A travel agency can be a company, a business firm, or an individual. The travel agents act as mediators in the sales and promotion of various services related to the travel and tourism industry, such as airlines, road transport, accommodation, railways, cruises, etc. and earns commission received on selling services to its clients.

Travel agency serves as a link between the travel suppliers and the tourist. Hence, a travel agency is like a retail store, with a uniqueness; that it serves on behalf of both the suppliers and the consumers.

Further, the main functions of the travel agency are to sell tourism products to travelers. Sometimes they even promote and advertise tourism related services on behalf of tourism service suppliers, such as hotels, airlines, destinations, railways, etc.

Thus, we can say that the travel agent plays an important role in the development and promotion of travel sales. They put together all the components of the tourism products and sell them to the tourists.

Types of Travel Agency

There are various types of travel agencies. The types of a travel agency are:

Retail Travel Agency

A retail travel agency is one that sells the various tourism services directly to its clients on behalf of the principal service provider/suppliers, i.e. hotels, airlines, cruises, railways, coach operators, etc., and in returns earns a commission from them. The retail travel agency may add mark-up cost on these travel services. Thus, it earns its income from the commission earned from suppliers as well as from the markup.

Wholesale Travel Agency

A wholesale travel agency plans, organize, develop, and sell package tours through a network of travel agencies or directly to the clients if it operates as a retail agency. Some travel agencies operate as both retail as well as a wholesale travel agency. For example, Thomas Cook, Travel Corporation of India, etc.

The wholesale travel agent purchases the various travel products and services in bulk from the principal suppliers and sells them to the retail travel agency or to the clients directly. Thus, the wholesale travel agency acts as a medium or a link between principal suppliers and the retail suppliers.

Full-Service Agency

A full-service agency organizes and handles all types of tours for leisure, free individuals travelers (FITs), group individual travelers (GITs), corporate travelers, etc. for inbound and domestic destinations. Under this type of travel agency, the staff works in different departments, for example, leisure department, inbound department, outbound department, trade fair, accounts, etc.

Commercial Agency

Commercial Agencies are specialized in meeting the requirement of corporate travelers. Such agencies are mainly located at business centers and cater only the business travelers. Walk-in or individual travelers are not served by these agencies. The airline, hotel, car, documentation, etc. are all looked at by the trained staff.

Implant Agency

It is a branch office of a full-fledged travel agency, which function on the premises of a corporate office. It handles all the travel arrangements of the corporate office.

Special Interest Travel Agency

This type of travel agency specializes in creating tour programs for special interest groups, such as adventure, wildlife, religion, etc. For example, Pug Marks in Pune.

E-Travel Agents or Online Travel Agent (OTA)

It is also popular as virtual/online travel agents (VTAs) or e-retailers. They are the new generation travel agents such as makemytrip.com, yatra.com, etc. These web portals allow consumers or travelers to access information and make online bookings.

What are the Functions of a Travel Agency?

The travel agency being an intermediary has an active role in providing quality services to the tourists. The travel agency performs a number of functions such as:

Providing Travel-Related Information

This is one of the most important and basic functions of a travel agency. The tour professionals should have detailed knowledge of the tourist’s destinations, distance from the airports/railway station, different types of hotels, and the services provided by them, etc. The staff should be fluent in the local language, English and foreign languages if dealing with foreign countries.

Planning Tour Itineraries

The tour professionals after receiving the client’s preferences of destination to be visited, his/her approximate date of travel and duration, the mode of transport, hotels, etc. has to plan the itinerary to suit the client’s needs.

Liaison with Tourism Suppliers/Vendors

The tourism suppliers are airlines, railways, hotels, transport operators, cruise ship companies, tour operators, insurance companies, etc. The travel agents before selling any form of travel product to their clients have to contact these service providers for selling products on their behalf. The travel agents have to negotiate for the best possible rates from the service providers. The suppliers give a certain amount of fixed percentage as commission to the travel agents for selling their products.

Tour Costing

After planning the tour and negotiating rates with principal suppliers, the next job of the travel agent is to do the tour costing. The tour costing is done for both the inclusive tours and individual tours. The tour costs are worked out on a per-person basis which includes the hotel, meals, transfers, sightseeing, guide fees, etc.

Settlement of Accounts

Settlement of accounts with the tourism suppliers is one of the major functions of the travel agency. The executives working in the accounts department should be familiar with and have a thorough knowledge of foreign currencies, their cross value, exchange regulation, etc.


This department helps its clients in providing facilitation services such as passport, visa, health, certificates, insurance, customs, regulations, immigrations, and permits required for restricted areas, baggage allows, etc. for traveling abroad.

Business tours/trade fairs

Apart from handling the leisure tourists and arranging domestic, inbound, and outbound tours, another major and much-in-demand job for the travel agent is the handling of business tours. The travel agent has to meet the different demands of business tourists. The business tourists may visit a particular destination for various reasons pertaining to their work such as to attend a business meeting, conference, convention, trade fair, selling products, meeting clients, etc. Thus, the travel agents have to arrange venues for meetings, conventions, and exhibitions; transport, accommodation, and sightseeing facilities required at these venues.


The travel agent after getting confirmation and initial payment from the clients has to book airline seats, hotel rooms, transport arrangements, and other services as per the requirements of the client. The tour professional should thus be familiar with the terms and abbreviations used for reservation procedures for airlines and hotels. The phonetic alphabet is preferably used for making reservations on the telephone. Once the booking has been confirmed and payments are made, the confirmed tickets, itinerary, and travel vouchers have to be handed over to the client.


To provide foreign currency, traveler cheques, etc. to tourists and getting it endorsed on the passport is yet another important function performed by the travel agencies.


From the above discussion, we can clearly say that a travel agent acts as a middle man or mediator between tourism-related service suppliers/providers and the travel consumer (Travelers). Besides, they also sell and market tourism products on behalf of tourism-related service suppliers.

The functions of different types of travel agencies differ as per the types and nature of travel agencies. However, the main aims and objectives of these travel agents remain the same, i.e. is to promote, developed, and help towards sustainable tourism.

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