South), India Tourism, 154, Anna Salai, Chennai, Tamil Nadu.
 The Regional Director (North – East), India Tourism, Asom Paryatan Bhawan, 3rd Floor, Near Nepali
Mandir, A. K. Azad Road, Paltan Bazar, Guwahati
 The renewal / extension, thereafter, shall be granted for five years after Inspection conducted by a
Committee comprising of concerned Regional Director and a member of TAAI, on an application made
by the Travel Agent along with the requisite fee / documents.
 The documents received from applicants after scrutiny in all respects will be acknowledged by the
Travel Trade Division in respect of first approval and by the concerned Regional Director for renewal.
The inspection for first approval / renewal shall be conducted by the Inspection Team within a period of
sixty working days from the receipt of complete application.
 The following conditions must be fulfilled by the Travel Agency for grant of recognition by Ministry of
Tourism.
 The application for grant of recognition / renewal shall be in the prescribed form and submitted in
duplicate along with the required documents.
 The travel Agency should have a minimum Paid up Capital or (Capital employed) of Rs.3.00 lakh duly
supported by the Audited Balance Sheet/ Chartered Accountant’s Certificate.
 (c) The Travel Agency should be approved by International Air Transport Association (IATA) or should
be General Sales Agent (GSA) / Passenger Sales Agent (PSA) of an IATA member Airlines.
 The Travel Agency should have been in operation for a minimum period of one year before the date of
application.
 The minimum office space should be at least 150 sq. ft. for rest of India and 100 sq. ft. for hilly areas
which are above 1000 meters from sea level. Besides, the office may be located in a neat and clean
surrounding and equipped with telephone, fax and computer reservation system etc. There should be
sufficient space for reception and easy access to toilet facilities.
 The Travel Agency should be under the charge of the Owner or a full time member who is adequately
trained, experienced in matters regarding ticketing, itineraries, transport, accommodation facilities,
currency, customs regulations and tourism and travel related services. Besides this, greater emphasis
may be given to effective communication skills, knowledge of foreign languages, other than English.
There should be a minimum of four qualified staff out of which at least one should have Diploma /
Degree in Tourism & Travel Management from a recognized University, IITTM or an institution
approved by AICTE. The owner of the firm would be included as one of the qualified employees.
The academic qualifications may be relaxed in case of the other two staff members who are
exceptionally experienced personnel in Airlines, Shipping, Transport and PR agencies, Hotel and other
Corporate Bodies and those who have worked for three years with IATA / UFTA agencies and also
those who have two years’ experience with Ministry of Tourism approved Travel Agencies.
For the agencies located in the North – Eastern region, remote and rural areas, there should be a
minimum of two staff out of which one should be a qualified employee with a Diploma / Degree in
Tourism & Travel Management from a recognized University, IITTM or an institution approved by
AICTE. The owner of the firm would be included as one of the qualified employees.
 The Travel Agency should be an income-tax assesses and should have filed Income Tax Return for the
current assessment year.
 Disclaimer: The Travel Agency should employ only Regional Level Guides trained and licensed by
Ministry of Tourism, Government of India and State Level Guides approved by the State Governments.
The implementation of this clause would be subject to the decision of Hon’ble High Court of Rajasthan
in Writ Petition No. 5607 / 2004 and other Hon’ble Courts.
 (i) For outsourcing any of the services relating to tourists, the travel agencies shall use approved
specialized agencies in the specific field of activity.
 The Travel Agency will be required to pay a non-refundable fee of Rs.3, 000/- while applying for the
recognition and renewal of Head Office as well as each Branch Office. The fee will be payable to the
Pay and Accounts Officer, Ministry of Tourism, in the form of a Bank Draft.
Types of Tour Packages
A travel agency/tour operator deals with variety of ‘tour packages,’ catering to the diverse needs of tourists
such as adventure, beach, architecture, cultural, business, conference, incentive tours, ayurvedic packages,
Buddhist, religious, incentive tour, special interest tours, cruise tour group tour, educational tour, heritage,
monuments, wildlife lovers, etc. These are broadly classified into five categories:
1. Independent Tours
2. Escorted Tours
3. Hosted Tours
4. Incentives Travel/Tours
5. Freedom Tours
Independent Tour
Independent tours are prepared/formulated for those tourists who want to travel independently. The
components of such tours are air travel, air transfer, accommodation, travel documents, sightseeing, boat
riding, entertainment, and other travel services.
However, in some cases, the tourists are free to purchase every single component separately. Thus, this type
of tour provides the tourists considerable freedom to plan the activities according to their own choice.
An independent tour may or may not be an all-inclusive tour. Therefore, tour price varies depending on the
type of air travel, air transfer, accommodation and is inclusive of other tour components. The foreign
independent travel (FITs) and domestic independent travel (DITs) are examples of an independent tour.

Escorted Tour
When a travel agency includes the services of a well-educated and trained tour manager in its package, the
tour is called an escorted tour. Basically, escorted tours are meant for those travelers who are planning to
visit a foreign country first time.
The escort’s responsibilities and duties are to provide comprehensive information and assistance to the
group or individual traveller, at the origin, en route and the destination place. The excursion tours are the
example of escorted tours.

Hosted Tours
A hosted tour means when an agency utilizes the services of another agency at a particular destination.
Suppose a group of French tourists is coming to India. When the group arrives in India, they are greeted at
the airports by TCI, which assists them in clearing their baggage and transfer them to the hotel.
Their tour-host (TCI) is available to offer device and information about the local attractions and
entertainment. Further, when the group arrives at another designation in India, a different travel agency
greets them at each tourist spot. Thus, a hosted tour provides the tourists maximum level of pre-arranged and
personalized services.

Incentives Travel/Tour
It is a motivational programme or a fully paid holiday which is given to the employees by the enterprises as
a reward. Mostly in medium and large-scale companies and usually too distant destinations to spur them in
maintaining their track record, to increase output, improve the image and moreover to earn the long period
loyalty of the employees. There are a number of the other packages offered by a tour company such as a
custom tour an excursion tour, an adventure, and special interest package tours.

Freedom Tours
Freedom tours are becoming very popular these days among the working class. These tours are designed as
per the choice of tourists. The tourist is free to choose and plan how they want to travel and enjoy their
holidays. These types of tours are meant for that kind of people who like to decide how, when, and where to
travel.