what is outbound tour operators

The differences between outbound and inbound tour operator agents

By Rezdy — 25 Mar 2018

distribution   inbound tour operator   inbound travel   outbound tour operator   outbound travel

Updated September 2024 – Are you a tour operator trying to find which option is best for you? Or alternatively, are you a tourism professional trying to set up your distribution system? Trying to make your mark and stand out in a highly competitive tourism industry? Let’s start at the beginning to help you understand the types of travel agents available to partner with, including inbound tour operators, outbound tour operators, and domestic tour operators.

The role of a tour operator is to brainstorm ideas and conduct research to design holiday packages for travelers. In essence, they curate and compile various travel elements into a package that people will find appealing — creating a tailored and individual experience based on the interests and needs of various travelers. Holiday packages usually combine accommodation, cuisine, sightseeing, and transport. Different types of tour operators, such as ground operators, receptive tour operators, and destination management companies, cater to specific destinations and travel experiences.

Inbound vs. outbound travel

An inbound tourist is someone who visits a country but is not a resident of it. In outbound tourism, residents of a country visit another country. Does this sound like two sides of the same coin? That’s because it is.

Let’s look at an example:

Kevin, an Australian citizen, is traveling to Argentina for a holiday.

Kevin is an inbound tourist to Argentina. In contrast, Kevin is an outbound tourist from Australia. 

Depending on where Kevin chooses to organize his holiday packages will depend on if he makes use of inbound tourism or outbound tourism.

An inbound tour operator will sell to people soon to be arriving in their countries, whereas an outbound tour operator will sell to people before they arrive at their destination.

Inbound tour operator agents

An inbound tourist is someone who visits a country but is not a resident of it. In outbound tourism, residents of a country visit another country. Does this sound like two sides of the same coin? That’s because it is. Inbound tourism involves welcoming international travelers, while outbound tourism focuses on residents of one country visiting others.

Let’s look at an example:

Kevin is an inbound tourist to Argentina. In contrast, Kevin is an outbound tourist from Australia. Depending on where Kevin chooses to organize his holiday packages, he might work with an inbound operator or an outbound operator. Outbound travel options offer opportunities for residents to explore international destinations, while inbound travel allows international travelers to experience local travel within their host country.

An inbound tour operator will sell to people soon to be arriving in their countries, whereas an outbound tour operator will sell to people before they arrive at their destination. Outbound tour operators also provide valuable services to international travelers, helping them navigate different countries and ensuring seamless travel experiences.

An inbound tour operator, also known as a destination management company, is a locally-based business or individual that provides holiday planning. This includes itinerary planning and arrangement of payment for their overseas clients. Inbound operators work closely with transportation companies, local service providers, and tour guides to create memorable experiences for inbound tourists.

Inbound tour operators deal with both individuals and groups of international travelers. They make arrangements that are specifically catered to international guests, ensuring their clients have a comfortable and enjoyable stay.

An inbound operator can work with the convenience of being able to operate at the same location in which they are organizing the holiday packages. Compared to outbound tour operators, an inbound operator would better understand the local area and its culture. This is especially true when receiving any inquiries or questions about tour information from a potential client. Additionally, an inbound tour operator is usually encouraged to develop strategic partnerships with other local companies and tour and activity operators . Building these relationships is a lot easier due to geographical location.

Inbound tour operators are locally based

The purpose of inbound tour operators is to promote the entire destination to potential visitors from their local viewpoint. The operational advantage of being locally based is having easy access to work with other companies to promote the location as a whole to interested overseas travelers. Additionally, inbound tour operators can offer a more personalized service to their customers by having direct contact with them in their chosen destinations.

Inbound tour operators often work with other travel agents and distribution partners

Tour packages are often created and promoted by inbound tour operators in partnership with other travel agents and travel distribution channels . Inbound tour operators work under the assumption that travelers are often motivated by package tours and promotions, and take advantage of this when marketing their destination. This means it’s beneficial for inbound tour operators to create packages that include local tourism businesses such as hotels, transportation, and tours and activities. Following that, these same packages are promoted to segments of the target market that are most likely to visit the region in the near future.

Choose an inbound tour operator if:

Working with an inbound tour operator is a good idea if you want to increase your visibility in a chosen destination. This will be increasingly beneficial if your target market shows interest in package deals. Inbound operators are particularly useful for companies targeting inbound tourism and specific country markets.

Outbound tour operator agents

A typical outbound tour operator works with international tourists. In contrast to inbound tour operators, outbound tour operators take travelers overseas from their home country. They offer a variety of tour packages  that enable tourists across borders to travel abroad easily. Outbound tour operators provide tailored travel packages to cater to the specific needs and preferences of outbound travelers.

Outbound tour operators contribute significantly to the destination country’s economic growth. The majority of outbound tour operators choose to focus on a specific destination. This may be a destination that is currently popular or a destination in which they have special expertise and distribution partners. This approach allows outbound tour operators to develop in-depth knowledge of the local culture, sightseeing opportunities, and the best service providers in the market.

Most outbound tour operators cater to international travelers.

Outbound tour operators offer travelers the convenience of visiting another country of their choice through tour packages. When travelers book a tour with an outbound tour operator, they can get everything they need under one roof — simplifying the travel experience. Outbound operators are skilled at designing travel experiences that appeal to specific traveler segments, whether they are domestic travelers seeking new experiences abroad or international travelers exploring Europe, Southeast Asia, or other specific destinations.

A particular region of the world is often their specialty

Outbound tour operators have the benefit of being experts in the destinations they serve. European destinations are a very popular choice with outbound tour operators; however, other destinations, such as Southeast Asia and the Middle East, are growing in popularity. A successful outbound tour operator will often be very tuned-in to trends, one step ahead of the crowds, so they know which destinations to specialize in next. Outbound operators are adept at curating experiences that resonate with the interests and expectations of their target market.

Choose an outbound tour operator if:

If your business strategy includes targeting international travelers, partnering with an outbound tour operator is likely to be a good fit. Additionally, an outbound tour operator will be a good fit if you understand overseas offerings and have the ability to promote them to domestic customers.

Advantages and Disadvantages

Just like running any form of travel company, there will always be some advantages and disadvantages. Before working with either an inbound or outbound tour operator, here are a few pros and cons you should consider.

Inbound tour operators

As an inbound tour operator, you’ll have the advantage of convenience. This is due to being able to operate in the same location or home country as the tours you offer. This is extremely beneficial when receiving any inquiries or questions about the tours as you’d have a greater understanding of the local area and its culture compared to outbound tour operators. Furthermore, as an inbound tour operator, developing strategic partnerships and forming great relationships with other local companies and tour and activity operators will be a lot easier and is usually encouraged.

Another major advantage an inbound tour operator has is that most of the interactions with their customers will be direct. Meaning, it will allow them to offer a more personalized experience based on their customer’s needs. Inbound tour operators can collaborate with providers to offer exclusive travel options that highlight local culture and unique experiences.

Outbound tour operators

Just like the inbound operators, outbound tour operators deal with customers from their own countries. This makes designing and creating tour packages a whole lot simpler as they can customize the tours based on the customer’s interests. However, a disadvantage outbound tour operators have is not being based on the travel destination itself. This could create problems and can be more difficult to resolve any issues that may arise.

Fortunately, outbound tour operators have the flexibility to update their products and packages based on the latest travel trends and demands. As we all know, the travel industry is highly competitive and constantly evolving. Offering outbound tours gives you the freedom to adapt to changes in the travel and tourism market swiftly. Outbound operators are well-positioned to offer curated travel packages that appeal to a wide range of traveler types, from luxury seekers to budget-conscious explorers.

———-

Which one should you choose?

The key difference between inbound and outbound tour operators comes down to whether they provide tours in their home country or abroad. You should consider both types of tour operator agents when developing your distribution strategy. Partnering with these two agents will maximize your reach to both international and domestic travelers. Inbound and outbound operators each offer unique benefits, making them valuable partners for any tour operator business.

Now, it’s time to think about ways to make your distribution and marketing strategies more effective. You can identify your key partners via your research or by connecting with a tour wholesaler . By establishing partnerships with a large tour operator network, you can advance your business — both inbound and outbound. Read our previous blog if you are looking for tips and tricks for partnering with travel agencies or download our online distribution  ebook today.

In general, both types of tour operator agents play an important role in the overall success of your distribution strategy. By partnering with both of these agents, you’ll be able to maximize your reach to both international and domestic travelers.

When bookings start to come through, you’d want to ensure that you’re providing your customers with a simple booking journey. By utilizing an online booking software , you’re not only simplifying the customer’s booking journey, you’re streamlining your processes as well. This is due to advanced features that automate your processes that allow your customers to make a booking on the spot. These features include a real-time availability viewer, that allows your customers to book based on your exact availabilities. Payment gateway integrations that provide your customers with the convenience of secure online payments. And Automatic communication, which sends your customers confirmation and updates regarding their bookings.

To top this all off, you can easily manage your partnership with both outbound and inbound tour operators via an online tour operator marketplace like Rezdy Channel Manager . Rezdy’s marketplace broadens your reach to over 25,000 active resellers in the industry.

Using Rezdy Channel Manager is as simple as:

• Naming your price
• Setting your rates
• Letting resellers sell and promote your products

On top of that, you don’t have to worry about collecting payments and paying commissions as Rezdy automatically organizes payments for both parties. This reduces the need to chase your agents for payments.

Ready to capture more inbound and outbound bookings with Rezdy? Book a free demo today.

If you enjoyed this article, then make sure to sign up for our newsletter where you’ll receive the latest marketing tools and tour operator tips designed with businesses like yours in mind.

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Know Your Niche: Types of Tour Operators—Inbound, Outbound, and More

September 24, 2024

Tour operators connect travelers to their dream destinations, but with much complexity in the travel industry, understanding the distinct types of tour operators can seem daunting at first glance.

Tour operators come in various forms, each with its own unique characteristics, challenges, and opportunities. From inbound operators welcoming international visitors to a country, outbound operators sending domestic travelers abroad, and specialized operators catering to niche markets, the travel industry’s diversity reflects travelers’ complex preferences.

This article explores the main tour operator types, their primary functions, key characteristics, and specific challenges and opportunities they face. 

What is an Inbound Tour Operator?

An inbound tour operator is an expert in creating experiences for international travelers visiting their home country. Inbound tour operators, sometimes referred to as incoming tour operators, typically act as local experts, design comprehensive itineraries that showcase the destination’s highlights, and manage all in-country logistics, from accommodation and transportation to activities and guides.

International tourist arrivals reached 97% of 2019 pre-pandemic levels , and it’s forecasted to reach 1.53 billion arrivals by the end of 2024. Although the COVID-19 pandemic significantly impacted these numbers, the industry is showing signs of recovery, with many destinations seeing a resurgence in inbound tourism.

