Tour Operator Functions and Role

Tour Operator

Tour Operators buy a range of tourist products in bulk – airline’s seats, hotel rooms, coach services. They ‘package’ them for subsequent sale to retailers or consumers. Their product is also called as Inclusive Tour Packages.

Tour Operator is one who buys the individual elements in the travel product on his own account and combines them in such a way that he is selling a package travel, the tour, to his clients. He is remunerated by a reasonable mark-up on the prices he had paid to the providers of the services – which make up the packages.

Tour Operators may be classified into different categories based on the nature of their work, i.e. the market area being handled and specialized by each one.

They are as follows

  • Mass Market Operators
  • Specialist Operators
  • Inclusive tours for particular destination
  • Inclusive tours for specific generating area
  • Inclusive tours for specific accommodation (campus, holiday villages)
  • Inclusive tours for specific transport
  • Inclusive tours for special interest (game or safaris, self rail cruising, business training etc)
  • •  Domestic Operators (assemble and sell inclusive tours to a destination within a country.
  • Incoming Tour Operators.

These operators are based in the destination selling only for that destination, but they may be selling in many different tourist-generating countries. In many countries these operators are provided help from the national tourist office, as they play an important role in the development and promotion of new tourist facilities in the country.


Production                                           •Developing, Planning, Reservation, Consultation, Guiding

•T.O. delivers value added to the customer better product, easier to organize, cheaper than own organization by customer

Marketing / Sales                               • T.O. acts as hinge (Scharnier) between service providers and demand

•T.O. buys part of service providers offers over specific period of time for specific price

•Product standardisation precondition for T.O.s work

• Bundling/Packaging of several offers into a one- stop package

Risk                                                    • T.O. has to bear the merchandising risk (not selling products bought) and the quality risk

Information                                         • Information about possible destinations and activities

Social function                                     • T.O. offer national and international tours for persons, who would otherwise would not dare to travel

• T.O. can offer affordable tours, who otherwise could not travel for economic reasons

Destination development                  • T.O. support the touristic development ofdestinations

  • T.O. offer predictable demand, enabling investment in touristical infrastructure

Destination changes                                      • T.O. help to give value to otherwise economically valueless resources (traditions, nature)

  • But T.O. need resources in a predictable, consummable, standardized, cheap, preferably all-year-round form
  • Packaged tours have a bigger influence on changing the local situation compared to non-package tourism

A travel agency can be a small set up with a few staff or a large organization with several employees. An agency can offer the entire range of travel related services or specializes only in tours. There are certain basic requirements needed to start travel agency, as under.

  • Capital – a sound financial base.
  • Premises – adequate place with suitable location and easily accessible to public
  • Competent, Qualified and Trained Personnel – to take care of the need of the customers.
  • Licenses – the necessary licenses or registrations required to carry on the business.
  • Recognition – by airlines / IATA, hotels and other suppliers of services, which will enable them to sell the products on their behalf and earn commission on such sales.
  • Communication network ­good telecommunication facilities to contact airlines, hotels etc for speedy reservations and confirmations.
  • Equipments and Machines – necessary to carry out all travel related services.