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The Role of Tour Operators & Travel Agents

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  • 0:02 Travel Is Big Business
  • 0:51 Travel Agents
  • 2:41 Tour Operations
  • 3:38 Example
  • 4:53 Lesson Summary
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Lesson Transcript
Instructor: Yuanxin (Amy) Yang Alcocer

Amy has a master's degree in secondary education and has taught math at a public charter high school.

Many people like to travel. In this lesson, you'll learn how a tour operator provides these people with services while travel agents help these people find travel options.

Travel Is Big Business

Travel is big business. In the United States alone, people spent an average of $2.7 billion dollars a day in 2016 on travel, both for leisure and business, according to the U.S. Travel Association. That's a lot of money! In fact, that averages out to $31,400 spent each and every second. It's a lucrative business.

Just look around and you'll see many different travel agents to choose from, as well as a number of tour operators. Look up cruises and you'll find options from many different companies. Need help putting a trip together? Look up any of the travel agencies around you. In this lesson, you'll learn the difference between a travel agent and a tour operator when it comes to the types of products and services they provide.

Travel Agents

First, let's look at travel agents, private retailers that provide their customers with services on behalf of hotels, airlines, car rental companies, and tour companies. Travel agents will often also provide their own special vacation packages that already have a hotel, flight, car rental, and tours included. For people who are not very familiar with the area they are visiting, tourists especially, vacation packages are ideal as everything has already been chosen for them.

Because travel agents are selling services provided by another company, they never have anything in stock, so to speak. Travel agents are essentially a third party to the transaction. They help the traveler connect with the right companies for an enjoyable vacation or business trip. The travel agent keeps a certain commission from each transaction. Travel agents don't normally offer insurance or other monetary protection. These are generally provided by the companies the travel agent is working with. According to the American Bar Association, travel agents are held responsible if they do not do their due diligence in researching the services they offer and the customer gets hurt as a result. If a travel agent ends up recommending one service over another, there is more liability involved if the customer doesn't receive an experience on par with what they have been told to expect.

Why would a traveler opt to use a travel agent instead of doing everything on his or her own? Well, a travel agent often times has more knowledge about the places that are good to visit or stay in. They may also have insight into the places that the locals visit. If someone wants to really experience what a particular area is like, there's no better way than to go where the locals go.

Tour Operators

In contrast, a tour operator is a company that provides customers with activities and travel to and from these activities. So, a tour package from a tour operator will typically include hotel stays, possibly a flight, and specified activities during the trip. For example, a New York tour might include travel from the airport to the designated beginning hotel. Then each day of the tour will have certain planned activities, such as visiting Niagara Falls, then going to the Watkins Glen State Park. The tour, of course, will stop for meals, but these are usually not included in the price and the customer is expected to pay for these.

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