Key Characteristics

Several traits distinguish inbound tour operators from other types:

• Local Expertise and Knowledge : Inbound operators understand their country’s attractions, culture, and logistical considerations in-depth.
• Strong Relationships with Local Suppliers : They collaborate with hotels, transportation providers, and activity vendors to ensure seamless experiences.
• Cultural Understanding : These operators excel at bridging cultural gaps and helping international visitors navigate local customs and traditions.
• Seasonal Fluctuations : Managing business operations and staffing through peak and off-peak seasons can be difficult.
• Adapting to Changing Regulations : Keeping up with evolving visa requirements and entry regulations for international visitors requires constant vigilance.

Opportunities

• Growing Demand for Authentic Experiences : As travelers increasingly want genuine, local experiences, inbound operators are well-positioned to meet this demand.
• Partnerships with Outbound Operators : Forming strategic alliances with outbound operators in key source markets can lead to steady business and growth.

What is an Outbound Tour Operator?

An outbound tour operator specializes in organizing tours for domestic travelers to international destinations. They typically curate comprehensive travel packages that include flights, accommodations, and activities, serve as the main point of contact for travelers before and during their international trips, and navigate international logistics and cultural differences on behalf of their clients. 

Outbound tour operators are known for:

• International Partnerships : They maintain strong relationships with overseas suppliers, hotels, and local operators in destination countries.
• Currency and Cross-Border Considerations : These operators must adeptly manage currency exchanges and understand international financial regulations.
• Marketing to Domestic Travelers : They specialize in promoting international destinations to their home market, often adapting global experiences for local tastes.
• Currency Fluctuations : Changes in exchange rates can significantly impact pricing and profitability, requiring careful financial management.
• Geopolitical Issues and Safety Concerns : Political instability or security issues in destination countries can quickly disrupt travel plans and require rapid adaptations.
• Rising Disposable Incomes : As disposable incomes increase in many countries, more people are looking to travel internationally, expanding the potential customer base.
• Specialization Potential : Operators can differentiate themselves by focusing on specific destinations or types of travel experiences (e.g., luxury travel, adventure tourism).

What is a Domestic Tour Operator?

A domestic tour operator coordinates travel within a country’s borders and caters mainly to local tourists. They focus on designing itineraries that appeal to local tastes and interests, showcasing diverse regions and experiences within the country, and often specializing in specific types of domestic travel (e.g., city breaks, rural tourism).

Domestic tour operators stand apart for their:

• In-depth Knowledge of Home Country : They have a deep understanding of local attractions, culture, and travel logistics.
• Smaller Scale Operations : Many domestic operators run smaller businesses compared to international tour companies.
• Catering to Local and National Tourists : They specialize in creating experiences that resonate with domestic travelers.
• Competition from Self-Planned Trips : With abundant online information, many travelers opt to plan their own domestic trips.
• Shorter Booking Windows : Domestic travelers often book trips with less lead time than international travelers.
• Growing Interest in “Staycations” : The trend towards exploring one’s own country offers significant potential for domestic operators.
• Ability to Quickly Adapt : Domestic operators can swiftly respond to changing local trends and events.

What is a Receptive Tour Operator?

A receptive tour operator acts as a local representative for foreign tour operators and travel agencies. They provide ground operator services and support for international visitors and manage local logistics and experiences for incoming tourists, serving as a link between international tour operators and local suppliers. 

Receptive tour operators are known for their:

• Intermediary Role : They bridge the gap between international operators and local service providers.
• Destination Management Expertise : They have in-depth knowledge of local attractions, logistics, and regulations.
• Multilingual Capabilities : Many receptive operators offer services in multiple languages to cater to a diverse international clientele.
• Maintaining Consistent Quality : Ensuring high standards across many local supplier relationships can be challenging.
• Balancing International Expectations with Local Realities : Receptive operators must manage the sometimes conflicting demands of international partners and local conditions.
• Becoming Destination Experts : There’s potential to become the go-to authority for specific destinations or experiences.
• Scalability : Partnering with multiple international operators allows receptive operators to scale their operations.

What is a Specialized Tour Operator?

A specialized tour operator caters to niche markets within the travel industry, often combining elements of inbound, outbound, and domestic operations. They might specialize in adventure tourism, luxury travel, eco-tourism, cultural and heritage tours, wellness and spa retreats, or sports and activity-based tours. 

According to the Adventure Tourism Market 2024 Report , the adventure tourism market was valued at $586.3 billion in 2018 and is projected to reach $1,626.7 billion by 2026, growing at a CAGR of 13.3% from 2019 to 2026.

Specialized tour operators are set apart by their:

• Niche Market Focus : They cater to specific traveler interests or demographics.
• Specialized Knowledge and Expertise : They possess in-depth understanding of their chosen niche.
• Higher Profit Margins : Specialized tours often command premium prices due to their unique offerings.
• Limited Market Size : Niche focus means a smaller potential customer base compared to generalist operators.
• Keeping Offerings Fresh : Continuously innovating within a specific niche can be challenging.
• Growing Demand for Unique Experiences : Travelers increasingly seek out specialized, experiential travel.
• High Customer Loyalty : Niche operators often enjoy strong word-of-mouth referrals and repeat business.

Online Travel Agencies (OTAs) as Tour Operators

The rise of digital platforms has led to the emergence of Online Travel Agencies (OTAs). While traditionally focused on booking accommodations and flights, many OTAs have expanded to offer tour packages and experiences alongside their core services. 

OTAs operating as tour operators typically have: 

• Technology-Driven Operations : They leverage advanced tour operator software and algorithms to offer competitive pricing and personalized recommendations.
• Wide Reach and Marketing Power : OTAs often have substantial marketing budgets and global brand recognition.
• Aggregator Role : Many OTAs act as aggregators, offering tours from various operators alongside their own tour packages.
• Increased Competition : OTAs’ market reach and pricing power can put pressure on traditional operators.
• Commission Structures : Working with OTAs often involves paying substantial commissions, impacting profit margins.
• Expanded Distribution : Partnering with OTAs can provide traditional operators access to a wider customer base.
• Technology Adoption : Traditional operators can learn from and adapt OTA technologies to enhance their own operations.

5 Key Considerations for Tour Operators

As the travel industry continues to evolve, tour operators of all types must adapt to stay competitive and meet changing consumer demands. Here are some key considerations for tour operators:

1. Choose the Right Type of Tour Operator Model for You

When starting a tour company , it’s crucial to consider your target market and its specific needs. Evaluate your local expertise and connections, and analyze the competitive landscape in your chosen niche. Lastly, assess your ability to scale and grow within a specific operational model.

[Note: Consider adding a chart/table showing the key differences between the types of tour operators]

2. Adapt to Changing Travel Industry Conditions

Tour operators should be prepared to pivot their offerings in response to global events or trends that may impact travel patterns. Moreover, tour operators must be prepared to modify their operations to comply with new regulations or safety standards.

3. Leverage Tour Operator Software and Digital Marketing

Implementing user-friendly booking systems can significantly improve the customer experience and streamline operations. Data analytics can fuel personalized marketing and improve operations. Maintaining a strong online presence through social media and content marketing with a focus on SEO is essential for reaching and engaging with potential customers. 

4. Build and Maintain Supplier Relationships

Tour operators should prioritize cultivating relationships with reliable local suppliers to improve their supply chain and drive better efficiency and customer satisfaction. It’s also crucial to ensure fair and mutually beneficial agreements with partners to foster long-term collaborations that withstand market fluctuations.

5. Ensure Customer Satisfaction and Repeat Business

Exceptional customer service should be present at every touchpoint of the traveler’s journey. Gathering and acting on customer feedback and creating loyalty programs can encourage repeat business and help you improve your offerings.

Each type of tour operator faces its own set of challenges and opportunities. The future of tour operations will likely see increasing overlap between these categories, with many operators adopting hybrid models to stay competitive.

The key to success in this industry lies in understanding these nuances, adapting to changing market conditions, leveraging technology, maintaining strong partnerships, and above all, focusing on delivering exceptional experiences to travelers.

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What is a tour operator and how does it work?

The tour operator is an integral component of tourism , yet many people are unclear about what a tour operator actually is or what they do.

In this article I will explain what a tour operator is and why tour operators are important. I will also talk about what the difference between a tour operator and a travel agent is, as well as the different types of tour operators.

What is a tour operator?

Definitions of tour operator, importance of tour operators, the difference between a tour operator and a travel agent, what does a tour operator do, products and services sold by tour operators, inbound tour operators, outbound tour operators, domestic tour operators, ground tour operators, the association of independent tour operators, the tour operator: to conclude.

Tour operators are inextricably linked to the package holiday model. The tour operator is the person or organisation who creates the package. A travel agency is then used to sell the package holiday.

In the chain of distribution , the tour operator is represented by the term ‘wholesaler’. This is because the tour operator is responsible for purchasing products of services in bulk and then redistributing them as a packaged product to consumers.

To put it simply, a tour operator is the person or organisation who takes the individual elements of a holiday (e.g. transfer, hotel, transport) and packages these together.

The types of package vary. Most commonly, tour operators are associated with mass tourism and the traditional package holiday market. However, tour operators do also play an important role in the production of niche tourism products and services too.

If you’re looking for a formal definition of a tour operator with a reputable source, you may want to reference Polyther, who in 1993, defined the tour operator as;

‘[an organisation or person] who has the responsibility of putting the tour ingredients together, marketing it, making reservations and handling actual operation’.

Similarly, Holloway (1992) states that;

tour operations undertake a distinct function in the tourism industry, they purchase separate e lements of tourism products/services and combine them into a package tour which they sell directly or indirectly to the tourists .

The Organisation for Economic and Cultural Development (OECD) define a tour operator as follows;

‘Tour operators are businesses that combine two or more travel services (e.g., transport, accommodation, meals, entertainment, sightseeing) and sell them through travel agencies or directly to final consumers as a single product (called a package tour) for a global price. The components of a package tour might be pre-established or can result from an “a la carte” procedure, in which the visitor decides the combination of services he/she wishes to acquire.’

Tour operators are an important part of the tourism industry .

Tour operators make the logistics of organising a holiday much easier for the consumer. This makes people more likely to travel, more often.

Tour operators have a lot of power. If they choose to sell holidays in a particular location, for example, then that location will receive many of the associated positive and negative economic impacts of tourism .

Tour operators are often vertically or horizontally integrated with other organisations, such as travel agents and airlines. This allows for easier management and distribution of products.

Tour operators typically build holidays en masse. This means that economies of scale play a key role in driving down prices- the more you produce the cheaper the product becomes! This is obviously beneficial to the consumer and helps travel agents to have a competitive advantage when selling holidays.

Many people are not aware that a travel agent and a tour operator are actually two totally different organisations and they are not aware of the difference between a tour operator and a travel agent.

In fact, it is quite easy to understand this difference!

A tour operator is the organisation which puts the different elements of a holiday together. And the travel agent is the organisation who sells it to the consumer.

Whilst this differentiation is pretty easy to comprehend, it is easy to understand why people get tour operators and travel agents confused. This is largely because many organisations will operate under the same company. For example, TUI has a tour operator and a travel agent (and an airline too). As a result, many people do not realise that in actual fact, there are two separate organisations doing two separate jobs.

