models for travel agency

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Online Travel Agencies (OTAs) And Their Business Models

Table of Contents

Google (Google Travel)

Tripadvisor

Key highlights of the business models from travel and accommodation platforms:

• Platform business model charging guests a service fee (5% to 15%) and hosts a commission (generally 3%) on reservations.
• Competes with other vacation rental platforms like Booking.com, VRBO, and FlipKey, as well as potential competition from Google Travel.
• Operates under Booking Holdings, controlling six main brands like Booking.com, priceline.com, KAYAK, agoda.com, Rentalcars.com, and OpenTable.
• Generates revenues primarily through travel reservations commissions, travel insurance fees, and advertising via KAYAK.
• Expedia (including Trivago):
• Trivago, part of Expedia Group, is a hotel comparison service monetized through a cost-per-click (CPC) model from advertiser listings.
• Expedia also owns other online travel agencies like Hotels.com, Vrbo, Orbits, CheapTickets, Travelocity, among others.
• Google (Google Travel):
• Originally part of Microsoft and later spun off, Google Travel provides travel-related information and services.
• Google Travel’s exact revenue model is not mentioned, but it likely generates income through advertising and possibly affiliate marketing .
• Online travel agency and search engine, acquired by Booking Holdings in 2013.
• Earns revenue through an advertising model based on cost per click, cost per acquisition, and advertising placements.
• An online restaurant reservation system acquired by Booking Holding in 2014.
• Generates income through subscription plans, referral fees, and potentially in-dining revenue .
• Utilizes a mixed business model , starting as a home aggregator in India and expanding into other verticals like leisure, co-working, and corporate travel.
• TripAdvisor:
• Matches travel demand with supply from partners, earning commission on a cost per click (CPC) and cost per thousand impressions (CPM) basis.
• Non-hotel revenue includes experiences, restaurants, and rentals.
• Part of Expedia Group, Trivago operates as a hotel comparison service, earning revenue through a cost-per-click (CPC) model from advertiser listings and also offers a Business Studio subscription for hoteliers to track data.

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Business model canvas for a travel agency (examples).

Get a watermark-free, fully customizable business model canvas in our business plan for a travel agency

In the dynamic and ever-evolving travel industry, having a clear roadmap to success is essential for any travel agency looking to thrive.

Welcome to your detailed walkthrough of the Business Model Canvas, customized for travel agency professionals.

This guide deconstructs the framework into manageable pieces, enabling you to pinpoint your unique value proposition, target customer segments, essential activities, and much more.

Should you be in search of a ready-to-use Business Model Canvas that's fully customizable, feel free to explore our business plan template designed specifically for travel agency ventures .

What is a Business Model Canvas? Should you make one for your travel agency?

A Business Model Canvas is a strategic tool designed to help you visualize and plan the building blocks of your travel agency business. It's like a map that guides you through the different aspects of your business, ensuring you cover all the bases.

Think of it as a one-page framework that helps you work through the core components of your travel agency, such as your unique value proposition, customer relationships, channels, key activities, revenue streams, and cost structure.

Why do people create a Business Model Canvas for their travel agency? It's simple: to get a bird's-eye view of how their business will operate and generate income. It prompts you to think about how you'll attract and retain customers, what kind of travel experiences you'll offer, how you'll reach your target market, and how you'll manage your finances.

For a travel agency, this might involve detailing your specialty in exotic destinations, personalized itineraries, partnerships with local tour operators, or your online booking platform.

The benefits of crafting a Business Model Canvas are numerous.

It encourages strategic planning and helps you to prioritize the most critical aspects of your business. It can reveal gaps in your plan or new market opportunities you hadn't considered. For example, you might discover a niche market for eco-friendly travel packages that sets you apart from competitors.

If you're starting a new travel agency, should you use a Business Model Canvas? Definitely.

It's an essential part of the planning process that can steer your business decisions and strategies. It's a way to clearly communicate your business concept to potential investors, partners, or employees. A well-thought-out Business Model Canvas, like the one you can create using our tailored business plan template for travel agencies , can transform a vague idea into a solid plan with a clear direction.

Is it useful for you? Without a doubt, especially if you want to establish a clear strategy for your travel agency. It forces you to systematically work through your business idea and assess its viability.

Moreover, it's a dynamic document that can evolve with your business and adapt to changes in the travel industry.

How to create a Business Model Canvas for your travel agency?

Creating a Business Model Canvas for your travel agency should be straightforward.

You can simply edit the one we have already created and filled in our business plan template made for a travel agency .

Need more details? Let's break it down into manageable parts, focusing on each section of the canvas, and we'll guide you on how to fill it out with ideas and inspirations, using a simple and straightforward approach.

Value Proposition

First off, let's talk about the Value Proposition.

This is the core of your travel agency. What makes your agency stand out? Is it the personalized travel experiences, the exclusive deals, or perhaps the comprehensive travel packages?

Think about what will make clients choose your agency over others.

It could be specialized tours, a strong focus on sustainable travel, or access to off-the-beaten-path destinations.

Customer Segments

Next up is Customer Segments.

Who are you catering to? Are you targeting luxury travelers, adventure seekers, or maybe budget-conscious students?

Understanding your target clients will shape many of your decisions, from package offerings to marketing strategies.

Now, let's focus on Channels.

How will you reach your clients? This could involve a mix of online and offline methods.

Think about using social media to showcase destinations, a website for booking and inquiries, and traditional advertising like travel expos and local events to attract a diverse clientele.

Don't forget the power of customer reviews and consider how you can encourage clients to share their travel stories.

Customer Relationships

Customer Relationships are all about how you interact with your clients and ensure they have memorable trips.

Personalized travel planning, follow-up services, and responding to feedback are key.

Consider how technology can enhance the travel experience, perhaps through a mobile app that provides travel tips and support.

Revenue Streams

The Revenue Streams section will make you think about how your travel agency will earn income.

Apart from direct travel bookings, consider other revenue streams such as travel insurance, visa processing services, or selling travel gear and accessories.

Be creative and think about what aligns with your brand and client base.

Key Activities

On the other side of the canvas, we have Key Activities.

These are the essential tasks you need to do to make your travel agency thrive. This includes curating travel packages, managing bookings, marketing, and customer service.

Consider what activities are crucial to delivering your value proposition and how you can perform them effectively.

Key Resources

Key Resources are the assets you need to deliver your value proposition.

This includes your travel expertise, your staff, your network of travel providers, and even your online presence. Think about what you need to make your travel agency successful and how you can secure these resources.

Key Partnerships

Key Partnerships might involve travel operators, hotels, airlines, or other alliances that can help you offer better deals or unique experiences.

For instance, forming a partnership with local tour guides or international travel agencies can expand your offerings and provide clients with exclusive experiences.

Cost Structure

Lastly, Cost Structure.

Running a travel agency involves various costs, from office rent and salaries to marketing expenses and software subscriptions. Understanding these will help you manage your finances effectively.

It's important to identify which costs are fixed, like rent, and which are variable, like advertising, to plan your budget accordingly.

What should be included in each section of the Business Model Canvas for a travel agency?

Unsure about how to detail the Business Model Canvas for your travel agency? You might want to consider customizing the one we've included in our business plan template .

Let us guide you through some examples of what you could include in each section of the Business Model Canvas for a travel agency.

Examples of Business Model Canvas for a travel agency

Below are examples of business model canvases for three different types of travel agencies: Luxury Travel Agency, Adventure Travel Agency, and Online Travel Agency.

Luxury Travel Agency Business Model Canvas

Adventure travel agency business model canvas, online travel agency business model canvas.

You can also read our articles about: - how to build a marketing strategy for your travel agency - how to segment the customers of your travel agency - how to make a competition study for your travel agency - how to start a travel agency (guide)

• Choosing a selection results in a full page refresh.
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Travel Agency Business Model: What It Is and How it Works

In 1758, Cox & Kings became the first travel agency in modern history. Since then, the traditional travel agency model has grown and evolved into a $149 billion industry while the new online traveling agency model generates over $400 billion. It’s clear that this is a business model that has withstood the test of time. Let’s take a look at this business model , its advantages and disadvantages, how it makes money, and a few examples.

The Travel Agency Business Model

The travel agency business model is a framework that travel agencies use to provide travel-related services to customers. At its core, this model involves acting as an intermediary between clients and various travel service providers, such as airlines, hotels, and tour operators.

Travel agencies understand customer needs, preferences, and budgets to create personalized travel experiences. They leverage their expertise and industry connections to access information and deals not readily available to the public. Typically, travel agencies earn their income through commissions from the service providers they book with, service fees charged to clients, or a combination of both.

However, technology has expanded how this model works and how it generates revenue. No longer are commissions the only method by which agencies make money. As the world has changed, so has this model and its income-generating capabilities. Let’s take a look at a few different ways to make money from this model.

