The profitability of travel agents

Surprisingly few studies of travel agency productivity and profitability exist. One way to measure
these is to examine their profit levels and turnover per employee. Earlier studies have generally
found multiples to be more profitable than independents. Annual reports allow comparisons to be
made between multiples and independent agents.

Some agencies have been successful in increasing profits through a supermarket approach to sales.
For example, First Choice introduced the Holiday Hypermarket brand, with superstores primarily
located at out-of-town retail parks.

Thomas Cook has introduced Thomas Cook Direct, to sell its products direct to consumers, and many
others have followed suit with a call centre approach, abandoning face-to-face contact with
customers to keep down costs. All four of the UK’s leading tour operator chains have tried selling
their products through interactive TV, although only Thomas Cook and TUI Thomson currently
operate their own channels. Despite more customers having access to interactive TV, however, it has
not really seen success.

Ancillary Tourism Services

Introduction

Attempts to analyse the tourism industry can lead to the problem of defining the parameters of the
industry. Some services depend largely or entirely on the movements of tourists, but are seldom
considered to be part of the industry itself – customs services or visa issuing offices, for example.
Other services that derive much of their revenue from tourism and yet are clearly not part of the
industry include companies specializing in the design and construction of hotels, theatres,
restaurants and other centres of entertainment.

There is a further category of miscellaneous tourism services that deserves to be examined more
closely here. We will call these ancillary services – these are provided either to the tourist or to the
suppliers of tourist services. Each of these will be dealt with in turn.

Services to the tourist

Guides and courier services
Unfortunately, there is as yet no term that conveniently embraces all the mediators whose function
it is to shepherd, guide, inform and interpret for groups of tourists; nor can one conveniently link
their functions to one particular sector of the industry. Some are employed by transport providers
and tour operators; others work independently or provide their services freelance to companies in
the industry.
In an industry that is becoming increasingly impersonal, as companies grow in size and tourism
products themselves become more homogeneous, the role of those who interface with tourists
becomes more and more important. Indeed, it may be the only feature of a package tour that
distinguishes one product from another, yet, curiously, it is a role that has been progressively
downgraded by the larger companies, often as a means of cutting costs. As experienced travellers
see the provision of such support as less important, many tour operators have reduced the numbers
of representatives in resorts, often providing any emergency assistance via telephone contacts
instead. There are some areas where the use of support personnel is still popular, however, so we
will examine these two similar roles – the courier and the guide. Couriers differ from guides in the
sense that the latter lay stress on imparting information as the most important function of their job,
while couriers may attach more importance to their social and people management functions.
Couriers
Couriers are employed by coach companies or tour operators to supervise and shepherd groups of
tourists participating in tours (either on extended tours or day excursions). As well as being called
couriers, they may be known as tour escorts, tour leaders, tour managers or tour directors (the
latter terms imply greater levels of responsibility and status). One of their functions is to offer a
sightseeing commentary on the country or region through which tourists are travelling and to act as
a source of information.
Courier work is essentially freelance and offers little opportunity to develop a career. Apart from a
handful of destinations that have truly year-round appeal (such as capital cities), most guiding work
is temporary and seasonal, even though many professional guides choose to return to the job year
after year. Some are able to find a combination of posts in summer and winter resorts, enabling
them to take up paid employment for most of the year.
Prior experience is the principal criterion in gaining employment. While qualifications exist in many
countries, they are not always essential to the role and, in Britain, professional training is available
but by no means obligatory. The role attracts graduates with relevant qualifications such as
languages or history, but many companies prefer to recruit couriers largely on the strength of their
personality, ability to handle clients with sensitivity and tact and stamina – both physical and mental.
In some posts, employers will lay emphasis on sales ability, as couriers may be required to sell
supplementary services, such as optional excursions. Arguably, this is changing the nature of the role
– commercial acumen replacing sociability.
Guides
Guides, or guide lecturers as they are frequently known, are retained by principals for their
expertise in general or specialist subjects. Employment tends to be freelance and intermittent, with
low-season jobs rare outside the large cities. Guides take pride in their professionalism and will often
have well-established regional and national bodies to represent their interests
This is a rather different picture from that in other European countries, where professional
qualifications are often essential to secure a licence to operate. In France, for example, a local guide
must be employed to guide in Paris, having demonstrated local knowledge in formally approved
qualifications (although such qualifications can also be obtained by workers from other EU member
countries, of course).

Services to the supplier

Education and training
With the growing institutionalization of sectors, greater emphasis is placed on professionalism, the
introduction of national standards and more formal modes of training. The difficulty of organizing
day release for employees of smaller travel companies encouraged the development of distance
learning packages. British Airways fares and ticketing courses, for example, which are offered either
full-time or through self-study packs, have found national acceptance as a standard for those seeking
to work in travel agencies and airlines, while Lufthansa provides similar nationally accepted courses
in Germany, and the World Tourism Organization (UNWTO) and International Air Transport
Association (IATA) organize internationally recognized distance learning packs for students of
tourism throughout the world.
With vocational courses of this nature, the question of balance between job-specific skills and
broader conceptual knowledge has long taxed employers and educationalists alike. Unlike most
countries in Europe, many tourism employers in Britain still do not hold formal qualifications in high
regard, still preferring to provide the job skills that are seen as essential to fulfil basic, sector-specific
roles in the industry. Across the globe, however, universities and colleges now offer courses
designed to provide not just essential skills but also a broader knowledge of the industry and the
world of business. This includes undergraduate studies as well as postgraduate diplomas and
Master’s qualifications in tourism-related studies (including specialist areas, such as e-tourism,
events and conference management)
The trade press
In addition to specialist academic journals, there is a large selection of weekly and monthly journals
devoted to the travel and tourism industry. The weekly trade papers Travel Trade Gazette and Travel
Weekly provide an invaluable service to the industry, covering news of both social and commercial
activities, as well as providing the heaviest concentration of advertisements for jobs in the industry.
Updates on the industry are also available to readers online.
In an industry as fast moving as tourism, employees can only update their knowledge of travel
products by regularly reading the trade press, whether in hard copy or online. The newspapers
complement the work of the training bodies, while, for untrained staff, they may well act as the
principal source of new information.
Hotel guidebooks
Hotel guides, of course, have always served the needs of both the trade and the public, although
many are produced commercially for purchase by the travelling public. They fall into three distinct
categories:
• independent guides do not charge for entries and inspections are made anonymously –
examples include the Michelin Red Guide,
• Good Hotel Guide l paid-entry guides make a charge for listing – examples include Alastair
Sawday’s Special Places to Stay, Condé Nast Johansen’s Recommended Hotels
• l registration guides are funded by membership fees – examples include the AA and RAC
handbooks.

Travel guidebooks
Travel guidebooks are enjoying huge popularity as more and more holidaymakers travel further
afield each year and specialist book shops, such as Stanfords, have sprung up to cater for this
growing demand. Such guidebooks must be updated frequently if they are to remain of any value, so
many are produced on an annual basis. This, again, is an area that lends itself to computerization
and much of the information held in guidebooks can be readily accessed using a computer. Travel
guides for longer trips, such as Lonely Planet or Rough Guides, or cities, such as Dorling Kindersley’s
Eyewitness series, include accommodation and transport details alongside historical details of
destinations, places to visit and restaurant recommendations for a variety of budgets.