Ultimately, a tour operator is responsible for putting the different elements of a holiday together into a commodified package.

To do this, there are a number of different roles and responsibilities that tour operator staff will have. This includes:

• Data analysis- which destinations will sell best, how many holidays should they sell etc
• Assessing suitability of accommodation, transfer and transport options
• Liaising with stakeholders e.g. coach operators, airlines, hoteliers and resort representatives
• Negotiating contracts
• Confirming reservations with airlines/hotels
• Managing and responding to customer feedback
• Undertaking market research
• Production of marketing material
• Providing pricing information
• Handling bookings, invoicing and issuing of tickets
• Working with travel consultants from different travel agencies to put holiday packages together

Tour operators have a number of products and services that they sell, depending on their specific business model, business intentions and target market. A tour operator will typically package together two of more elements to form a packaged product, which is then sold at an inclusive price.

Examples include:

• Package holidays
• Accommodation
• Information on destinations
• Representative service in resorts

Types of tour operator

Tour operators come in all shapes and sizes. Some are large, multinational organisations and other are small, independent business.

Different types of tour operators develop products for different types of tourism . This can include the mass market, niche tourism market, special interest tourism, the luxury market, tailor-made products and dynamic packages .

There are four different types of tour operators, which I will explain below.

• Inbound Tour Operators
• Outbound Tour Operators
• Domestic Tour Operators
• Ground Operators

An inbound tour operator is one who facilitates inbound tourism .

The aim of an inbound tour operator is to bring tourists in to a particular country or countries.

Inbound tour operators will often collaborate with local travel agencies and transport operators to facilitate travel arrangements for their customers.

Inbound tour operator example: A group of German tourists conduct a tour of China, encompassing a visit to Shanghai , Hangzhou and the Yellow Mountains . The tour operator who organises their travel is Chinese-based company China Highlights . This company is based locally in China and they offer local, Chinese tours.

An outbound tour operator is one who facilitates outbound tourism .

The aim of an outbound tour operator is to send tourists out of a particular country or countries.

Outbound tour operators will often collaborate with foreign travel agencies and transport operators to facilitate travel arrangements for their customers.

Outbound tour operator example : A family of four from Liverpool, UK want to book an all-inclusive summer sun holiday in Alicante. They book through TUI , the largest tour operator in Britain, who specialises in outbound travel. They are based in the UK, but they work with foreign partners to facilitate holidays overseas.

A domestic tour operator is one who facilitates domestic tourism .

The aim of a domestic tour operator is to organise travel within a particular country or countries.

Domestic tour operators will often collaborate with domestic travel agencies and transport operators to facilitate travel arrangements for their customers. Domestic tour operators will often also serve the inbound tourism market.

Domestic tour operator example : A group of twenty-something boys from Chicago want to travel to Florida for the spring break holiday. They want to do a tour of the local attractions in the area and have some time to relax on the beach . They organise their travel through the tour company, Trek America . Staff at this company are experts in domestic travel within the USA.

A ground tour operator is an organisation who dopes the ground work as grass roots level.

Many tour operators do not have connections in all places around the world, therefore they build a network of connections to help them run their business.

Essentially, some of the work is passed on to a third party, known as a ground operator. This work may include negotiating local contracts, liaising with local suppliers and providing market data, amongst other things.

This is especially common for small tour operators.

You may also hear ground tour operators referred to as handling operators or handling agents.

Ground tour operator example : A backpacker wants to ‘give something back’ and book a volunteer tourism holiday in Kerala. She wanted to use a known and trusted tour operator to book her trip so she booked it with Intrepid Travel . Intrepid Travel create and sell adventure holidays all over the world, and it is impossible for them to have contacts and every staff in every corner of the globe. Therefore they work with local ground operators, who do the work on the ground. In this instance, the ground organisation is Iris Travel – a tour operator based in Kerela, India.

The Association of Independent Tour Operators , abbreviated as AITO, is a travel industry trade group (like  ABTA  or ATOL) based in Britain. They launched in 1976.

The AITO represents around 120 independent  tour operators  across 200 countries.

These tour operators provide access to a huge range of activities including city breaks, safaris, luxury holidays and much more. The AITO is based in Twickenham, south-west London.

The AITO does a variety of things. Most importantly, you can be reassured that your holiday is well-protected thanks to the Association of Independent Tour Operators.

They assess every member financially as well as by their own business practice code before granting membership; this means that you are guaranteed clear and accurate descriptions of holidays as well as tour standards that are consistently monitored.

Tour operators are an important part of the tourism industry, and with AITO, you have added security when booking your travels through a tour operator. Hopefully after reading this article you are now confident with what a tour operator is, how these organisations work and the different types of tour operators operating the market.

If you liked this article, why not take a look at these too?

• Types of travel agents | Understanding tourism
• What is e-tourism and how is it changing travel?
• 10 jobs in travel and tourism that will be BIG in 2022 and beyond
• What does the World Travel and Tourism Council do?

Tour Operators

Tour operator is an organization, firm, or company who buys individual travel components, separately from their suppliers and combines them into a package tour, which is sold with their own price tag to the public directly or through middlemen, is called a Tour Operator .

More precise tour operators are primarily responsible for delivering and performing the services specified in a given package tour. They can provide these services themselves as some have their own cars and coaches, hotels, and other travel-related services or can obtain these from the other suppliers. That is why they are called manufacturers of tourism products .

Tour operators are sometimes called wholesalers but this is partially true because a wholesaler buys goods and services in bulk at his own account to prepare a tour package and then retails it through the travel agencies or directly to clients. However, a tour operator who has his own one or more tourists products components, (SOTC, TCI, Thomas Cook, Indo Asia KUONI formulates a new tourist product for example ‘ inclusive tours .’

Tour operators generally offer a variety of package tours to cater to the needs of different kinds of travelers.

Definitions of Tour Operator

Poyther (1993) defines, “tour operator is  one who has the responsibility of putting the tour ingredients together, marketing it, making reservations and handling actual operation.”

Holloway (1992) stated that tour operations undertake a distinct function in the tourism industry, they purchase separate elements of tourism products/services and combine them into a package tour which they sell directly or indirectly to the tourists.

Today, tour operators have become highly competitive. They endeavor to achieve a high volume of turnover, and maximum International and domestic market share by effectively operating. Moreover, the success of many developed and developing nations as tourists destinations depend heavily on a tour operator’s ability to attract tourists, development and promotion of tourism plant, diversification of tourism product and their social responsibilities to develop a remote and backward area.

Types of Tour Operators

Tour operators are basically categorized into four types . These are categories on the basis of their nature of the business and its operations.

Inbound Tour Operators

Outbound tour operators, domestic tour operators.

• Ground Operators

These are also known as incoming tour operators . Technically, the operators who receive guests, clients/tourists, and handle arrangements in the host country are c alled inbound tour operators . For example, a group of American Tourists is coming through TCI Ltd. to India and the company makes arrangements and handles the group in India then TCI is called an inbound tour operator.

Incidentally, the inbound traffic to the country for the last two decades has been decreasing. Essentially the tour operators need to adopt innovative marketing strategies and should introduce a special interest tour to cater the special needs of Japanese, Americans, French and British people.

Tour operator who promote tours for foreign destinations, maybe business tour or leisure tour is called outbound tour operators . For example a group of American tourists going to a trip of India and Thomas Cook handle arrangement in America like as ticket reservation, hotel booking etc. then Thomas Cook is called Outbound Tour operators in the context of America.

Domestic tour operators are those who assemble, combine tourist components into inclusive tours and sell it to the domestic travelers. In general, these tour operators provide travel services within the tourist’s native country.

The domestic tour operators operate within the boundary of the home country and offer package tour to the travelers viz. Domestic inclusive tours or independent tours.

Ground Operators/Destination Management Companies

These are commonly known as handling agencies and their main function is to organize tour arrangements for incoming tourists on the behalf of overseas operators. Let us take the case of India as a destination that – has a varied culture.

When a tour operator himself promotes beach holidays, wildlife holidays, adventure tours, heritage tours at the different places, the difficulty arises. It is the ground operator then who by handling the incoming travelers in the same season but at different places ensures that the entire operation is according to the package tours or agreements.

Sometime when a handling agency is at a prominent tourist place i.e., Delhi and it has to make arrangements to Goa, then it contracts (If it has no office of its own) with a local operator (known as excursion agent) to handle the arrangement on his behalf.

Why Ground Operators?

Obviously, the tour operation companies do not have close contact with suppliers, governments, destinations and so on. It leaves no choice with the companies but to appoint handling agencies at the destinations.  The main reasons are:

• Introduction of new products or plant to promote an exotic destination.
• Lack of Government regulations.
• Lack of personal contract.
• Language problem.
• The company cannot establish its own branch.

Recognizing the very fact that the reputation, performance, and profitability of tour company in its own market largely depends on the efficiency and effectiveness of ground operators, it has because necessary for the company to consider various factors before the selection of a handling agency, they are:

• Size of business
• Professional staff
• Length of business
• Area of operation/Product line
• Market share

Functions of Ground Tour Operators

Over the years of functions and activities of the destination, companies have changed drastically to cope with the changing environment of the tourism industry. In fact, today’s destination companies have become more professional and are bound to provide personalized travel services to the tourists. The following functions are performed by ground tours operators:

• Land arrangement
• Contract and Negotiate with other vendors
• Handling of Arrival and departure procedure
• Planning and organizing local package tour
• Escorting the tourists
• Providing market information
• Costing and pricing package tour

Practically, if we see the working of the travel agencies and tour operators in the industry we find that most of the organizations are performing different types of activities like the retail travel agency , wholesale travel agency, and tour operators.

The travel agency business is no longer an amateurism. Over the last two decades, the pattern and structure of travel agencies have changed to meet tough challenges in the international market. Today, small-scale agencies are finding the travel industry increasingly complex.

Thus, the small and medium scale travel agencies are disappearing or merging or falling instead of rising. On the other hand, a new concept has also emerged i.e. tour operation business . The tour operation business is new but a maturing business at the global level.

Functions of Tour Operator

A tour operator is an organization, firm, or person who is responsible for the actual arrangement of transport and accommodation facilities on any tour or vacations. They are also responsible for operating and providing vacation through contracting, booking, and packaging together of the various components of the tour such as hotel, transportation, meals, guides, optional tours, and sometimes flights.

A tour operator is like a service provider, providing the most convenient option for tourists to stay, visit, as well as leave from the city. A tour operator owns a high volume of travel services across carriers, services, and accommodation. Some most important functions of the tour operators are following as:

Planning a Tour

The most important functions of the tour operators are planning a tour. Tour operators plan a tour and make tour itinerary which contains the identification of the origin, destination and all the stopping point in a traveler’s tours. A prospective tour operator also gives advice to intending tourists in various types of tour programmes, which they may choose for their leisure or commercial travel.

Making Tour Package

Tour operator buys individual travel components, separately from there suppliers and combines them into a package tour. Tour operators make tour package by assembling various travel components into a final product that is called tour package which is sold to tourist with own price tag. Making tour packages is also an important function of Tour Operator.

