MARKETING THE
INDUSTRY
SEGMENTS
4.07 Explain travel agencies.
Travel agent: A wholesaler who is
authorized to represent buyers and sellers
of the travel industry for a commission
Travel agency: A
business that employs
travel agents who make
travel arrangements for
clients for a commission
or service charge
Travel Agencies
•American Express
•AAA of the Carolinas
•Mann Travel & Cruise
•Thomas Cook
American Express
•Independently owned and operated
travel agencies licensed to provide
travel and travel-related products and
services
•American Express TravelFunds Card
New, safe way to carry money
Not linked to your bank account
Prepaid, reloadable card
Balance refunded on lost or stolen cards
American Express (cont.)
•American Express Travelers
Cheques
Available from banks
Can be ordered online up to $1,000 in
combined Travelers Cheques and foreign
currency
Customer service support available 24/7
Value refunded on lost or stolen cheques
Accepted practically everywhere
AAA of the Carolinas (American Automobile
Association)
•25 offices in the Carolinas
•Member benefits
Travel assistance with destinations
and reservations
Road service
Insurance
Assistance with automotive
purchase, maintenance, and repair
Mann Travel & Cruise
•Founded in 1975
•Largest locally-owned travel
agency in the Carolinas
Thomas Cook
•3,600 travel agencies
•Services supported by 28,000
employees across 5 continents
•Third largest travel group in the
world
Historical events in the travel industry
•Thomas Cook started the concept of the
travel agent in England in 1841.
•Ward Foster introduced travel agencies to
the US in 1888.
•Airline Deregulation Act was passed in 1978
and had impact on travel agencies.
Commission cap was established reducing the
travel agent’s profit.
Travel agents had to diversify and began
offering tourism services that were not
dependent on airline reservations.
Agents began to charge for their services.
Types of travel agencies
•Independent agencies: Small, unaffiliated agencies
that serve clients from a walk-in office location or over
the telephone
•Agency chains: Semi-independent agencies affiliated
with one another through franchise agreements
•Consortium-affiliated agencies: Independent
agencies linked to gain the resources and financial
benefits of a chain but with lower fees and
commissions. Examples: World Travel Affiliates and
Hickory Travel Systems
•Commercial or corporate travel agencies: Agencies
that provide services to business clients for a
commission on reservations made or for a
management fee
Types of travel agencies (cont.)
•Home-based agencies: Agents who conduct
business from their homes using electronic
technology rather than from the traditional office
•Internet agencies: Agencies that may or may not be
home-based and that serve clients primarily through
the use of the Internet
Internet travel intermediaries: Internet agencies
that act as a mediator between the travel
industry businesses and customers at a lower
price per transaction than either the business or
a traditional travel agency may be able to
provide
•Priceline.com
•Travelocity.com
•Expedia.com
•Orbitz.com
•Pioneer Internet intermediary of the hospitality
industry, organized as Priceline Hotel Service in 1998
and allows customers to negotiate prices
•Customers enter data stating destination, minimum
quality star rating, and price they would like to pay.
•Priceline only considers hotels at or above the quality
tier the customer has specified.
•Priceline negotiates to match the offer that best
accommodates the client.
•Priceline receives a service charge.
•A giant search engine
that allows consumers
to enter a request and
receive comprehensive
data about options
available
•Offers multiple ways to
search for economy
class travel
•Does not act as a
negotiator
•World’s leading online travel
service
•4th largest travel agency in the US
•Carries the Good Housekeeping
Website Certification Seal
•Does not act as a negotiator
•A travel website formed by five airlines
sharing a mission to provide better online
customer service
•The award-winning flight search engine
makes finding the lowest fare easy
•Searches hundreds of airlines to find the
best flights for the customer
•Offers the largest collection of discount
web-only airfares from dozens of airlines
•Provides a comprehensive selection of
hotel rates, including discounted Orbit Saver
rates
•First travel site to monitor travel conditions
for travelers
•Does not act as a negotiator
Advantages of using a travel agent
•The agent has knowledge of a geographically
diverse marketplace.
•The agent saves the customer time by
researching the product mix that best meets the
customer’s request.
•The agent can recommend price considerations.
•The agent may use Global Distribution Systems
(GDS) to make reservations. GDS is a worldwide
inter-organization information system that maps
destinations for travel associates’ use in selling
tourism services.
Disadvantages of using a travel agent
•The customer may be asked to pay a service
charge.
•The agent may not have current information
and prices.
•The agent may not work in a timely manner.
Challenges facing travel agencies
•Agents are no longer just order-takers making
reservations at the customer’s request.
•Agents have to market themselves and the
agency.
•Agents now have Internet competition.
•Agents earn commissions on reservations
they make.
•Travel agents spend much of their time
researching travel products.
•Agents must be culturally diverse and able to
relate to customers’ personalities.
Package tour: A prepaid travel arrangement that includes
transportation, accommodations, and at least one other
component such as meals, transfers, sightseeing, or car
rental, and that is sold for a single all-inclusive price.
Most tours are arranged using the services of a travel
agent.
•Itinerary: The predetermined schedule
and arrangements for a trip.
•Independent tour: The least structured
tour package allowing purchasers to set
their itineraries themselves. It is usually
more costly for the customer and results
in higher profits for the agent.
•Escorted tour: The most structured tour
package with a predetermined itinerary
and a guide or host.
Tour rates
•An all-expense tour offers transportation,
lodging, meals, and sightseeing for a preestablished price.
•Group rates or bulk fares are available only to
tour organizers or agents who request a
specified block of rooms or seats.
Resources available to travel agents
•Trade publications: Print media associated
with the travel industry. Examples: Today’s
Traveler, Travel Weekly
•Trade associations: Professional organizations
associated with the travel industry. Example:
American Society of Travel Agents (ASTA)
•Tour associations: Professional organizations
associated with travel agencies that specialize in
tours. Example: National Tour Association
Marketing strategies for travel agents…
•Marketing is vital to the
successful travel
agent/agency.
•Between 5 and 10
percent of an agency’s
total budget should be
spent on promotion.
•Advertising is paid for by
the agency.
•Agents must make a
commitment to market
themselves and the
services they provide.
Advertising for Travel Agencies
•The objective of the agency must be
determined before deciding how and
where to advertise.
•The agency must consider the
target market.
•The agency should consider the
current client database.
•Broadcast media
•Print media
•Internet
Sales Promotion for Travel Agencies
•Contests
•Sweepstakes
•Incentive programs
Publicity/Public Relations for Travel
Agencies
•Can be positive if
initiated by the travel
agent/agency or a
satisfied customer
•May be negative if
communicated by a
dissatisfied
customer
•Example: Travel
column written by a
travel agent