Should I Start A Tour Operator or Travel Agent Business?

Are you toying with the idea of starting your own travel business? If you have a passion for a particular part of the world, you may want to start a tour operator or travel agent business. Or, maybe you have a hobby that you love and want to share opportunities with like-minded people. If you would like to make your passion into a business, starting a travel business could be the route forward for you. But before you start planning, you may need to ask yourself, “Should I start a tour operator or a travel agency?”

What are the main differences between starting a Tour Operator or Travel Agency?

There are differences between a tour operator and a travel agent and considering which one your business will fit into really depends on what type of travel you are looking to sell. The main differences are as follows:

Tour Operator

A tour operator combines tour and travel components to provide a holiday. The most common example of a tour operator’s package would include a hotel, a transfer from the airport, a specific activity and possibly a flight. Niche tour operators may specialise in specific destinations, e.g. Italy, Sri Lanka, Bali, UK, activities, and experiences like skiing, music trips, cookery holidays, photography holidays, safaris, special interest tours, or a combination of both.

For-profit, tour operators usually negotiate net rates with suppliers and then add their own margins onto the package on a percentage or per passenger basis. As tour operators act as principal for the packages they provide they also have to provide financial protection in line with the Package Travel Regulations or ATOL.

Travel Agent

A travel agent is a private retailer that provides travel-related services to the public on behalf of suppliers such as hotels, flights, car hire or package holidays (tour operators). Basically you are the middle-person between the tour operator and the traveller.

A travel agency’s main function is to act as an agent selling travel products and services on behalf of a supplier. Consequently, unlike other retail businesses, they do not keep any stock in hand. A package holiday or a ticket is not purchased from a supplier unless a customer requests that purchase. The holiday or ticket is supplied to them at a discount and profit is, therefore, the difference between the advertised price which the customer pays and the discounted price at which it is supplied to the agent. This is known as the commission.

Essentially, a travel agency may be perfect for you if you just love travel. Some can be more niche, but generally a travel agent is more about being a travel expert than a niche one. Relationships are key to being a travel agent, so if you don’t have a niche, but you love networking and talking to travellers, this could be the perfect avenue for your travel passion.

Whatever your business, it’s important to provide protection and security to your clients. This is exactly why we at PTS provide a flexible package with all the support and tools you may need, regardless of how you run your business. Whether you’re a tour operator in need of an ATOL, or a travel agent just looking for the perfect software to fix all your admin issues, PTS is here to make selling travel simple for you.

If you’d like to learn more about what the PTS membership offers you, please get in contact with one of Protected Trust Services’ (PTS) lovely staff members by calling 0207 190 9988. Alternatively, you can visit our member support and travel trust account pages to learn more about how we protect you.