Arranging a Tour

Tour operators make tour package and also arrange a tour according to tourist demands. Tour operators arrange the tour package and various tourists activities to provide the best experience to tourists/traveler.

Travel Information

Whatever the size of tour operators, it has provided necessary travel information to the tourists. This task is utterly difficult and very complicated. A tour operator must give up-to-date, accurate and timely information regarding destinations, modes of travel, accommodation, sightseeing, immigration, health and security rules about various permits required to travel in a particular area etc.

Reservation

It is a very important function of all type tour operators and travel agencies. Tour operator makes all the reservation by making linkages with accommodation sector, transport sector and other entertainment organizations to reserve rooms, and seats in cultural programmes and transportation.

Travel Management

Tour operators manage tour from beginning to the end of the tour. A tour operator has the responsibility to look after the finer details of a vacation or tour such as hotel, accommodation, meals, conveyance etc. Tour operators provide travel guide, escorting services and arrange all travel related needs and wants.

Evaluate the Option Available

Tour operators evaluate all available options to provide a unique or unforgettable travel experience to tourists during their journey. Tour operators evaluate the various options available for a tour package and provide best of them to tourists.

Tour Operators makes tour packages and promote them into various tourists markets at domestic as well international level. Tour operators promote a travel destination to attract a large group of tourists at domestic as well as international level. In the promotion of tourist destination, tour operators play a key role. Travel agencies or tour operators are called as image builder of a country.

Sales and Marketing

Tour operators do sales and marketing of tourist products. Tour operators buy individual travel components, separately and combine them into a tour package, which is sold with their own price tag to the public directly. Tour operators do marketing of tourist destinations and tourism product to attracts the attention of the tourists/travelers.

Taking Care of Glitch

Tours operators are also called handling agencies which handles tour package and take care of all the glitches and problems arises during a tour package. Tour operators fix the glitches and provide the best available alternative to tourists during their journey.

Importance of Tour Operators

Tours operators play a key role in the tourism sector. Tour operators create tourist products, promote them a finally sold them to tourists.

Tour operators provide the best and competitive price to the tourist. Tour operators negotiate with suppliers of tourism products such as hotels, airlines and provide the best possible price to the tourist. Tour operators buy tourist products in bulk and get huge discounts from suppliers. So that they provide tourist products at a cheap price.

Tour operators organized a tour in the best way. They personalize and make sure each and every component of the tour is well-taken care. Tour operators provide the best travel experience during a tour. Tour operators save tourists time and money.

Tour operators provide immediate support systems at the host country as well as a foreign land. When tourists travel to a foreign land and things get uncertain, maybe its a health or loss of documents and need to return back or change of travel plan. A qualified tour operator takes care of all these unseen events with efficiency.

Tour operator caters to the needs of tourists on the based on their taste of travel. Tour operator provides all the best available option according to tourist needs and demands

Difference between Travel Agent and Tour Operator

There is a lot of confusion about the difference between tour operators and travel agents what exactly makes them different. The main difference between a Travel agent and Tour operator are following as:

• A travel agent is a person who has full knowledge of tourist product – destinations, modes of travel, climate, accommodation, and other areas of the service sector. He acts on the behalf of the product providers/principals and in return get a commission.
• Tour operator is an organization, firm, or company that buys individual travel components, separately from their suppliers and combines them into a package tour, which is sold with their own price tag to the public directly or through middlemen.
• Tour operators are like wholesalers and travel agents are the retailers.
• A tour operator makes the package holidays up and the travel agents sell them on.
• Tour operator taking up the bulk of the responsibilities and his fee is obviously much greater than a travel agent.
• A tour operator has the responsibility to look after the finer details of a vacation or tour such as hotel, accommodation, meals, conveyance, etc.

The wholesale travel agencies may offer or operate the package tours or may specialize in developing tours for inbound as well as outbound travelers. They are often referred to as tour operators, but there is a difference between Wholesale Travel Agencies and Tour operators .

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What is a Tour Operator? Types, Importance, Pros & Cons

Home » Blog » What is a Tour Operator? Types, Importance, Pros & Cons

Tour operators are the masterminds behind many unforgettable vacations. They organize travel experiences taking the hassle out of planning for travelers ensuring a seamless journey.

But what exactly are tour operators? What do they do, and why are they important?

Stay with us as we discuss all the above queries and more!

Table of contents

What is a tour operator, 1.inbound tour operators, 2.outbound tour operators, 3.domestic tour operators, 4.receptive tour operators, 5.ground tour operators, roles of a tour operator, importance of a tour operator, best tour operators, best tour operator software, tour operator vs travel agency, difference between a tour operator and a travel agency (infographics), frequently asked questions.

A tour operator is a company that specializes in designing and packaging travel itineraries . They act as a one-stop shop for travelers, offering pre-arranged tours that typically include flights, accommodation, transportation, sightseeing activities, and sometimes even meals.

They cater to various interests and budgets, offering adventure trips, cultural experiences, luxury getaways, and more. A tour operator not to be confused with a travel agency thinks up ideas for holidays, researches the ideas, designs the holiday itinerary, and contracts all the services needed.

Types of Tour Operators

Tour operators can be divided into five main categories: inbound, outbound, domestic, receptive, and ground.

Inbound tour operators bring tourists into the country in groups or through individual travel packages. They make all the arrangements in the host country, and the trips they organize are mainly intended for foreigners visiting the country.

When a group of Indian tourists wants to explore France, the company in France that organizes the whole trip is called the inbound operator. So inbound operators are local and offer trips that include their own country.

Unlike inbound, outbound tour operators work in their own country to take travelers to other countries. These are operators that market their travel to international destinations for either business or leisure.

For example, suppose a group of German tourists are planning a trip to India. Then the outbound operator is a German travel company that handles all ticket and hotel reservations.

Domestic tour operators are those who put together complete travel packages and sell them to domestic travelers. In other words, they are operators that offer travel packages and trips in the tourist’s home country.

Domestic travel usually involves residents of a certain country traveling within that country. They can visit national parks, scenic areas, hospitality tours, city tours, hikes, etc.

Receptive Tour Operators (RTO) provide travel products to companies in other markets (as a business-to-business relationship).

In particular, RTOs sell travel products to operators and/or travel agents, whether sold in a package or individually. They are primarily wholesalers and do not sell directly to the public.

Ground Tour Operators operate domestically. However, they differ from domestic operators in that they organize trips for inbound tourists on behalf of the inbound operator (and sometimes also the outbound).

Tour operators are responsible for the operation of a vacation by contracting, booking, and packaging together various travel components . These components can include: hotel, transportation, meals, guides, optional tours, and flight.

• Development of Tour Packages: These professionals develop travel packages for individual clients or groups of travelers. They work with clients to understand their interests and recommend different attractions, accommodations, and transportation options to help clients choose a travel package.
• Negotiating Prices: Companies usually negotiate prices with other vendors, such as hotels and transport companies. For example, they can ask the hotel to lower the room rates for a large tourist group.
• Travel Management: These professionals help organize travel plans for clients to reach their destinations. For example, they can book a bus to help customers travel between cities or a rental car to help customers reach various attractions.
• Providing Customer Support: The company provides customer support to help their customers prepare for their trips. For example, they can answer customers’ questions about the destination, provide information about exchange rates, or notify them of changes to travel plans.
• Travel Budgeting: Travel companies work with clients to help them budget for their trips. They develop different itineraries at different prices and advise clients on accommodation and sightseeing within their desired budget.
• Researching Travel Options: These professionals research different trips to give their clients recommendations on places to visit, stay, and eat. They read articles and search the web for information on travel trends and new destinations to stay current in their field.

Explore this article “World Tourism Ranking by Country 2024”

Pros and Cons of Tour Operator

A tour operator puts together packages by bundling the individual services making up itineraries. That’s why it’s sensible to review your options.

So, what exactly are the advantages and disadvantages of using a tour operator?

• Competitive Prices: They can offer more economical packages than individual options providing better value for money. They often negotiate discounted rates, making travel more affordable.
• Peak Season Options: They can anticipate peak season dates and offer options for these times.
• Convenience: Travel companies can provide seamless connections from one location to the other. They handle everything, allowing travelers to relax and enjoy the experience.
• Expertise: Their knowledge of destinations ensures a well-rounded itinerary with hidden gems and local experiences. They can ensure that travelers don’t miss any hidden corners of a destination.
• Reduced Stress: No need to research or book individual components, leaving travelers free to focus on having fun.
• Resolve Unseen Problems: Travel companies can resolve unforeseen problems, such as flight delays or cancellations.
• Safety and Security: Companies can provide an environment of safety for visitors. They can assign guides for support and guidance, especially in unfamiliar destinations.
• Assurance: If the arrangements made by an operator fall short of what was agreed, you can seek redress by way of a refund.

However, working with an operator can have downsides as well. Some disadvantages may include:

• Less Flexibility: Itineraries are predetermined, offering less freedom for spontaneous exploration. If you discover an activity or a restaurant you’d like to try that isn’t on your pre-planned itinerary, you may not be able to explore it.
• Limited Personalization: Customization options might be limited compared to independent travel.
• Higher Cost : It might not be your cheapest option. Tour packages can sometimes be pricier than piecing things together yourself.
• Larger Groups: Tour groups can range from private trips to groups of 50 or more people. Some tours involve group travel, which might not suit everyone.

Tour operators play a vital role in the tourism industry by planning and coordinating travel plans, travel packages, activities, and itineraries for their clients.

They use their expertise and resources to create high-quality tour packages helping tourists travel stress-free. Other reasons why tour operators are important are:

• Competitive Pricing: They negotiate in advance with hotels and airlines and offer you the best rates.
• Well Organized: Since the company is a travel company, they want to provide you with the best ground services. They personalize and ensure that every part of the tour is well taken care of.
• Boosting Tourism: They promote destinations and generate tourist revenue, benefiting local economies.
• Ensuring Quality: They maintain high standards for travel experiences, making sure travelers have a positive experience.
• Convenience and Accessibility: They make travel accessible to a wider range of people, including those who might not have the time or expertise to plan their own trips.
• Immediate Support System: When traveling to a foreign country things can become uncertain at any time. A competent company handles all these unprecedented events efficiently.
• Supporting Local Businesses: They partner with local businesses, contributing to the growth of sustainable tourism practices.
• Networking Opportunities: A tour company targets many people like you. Staying, traveling, and eating together is a great way to increase your network.

There isn’t a single best tour operator as it depends on your travel style, budget, and destinations. However, here is a list of the 10 best travel companies & tour operators in the USA with 191,668 reviews. [Source: tourradar ]

Travel companies that organize guided tours use travel operations software to manage customer information, travel information, and background functions. This type of tour operator software helps companies keep track of the organizational aspects of travel such as schedules, itineraries, meal plans, and more. In addition, it tracks tourists and participants, as well as personal tasks and activities. Companies can use this type of software to manage costs, expenses, and revenue. Capturing 75% of the Global Tourism market with over 883,934+ downloads globally and surpassing software like Rezdy, Peek Pro, Bokun, and more, the best software is found to be WP Travel . Here’s a list of the 5 best tour operator software:

Check this article on Best Tour Operator Software for a detailed overview of features and prices.