How Travel Agencies Make Money

Traditionally, the way travel agents generate revenue is the same way other businesses using the agency model make their money: through commissions. When an agent or agency recommends a hotel, cruise, or airline, they receive a commission from those entities. The size of the commission usually depends on the type of service purchased. For example, hotels typically offer a 10% commission per booking. 

On the other hand, c ruises offer up to 18% commission to agencies for vacation packages sold. 

• Commission from bookings : Earn a percentage from bookings for hotels, airlines, cruise lines, and tour operators.
• Service fees: Charge for personalized services like itinerary planning, booking assistance, and on-trip support.
• Travel insurance: Sale of travel insurance to clients for additional income and enhanced customer service.
• Exclusive tours and packages: Organizing and selling their own tours and packages for higher profit margins.
• Travel-related merchandise: Selling merchandise related to travel.
• Strategic partnerships: Leveraging partnerships for mutual promotions and additional revenue.

Types of Travel Agencies

Traditional brick-and-mortar agencies.

Traditional brick-and-mortar travel agencies are physical establishments where clients can walk in and consult with travel agents face-to-face. These agencies offer a personal touch, with experienced agents providing customized travel planning services.

They are particularly valuable for complex travel arrangements, like multi-destination trips, cruises, or group travel. Traditional agencies often build strong local customer bases and can provide a level of detail and customer care that is hard to match online. They are ideal for customers who prefer in-person interactions and seek expert guidance and reassurance throughout the booking process.

Online Travel Agencies (OTAs)

Online Travel Agencies, or OTAs, operate strictly on the internet. Travelweb.com and Expedia were among the first online travel agencies that helped visitors find hotels and flights without working with a human agent. Sites like Travelocity and Orbitz soon followed. Eventually, those agencies were acquired by Expedia Group. 

OTAs provide the advantage of easy comparison shopping, allowing customers to quickly compare prices and options for flights, hotels, car rentals, and more. They often offer competitive pricing and are accessible 24/7. However, they may offer less personalized service compared to traditional agencies. OTAs often make money using different pricing models.

Here are some examples of the different pricing models used by OTAs:

• Airbnb – Peer-to-Peer Model
• TripAdvisor – Advertising Model
• Booking.com – Agency and Merchant Model
• Travelocity – Merchant Model

Airbnb, which was once known as a rental company has pivoted into a travel agency. 

Specialty Travel Agencies

Specialty travel agencies focus on particular types of travel or destinations. These agencies create a unique selling point by offering expert knowledge and specialized services. This category includes agencies that specialize in areas like luxury travel, adventure tours, eco-tourism, or specific regions of the world.

They cater to niche markets and provide in-depth knowledge and unique experiences tailored to their clients’ interests. For example, an agency specializing in safari tours would have detailed knowledge about various African destinations. They would also know the best times to visit and any unique accommodations. These agencies are ideal for travelers with specific interests or who are seeking an extraordinary travel experience.

Corporate Travel Agencies

Corporate travel agencies specialize in handling the travel needs of businesses and organizations. They manage business trips, conferences, and other travel-related needs for companies. These agencies are adept at navigating the complexities of business travel, such as corporate rates, expense management, and travel policy compliance.

They offer services like 24/7 support, travel risk management, and detailed reporting. Corporate travel agencies are essential for companies looking to streamline their travel processes, ensure the safety and comfort of their traveling employees, and control travel-related expenses. AMEX GBT and TravelBank are a few examples of the leading corporate travel agencies out there.

Pros of the Travel Agency Business Model

The travel agency business model, despite its challenges, offers several advantages that make it a viable and often preferred choice for many travelers. These benefits not only help travel agencies attract and retain customers but also provide them with unique opportunities to stand out in a competitive market.

Personalized Customer Service

One of the primary strengths of travel agencies is their ability to offer personalized customer service. However, this is true for brick-and-mortar agencies. OTAs have very few personalized services other than those recommendations offered by the site’s algorithms or targeting cookies.

Unlike online booking platforms, retail travel agents can provide a high level of personal attention. They understand that individuals have different preferences, needs, and budgets.

This personal touch allows them to craft travel experiences that are tailored specifically to each client. This can be particularly valuable for complex itineraries, special occasions, or for travelers with specific needs. The ability to offer bespoke travel planning and problem-solving during trips creates a customer experience that automated services simply cannot match.

 Diverse Revenue Streams

One of the major advantages of the travel agency business model is the potential for diverse revenue streams. Travel agencies can earn income through various channels such as commissions from travel providers (like airlines, hotels, and tour operators), service fees for specialized itinerary planning, and the sale of travel insurance. This diversification allows agencies to maintain a steady income even if one particular source declines.

High Client Retention Rate

Travel agencies often enjoy a high client retention rate. In the hospitality and travel sectors, the typical client retention percentage ranges around 55%. By providing personalized service, expert advice, and hassle-free travel planning, agencies can build a loyal client base. Satisfied customers are likely to return for future travel needs and recommend the agency to others, which is invaluable for long-term business growth.

Scalability in the Travel Agency Business

Scalability is a standout advantage in the travel agency business model. Initially, a travel agency can start small, focusing on a niche market or a specific type of travel service. As the business gains a foothold, it can incrementally expand what it has to offer. This could include adding new destinations, diverse travel packages such as luxury tours, budget trips, or adventure travel, and broadening the range of services including corporate or group travel management.

Importantly, the scalability of a travel agency does not necessarily require a proportional increase in overhead or resources. This aspect allows for sustainable growth. As a result, travel agencies can scale up (or down) in response to market trends or economic conditions. This also means that they can pivot because of consumer preferences. 

For example, in the 1990s Acapulco was a highly desired destination. However, in the 2020s travelers are flocking to Dubai for their getaways. Travel agencies can quickly pivot in order to give clients travel options while not needing to change their business operations.

Cons of the Travel Agency Business Model

Increased competition.

One of the most formidable challenges facing travel agencies today is the heightened level of competition. With the advent of online booking platforms, such as Expedia and Booking.com, and direct booking options offered by airlines and hotels, traditional travel agencies find themselves competing in an increasingly crowded market.

These online platforms often provide customers with a convenient way to compare prices and book travel services directly, bypassing the need for an intermediary. Additionally, they are typically available 24/7, offering a level of convenience that traditional agencies struggle to match.

This shift has not only squeezed the market share of traditional travel agencies but also put downward pressure on their pricing and service fees.

Dependence on External Factors

One notable disadvantage of this model is the high level of exposure to external factors. Their operations and profitability are closely tied to global and regional dynamics. As most know, these can be unpredictable and highly impactful. Geopolitical events, such as political unrest, terrorism, or diplomatic tensions, can abruptly make destinations less appealing or even inaccessible. When these things happen, it can lead to a significant drop in bookings and revenue. Similarly, economic downturns can quickly change travel patterns, with people cutting back on discretionary spending like vacations, directly affecting travel agency sales.

Natural disasters, health pandemics, and environmental concerns also play a major role in influencing travel decisions. For example, during the first year of the COVID-19 pandemic, global road travel and commercial flight activity decreased by 50 percent and 60 percent . 

Also, currency fluctuations and changing visa regulations can impact international travel trends. A strong currency in a key market can deter travelers. On top of that, stricter visa regulations can reduce the number of inbound tourists. These elements make planning and forecasting exceptionally challenging for travel agencies, requiring them to be adaptable and resilient in the face of constant change.

Low-Profit Margins

The travel agency business is characterized by relatively low profit margins, a significant con in its operational model. This challenge stems from several factors, including intense competition with online travel platforms and direct booking options offered by airlines and hotels, which often feature lower prices and more direct control over the customer experience. In order to remain competitive, traditional travel agencies are often compelled to offer compelling deals, which can further compress their profit margins.

Commission-based income, which is a primary revenue source for many travel agencies, presents its own set of challenges. These commissions, often a percentage of the total booking cost, can be modest, especially with suppliers increasingly reducing commission rates. Furthermore, the growing trend of suppliers offering the same or lower rates directly to consumers further exacerbates the pressure on profit margins.

Time-Intensive Operations

The operation of a travel agency is often a time-intensive endeavor, which can be a significant downside of this business model. Crafting personalized travel experiences, which is a key selling point for many agencies, requires meticulous planning, extensive research, and constant communication with clients and suppliers. This level of customization and attention to detail is labor-intensive and time-consuming, especially when catering to clients with specific or complex travel needs.

Furthermore, the nature of the travel industry demands that agencies remain responsive to client needs around the clock, especially for clients who are actively traveling. Dealing with last-minute changes, addressing travel disruptions, and providing support across different time zones can be demanding and reduce the time available for other business activities.

