Travel Agency Management

1478 WordsNov 18, 20086 Pages
Could the tide be changing? Travel agencies play an important role within the UK travel and tourism industry. They are the retail arm of the industry, selling a wide range of holiday products and travel services to the public. Yet travel industry analysts have been predicting the death of the high street travel agent due to the ever-changing nature of distribution channels. Travel agents are the key intermediaries in the distribution chain whose main role is selling air, rail, sea and land based services. They do this on behalf of their suppliers or principals. They also may offer additional travel-related services such as insurance and foreign exchange . Throughout the history of the travel agent is has shown an…show more content…
Integration means formal linking arrangements between one organisation and another. Vertical integration occurs along the production process, for example, when an airline establishes its own tour operating company. This type of integration is forwards into the marketplace, and the most popular example is when a tour wholesaler acquires a retail travel chain through merger or purchase. Another way is backwards and this is most commonly seen when tour operators own airlines, and when scheduled airlines form alliances with multinational hotel chains and surface transport companies to secure trading advantages over their rivals. The benefits of forming vertical links include “cutting out the middle man by being able to control costs and quality standards…securing supplies and increasing buying power, and protecting market position by guaranteeing retail outlets on prime high street sites.” (Fyall and Wanhill, 2007) Other ways of controlling the market is by franchising, which is a licensing agreement whereby the parent company grants another firm the right to sell its products and use its brand name, but in return the firm should not sell the products of its competitors. And through mutual shareholding arrangements and a system of tied agency licensing, which gives them exclusive outlets for their products and protects their profits. Second type of integration is called horizontal integration, which occurs when two tour operators or two travel agents integrate,

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