A tour operator is a person or organization responsible for planning travel and vacation packages. G Adventures and Intrepid Travel are some famous examples.

A travel agency is a private broker or agency that sells holiday packages. American Express Travel is an example of a travel agency. While Booking.com is also a travel agency, it is regarded as an Online Travel Agency (OTA) rather than a traditional one.

When the tour operator creates services, the travel agency is the intermediary that sells those services.

Further differences between a tour operator and a travel agency can be discussed below:

Explore this article “Tour Operator vs Travel Agent- What are the Differences?”

Launching your own tour operator business can be an exciting and rewarding venture. Here’s a roadmap to get you started: 1. Research the market and develop a solid business plan. 2. Create a unique brand and effective marketing strategy. 3. Develop tailored tour itineraries by collaborating with local businesses. 4. Prioritize safety protocols and staff training 5. Integrate technology like online booking and tour management software.

To package a tour, tour operators first research trends, design itineraries, then source local activities, and negotiate bulk rates with hotels and transportation. With everything neatly bundled (accommodation, meals, travel), they create a price-conscious package and market it through various channels. Some even offer customization options for the customer.

Tour operators function by streamlining the travel experience. They utilize bulk rates on flights, hotels, and activities. This allows them to create pre-designed packages that bundle everything you need for your trip – flights, accommodation, transportation, and sometimes even meals or entrance fees. This one-stop-shop approach simplifies trip planning, letting you focus on enjoying the destination.

Here’s a step-by-step process to start your very own tour operator business. Research and Planning 1. Legal and Financial Consideration 2. Branding and Marketing 3. Operations and Logistics 4. Technology Integration 5. Hiring and Training Staff 6. Launch and Growth Strategies. To look into these steps in detail, check this article on starting a tour company .

No, booking.com is not a tour operator. It is one of the largest online travel agencies in the world. Booking.com does not create its own travel packages but helps tour operators from around the world market their packages.

Yam Bahadur Chhetri is a content writer and vivid contributor to the WordPress community and a WordPress enthusiast with an experience of 7+ years in the relative field. He also loves to develop WordPress Themes, Plugins, and custom WordPress development for clients.

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FBT Adventures Travels LLC | Inbound Tour Operators in Dubai-UAE

Inbound Tour Operators in Dubai UAE

What Is an Outbound Tour Operator?

An outbound tour operator is a company that specializes in organizing and facilitating travel experiences for individuals or groups who are leaving their home country to visit destinations abroad. These operators serve as intermediaries between travelers and various components of the travel industry, such as airlines, hotels, transportation services, and tour guides.

When you plan a trip, whether it’s a relaxing beach vacation. An adventurous trek through the mountains, or a culturally enriching tour of historic sites. There are many moving parts behind the scenes to ensure your journey is smooth and enjoyable. One essential player in this process is the outbound tour operator. These specialized companies are dedicated to crafting unforgettable experiences for travelers venturing beyond their home countries. They serve as the bridge between wanderlust-filled individuals and the wonders of the world, curating seamless journeys that transcend mere vacations.

What are Outbound Tour Operators in Dubai?

Dubai, a vibrant metropolis in the UAE, is a global tourism hub and a prime destination for outbound travelers. Moreover, the city’s cosmopolitan charm, rich cultural heritage, and modern marvels draw numerous outbound tour operators to establish their base.

These outbound tour operators in dubai cater to the diverse needs of travelers from the UAE and the wider region, offering curated tours and experiences that span the globe. They leverage their extensive network of local partners and industry expertise to create seamless and unforgettable journeys for their clients.

From exploring the ancient wonders of Egypt to embarking on a safari adventure in Africa, or immersing in the vibrant cultures of Europe and Asia. These outbound tour operators in Dubai serve as trusted guides, ensuring that every traveler’s dreams become a reality.

An outbound tour operator is a travel expert who specializes in organizing and coordinating outbound tours, catering to the desires of travelers seeking to explore foreign destinations. Their expertise lies in meticulously planning every aspect of the trip. They handle transportation, accommodation, activities, and local experiences. Acting as a trusted guide, they ensure each traveler’s journey is tailored to their preferences, interests, and budget.

These professionals possess an in-depth knowledge of global destinations, allowing them to craft itineraries that showcase the best of each location. Additionally, from navigating cultural nuances to uncovering hidden gems, outbound tour operators are the gatekeepers to authentic and enriching travel experiences.

Why Dubai Is a Popular Destination for Outbound Travelers?

Dubai’s strategic location, world-class infrastructure, and unwavering commitment to tourism have made it a popular destination for outbound travelers. Several factors contribute to its appeal:

• Connectivity : Dubai’s international airport is a major global aviation hub, offering direct flights to numerous destinations worldwide, making it an ideal starting point for outbound travel.
• Diverse Offerings : Dubai itself is a melting pot of cultures, offering a diverse array of attractions, cuisine, and experiences that appeal to travelers from around the world.
• Luxury and Comfort : The city is renowned for its opulent hotels, world-class shopping, and exceptional hospitality, providing outbound travelers with a taste of luxury before embarking on their adventures.
• Safety and Stability : The UAE’s reputation for safety and political stability offers peace of mind to travelers, allowing them to focus on enjoying their outbound experiences without worries.
• Multicultural Demographic : Dubai’s cosmopolitan population and the presence of expatriates from various countries have fostered a thriving travel industry, catering to diverse preferences and cultural sensitivities.

Understanding The Role of Outbound Tour Operators

As a travel agency, we come to appreciate the multifaceted role outbound tour operators play in crafting unforgettable experiences. Their responsibilities span a wide range of tasks, each contributing to the overall success of a journey.

• Destination Expertise : Outbound tour operators possess in-depth knowledge of various destinations, including cultural nuances, local customs, and hidden gems. This expertise allows them to curate itineraries that offer authentic and immersive experiences.
• Logistical Planning : From arranging transportation and accommodation to coordinating activities and local guides. Outbound tour operators handle the intricate details, ensuring a seamless and hassle-free experience for travelers.
• Customization : These professionals excel at tailoring tours to meet the specific needs and preferences of their clientsz. Whether it’s catering to dietary restrictions, accommodating mobility requirements, or incorporating unique interests.
• Risk Management : Outbound tour operators prioritize the safety and well-being of their clients by conducting thorough risk assessments, implementing contingency plans, and adhering to industry best practices.
• Local Connections : With their extensive network of local partners and suppliers. Outbound tour operators can provide exclusive access to experiences and opportunities that may be challenging for independent travelers to secure.
• Cultural Immersion : By collaborating with local communities and experts. Outbound tour operators facilitate authentic cultural exchanges, enabling travelers to gain a deeper understanding and appreciation of the destinations they visit.

Benefits of Contacting Outbound Tour Operators in Dubai

Partnering with outbound tour operators in Dubai offers numerous advantages for those seeking to embark on unforgettable adventures. Here are some compelling reasons to consider working with these travel experts:

• Expertise and Experience : Dubai’s outbound tour operators have vast experience organizing tours to various destinations. Additionally, they offer extensive knowledge and expertise. With their local insights and global connections, every journey is meticulously planned and executed.
• Customized Itineraries : These professionals excel in crafting personalized itineraries that cater to individual preferences, interests, and budgets. Whether you seek adventure, cultural immersion, or luxury, they can tailor the perfect experience.
• Time and Stress Reduction : By entrusting the planning and coordination to outbound tour operators. Travelers can save valuable time and reduce the stress associated with organizing complex international trips.
• Access to Exclusive Experiences : Outbound tour operators in Dubai have established partnerships with local suppliers and communities, granting travelers access to unique experiences and opportunities that may be challenging to secure independently.
• Multilingual Support : With a diverse team of travel professionals fluent in various languages. Outbound tour operators in Dubai can provide seamless communication and support throughout the journey.
• Peace of Mind : By working with reputable and licensed outbound tour operators. Travelers can enjoy added peace of mind, knowing that their safety, well-being, and overall experience are in the hands of professionals.

Top Attractions and Experiences Offered by Outbound Tour Operators in Dubai

Outbound tour operators in Dubai offer a wide range of attractions and experiences to cater to the diverse interests of their clients. Here are a few of the best options:

• Cultural Tours : Immerse yourself in the rich heritage and traditions of destinations around the world. Embark on guided tours of historical sites, museums, and cultural festivals, experiencing the essence of each location.
• Adventure Experiences : From safaris in the African wilderness to trekking in the Himalayas or exploring ancient ruins. Outbound tour operators in Dubai provide adrenaline-fueled adventures for the thrill-seekers.
• Culinary Journeys : Embark on a gastronomic adventure by exploring the flavors and cuisines of various destinations, including cooking classes, food tours, and wine-tasting experiences.
• Luxury Getaways : Indulge in opulent accommodations, exclusive amenities, and personalized service with luxury tours tailored to provide the ultimate in comfort and indulgence.
• Wellness Retreats : Rejuvenate your mind, body, and spirit through wellness retreats that combine yoga, meditation, and holistic healing practices in idyllic natural settings.
• Eco-tourism Experiences : Explore the world’s natural wonders while contributing to sustainable tourism practices through eco-friendly tours and activities.
• Family-friendly Tours : Create cherished memories with family-oriented tours that cater to the interests and needs of travelers of all ages. Ensuring an enjoyable and educational experience for everyone.

How to Choose The Right Outbound Tour Operator in Dubai?

With the abundance of outbound tour operators in Dubai, selecting the right one can be a daunting task. However, by considering the following factors, you can ensure a seamless and unforgettable travel experience:

• Reputation and Experience : Research the outbound tour operator’s reputation, years of experience, and customer reviews to gauge their reliability and quality of service.
• Specialization and Expertise : Evaluate the operator’s specialization and expertise to ensure alignment with your desired destination and travel preferences effectively.
• Customization Capabilities : Assess the operator’s ability to tailor itineraries to your specific needs, interests, and budget.
• Safety and Security Measures : Prioritize operators who adhere to strict safety protocols and have contingency plans in place for unforeseen circumstances.
• Local Partnerships and Connections : Opt for outbound tour operators with strong local partnerships and connections, as these can provide access to exclusive experiences and insider knowledge.
• Customer Service and Support : Consider the operator’s commitment to customer service, including their responsiveness, communication, and support before, during, and after the tour.
• Value for Money : Evaluate the overall value proposition, taking into account the inclusions, quality of services, and competitive pricing.

By carefully considering these factors. You can increase your chances of finding an outbound tour operator in Dubai that aligns with your travel aspirations and provides an exceptional and memorable experience.