For small or independent travel agencies, where resources are limited, this time commitment can be particularly challenging. Balancing the need to provide high-quality, personalized service to existing clients while simultaneously engaging in marketing efforts, business development, and administrative tasks can stretch resources thin. This time pressure can limit the agency’s ability to scale up, as acquiring new clients and expanding services requires additional time and effort that may not be readily available.

As we mentioned before, it appears that this is a business model that is here to stay. The travel agency model has many traditional elements of a successful business model but has also integrated modern methods with the advancement of technology. Entrepreneurs and business owners considering this model should take the time to understand the benefits as well as the risks involved.

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Business Model Innovation Is the Hottest Thing in Online Travel

Dennis Schaal , Skift

July 27th, 2022 at 2:30 AM EDT

Innovation comes in many forms. Sometimes it's a new technology. But for a growing number of online travel companies, it's all about disrupting traditional business models.

Dennis Schaal

Dennis' Online Travel Briefing

Editor’s Note:  Every Wednesday, Executive Editor and online travel rockstar Dennis Schaal will bring readers exclusive reporting and insight into the business of online travel and digital booking, and how this sector has an impact across the travel industry.

Online Travel This Week

One of the most interesting developments in online travel these days is companies overturning existing business models with AirAsia , eDreams Odigeo , and Hopper leading these efforts.

These three aren’t the only ones changing the ways travel companies have traditionally conducted business online, but they provide interesting test cases.

Airlines have traditionally made their money selling flights, entering into lucrative deals with credit card companies, and charging for extras such as bag fees.

Whether it succeeds or not, Capital A , which operates AirAsia, now can boast that the Malaysia-based airline group’s superapp has more than 10 million monthly active users, and among the twists, AirAsia is now selling flights through its app from other airlines, such as Singapore Airlines .

As a way to expand its network and revenue stream, AirAsia partnered with Czech Republic-based Kiwi.com to offer customers tickets on other airlines. AirAsia calls the offering FlyBeyond.

Sure, airlines commonly sell partners’ flights as codeshares or as part of joint venture agreements. That’s not new. But AirAsia doesn’t necessarily have deep partnerships with the airlines in FlyBeyond, and is trying to make its superapp a one-stop shop for customers so they can fly to destinations AirAsia doesn’t service.

Whether AirAsia’s superapp strategy proves to be a success remains to be seen. Several years ago, Accor hotels tried to list unaffiliated independent hotels on its website, and that didn’t work. But AirAsia’s effort, as part of its superapp strategy to offer banking and payment solutions, as well as retail products and ridesharing, seems to have some upside.

Edreams Odigeo, based in Spain, is among a new crop of companies changing the way they operate to tilt their businesses toward subscriptions or memberships. As detailed in a recent Skift Research report , the Edreams Odigeo Prime subscription program, which offers discounts on flights and hotels, now has more than 3 million travelers paying $60-$75 per year to be members.

Edreams Odigeo generated some 40 percent of its euro 424 million in sales in the 12 months through May 2022 from its Prime subscription plan, the report found.

In addition to Edreams Odigeo, lots of travel businesses, including AirAsia, metasearch and review company Tripadvisor , hotel brand Selina , and luxury accommodation provider Inspirato , are orienting their business models to include subscriptions.

“Performance indicators for travel have traditionally focused on volume, pricing power, and unit revenue (e.g. for hotels RevPAR, for airlines PRASM),” the report said. “A shift to a subscription model means that travel companies must also put in place training, systems, and procedures to track and understand a new set of engagement metrics like the upfront cost to acquire a customer, customer churn, and customer lifetime value.”

Montreal-based Hopper, too, is changing the traditional online travel agency business model. With its variety of fintech-oriented products, such as freezing the prices of flights and hotels for a week or two for perhaps a $25 or $45 fee, Hopper recently claimed its revenue run rate is 30 times higher than in 2019.

Hopper bets, based on its technology, that it will recoup way more money in fees than in having to pay the difference for higher airfares or hotel rates for customers if prices soar.

In September 2021, Hopper CEO Fred Lalonde said some 70 percent of the company’s revenue came from financial products, and not selling the travel itself, although that percentage is likely lower in 2022.

Critics claim that Hopper labeling these products as trendy “fintech” offerings is hype, and they actually are a form of insurance. Regardless, if an online travel agency is making way more money on price freezes than on flight and hotel commissions, that will disrupt parts of the online travel agency business model, and imitators will undoubtably follow.

MakeMyTrip Joins the Growing Club With SuperApp Ambitions

In a Skift interview, MakeMyTrip Group CEO Rajesh Magow said the online travel agency wants not only to achieve superapp status in India, but in the Middle East, as well, where it has launched operations. He also seemed to hint about a deeper partnership with Amazon. Skift

Lastminute.com Group Gets an Interim CEO

Other than Jie Sun in China, there aren’t a lot of CEOs of online travel companies who are women. But Amsterdam-based Lastminute.com Group, reeling from the detention of its CEO and chief operating officer in a Swiss Covid relief fund fraud investigation , appointed Laura Amoretti interim boss. Amoretti most previously served as chief customer officer. Skift

Airbnb Co-Founder to Step Away From Day-To-Day Operations

Airbnb co-founder Joe Gebbia said he planned to step away from day-to-day operations at the company, where he chaired its in-house design studio Samara. Gebbia will remain on the Airbnb board and will stay involved with the independent non-profit, Airbnb.org. Skift

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Our daily coverage of the global travel industry. Written by editors and analysts from across Skift’s brands.

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Tags: accor , airasia , airbnb , capital a , Dennis' Online Travel Briefing , edreams Odigeo , fintech , hopper , inspirato , Kiwi.com , lastminute.com , makemytrip , online travel newsletter , selina , singapore airlines , Skift Pro Columns , subscriptions , tripadvisor

Travel agency study set to explore new business models

The travel agency channel was a high-tech of industry in the 1970s and 1980s. Retailers worked on big-box computers and used almost as much code as programmers to book tickets and make reservations. As decades progressed, the segment changed and was often criticized for being less than tech savvy.

Today, the travel agency business is fueled by AI, apps, businesses run on tablets and smartphones and a social media expansion in marketing and customer engagement.

"Something is happening in this channel. Established tech firms are getting funding and are building out more features. Additional rounds of funding is such a good sign. People are buying from advisors via text, WhatsApp, WeChat. The advisors have taken technology and transitioned it to help meet clients where they are. Agents are much more flexible and nimble … something Expedia and OTAs cannot do," said David Kolner, senior vice president, global member partnerships at Virtuoso .

Virtuoso is one of the lead sponsors of a new research initiative by Phocuswright. Phocuswright will commence research of the U.S. travel agency market during 1Q2018. The U.S. Travel Agency Landscape landmark study will analyze the complex and changing business models of the segment. Phocuswright has been researching the travel agency distribution landscape in the U.S. since 2006 and the 2018 study will be its third comprehensive look at the travel agency market (the first study focused on 2006-2009 and the second on 2008-2013).

Virtuoso is the first to contract with Phocuswright as a Platinum research partner. "With respect to research, it is always important to create data that shows the value of the distribution channel and to draw attention to the entire industry for suppliers, for the media and for the industry at large," said Kohlner. He said so much has changed in the demographics and business models of the agency community as well as the role of technology and the acceptance of consumers to using agents. "There has been a renaissance of the travel distribution channel. These changes have made travel advisors accessible to the public and available in their local market. Personal connections and networks that were the foundation of original businesses – such as being in the business and social community – wasn't as scalable but is now as independent contractors expand. Consumer reach of independent contractors has changed the industry and fueled the growth, not just for Virtuoso, but for everyone."

The travel agency landscape appears to have stabilized, but its demographics have morphed in the process. The U.S. Travel Agency Landscape study will explore business models, technology choices, booking patterns, mobile and social strategies, online activities and loyalty among agents to suppliers and among consumers to their agents. The agency landscape will be analyzed across their supplier relationships, consortia and affiliation partners and their technology providers.

"The rise of the service economy and the challenges of do-it-yourself have escalated the growth and complexity of the travel agency model. With a multitude of affiliations, business models and locations, travel suppliers have a much more diverse audience to find and service," said Lorraine Sileo, senior vice president, research and business operations for Phocuswright. "Our team is anxious to dig deeper into the complexity and help the industry understand what their sales force really looks like today, what role technology plays in their business and where they are headed in the future."

In the 2013 Travel Agency Landscape Study, mobile was such a small part of the equation. Kohlner anticipates a very different picture to emerge with the new research. "With respect to technology, there is a misnomer that this channel is tech-averse. Nothing could be further from the truth. New millennial advisors or old established mature advisors, I have so much respect for them. They are constantly testing new systems. The best travel advisors are curious, a creative force."

