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The Difference Between Tour Operators and Travel Agents

By Lyndsey Thomas – 10th February 2020

Depending on the type of holiday you are dreaming of, the answer should impact on the route you take to book it. Here’s what you need to know…


What’s a tour operator?

A tour operator is a company that creates and operates a holiday. Large tour operators such as Virgin Holidays have their own aircraft and transportation services, their own hotels, and/or their own ground staff. They can have their own retail travel agents, and they might act as a preferred supplier for other retail travel agents.

Big tour operators don’t work with local agents or direct with hotels depending on the country you’re wanting to visit, but instead will buy holiday components from wholesalers, hotels from huge bed banks and in some destinations (popular for fly-drives and touring), will sell an ‘off-the-shelf’ itinerary that is not exclusive to them. Some big tour operators have their own hotel products in some destinations.

There are a plethora of smaller specialist tour operators across the UK that specialise in specific countries and offers a tailor-made service.  They will usually also work closely with a local agent in the country you’re visiting, who has the best knowledge of the different types of accommodation, the latest tours and the kind of trip that suits their clients


 7 Things You Might Like To Know About How Tour Operators And Travel Agents Function:

1) Hotels sometimes have to pay to feature in big tour operator brochures. Don’t assume that because a hotel is featured in a big UK tour operator brochure that it’s there on merit only.  Many hotels have to pay, whether it be directly, or indirectly through a marketing campaign or as part of a wider partnership with a tourism board. Hotels that have money, are more likely to get featured in brochures, on websites and in marketing and advertising.

2) Big tour operators are restricted to what hotels they can sell. Tour operators and wholesalers don’t want to take on smaller hotels as they often can’t get the availability of rooms in the numbers that they need. It’s unlikely you’re going to get to stay in a cute little five-room hotel which is off the beaten track if you book via a big UK tour operator or walk into a high street travel agent.

These guys have preferred suppliers which can mean that some of the best little hotel gems don’t get a look in because these small establishments can’t work on an ‘allotment basis’ – this means that the hotel in question has to commit to giving the wholesaler/tour operator a certain number of their hotel rooms a week/month that only they can sell.

It also means that they have to discount their rates and give the wholesaler a NET rate, so the wholesaler and the tour operator, and possibly even a travel agent can add their profit margin. High street travel agents are mainly affiliated with a tour operator which means that the tour operator and their affiliated travel agent will need to make a profit margin.

3) High street travel agents work on commission and are not without bias. They can make anything between 10 and 20% commission on your booking depending on which tour operator products they are directionally selling and it’s worth noting that many of them are not without bias. Whilst they, for the most part, will have your best interest at heart, some might not want to work as hard as others to make their money.

Again, the mainstream travel agents are definitely (based on their business model)  limited in what, where how and why they sell a holiday-they often can’t give you the flexibility you need.

4) Big hotel chains incentivise travel agents to sell their rooms. It’s perfectly normal for big hotel chains to incentivise a travel agent to get them to sell more rooms. This might be by promise of a free stay in their hotel, extra commission or a place on a travel agent FAM trip. Again, not without bias.

5) Legal contracts between a  hotel and a tour operator/OTA means big hotels cannot sell their hotels rooms online on their own website cheaper than a tour operator. But yet the hotels make less on a tour operator than a direct booking because of the commission the hotel has to pay, so calling the hotel and booking directly over the phone can sometimes result in getting a better deal, a better room, and more added value.

That being said, if you are booking a multi-centre trip (you are staying in more than two hotels) it might not make sense to book your accommodation across lots of different channels and it’s not without risk.

6)  Hotel rates through tour operators are changing all the time thanks to dynamic booking systems. Big tour operators can feed into big bed banks via XML links, which means they can book rooms immediately online from their allotment of rooms reserved only for their customers. Once again it’s always worth cross-checking the rates.

7) Using a personal independent travel agent who is not associated with a big tour operator means less bias and more choice. Independent travel agents act, first and foremost, on behalf of their customers, and a good one is worth their weight in gold. They are more likely to have seen first hand, the destinations and hotels they are going to suggest to you. Whilst booking direct with a hotel and using local currencies can be a win, it can also be a fail.

You may be interested to read about the best Tour Operators UK Click Here

What’s a travel agent?

Travel agents’ main function is to act as an agent on behalf of a supplier. They are an intermediary and they advise on and sell you the products of other companies. There are different four main types of travel agents:

Retail travel agents – these are the guys who are employed by the travel agencies on your local high street. The people you can pop in and chat to about your holiday face-to-face. These shops are usually linked to a big UK Tour Operator. An example is Trailfinders.

Call centre travel agents – the people who work in call centres such as Flight Centre. You’ll probably never meet them, but you can book with them over the phone.

OTAs (online travel agents) – a company that sells holidays over the internet. It’s likely you’ll have no human interaction with an OTA unless something goes wrong. An example of an OTA is Expedia.

Personal travel agents – home-based travel agents who are self-employed and pay commission to an organisation called a Consortia for access to booking software, travel regulation compliance and to suppliers and wholesale rates. Personal travel agents have the most flexibility and least restrictions and therefore the least bias.

They can pretty much book anything and everything and will often advise you on their own personal experiences. A really good personal travel agent has been at it for years, will have a little black book of amazing hotel contacts and local ground-handlers and a small circle of devoted customers.


Feel free to drop me a line if you want any clarification on any of the above. After all, that’s what we are here for!


Girl About | Best Travel Agents UK


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Lyndsey Thomas GirlAbout.co .uk
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