Planning your Itinerary with an Outbound Tour Operator

Collaborating with an outbound tour operator to plan your itinerary is a seamless and rewarding process. Here’s a glimpse into the typical journey:

• Initial Consultation : The first step involves a detailed consultation where you share your travel preferences, interests, budget, and any specific requirements or limitations. This allows the outbound tour operator to understand your needs and tailor the itinerary accordingly.
• Destination Selection : Based on your preferences and the operator’s expertise. They will recommend destinations that align with your desired experiences. Whether it’s exploring ancient civilizations, immersing in vibrant cultures, or embarking on outdoor adventures.
• Itinerary Crafting : With your input and the operator’s knowledge, a comprehensive itinerary is crafted, outlining the destinations, activities, accommodations, transportation, and any special arrangements required.
• Customization and Refinement : The outbound tour operator will work closely with you to refine the itinerary. Ensuring it meets your expectations and incorporates any specific requests or modifications.
• Booking and Coordination : Once the itinerary is finalized, the outbound tour operator handles all the necessary bookings, reservations, and coordination with local partners and suppliers, ensuring a seamless experience.
• Pre-Departure Briefing : Consider the operator’s commitment to customer service, including their responsiveness, communication, and support throughout the tour.
• On-Tour Support : Throughout your tour, the outbound tour operator remains accessible, providing support, guidance, and assistance as needed. This ensures a hassle-free and enjoyable experience for all.

By collaborating with an inbound tour operators in dubai . You can sit back, relax, and focus on creating cherished memories while they handle the intricate details. Allowing you to fully immerse yourself in the wonders of your chosen destinations.

Tips for A Seamless and Unforgettable Experience with Outbound Tour Operator in Dubai

To ensure a truly memorable and seamless experience when working with an outbound tour operator in Dubai. Consider the following tips:

• Clear Communication : Clearly communicate your preferences, interests, budget, and any special requirements or limitations from the outset. This proactive approach will effectively help the outbound tour operator tailor the itinerary to your specific needs.
• Be Open-Minded : While it’s essential to share your preferences, remain open-minded and receptive to the outbound tour operator’s suggestions and recommendations. Their expertise and local knowledge can often lead to unique and enriching experiences.
• Ask Questions : Don’t hesitate to ask questions throughout the planning process and during the tour itself. A reputable outbound tour operator will be happy to provide clarification and address any concerns you may have.
• Respect Cultural Norms : When visiting different destinations, it’s crucial to respect local customs, traditions, and cultural norms. Your outbound tour operator can guide you on appropriate attire, behavior, and etiquette to ensure a respectful and enjoyable experience.
• Stay Flexible : While a well-planned itinerary is essential, unexpected situations may arise. Maintain flexibility and trust in your outbound tour operator’s ability to make necessary adjustments or contingency plans to ensure your safety and enjoyment.
• Embrace Authenticity : Working with an outbound tour operator offers the chance to experience authentic local cultures and traditions firsthand. Embrace these experiences with an open mind and a willingness to learn and immerse yourself.
• Provide Feedback : After your journey, take the time to provide honest feedback to the outbound tour operator. Your insights can help them improve their services and enhance the experiences for future travelers.

By following these tips and fostering a collaborative relationship with your outbound tour operator. You can embark on a truly unforgettable and seamless adventure, creating cherished memories that will last a lifetime.

The Future of Outbound Tour Operator in Dubai

As the travel industry continues to evolve, outbound tour operators in Dubai are poised to play an increasingly pivotal role in shaping the future of global travel experiences. Here are some trends and developments that are expected to shape the industry:

• Sustainable and Responsible Tourism : With a growing emphasis on environmental conservation and cultural preservation. Outbound tour operators in Dubai are likely to prioritize sustainable and responsible tourism practices. This includes promoting eco-friendly accommodations, supporting local communities, and minimizing the carbon footprint of travel.
• Personalization and Customization : Travelers are increasingly seeking personalized and tailored experiences that cater to their unique interests and preferences. Outbound tour operators will leverage advanced technologies and data analytics to create highly customized itineraries and experiences.
• Immersive Experiences : As the demand for authentic experiences grows, outbound tour operators will increasingly partner with local communities and experts. Consequently. This collaboration will foster enriching cultural exchanges and genuine connections.
• Digital Integration : The integration of digital technologies, such as virtual reality, augmented reality, and mobile applications, will enhance the travel experience. Additionally, they will provide interactive and engaging pre-trip planning, on-tour information, and post-trip sharing opportunities.
• Wellness and Mindfulness : As travellers prioritize their overall well-being. Outbound tour operators in Dubai will incorporate wellness and mindfulness elements into their offerings, including yoga retreats, meditation experiences, and holistic healing practices.
• Multigenerational Travel : With the rise of multigenerational travel, outbound tour operators will design tours and experiences that cater to diverse age groups, ensuring enjoyment and engagement for families and groups of varying interests and abilities.
• Collaboration and Partnerships : Outbound tour operators in Dubai will continue to strengthen their partnerships with local communities, suppliers, and industry stakeholders to provide seamless and enriching travel experiences while contributing to the sustainable development of destinations.

As the world becomes increasingly interconnected and the desire for meaningful travel experiences grows. Outbound tour operators in Dubai will play a crucial role in shaping the future of global tourism. They are offering curated journeys that celebrate diversity, promote sustainability, and create lasting memories.

Embrace The Essence of Outbound Tour Operator in Dubai

As a reflect on the invaluable role of outbound tour operators in Dubai. We are reminded of the transformative power of travel and the importance of embracing authentic experiences. Additionally, these professionals aren’t just travel planners; they’re curators of unforgettable journeys, seamlessly weaving culture, adventure, and discovery.

By entrusting your travel dreams to an outbound tour operator in Dubai. As you embark on a journey that transcends mere sightseeing, immerse yourself in global cultures. Therefore, forge connections with communities, gaining a deeper appreciation for world diversity.

Whether you seek the thrill of adventure, the serenity of wellness retreats, or the indulgence of luxury getawayes. Outbound tour operators in Dubai, with their expertise and resources, can craft personalized experiences that exceed your expectations.

Discover the essence of outbound travel by partnering with reputable outbound tour operators in Dubai. Embark on a soul-stirring journey, creating timeless memories with FBT Adventures that leave lasting impressions. Contact us today to begin crafting your dream adventure. And let the experts guide you through a world of endless possibilities.

As the world continues to evolve, the role of outbound tour operators in Dubai will become increasingly vital, bridging the gap between wanderlust and reality. They ensure that every traveler’s journey is seamless and unforgettable. Embrace the essence of outbound travel; therefore, let Dubai’s experts guide you on the path to discovery, enlightenment, and lasting memories.

FBT Adventures that leave lasting impressions, as we are the best tour and travel Company in Dubai provides seamless travel arrangements for corporates tour, meetings, events and luxury travel packages in Dubai. We are an inbound tour operators in Dubai, offer travel services for whole UAE.

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Types of Tour Operators: Which One Is Right for Your Travel Business?

Starting a tour operating business can be an exciting and rewarding experience. However, with so many different types of tour operators out there, it can be challenging to decide which market to pursue. In this blog, we will provide guidance on the different types of tour operators available and help you choose the right market for your tour operating business.

Inbound Tour Operators

Definition of Inbound Tour Operators; An inbound tour operator is a company that specializes in organizing tours and activities within their country, working with travel agents to create packages for international visitors. They are responsible for organizing itineraries, accommodations, transportation, and activities for incoming tourists.

Their role in managing domestic tours and activities; they welcome international travelers and assist them with planning their travel to suit their needs using their country-specific knowledge.

Advantages of working with an inbound tour operator; They use their local knowledge to create a seamless, stress-free travel itinerary for their customers.  

Outbound Tour Operators

Definition of Outbound Tour Operators; An outbound tour operator is a company that works with clients who are traveling outside of their home country. They offer packages that include flights, accommodations, and activities. For example, if a US resident is planning a trip to Asia, an outbound US tour operator will take care of all the details.

Their role in managing international tours and activities; They work with local travel partners in different countries to provide travelers with a complete travel experience.

Advantages of working with an outbound tour operator; They allow customers to work with someone from their home country to plan and book international travel itineraries.

Domestic Tour Operators

Definition of Domestic Tour Operators; A domestic tour operator specializes in organizing tours and activities within a specific country. They cater to locals who want to explore their own country.

Their role in managing tours and activities within a particular country; They cater to locals who want to explore their own country and have specialized knowledge on trips and activities that locals don’t often experience.

Advantages of working with a domestic tour operator; Domestic tour operators often cater to native travelers who want to experience new areas within their home country. They typically have a collection of specific holiday and weekend trips that are ideal for travelers looking to book around their work and family schedules.

Specialist Tour Operators

Definition of Specialist Tour Operators; A specialist tour operator is a company that focuses on a specific niche or interest. They create packages that cater to travelers with specific interests or needs. Some examples include adventure, luxury, cultural, or wildlife travel.

Their role in managing niche travel experiences; They specialize in creating tour packages that match travelers with experiences that they are particularly interested in or wanting to learn more about. They work with local partners to create these unique offerings.

Advantages of working with a specialist tour operator; They offer tour packages specifically crafted for different interests and often allow the traveler to learn more about their destination than other options.

Ground Operators

Definition of Ground Operator; Similar to domestic operators, ground operators work on travel itineraries within their home country. The difference is that they specialize in providing local services on behalf of other travel agencies and operators to the clients throughout their trip.

Their role in managing tours and activities; They work with travel agents to create customized travel itineraries for groups and individual travelers. Their services may include directly taking care of a client’s transportation, accommodations, meals, and activities during their trip.

Advantages of working with a ground operator; They provide a high level of support and assistance throughout the trip, ensuring that everything runs smoothly and according to plan.

Conclusion:

In conclusion, choosing the right market for your tour operating business depends on your interests, expertise, and resources. Whether you choose to specialize in inbound or outbound tours, domestic or international travel, or a particular niche, there are endless opportunities to create unique and memorable travel experiences for your customers.

With the guidance and support of TripMatrix, you can start your tour operating business and pursue the market that best suits your vision and goals as well as connect with other operators. Discover how TripMatrix tour operator software is helping true operators aound the world to manage their travel business more efficient.

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Types of Tour Operators

We know that the travel market is vast, and it can be confusing trying to navigate the different types of tour operators and their offerings. 

Whether you are a tour operator trying to choose which market to specialise in or a traveller looking for assistance with your next trip, we’ve got you covered!

In this blog post we will walk you through the main types of tour operators and explain how each one can help their customers to plan and book their dream trips.

What is the role of a Tour Operator?

Tour operators help travellers to design, plan, book and enjoy their trips, assisting with the entire customer journey from beginning to end. 

They often combine components from several different companies such as airlines and accommodation providers as well as extras such as activities, transfers and entertainment, transforming them into tours which are sold to the public as a package . 

The tour operators themselves are also responsible for the marketing of their travel packages, a topic that we covered in ‘ the tour operators’ guide to creating an exciting marketing strategy ’, and should be available for direct communication with the customer throughout the entire process. 

Wondering what the differences are between each tour operator?

Well, we’re here to help.