Virtuoso believes the combination of creative and effective technology and human interaction is what is making the travel advisor competitive. The new Travel Agency Landscape study will explore the multiple definitions of "online" in this segment as well. Many traditional retail-type businesses generate customers online but service these customers and close the deals offline. Independent contractors have risen to a level of high importance for suppliers as top agencies grow through these off-location sales people.

New and different business models will be explored in quantitative and qualitative research. Kohlner predicts the results will show how dramatically the segment is changing. "They are morphing into complete lifestyle consultants. The channel is blurring the edges."

As Phocuswright commences this third U.S. Travel Agency Landscape study to analyze the complex and changing business models of the U.S. travel agency market, limited opportunities are still available for participants and sponsors to help set the research agenda, gain access to unpublished data, and more. Click here to find out more about The U.S. Travel Agency Landscape study.

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Understanding the Online Travel Agency Business: Partners, Building Blocks, How to Grow

• 10 min read
• 3 Sep, 2020
• 1 Comment Share

Online travel agencies are among the youngest players in the travel market. Since their appearance in the 90s, they flipped travel distribution, became hotels’ biggest enemies , and changed how people research, plan, and buy their trips. And they’re not planning to stop with new startups emerging every year and massive businesses growing even more. Having worked with numerous travel businesses , we can boast that we know a thing or two about building and growing a successful online travel agency. Here we will talk about the ins and outs of the industry, from increasing your inventory to getting the right technology and staying ahead of the competition. But let’s start with the basics.

What is an Online Travel Agency? How OTAs work

An Online Travel Agency or OTA is a website (or app) specializing in selling travel services to customers. There are OTAs that offer hotel rooms, flights, rental cars, vacation homes, tours, or all of those at the same time. They basically are distributors for hotels, airlines, and tour companies that profit by taking a fee for each sale. Here’s how it works.

Airline and hotel distribution network. White lines indicate user interaction and blue lines show the movement of data

OTAs are intermediaries between customers and service providers. Travelers can go directly to the hotel’s or airline’s website but around  44 percent of people go to OTAs to compare prices and see the whole pool of options. OTAs compile their rich inventories by connecting to different partners via APIs - pieces of code facilitating the communication between different software systems. Who are those partners? Hotels . There are different ways for hotels and OTAs to connect: via Extranet , a Channel Manager software , or API connecting with hotels’ Central Reservation Systems . Bed banks or wholesalers . These industry players buy hotel rooms in bulk and sell them to OTAs, travel agents, or even airlines. Here’s more info on the largest bed banks and how OTAs can work with them . Global Distribution Systems (GDSs) . These computer networks dominate travel distribution and store inventories, schedules, and fares for all types of services: from hotels to ferries. Sabre, Amadeus and Travelport are the biggest and just about a necessity if you want to sell flight tickets. You can log into GDS terminals manually or set up an API connection. Airlines via NDC connection . This fairly new way of distribution allows airlines to sell their inventory bypassing GDSs. We previously explained how NDC works in detail, but in short, you’ll need a separate software solution. One more partner allows OTAs to promote their propositions - metasearch engines . Websites like Google Flights or Skyscanner aggregate different flight options. For many OTAs, this is the main source of traffic.

Finding the best mix of providers and distributors to keep the prices low and the markup high is the main task for any OTA and how they essentially make a profit. To support that task, an OTA should work like a well-oiled machine. Let's turn our attention to the main elements that help that machine run.

Online Travel Agency building blocks and technology

OTAs are technology-focused businesses. And they appeal to today’s traveler more than traditional travel agents for this exact reason. Most operations in OTAs are automatic, and there are many systems responsible for that. We will cover three mechanisms running in the background of an OTA: its booking and commission engines, and the back office. If you’re a visual learner, watch a series on YouTube from our Travel Technology Competence leader Andrey Chebotarov where he covers all of that. Starting from the customer’s perspective first, let's talk about booking engines - the heart of an OTA that interacts with users on the front and runs all main OTA tasks in the back.

How a booking engine works

A travel booking engine is a software component that processes bookings automatically. That’s just the tip of the iceberg though. In fact, a booking engine is responsible for all the following functions in an OTA.

A booking engine manages search and booking functions on the OTA website

Search rules . A booking engine can be programmed to show search results in a manner that suits you best using search rules. Search rules dictate what products from what suppliers at what price and to what users to show. That and the pricing rules are crucial elements in creating travel personalization . Pricing rules . Many OTAs practice dynamic pricing , meaning that the prices change depending on current demand, competition, season, suppliers, customer acquisition sources, and more. Pricing rules allow you to always choose the most profitable pricing considering all those factors. Booking and ticketing flow . A booking flow is a set of steps leading customers from search to payment. Each supplier has their own booking flow, and your OTA has to adjust to them all, which is a difficult technical and UX task, managed by a booking engine. Note: OTAs can do ticketing only if they’re accredited by IATA. Read how to get IATA accreditation and what the alternatives are in a separate article. This must’ve given you a good enough idea of how the main OTA process - booking - works. Now, let’s talk about the system that helps OTAs generate profit - a commission engine.

How a commission engine works

A commission rules engine is a software component that automatically calculates commission and accordingly - the final price of the booking.

Watch Andrey’s explanation for a detailed look at commission engines

There are two types of commissions used at OTAs - flat fees and adjustable commissions. Flat rates are common but unhelpful for winning the competition. So OTAs write commission rules depending on different factors, namely: Suppliers . If you got a particularly good rate from a supplier, you can set a lower commission, thus making a sale and keeping the margin high. Dates and destinations . You can set a larger commission ahead of high season or a popular event when you know that the demand will go up. Size of a deal . Customers with complex itineraries who bring more revenue than a regular traveler can get a discount. This is often a small price to pay for someone’s satisfaction and loyalty. Traffic source . A common practice is to cut the commission for users on the metasearch website where you’re fighting with competitors for the lowest price, and vice versa - boosting it up for people coming directly to your website. There are tons of factors and their combinations to include in commission rules. To learn the most successful combinations, OTAs can use analytics and tweak rules accordingly, or even automate the engine to always deliver you the best deals. These were two major systems in an OTA, but we also want to briefly cover a few admin processes happening in the background in an OTA’s back office.

What goes into an OTA’s back office

How main modules of the back office interact with each other and the partners

Booking desk . No OTA is fully automated. Many mid- and small-sized ones still rely on over-the-phone or offline bookings, even if customers come from the website. A booking desk is a tool for travel agents to view all bookings on a centralized platform, create custom travel packages, and book using more sophisticated ways, like accessing GDS terminals by hand. Customer relationships and support . Just like with any eCommerce business, it’s typical for an OTA to have a CRM system to keep information about customers. It’s mostly used for marketing, which is the lion’s share of an OTA’s budget. Customer data allows for understanding your client segments better, targeting them with offers they will be interested in, and building trust and loyalty.

Billing and payment processing . The topic of funds settlement often gets confusing, especially considering that the process is different for hotels and airlines, with many extra players joining in. When working with airlines, OTAs use software from industry regulators IATA or ARC . Hotels are often less complicated, but since you mostly get your inventory from third parties, the process requires some smart management and technical finesse. Ideally, all these functions should be automated to allocate your time and human resources to growing the business rather than supporting it. But realistically, you want to automate at least one system to solve the most repetitive tasks.

How to grow an OTA and maintain a competitive edge

There are tons of OTAs in the world and about 70 percent of the market is shared between the two largest players: Expedia Group and Booking Holdings. Expedia Group owns such brands as Expedia, Orbitz, Travelocity, Trivago, and more. And Booking Holdings covers Booking.com, Priceline, Agoda, and Rentalcars. You can see the market distribution in detail in this handy infographic . Despite a near oligopoly on the market, travel distribution remains a profitable business to start and run. Today, mid- and small-sized companies have all resources to thrive if they know what OTA success consists of. It’s one or a combination of these three things:

• Niche markets/demographics/regions . The more mainstream an OTA is, the less targeted it can be. Expedia and Booking.com can’t be oriented to every single region of the world, or traveler budget, or specific traveler taste. That’s why having done their research right, smaller businesses can find a niche to serve better than the giants do. Look at hostel-specific OTAs, local websites serving smaller European communities, or OTAs with rare connections to Destination Management Companies .
• Unique user experience . Traveler behavior changes all the time, which means that they have new needs and tastes that need to be satisfied. Tons of travel startups today offer interesting solutions to common problems - some offer subscription travel service, others allow monitoring prices or creating a full itinerary with minimum input from a customer. Unique ideas may take some advanced technological support, but it may benefit in the long run.
• Cheap prices . For 60 percent of travelers , the price remains the most important factor when choosing the itinerary, which means that customers choose a better deal over a brand name. Which is why the main competitive advantage your OTA should have is exclusive prices. Exclusive means previously negotiated with the supplier - not just pulled from the search result of a GDS.

