Travel Agencies and Tour Operations
What this domain tests
Domain 3 - Travel Agencies and Tour Operations. Expect questions on the intermediary role, IATA and ticketing, the difference between an agency and an operator, and simple package costing.
Core concepts
- Travel agency: retail intermediary that sells airline tickets, rail, hotel rooms, insurance and visas on behalf of principals; earns commission or service fees; often IATA-accredited to issue tickets.
- Tour operator: buys components in bulk, assembles them into a package, sets the price, bears risk and markets the package; earns markup.
- Functions common to both: advice, itinerary planning, reservations, documentation (passport, visa), forex, insurance, complaint handling.
- Types: inbound, outbound, domestic, special-interest (pilgrimage, wildlife, medical).
Worked example
A Pune agency plans a 3-night Kerala package for 20 people. Costs per person: air ₹9,000; hotel ₹2,500 × 3 = ₹7,500; meals ₹1,200; transfers ₹1,500; guide ₹800; total ₹20,000. Add 10% markup = ₹2,000; selling price = ₹22,000. For 20 pax, gross margin = ₹40,000. Reasoning: the operator must also check GST, cancellation policy, season surcharge and a contingency buffer before quoting; the agency selling it may instead take a commission.
Traps
- Saying an agency manufactures the package.
- Mixing commission (agency) with markup (operator).
- Forgetting per-person versus total costing.
- Quoting a price without checking child rates, single supplement and taxes.
- Ignoring visa and insurance timelines.