While there are several different types of tour operator, the main ones include:

• Inbound Tour Operator
• Outbound Tour Operator
• Domestic Tour Operator
• Ground Operator
• Receptive Tour Operator

These companies can also focus on the mass market or can specialise on a niche group, such as eco-tourism, adventure sports or food tours. 

Inbound Tour Operators

As we explained in ‘ Outbound vs Inbound Tour Operators ’, inbound tour operators are locally-based companies that work by bringing visitors into a specific country or destination , often partnering with other businesses such as accommodation and transport providers in order to offer customers package deals.

Inbound tour operators are also sometimes referred to as destination management companies, aiming to promote their destination as a whole to incoming travellers and assist them with all aspects of their trip. This also requires a knowledge of overseas markets and the needs and interests of different types of customers in order for them to promote their tours effectively.

Outbound Tour Operators

While inbound tour operators bring tourists into a country, outbound tour operators market to travellers in their own country and offer tours in international destinations . 

When creating tour packages, outbound tour operators usually focus on specific countries, destinations or regions of the world, and also partner with businesses in the host country to provide customers with convenient and comprehensive packages.

A good example of an outbound tour operator is TUI , one of the world’s largest travel companies that works mainly by selling tours to overseas destinations and who is also one of our customers. 

Domestic Tour Operators

As the name suggests, domestic tour operators put together packages for domestic travellers – those who are travelling within their native country . This type of business aims to promote travel within their own country, and offers packages in popular destinations. 

Haven Holidays is a domestic tour operator that focuses on the British market by offering breaks in its self-catering holiday parks in an array of coastal destinations around the UK. These types of tour operators frequently offer family-friendly activities and diverse entertainment options for those who want to enjoy weekend breaks or summer holidays within their own country. 

Ground Operators

Like domestic tour operators, ground operators also work within their own country . However, ground operators usually work on behalf of inbound or outbound tour operators and are the ones that provide the actual travel service in a destination, helping to organise and assist tourists.

This type of tour operator is especially useful for tours in far-flung destinations where it can be difficult to plan itineraries without local knowledge, expertise and contacts. Ground operators are likely to be on hand in the destination itself to organise transfers, negotiate special rates with accommodation providers or find the best local tour guides. 

Receptive Tour Operators

Receptive Tour Operators provide tourism products , whether in the form of packages or single components, to other tour operators or travel agents . They do not sell directly to the public and usually follow a structure similar to a wholesaler.

RTOs are experts in their market , and help their customers to find the best accommodation providers, services and activities in their chosen destination. This type of tour operator makes money by adding a percentage rate to the final price that their customer is selling the travel product for. 

For example, a receptive tour operator may work with an outbound tour operator by providing them with travel packages for a specific destination. The outbound tour operator then sells this tour package to its customers and adds an extra fee to the cost, which goes directly to the receptive tour operator.

Technology for Tour Operators

Here at Nezasa , we provide tour operators with a cutting-edge product that allows them to plan, book and customise their customers’ trips with ease. The use of a software solution like ours is an excellent way to simplify aspects of your business, allowing you to focus on the customer themselves. 

Our TripBuilder software is a unique, seamless and integrated solution, designed to help you efficiently create hyper-personalised and flexible itineraries for your customers. 

To find out more about our innovative products, make sure to sign up for our next webinar here . 

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What Is a Tour Operator?

When starting a travel agency , there is much to learn such as industry-specific terminology and best practices. One important nuance to understand is that tour operators can assist travel agents in creating great itineraries for clients. 

When you start looking at options, it is important to know that tour operators are often classified in different ways such as mainstream, boutique, or luxury; or by niche or activity, such as bike, rafting, cruise, or even bus. The specialties are mainly driven by the types of tours created for the client.

Tour operators know destinations intimately and take care of the logistics and details. Among the travel advisors interviewed for this article, they all agree that tour operators they have trusted relationships with are key to their successful businesses . 

Let’s start at the beginning and answer some common questions about what tour operators are and how they work with travel agents.

What Is a Tour Operator? 

At its most basic, a tour operator is a type of travel supplier that creates and sells tour packages. These packages typically bundle accommodation, transportation, activities, guides, and sometimes meals into one price. Flights are occasionally included as well. Tour operators often specialize in certain destinations or travel niches .

Several different terms are used for tour operators— inbounds, outbounds, DMC (destination management company), and suppliers. Here’s a closer look at these terms.

Inbound tour operator

An inbound tour operator is an operator who specializes in or is located in the country, region, or place where advisors are designing a client’s itinerary . Inbound tour operators receive clients into their country or region (though they may serve domestic travelers as well). 

Some inbound, or local, operators purely run day tours, while others also run multi-day itineraries. Some inbound tour operators may also be called DMCs. ( See more below on DMCs .)

Outbound tour operator

An outbound tour operator generally works with DMCs to design and package itineraries that they sell directly to consumers. These may be group departures, custom, private, or self-guided. They may use a DMC for part of an itinerary or different DMCs for different segments of a trip, for example, if different countries are involved. 

Destination management company (DMC)

A DMC (also called on-site) is a local company with deep knowledge and resources that puts together tours by working with local and inbound tour operators, guides, accommodation providers, transportation providers, and others. 

What’s the difference between a tour operator and a DMC ? A DMC is a type of destination/regionally specialized tour operator with boots on the ground whereas a tour operator may subcontract some or all of their tours.

Some DMCs only work B2B (business to business -- for example, booking a trip for an outbound tour operator or travel agent) while others may also work B2C (business to consumer, or direct to consumer). The DMC tour can be white-labeled for the outbound operator.

To further confuse matters, all these tour operators are also referred to as Suppliers. “Suppliers” is the umbrella term for all different kinds of tour operators ( in addition to other travel providers). Every travel consortium will have a list of what’s called preferred suppliers , which are approved and vetted suppliers that include tour operators and DMCs. 

What Type of Trips do Tour Operators Provide? 

Just as there are many different types of tour operators, there are a variety of trips they may provide. Here are a few examples of the different kinds of trips a tour operator might offer a traveler or travel advisor.

1. Group Tour

A guided trip package for travelers that has a common itinerary, travel date, and transportation. Group tours are usually prearranged and prepaid and include transportation, lodging, dining, activities, arranged experiences, and admissions to attractions.

2. Guaranteed Departure

A group tour that will depart no matter what (great for travelers with no flexibility or limited time off).

3. Private Tour

A guided tour for a pre-established group (or small group) of travelers that is catered to their specific schedule preferences.

4. Custom/FIT Tour

Tailoring each component of an itinerary (car, air, hotel, entertainment, day tours, etc.) to the client’s exact specifications.

5. Self-Guided Tour

A tour with no private guide, where travelers go at their own pace on a pre-arranged itinerary.

6. Charter Packages

An unguided packaged tour (common among sun-and-fun destinations with all-inclusives and include chartered air)

How do Tour Operators Work with Travel Advisors? 

Tour operators have itineraries for sale or options for the travel advisor to choose from to curate their client’s itinerary. There might be a booking area just for travel advisors and B2B partners on their websites. 

Advisors might work with tour operators to book into a set group departure date or to work with a custom/FIT consultant on their team who can craft a custom or private tour for their clients. 

PAYMENT STRUCTURES

For travel advisors, one of the biggest differences between tour operators is whether the tour operator works from net rates or commissions. 

Net Rate - Some DMCs and tour operators offer net rates, which allow advisors to determine the appropriate profit margin when setting the price for the client. In this case the advisor collects payment from the traveler and the travel advisor pays the DMC the net rate.

Commission - There is another option and that is a DMC giving a retail price for their tour to the travel agent and then collecting payment from the traveler. The travel advisor then earns a commission from the DMC.

Outbound tour operators usually follow a commission-based model. Some companies will create tiered commission structures that allow advisors to earn more commission based on sales volume for the year. (Note, this can be an advantage to working with a host agency as they can help advisors reach higher tiers with tour operators.) 

CLIENT COMMUNICATION

Most of the time, tour operators expect travel agents to be the touch point with the client. They direct communications to the advisor, who then shares the details with their client. Outbound tour operators maintain communication with the travel advisor from pre-travel all the way through post travel.

However, for inbound tour operators and DMCs, a travel advisor books the trip for the client and maintains communication up until departure. Once the client departs, the inbound or DMC communicates directly with the client during travel to ensure solid communication. However, it is important that there is trust and an agreement that the inbound or DMC doesn’t solicit clients for future business.

Where Do Travel Advisors Find Good Tour Operators to Work With?

Many consortia and host agencies will do the heavy lifting and find great operators for advisors to work with, however travel advisors may need to go outside preferred suppliers.

So where do advisors find that boutique DMC in Slovenia, Panama, or Japan or that outbound tour operator that offers everything the client has requested?

• Events - Attend trade events and meet with operators in new destinations. At those events, meet other advisors and learn what operators they like to work with. (Check out HAR’s article on how to make the most of a travel conference .)
• Host Agency - Utilize the great partnerships host agencies set up and also let them know when there’s a significant demand for new experiences. Some host agencies may have preferred DMCs advisors can utilize.
• Consortia - Virtuoso, Signature, and Travel Leaders among others vet operators, removing some of the barriers for advisors to build relationships with suppliers.
• Facebook groups (for example, Travel Advisors Selling Europe ) - virtual groups and communities centered around a travel niche can be a great place to ask questions or just listen for new operators. (Read Nikki Miller’s post on asking qualified questions to travel advisor Facebook groups.)
• Travel Trade Communities - Utilize and become active in travel trade communities such as group chats and webinars in order to connect and get to know your community members. Share your needs publicly and see what comes back!
• Referrals - Word of mouth referrals from fellow advisors can be a fast track to reliable operators.
• FAM Trips - Going on a trip with a potential tour operator can definitely create a pathway to partnership as the advisor can experience the tour operator’s service offering.
• Representation companies - If you know people at sales representation companies and they have similar values to you, this can be another way to vet out potential new partners. These companies are essentially the sales and marketing “arm” for boutique lodges, specialty operators, and DMCs. (e.g. Emerging Destinations and Kusini Collection)
• Tourism Boards / Destination Management Organizations (DMO)/ CVB (Convention & visitor Bureaus) - Often the official tourism board, CVB, or DMO for a region or place will have a marketing and/or management organization that is responsible for driving visitation, creating visibility, and developing healthy thriving local communities. These offices often have amazing relationships with local businesses and can be great options for discovering interesting travel opportunities for clients.

Once advisors find contacts, the most important thing is to start building relationships and trust. Doing research to understand the best questions to ask will help.

Vetting a Tour Operator? Here's what to Look for!

There are some simple ways to check to see if a tour operator is going to be a fit for you and a trustworthy business. Larger companies will have some of this dialed in more than some smaller businesses. Don’t count them out, just know you may need to ask more questions. Smaller boutique DMCs and operators can offer some amazing experiences for clients.

If you’re a travel agent, connecting with a tour operator that’s a good fit for your agency will help you provide stand-out service to your clients. 