We have a guide to building a marketing and pricing strategy for an OTA , but here are some main points.

Develop your partnerships

Even if you have the most advanced booking engine and a group of skilled agents to close the deals, the customers will leave you for OTAs where the price is simply lower. When connecting to bed banks and GDSs, every agency gets the same list of rooms, flights, and prices, so you have to start by negotiating the best rates with your main suppliers. For example, if your niche is family vacations in Greece, you should research airlines that fly there the most and find a wholesaler with the largest inventory of all-inclusive hotels in the Balkans. You get the idea.

Win the competition on metasearch sites

Skyscanner lists several OTAs with different prices for the same flight

Using acquisition analytics . To know what to promote, you need to know what already performs well and what (and why) doesn’t. The conversion rate is your main indicator that visitors chose a better deal over yours. Learn where it happened by looking at acquisition channels. Using metasearch analytics . Metasearch engines sell reports listing information on their search data, number of competitors (called bidders), and stats sorted by tons of different factors. This is an invaluable source of information to help you better target your offers. Understanding your engines . You will use a few metasearch sites to distribute and they’re rarely the same. Look into their demographics the same way you would consider suppliers.

Advertise and use content marketing

OTAs like Expedia use up to 50 percent of their revenue on marketing. They want to appear on your Facebook feed, remind you about your latest searches in emails, and create viral ads. Trivago’s tagline and pushy sales strategy even birthed a few memes . Get smart with your SEO and landing pages, focusing on keywords that your audience uses in their searches. Deliver useful content that will bring traffic and put you higher on the search page. And use Google ads, which are totally effective if you use specific keywords.

A few final pieces of advice

If you know the right formula and keep iterating, you will succeed. But we won’t lie - there are many challenges in this industry that OTAs face. The coronavirus crisis . The future of the travel industry is still unclear and all players are struggling to stay afloat and find new revenue streams . Joining the market right now is dangerous if you don’t have a strategy for working in the current climate. Some businesses, however, have opportunities to grow - smaller OTAs have a chance to offer more localized travel options to address current customer needs. Here's the take on the future of OTAs by our travel tech competence leader, Andrey:

Invisibility . OTAs should be ready to invest a lot in marketing and promotion. And often, there’s no clear way to what suits your business and customers best. This means analytics that will help you understand what works and what doesn’t are a must. Which brings us to the next point. Technology . Digital distribution thrives on technology. The most successful companies are tech giants with complex booking platforms. Smaller businesses succeed when they have either a digital infrastructure that allows them to work more effectively than competitors or unique customer-facing technology that makes travel shopping better. Whichever route you choose, make sure to invest in great custom technology.

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Category: Travel

Date: October 20, 2023

Online Travel Agencies – A Brief Introduction

The role of an online travel agency (OTA) is becoming increasingly important in the accommodation industry as they provide a convenient way for travelers to arrange their stay. From the comfort of their home, travelers can compare hotel prices and book them over the internet. 

In this blog, we are going to discuss what an OTA is, the best OTA platforms, travel website development and how to do it right, and more.

Ready? Let’s go.

What Are Online Travel Agencies?

An online travel agency (OTA) arranges and sells accommodations, tours, transportation and trips on an online platform for travelers. They are third parties who sell services on behalf of other companies.

Usually, these OTAs offer many benefits with added convenience with more of a self-service approach. They also include a built-in booking system which allows instant bookings.

How Do Online Travel Agencies Work?

OTAs generally work on two models. They are,

1. Merchant Model

In this model, hotels sell rooms to OTAs at a discounted or wholesale price. Then, the OTA sells them to the customer at a markup price

2. Agency Model

This is a commission-based model where OTAs acts as a distribution partner. OTAs receive full commission after the stay has taken place. The hotel directly receives the payment from the end customer and does not wait for the payment transfer from third-party distributors.

What Are the Benefits of Partnering with Online Travel Agencies?

In one word – exposure! Online travel agents get thousands of website visitors from all over the world. Plus, they have positioned themselves as an authority on everything related to travel. So, people trust the recommendation they receive from OTAs.

By listing in OTAs, accommodation businesses like hotels not only reach a vast set of audience but will also find their service among many other reputable sources of information.

In addition, hotels that are listed on OTAs can also benefit from what is referred to as the ‘billboard effect’. This means that OTAs provide a form of advertising for service providers such as hotels on their platforms. Once the user gains this awareness, they may even go to the website of that particular hotel to make a direct booking.

What Are the Advantages and Disadvantages of Selling Through Online Travel Agents?

Accommodation businesses like hotels and B&Bs have pros and cons of getting listed in OTAs. Let’s take a look at them.

Advantages Of Online Travel Agents

• Low-cost method of selling accommodation services
• Reduced online marketing spend as OTAs invest in advertising to attract potential customers
• Impartial reviews give customers the confidence to book
• Users can easily compare various accommodation costs at one place

Disadvantages Of Online Travel Agents

• Commission rates are charged on every sale. It can range between 10-15% of the gross cost
• Restrictive cancellation terms
• Even if accommodation businesses use OTAs, the need for their own website and booking engine does not go away
• Investment in a balanced multi-channel strategy may be needed to boost sales

Even though OTAs can help to fill your rooms, accommodation businesses must try to maximize revenue through their own website. Consistent work on search engine optimization tactics and other digital marketing techniques is a must. Accommodation businesses must focus on customer retention techniques and directly target their existing customers through emails and direct marketing.

How To Start An Online Travel Agency?

Travel agencies no longer inform customers about the availability of flights and rooms. They issue rooms and get a commission from the respective accommodation businesses. That is why most of the new travel businesses follow the OTA model.

If you plan to enter the OTA arena, you can specialize in pilgrimages, leisure travel, business travel or any niche. But, focusing on how effectively you offer things is the key to success.

Here Are Some Points You Have To Consider When Starting An Online Travel Agency.

• Register the name of your agency and if applicable, take a license as per your local laws
• Try to get a membership in IATA or any other reputed travel organization
• Gain more knowledge about the travel industry and particularly the nice you want to concentrate
• Get your travel website designed by a professional company like ColorWhistle
• Offer deals that focus on a specific geography. Focusing on a particular niche will also bring more success
• Publicize your business in the online space
• Utilize the power of blogging
• Create a good social media presence

Why Do People Use Online Travel Agencies?

 here are some of the main reasons they prefer ota’s..

• Few OTAs offer reward programs which can be used for future travel needs
• Special rates which cannot be found elsewhere
• Some OTAs may have generous cancellation policies. For example, Priceline does not offer any penalty if the user cancels the ticket until the end of the next business day
• Most users may not have an idea on where to book other than an OTA
• OTAs make it easy to compare different rates

Who Are the Top Online Travel Agents?

1. booking.com.

Booking.com is one of the largest accommodations websites which has now expanded to smaller markets such as family-operated bed and breakfast, vacation rentals and self-catering apartments.

Interesting statistics

• Every day, 1,550,000 nights are booked
• 68% of nights booked came from families and couples
• 42% of nights booked came from unique places such as homes and apartments
• 38% of reviews are given by guests which are useful for other travelers
• 75% of nights booked come from guests who booked more than 5 times

2. Expedia’s Hotels.com

Expedia’s Hotels.com is a popular brand which has a global audience and attracts diverse travelers. The company gained more power in the industry by acquiring Travelocity.

• Gets over 675 million monthly site visits
• Operates in 70+ countries and 40+ languages
• Attracts 75 million monthly flight shoppers

Airbnb revolutionized the travel accommodation industry by introducing home-sharing. The website has diverse listings and travelers get a sense of safety as they can know their guest’s identity.

• 2.9 million hosts are present on Airbnb
• Average of 800k stays each night
• 14k new hosts join every month

Apart from these major OTAs, there are many small ones such as OneTravel, Vayama, Tripsta, TravelMerry, ExploreTrip, Kiss&Fly, Webjet, GoToGate, Travelgenio, Bookairfare, Fareboom, Skybooker, Travel2be, OneTwoTrip!, and eBookers.

Drive Conversions and Boost your Business with Expert Travel Website Development.

What the future holds for online travel agencies.

It is clear that, in the near future, accommodation businesses are not about to back down from OTAs. They are enjoying the billboard effect and trying their best to retain website visitors and convert them into direct booking. 

Sure, there is a cost involved. The upside of this is that accommodation businesses are working hard to create a loyal customer base that will continue to seek direct bookings.

The chances of OTAs suffering in the long run are pretty slim. Smaller accommodation businesses have a lot to gain from the exposure they receive through OTAs. Plus, a large portion of the younger generation prefers OTAs. So their market will continue to grow.

If you need any help to design, develop or market an OTA website, contact our travel web design and development experts at ColorWhistle . 

We can create an amazing website with beautiful designs combined with dynamic content such as live rates and special offers. Contact us today for your free business analysis and consultation.

