Travel and Tourism Industry
This domain tests how the travel and tourism industry is structured, who performs which role, and how distribution and consumer rules affect a consultant’s advice. Expect questions on industry organisations, intermediaries, principal-versus-agent relationships, and the commercial flow from supplier to traveller.
Industry map and roles
- ICAO is the UN specialised agency for civil aviation, created under the Chicago Convention; it sets safety, security and facilitation standards. It is not a travel trade association.
- IATA is an airline trade association. It develops industry standards and systems such as airline and airport codes, BSP settlement and e-ticketing, but it is not a government regulator.
- UN Tourism (formerly UNWTO) is the UN agency focused on tourism policy and statistics.
- Intermediaries include travel agencies, tour operators, OTAs, GDSs and consolidators. The key question is whether the intermediary acts as agent for a principal supplier or as principal in its own right.
Distribution and consumer rules
When an agency sells a flight as agent for the airline, the contract of carriage is normally between the traveller and the airline. When the agency assembles and prices a combination of components as its own package, package-travel obligations may apply, including pre-contract information, organiser responsibility and cancellation terms. Commission is paid by the principal; a markup is the agency’s own charge.
Worked example
A client asks for a flight plus three hotel nights at one inclusive price. The agency chooses the components, issues its own itinerary and takes the risk if a supplier fails. Reasoning: this looks like principal/organiser activity, not simple agency, so package disclosure and protection rules must be checked. If the agency merely books an airline ticket in the airline’s name, the agency role is different.
Traps that cost marks
Do not describe IATA as a regulator; do not assume every OTA is an agent; do not confuse commission with markup; and do not treat a package as a simple sum of separately contracted services.
Key points
- ICAO: UN aviation standards body; IATA: airline trade association.
- Agent versus principal determines contracting party and liability.
- Package combinations can create organiser obligations.
- Commission comes from the principal; markup is the agency’s charge.