Tourism – Introduction to Retail Travel Sales
Tour wholesalers are companies that purchase a variety of tourist services and sell them as a single product; a package holiday.
Package holidays appeal to people for practical and emotional reasons.
The practical benefits of package holidays are convenience, expertise and price.
Tour packages are less expensive than if the components were purchased separately by the tourist.
For tour wholesalers the average return on sales is about 3%
Since net profit is low, it is essential for tour wholesalers to sell a large volume of product.
There are four types of package holidays:
To overcome the negative images of package holidays, tour wholesalers need to be innovative in upgrading the image and the content of package holidays.
Retail travel agents act as sales outlets and travel advisors.
Thomas Cook was the first travel agent and began packaging domestic tours in 1841.
To open a tourist agency in Europe, a company must obtain a travel retail licence.
In the USA, all travel agencies must be certified by four industry associations in order to legally operate.
Travel agents must remember that they can be legally held responsible for their actions in running their business.
Retail travel agents’ income comes from commissions paid by suppliers and tour wholesalers.
On average, almost 60% of the average travel agencies’ income comes from commissions for air travel.
The internet has greatly changed the travel industry.
In partnership with IBM, American Airlines created the first online reservation system called SABRE.
SABRE launched in 1964 and was made available to other airlines in 1976.
Today 38% of travel organising is done online.
As more and more people begin booking their flights online, airlines have begun lowering the commission fees they offer travel agencies.
Consumer research groups have predicted that by 2022 over 75% of travel plans will be made online.
In recent years, travel agencies have begun embracing the web and understand that it provides a number of opportunities.
In order to remain relevant, agencies must place a renewed emphasis on services they provide which cannot be found online.
Travel agencies are now using the web to ensure that they are much more knowledgeable than the customer.
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