In quest of the Perfect Travel Tech Solutions Buddy?

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About the Author - Anjana

Anjana is a full-time Copywriter at ColorWhistle managing content-related projects. She writes about website technologies, digital marketing, and industries such as travel. Plus, she has an unhealthy addiction towards online marketing, watching crime shows, and chocolates.

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Travel Agency Business Model Canvas

$15.00 $9.00 1 review

Resources On Travel Agency

• Financial Model
• Business Plan
• Value Proposition
• One-Page Business Plan
• SWOT Analysis
• Marketing Plan
• Bundle Business Plan & Fin Model
• Description
• 1. Key Partnerships
• 2. Key Activities
• 3. Key Resources
• 4. Value Propositions
• 5. Customer Relationships
• 6. Channels
• 7. Customer Segments
• 8. Cost Structure
• 9. Revenue Streams

Travel Agency Business Plan

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Introduction

Travel booking has long been an integral part of any human being's life, especially in today's highly connected world, where access to global destinations has become easier and more affordable. With the rapid growth of global societies, the travel industry is anticipated to grow even further over the next decade, reaching an estimated market size of $17 Billion by 2027. As such, many entrepreneurs are looking to invest in this burgeoning industry, starting their own travel agencies.

Those considering opening their own travel agency are looking for a business that offers quality services and the capability to ensure their client's satisfaction. Answering this growing demand is the Travel Agency service, a personalized service that focuses on creating customized trips and vacation packages based on the individual desires of the client. Offering a wide range of services, such as flight and hotel bookings, visa and insurance acquisitions, detailed itineraries, and travel advice, Travel Agency wants to become an integral part of their clients’ adventures and provide them with an experience of a lifetime.

Key Partnerships

A travel agency requires strong partnerships with a variety of providers to ensure that clients are offered a comprehensive range of services. These key partners should include:

• Travel suppliers : airlines, hotels, tour operators, car rental companies, cruise lines, etc.
• Insurance providers : to ensure clients are adequately covered for the duration of their travels
• Visa processing services : assistance with obtaining the necessary visas and immigration documentation required for international travel
• Local tourist offices : offering advice and assistance on local attractions, restaurants and activities

Key Activities

Key resources.

The key resources of a Travel Agency include:

• Office Space and Equipment: office space and all necessary equipment, such as computers, phones, filing systems and other items needed to run a business.
• Knowledgeable, Experienced and Customer-Oriented Staff: staff with the relevant knowledge, experience and customer-oriented attitudes necessary to work in this industry.
• Customer Relationship Management Software: software to handle customer inquiries, support, and sales.
• Contracts with Travel Suppliers: contracts with suppliers of flights, cars, tours, and other relevant travel products.
• Insurance and Visa Processing Services: services for processing travel insurance and visas for the agency's customers.
• Online Booking Systems: automated booking systems for customers to use when booking their trips.
• Websites for Advertising and Customer Queries: websites to advertise the services of the travel agency as well as to allow customers to ask questions.

Value Propositions

The Travel Agency will provide customers with a range of tailored value propositions that allow them to experience the best that their trip has to offer. These value propositions include:

• Tailored travel packages and itineraries , designed around the individual needs of each client
• High level of customer service and care , before, during and after the trip
• Expert travel advice and tips
• Competitive prices
• Convenient online booking system
• Delivery of travel documents and tickets

Customer Relationships

The travel agency will focus on creating personal, one-on-one relationships with customers. This will be done by offering online customer service and direct interactions with travel experts. By creating personal relationships with customers, the travel agency aims to build loyalty and ensure customer satisfaction.

• Personal, one-on-one relationships with customers
• Online customer service
• Direct interactions between customers and travel experts

We will utilize multiple channels to ensure our travel agency is well represented and can efficiently serve customer needs. Our primary channels will include:

• Websites for advertising and customer queries.
• Social media to reach a broader customer base.
• Print advertising through local publications and magazines.
• Offline offices and travel agencies for customer service.
• Direct marketing through email, SMS and other forms of communication.
• Multi-level affiliate marketing in order to gain the attention of potential customers.

Customer Segments

Travel agencies can target a wide variety of customers, such as:

• Individuals looking for customized travel packages and services
• Groups of travelers looking for a memorable experience
• Business travelers needing efficient and cost-effective services

In addition, travel agencies can also target special customers such as frequent travelers, honeymooners, VIPs, and senior citizens.

Cost Structure

• Staff salaries
• Office space and equipment
• Marketing and advertising expenses
• Commission from travel suppliers
• Insurance and visa processing costs
• Transactional costs for online booking systems

Revenue Streams

• Commissions from travel suppliers: The Travel Agency may earn from commissions from travel suppliers, such as hotels and airlines, for the bookings made through them.
• Fees charged to customers for customized travel packages and services: The Travel Agency can charge fees for customized travel packages and services, like local tour guides, car rentals, restaurant reservations, and much more.

In conclusion, the business model canvas for the Travel Agency provides a bird's eye view of the company's organization and operations. The Business Model Canvas captures theTravel Agency’s key value proposition, customer segments, channels of delivery, revenue streams, customer relationships, key activities, and ultimately, key resources required to sustain the business.

The Business Model Canvas allows the Travel Agency to quickly evaluate changes in the competitive landscape, customer preferences, and their own operations. With the Canvas, the Travel Agency can identify the areas that need to be addressed to increase the efficiency and effectiveness of their operations. In addition, the Canvas allows for easy communication between the Travel Agency and stakeholders, making it easier for them to identify opportunities for creating greater value.

The Travel Agency’s Business Model Canvas provides a great framework for successful and sustainable growth. With a complete understanding of their customer segments, value proposition, channels of delivery, and key resources, they can start to formulate plans for a successful and profitable future.

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Summer Is Here: A Travel Agency Data Model

Database designer and developer, financial analyst.

• database model
• example data model
• example ER diagram
• example ERD diagram

Most of us love to travel and explore new places, and using travel agencies is an easy way to plan our holidays. With vacation season in mind, we’ll answer the question “What kind of data model would run a travel agency?”

In my personal opinion, the best way to travel would be without any time or budgetary limits. We could leave the beaten track and explore all the most interesting places in as much detail as we want. Unfortunately, most of us don’t have that luxury, so we use what is available: travel agencies. These companies make planning and combining accommodations, transportation, and even activities much easier. In this post, we’ll explore a data model that we could use to run such an agency.

What Should We Know About Travel Agencies?

Before we look at the data model, let’s answer some common questions about the travel business.

What do travel agencies do?

Broadly speaking, the answer is “anything related to travel in any way”. However, two services are the most important and also the first things that come to mind: transportation (how we get to the destination) and accommodation (where we will stay once we get there). These two make up the core business of a travel agency.

Even so, there are many other services that travel agencies offer. When we reach our destination, we may want to do something that’s unique to that place: visit the Tower Bridge, ride on the London Eye, see an opera at the Sydney Opera House, etc. Travel agencies may buy tickets, rent vehicles, book tours, or do other destination-related things for us. Some people simply ask the agency to organize everything for their trip. Others book a tour package. Universally, customers want to get the best possible service and an experience that meets their expectations at the lowest possible price.

How does the business model work?

Travel agencies usually work with partners who provide lodging (hotels, hostels), transportation (airlines, bus lines) and activities. They offer a wide range of services and combine them to present the most attractive offers to potential customers. In addition to their own surcharges and fees, travel agencies may be paid a commission on the partnered services they sell. If they combine many services (i.e. as a package deal), they could also offer a discount to customers.

Basically, travel partnerships are a win-win situation because partner providers save money they would otherwise need to invest in marketing and travel agencies get needed funds. And there is also a win for the customers, who save time as well as some money.

How old is the travel agency concept?

Before people traveled for pleasure, a voyage usually involved some type of pillaging and burning. ☺ Seriously, though, for much of history only the rich could afford to travel to a distant land. Religious pilgrimages became popular in the Middle Ages; many of these pilgrimages are still very popular.

From 1660 to the mid-1800s, the Grand Tour became a must for well-educated members of the European upper classes. This was a long trip around Europe that let people experience other cultures, learn new things, and step outside their comfort zone. During the mid-1800s, the rise of railroads and industrialization made travel more accessible to the middle classes.

The world’s first travel agency, Cox & Co. was established in London by Richard Cox in 1758. Now doing business as Cox & Kings Ltd, it is still active today.

What’s the status of today’s travel agencies?

Technological growth has made many things affordable to middle and lower class customers, including travel. Today you can find multiple travel agencies in nearly every city. Plus, the world is “smaller” than it has been ever before. Travelling from Europe to Cuba or Australia is now a matter of hours rather than weeks or months.

Also, customers are better informed. When they enter a travel agency, they know about hotel and transport services from all over the globe. They just need to pick and book what they want and can afford.

What will we cover in our travel agency data model?

This will be about basic requirements. We’ll focus on the two most common services: accommodation and transportation. We’ll also have a set of predefined offers, and we’ll track contracts and payments. We won’t go into much detail because the model would become too large.

Now let’s move on to the data model.

The Data Model

The data model consists of four main subject areas:

• Countries & cities
• Hotels & transport companies
• Customers & agents
• Offers & contracts

We’ll describe each subject area in the same order they are listed.

Section 1: Countries & Cities

The Countries & Cities subject area contains only two tables. We’ll use them to denote the cities where hotels are located as well as the starting and ending points of a trip.

The country table contains UNIQUE country_name attributes. Each country will also have a UNIQUE country_code . For the United Kingdom, this code might be “GB”, “GBR” or even “826” (think ISO).

The city table will list all cities where our travel agency transacts some type of business. Each city will have a city_name and the ID of the country it belongs to.

Section 2: Hotels & Transport Companies

This subject area will store records for all services and their providers. I’ve focused only on accommodation and transport here. Three of the seven tables in this section are related to hotel services; the remaining four deal with transportation services. The city table in this section is just a copy used to avoid relations overlapping.

The most important aspect of accommodations is the partners we work with. A list of all such partners – i.e. hotels – is stored in the hotel table. Please note that we could easily use this table to store hostels, motels, or even rental homes or apartments. The attributes in this table are:

• hotel_name – The name of a specific hotel. We can expect that it will be the same as the one that is usually used for that hotel, e.g. “Sheraton Zagreb Hotel”. This name will almost always be unique, but this attribute is not UNIQUE.
• city_id – The city where the hotel is located.
• hotel_address – The address of the hotel. Once again, this will almost always be a unique value, but it is not a UNIQUE attribute.
• details – All the hotel’s details, in text format.
• is_partner – If this is a partner hotel or not.
• active – If the hotel is currently operating.

The room_type dictionary lists all possible types of rooms any hotel could have. Besides the primary key, this table contains only the UNIQUE type_name value. Some expected room types are “single”, “double”, “single with balcony,” etc.

The main service hotels offer is the rental of one or more rooms. We’ll store the prices related to each hotel’s various room types in the hotel_service table. This list will be used later when we make offers to customers. For each room type, we’ll store:

• hotel_id – A reference to the related hotel.
• room_type_id – A reference to the room_type dictionary.
• service_price – The actual price the customer should pay for that room.
• active – If the room type is currently on offer.

Now, let’s move on to transportation. The combination of transportation and accommodation are the backbone of each travel agency’s business. As I’ve already mentioned, we’ll use four tables for this key area.

We’ll consider the two dictionaries first. Both of them consist of only two attributes – id , the primary key of the table, and the type_name attribute, which holds only UNIQUE values. The company_type dictionary will contain values like: “airline company”, “railway company”, “bus company” and “car rental company”. The ticket_type dictionary will contain anything that could be used to describe a ticket: “one-way ticket”, “round-trip ticket”, “first class”, etc.

Just as hotels are our accommodation partners, transportation companies are our transport partners. A list of all such companies is stored in the transport_company table. We’ll use the following attributes to describe each one:

• company_name – The company name, which is not necessarily unique. We can expect that the combination of company_name and HQ_address will uniquely denote each company.
• city_id – The city where the company headquarters is located.
• HQ_address – The address of the company headquarters.
• company_type_id – References the company_type dictionary.
• description – A detailed textual description of the company. If it is a partner company, we could also describe our partnership here.
• is_partner – If the company is our partner.
• active – If the company is currently operating.

The last table in this subject area is the transport_service table. We’ll use it to record prices for all available ticket types. For each ticket type, we’ll store:

• transport_company_id – The ID of the transport_company that is offering the ticket.
• ticket_type_id – References the ticket_type dictionary.
• from_city_id and to_city_id – Are both references to the city table and denote the starting and ending points for that ticket.
• service_price – The actual price the customer should pay for that ticket.
• active – If this ticket type is active or not.

An actual schedule is not stored in this table; that would require having schedules for every line from every partner company in our database. I would avoid this because we’d have to be updating the schedules quite a lot (and regularly checking all partner sites for changes). I would leave checking actual schedules as an action to be performed by an operator when an offer is created.

Please notice we don’t store exact room or ticket numbers in the hotel_service and transport_service tables. Instead, we store information about the companies that provide such arrangements. We can assume that we’ll check room and ticket availability directly using the company’s system. Still, we need to know what services they offer to say (for example) to a customer: “You can fly first-class from Hamburg to Havana with Air France on May 25 th , stay at the “Iberostar Parque Central” hotel for 2 weeks and fly back to Hamburg on June 6 th for $3,000 US”.

We simply cannot store all room and ticket availability data. That would require that we have direct access to all the data from all our partners.

Section 3: Customers & Agents

This subject area consists of two tables that relate offers and contracts with customers and agents.

The customer table stores a list of every customer we have ever had contact with. For each customer, we’ll have the following values:

• first_name and last_name – The first and the last name of that customer.
• address , phone , mobile and email – All contact details for that customer.
• details – An unstructured textual description for that customer.
• customer_from – When this customer’s record was inserted into our system.

The second table in this subject area is the The second table in this subject area is the “agent” table. It lists all previous and current employees who have made offers to customers on behalf of our agency. For each employee, we’ll store: table. It lists all previous and current employees who have made offers to customers on behalf of our agency. For each employee, we’ll store:

• agent_code – A UNIQUE code for that agent.
• first_name and last_name – The first and last name of that agent.
• active – If the agent is currently employed by our agency.

Section 4: Offers & Contracts

The last subject area in our model is Offers & contracts . It holds seven tables that contain the details of all offers and contracts we have made for our customers. I will focus only on offers and contracts for individual customers here. Two tables, the hotel_service table and the transport_service table are copies used here to simplify the model.

I’ll describe promo offers first, then move on to other offers and finally to contracts.

Before a customer even enters our agency, we could already have some predefined offers available – our promos, or promotional offers. Creating such offers simplifies our business. We can present these quickly and many customers will select one. All such offers are recorded in the promo_offer table. For each promo, we’ll store:

• promo_offer_code – An internal code that UNIQUELY identifies a promo.
• promo_offer_name – The full name of that promo offer.
• active_from – The date when we started or can start offering this promo to customers.
• active_to – The last day when this promo could or can be offered. Note that this field could contain a NULL value. We may want to offer this promo indefinitely, or we may not have the ending date yet.

Each promo offer contains a list of services, usually including (at a minimum) accommodation and transportation. We’ll use the promo_offer_hotel_services and promo_offer_transport_services tables to store this data. The structure of both tables is almost the same, so I’ll describe them together. For each promo-related service, we’ll store:

• promo_offer_id – References the related promo offer.
• hotel_service_id or transport_service_id – References the related hotel or transportation service.
• price – The price of the service at the moment when the promo offer was created. We should save this price because the service_price could change along the way.
• discount_percent – The price discount percentage we’ll offer to a customer for that service (if the customer accepts this promo offer).
• final_service_price – The service price less the discount amount.
• description –All details, in unstructured format, related to this service and promo offer.

We will also need to create offers “from scratch” – that is, not related to any promo offer. Both “from scratch” and promo offers are covered in the offer table. For each offer, we’ll store:

• offer_code – An internal code that UNIQUELY denotes an offer.
• offer_name – The full name of that offer.
• time_created – The exact time when the offer was created.
• active_from – The date when this offer became active for that customer.
• active_to – The date when this offer is no longer active for that customer. This could be NULL if an offer is available indefinitely. We can expect that we’ll give the customer a timeframe to accept an offer; if it expires before the customer acts, the offer won’t be available anymore.
• time_accepted – When the customer accepted this offer (if any).
• accepted – If the offer was accepted.
• promo_offer_id – References the promo_offer table. If the customer selected one of our promo offers, we’ll store the ID of that offer here. If we have created a custom offer, this value will be NULL.
• agent_id – References the agent who created that offer.
• customer_id – References the customer for whom the offer was created.

As with promo offers, customized offers will also include accommodation and transport services. We’ll use the offer_hotel_services and offer_transport_services tables for this information. Their structure and attributes are almost identical to the promo_offer_hotel_services and promo_offer_transport_services tables, so I won’t explain them again.

The last table in our model is the contract table. The contract is generated after the client accepts an offer. This table will store all details related to contracts signed by our customers. It contains these values:

• contract_code – An internal code that UNIQUELY identifies each contract.
• customer_id – The ID of the relevant customer.
• agent_id – The ID of the agent who signed that contract on behalf of our agency.
• offer_id – The ID of the related offer. This provides us with information about all the services included in the contract.
• time_signed – When this contract was signed.
• total_price – The sum of all prices for all services included in the offer.
• payment_date – The date when the client paid for this contract.
• payment_time – The actual time when the client paid for this contract.
• payment_amount – The amount paid for the contract.
• refunded – If a refund was made for the contract.
• refunded_time – When the refund was issued (if any).
• refunded_amount – The amount of the refund (if any).

The attributes for payments, refunds, times, and amounts can contain NULL values. They will be updated as needed.

What Else Could We Do With This Model?

Today we have discussed a very basic data model that could help manage a travel agency. All the most important parts of a travel business – like the customers, agents, accommodation services, and transport services – are covered. Still, there is much more that could be added.

For example, what about group reservations? This would let us book multiple rooms and tickets for a group of tourists. In that case, we would need modifications in the tables handling promo offers, offers, and contracts.

What would you add to this model? What would you change? Would you remove anything? Tell us in the comments section.

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Welcome to visit moscow tours.

We provide authentic, informative and memorable tour packages and city tours, at very competitive prices. Visit Moscow Tours are available not only in Moscow, but also in other cities: Saint Petersburg, Kazan, Suzdal and Sergiev Posad.  We also organise customised individual programs tailored just for you.

Our guests come in large groups, small private groups, as couples or as single travellers. We take care of and treat our guests with respect in a friendly and warm family environment. We show people our beautiful cities with passion and deep knowledge of their history, culture and traditions.

Our guides are extremely hospitable, helpful and well-informed. They are simply the best because only by providing the best services can we make the world fall in love with Russia. And we are very happy when our guests say that they will definitely come back to Russia and that they will tell all their friends how great Russia is! That is what inspires us to put even more dedication and hard work into our tours, knowing that what we do is positive and meaningful.

Our classic tours include tours of Moscow and Saint Petersburg, two main Russian cities.

Moscow is a big and busy  megalopolis and Russia’s capital city, where more than 12 million people live and work. Our capital city is happening place; it is mysterious, elegant, luxurious, fashionable, clean and bright, with its unique legends, traditions and events. It is with great pride that we show the Red Square and the Kremlin, our Underground and Tretyakovskaya Gallery, among other stunning attractions.

Saint Petersburg is our second capital,  the second largest city in the Russian Federation. This wonderful city has a strong and lively aristocratic spirit, uniquely Russian royal architecture, magnificent museums and theatres. Saint Petersburg bears the royal heritage of Russia, which can be felt in its air, its streets, parks, monuments, museums and citizens.  In Saint Petersburg tours, we will take you to the Hermitage, Peter and Paul Fortress, Faberge Museum and Orthodox Cathedrals. We’re sure you will love it!

If you have a few more days to spare, venture into the dreamy Russian countryside in Suzdal or Sergiev Posad. Suzdal is a small town with a population of about ten thousand people, situated on less than 15 square kilometres. This tiny area is home to 53 historic cathedrals, five monasteries and a kremlin. Church domes are visible like mushrooms from anywhere and everywhere in the town like in a fairy tale. No wonder Suzdal is called the ‘Town Museum”.  It is definitely worth visiting!

Just try any of Visit Moscow Tours’ tour packages or any individual city tour, and we promise that you will want to come back to Russia again.  Russia is huge with countless amazing places to visit. There are so many unique experiences to be had and energies to be felt that one tour is definitely not enough to explore this vast land. It is also a very safe destination to travel, and we have a tradition of warm hospitality. Our people adore and take care of visitors as our own guests, and even if they do not know your language very well, they still try to be helpful and hospitable.

Our guides will show you the most interesting attractions and historical places, taking you on a journey to the past to enjoy stories of medieval times, the Romanov monarchy, the Soviet Era. And of course, we will show you the contemporary life of our country through authentic local experiences.

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Why travel to Moscow

Contrasts: 12th century monasteries and some of the tallest skyscrapers in Europe can be found side-by-side in this complex and captivating city. The diversity of this mega-city is astounding. Only a few steps away from the solemn red facade of the Kremlin and the sounds of righteous church bells, a buzzing night scene and alternative-fashion boutiques can be found.

Culture: In Moscow only the best goes. Be it a theatre, restaurant or gallery, the standards are certain to be world-class. The Bolshoi ballet company is reputed to be even better than the Mariinsky’s and “MMOMA” (Moscow’s museum of modern art) exhibits works of art as profound as any that could be found in the famed MOMA.

Convenience: Unlike the rest of Russia, it’s easy enough to get by with just English in Moscow and, driving excepted, it is surprisingly safe: the murder rate is lower than in some of America’s major cities.

Top Sights in Moscow

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Why visit Moscow

It would take more than two days to walk around the perimeter of the biggest city in Europe, Moscow. Many of its inhabitants barely know what’s beyond the few blocks around their flat and there are so many attractions that it’s almost impossible to know where to start. If there is such a thing as an antidote to boredom, Moscow City is it. The mind-boggling range and diversity of things to do, places to eat, parks, historical monuments and more means that a vacation in Moscow has a wealth of activities to offer for every type of traveler, from young families to retirees.

Reasons to Vacation in Moscow in 2022

The Bolshoi theatre is familiar to almost everyone as Russia’s grandest theatre, but what people don’t know is that there are many more bolshoi (big) sites in Moscow that are worth travelling all the way to Moscow to see. For more than 100 years, the world’s biggest bell has been hidden behind the Kremlin’s walls and inside Moscow’s main park (which is bigger than some countries!) there is the world’s largest outdoor ice-rink. Travelers that visit Moscow can stay at the Izmailovo, Europe’s biggest hotel, then eat at the largest and most historic McDonald’s in Europe and after that have fun at the largest European indoor theme park!

Ancient Past & Stunning Architecture:

As those who travel to Moscow will see, just because Moscow is a city of record-breaking, glitzy high-rises doesn’t mean that there is no history. On the famous Arbat street, time-worn, wooden storehouses and century-old churches are squashed up against grey, soviet blocks which are then towered over by 21st century office-blocks. Unlike its much younger sibling, St Petersburg, Moscow’s roots stretch way back to the 12th century. Within the walls of the Kremlin, the city’s oldest building the Cathedral of Assumption can be admired in all its 500+ years of age.

Culture & Convenience

For a foreigner who has never visited Russia, Moscow is the perfect stepping stone into this great land of mystery. From the country’s best classical ballet troupes to snow-white troikas trotting through the parks, all the highlights of Russian culture can be had in Moscow without any of the complications that would be expected in other, less developed regions of Russia.

Cheap as Caviar

In Moscow, everything is bargain when with the current foreign exchange rates being what they are. Even caviar doesn’t seem so dear when the exchange rate is at 60rub to the dollar, so go on indulge yourself! Take your 2022 vacation in Moscow and have the best of both worlds, with European luxury at very affordable prices.

Lena, our guide in Moscow was excellent. She was very knowledgable and could answer any question we had for her. We liked that she could pick up on our interests and take us places we might not have thought of to go. When we realized that one of the places we had chosen to see would probably not be that interesting to us, she was able to arrange entry to the Diamond Fund and the Armoury for us. Riding the Metro with Lena was a real adventure and a lot of fun. In Saint Petersburg we found Anna well versed in the history of the Tsars and in the Hermitage collection. Arkady in Veliky Novgorod was a very good guide and answered all of our questions with ease. Novgorod was perhaps a long way to go for a day trip, but we did enjoy it. Vasily was a great driver to have and kept us safe with good humour and skill. We enjoyed ourselves so much, my daughter says she is already planning to return. We would both have no hesistation to recommend ExpresstoRussia to anyone we know.

Just wanted to let you know that My grandson Bruno and I couldn´t have been more pleased with our week in Moscow (6/15 - 6/21). We were absolutely enchanted with the whole experience, including getting lost a couple of times in the Metro during our free time. Although both our guides (both Eleanas) were excellent, I would particularly commend the first one (she took us to the Tatiakov, the KGB tour, and to that beautiful cemetery where so many great Russian artists, authors, composers, musicians, militarists, and politicians are buried). Her knowledge is encyclopedic; and her understanding of today´s Russia as a product of its past was, for us, truly enlightening. I will be taking another tour in Russia, with my wife, within the next two or three years. I will be in touch with you when the time comes. Meanwhile, I will refer you to other potential visitors to Russia as I meet them.

We had a great time both in Moscow and St Petersburg. Your travel agency was excellent in coordinating the whole trip. Everything worked like clockwork. The guides assigned to us were very nice and friendly. They had a great knowledge of their subjects. The cars and the drivers were great. The hotels were good and the itinerary was good. All in all, it was a wonderful experience. It was nice dealing with you and your company. Thank you very much for a great Russian experience. Have a great future ahead

• 31 reviews of Express to Russia Moscow Tours in Moscow

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