“No matter who I called, someone always picked up. They were easy to talk to. It felt like a team.” - Judi Lombardi

Here's a checklist to use when vetting a tour operator:

• Consortium’s preferred supplier 
• Host agency’s preferred supplier - (Go to HAR’s host agency profiles . When you click into a profile, their preferred partners will be listed at the bottom!)
• Association Membership (examples USTOA, ASTA, IATA , ATTA) or connection to Destination Management Organizations (DMO) or Chambers of Commerce
• Awards from recognized industry leaders from media companies to associations
• Sustainability certifications, environmental projects or local community partnerships
• Positive reviews from clients or travel advisors
• Dedicated travel advisor portal - like this one from G Adventures
• Travel advisor dedicated number and staff 
• Travel advisor branding possible on materials to clients
• Visible Seller of Travel #  
• Insurance coverage, $1-2M in liability insurance is best practice. 
• Number of years in business
• Secure digital payment methods are available
• Sample trips, experiences, dates visible on their website
• Payment structure (net rate or commission)
• Business structure - B2B, B2C, or both? Do they currently work with advisors?

Want to have a list of questions to ask of your very own? Download HAR's resource below!

Tour operators are an important part of the travel ecosystem for the traveler and travel advisor alike. The variety of tour operators available offers advisors an opportunity to build partnerships to plan and book the perfect itinerary for their clients. 

Did we miss anything about working with tour operators that gives your business an added edge? Weigh in below in the comments with your experiences and tips! 

Casey Hanisko , executive coach, business consultant, and travel industry expert and Mary Stein from Host Agency Reviews collaborated on this post. Travel advisors, Erin Green, Pique Travel; Judi Lombardi, Memories on the Move Travel; and Laura Mandelkorn, Go Custom Travel graciously shared some of their business practices and tips to inform this article.

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Which Type of Tour Operator are You?

Let’s be honest – the tour operator business is highly competitive as companies try to get a large share of the international and domestic markets they operate in. In order to better navigate the landscape, you need to understand where you stand in that market.

We all know that a tour operator is one who packages key components (or all) of a trip, markets it, sells it to a traveler or tourist, and handles the entire tour operation.

But do you know exactly which type of tour operator you are?

Having clarity on this question will help you identify key partners to work with (like DMOs or hotels) and make better business decisions overall. As a result, you’ll be able to curate better tour packages and run your entire tour operation smoothly, efficiently and successfully.

This is why we’ll cover the different types of tour operators below (plus – we’ve attached a handy infographic at the end for your reference).

So, let’s get to it – which type of tour operator are you?

Types of Tour Operators

There are five main categories of tour operators that you could fall into: inbound tour operators, outbound tour operators, domestic tour operators, receptive tour operators, and ground tour operators. Let’s find out which one of these five you fall into.

Of course any tour operator cannot be fully successful without a booking system that will automate all reservation processes and allow them to generate more revenues. If you still haven’t got a booking system, try Regiondo , the most popular booking system in Europe designed to streamline your booking process. Book a demo with Regiondo experts to learn how your business can leverage booking system.

Inbound Tour Operators (AKA Incoming Tour Operators)

Inbound tour operators bring tourists into a country as a group or via individual tour packages. They handle all arrangements in the host country; and the types of tours they curate are specifically for non-residents touring the country.

Let’s look at an example.

If a group of Italian tourists want to explore Germany, then the tour operator in Germany who handles all the arrangements for the tour is known as an inbound tour operator. So, inbound tour operators are locally based and offer tours that cover their own country.

Most inbound tour operators hire local travel agencies for things like airport pick-up and drop-off; form partnerships with local hotels and businesses; and have key partnerships with other types of tour operators (who help them run tours on the ground).

Outbound Tour Operators

Unlike inbound tour operators, outbound tour operators work within their countries to take travelers to other countries. They are tour operators who market their tours for international destinations, either for business or leisure travel.

Let’s say, for example, that a group of Canadian tourists are planning a trip to Italy. Then the tour company in Canada that handles all the ticket reservations and hotel bookings is the outbound tour operator.

To further simplify things, outbound tour operators design and package tours for tourists in their home country to visit an international destination.

Now, most outbound tour operators choose to specialize in specific destinations: either a destination that is “trending” or one in which they have particular expertise and distribution partners. They often work with other tour and activity providers in the destination when designing their travel packages.

Domestic Tour Operators

Domestic tour operators are those that put together inclusive tour packages and sell them to domestic travelers. In other words, they are tour operators who provide travel packages and tours within a tourist’s native country.

Domestic tours usually involve residents of a specific country traveling within that country. They can visit national parks, scenic areas, hospitality tours, city tours , train tours, etc. Since there are many options that tourists can choose from, domestic tour operators often combine several tourist components into an inclusive package that they can sell to travelers within the boundary of the country.

Domestic tour operators form key partnerships with other tour and activity providers in order to attain a larger share of the domestic tourism market.

Receptive Tour Operators (RTOs)

Receptive Tour Operators (RTOs) provide tourism products to tour operators in other markets (as a business-to-business relationship).

Specifically, RTOs sell tourism products, whether they are sold in a tour package or alone, to tour operators and/or travel agents . They are essentially wholesalers and they don’t sell directly to the public.

So how do they make money?

They add a percentage rate (or fee) to the final price that the tour operator is selling the product or service for. When a travel agent buys the tour product, they incur the RTO’s fee in the final price. In that sense, RTOs do not charge commission. They simply market the tourism product and add their fee to the final product price.

Another key characteristic of RTOs is that they are experts in the region they operate in; and know much more than just the hotels and types of tourism activities that are offered in the region. As such, RTOs to help other tour operators identify things like hotels, services and design itineraries in regions they are not familiar with.

Ground Tour Operators

Ground tour operators operate domestically. They are however different from domestic tour operators in that they organize tours for incoming tourists on behalf of an inbound tour operator (and sometimes, outbound tour operators).

Let’s look at an example to better understand the role they play.

Italy will be the destination in this example. So, here’s how it works:

An inbound tour operator designs and promotes beach holidays, adventure, and heritage tours in different parts of Italy. Problem: the inbound tour operator doesn’t have offices across Italy. The inbound tour operator also doesn’t have close contacts or partnerships with suppliers and key agents in certain parts of the country. So, they consult with ground tour operators.

It is the ground operator that will handle the incoming tourists at those various destinations around Italy. They oversee land arrangements; negotiate with and contract local vendors; coordinate arrivals and departures; plan and put together local tour packages; escort tourists; provide market data; and cost and price tour packages. Overall, it is their duty to ensure that the entire trip goes smoothly based on the package tours and agreements.

You may know ground tour operators as “handling agencies” because they organize tours for incoming tourists on behalf of overseas tour operators.

Wrapping Up

Back to the question we asked at the very beginning: which type of tour operator are you? Now that you’re better informed to answer that question, you can also start thinking about ways to improve your distribution and marketing channels based on that answer.

The next step is to figure out who your key partners are and strike up deals to propel your business forward.

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Tour Operators: Types, Functions, Importance, Difference

• Post last modified: 19 January 2023
• Reading time: 18 mins read
• Post category: Uncategorized

What is Tour Operator?

Tour operators are sometimes called wholesalers but this is partially true because a wholesaler buys goods or services in bulk at his own account to prepare a tour package and then retails it through the travel agencies or directly to the clients.

Table of Content

• 1 What is Tour Operator?
• 2.1 Inbound Tour Operators
• 2.2 Outbound Tour Operators
• 2.3 Domestic Tour Operators
• 2.4 Destination Management Companies
• 3.1 Planning a Tour
• 3.2 Making Tour Package
• 3.3 Arranging a Tour
• 3.4 Travel Information
• 3.5 Reservation
• 3.6 Travel Management
• 3.7 Evaluate the Option Available
• 3.8 Promotion
• 3.9 Sales and Marketing
• 3.10 Taking Care of Glitch
• 4 Importance of Tour Operators
• 5.1 Tour Packages Creation
• 5.2 Make Travel Arrangements in Advance
• 5.3 Tour Operations Budgeting
• 5.4 Providing a Relaxed and Safe Tour
• 6 Difference between Travel Agent and Tour Operator

However, a tour operator who has his own one or more tourist product components formulates a new tourist product for example ‘inclusive tours’. Tour Operators generally offer a variety of package tours to cater to the needs of different kinds of travellers.

An organization, firm or company which buys individual travel components, separately from their suppliers and combines them into a package tour, which is sold with their own price tag to the public directly or through middlemen is called a tour operator.

More precisely, tour operators are mainly responsible for delivering and performing the services specified in a given package tour. They can provide these services themselves as some have their own cars and coaches, hotels and other travel-related services or can obtain these from other suppliers. That is why they are called manufacturers of tourism products.

Types of Tour Operators

Following are the types of tour operators explained briefly:

Inbound Tour Operators

Outbound tour operators, domestic tour operators, destination management companies.

These are also known as incoming tour operators. Technically, the operators who receive guests, clients/tourists, and handle arrangements in the host country are called inbound tour operators.

For example, a group of American tourists coming through TCI to India and the company makes arrangements and handles the group in India, then TCI is called an inbound tour operator. Incidentally, the inbound traffic to the country for the last two decades has been decreasing.

Essentially, tour operators need to adopt innovative marketing strategies and should introduce special interest tours to cater to the special needs of foreign tourists.

Tour operators, who promote tours to foreign destinations, maybe business tours or leisure tours are called outbound tour operators. Indian outbound tourist traffic is growing at a rate of 10 percent annually and this makes India the second-largest country in the world with regard to the travelling population.

However, India’s outbound tourism is not only holiday-oriented but it is business-oriented too. There are many travel companies that offer outbound packages such as SITA, TCI, Thomas Cook etc.

Domestic tour operators are those who assemble and combine tourist components into inclusive tours and sell them to domestic travellers. In general, these tour operators provide travel services within the boundary of the home country and offer package tours to travellers viz. domestic inclusive tours or independent tours.

These are commonly known as handling agencies and their main function is to organize tour arrangements for incoming tourists on behalf of overseas operators. When a tour operator himself promotes beach holidays, wildlife holidays, wildlife tours, heritage tours, cultural tours at different places, difficulty arises.

It is the ground operator who handles the incoming travellers in the same season but at different places and ensures that the entire operation is according to the package tours or agreements.

Sometimes when a handling agency is at a prominent tourist place, for example, Delhi and it has to make arrangements to Goa, then it contracts (if it has no office of its own) with a local operator (known as an excursion agent) to handle the arrangements on his behalf.

Functions of Tour Operator

A tour operator is like a service provider, providing the most convenient option for tourists to stay, visit, as well as leave the city. A tour operator owns a high volume of travel services across carriers, services, and accommodation. Some most important functions of the tour operators are following:

Planning a Tour

Making tour package, arranging a tour, travel information, reservation, travel management, evaluate the option available, sales and marketing, taking care of glitch.

The most important function of the tour operators is planning a tour. Tour operators plan a tour and make a tour itinerary that contains the identification of the origin, destination and all the stopping point in a traveller’s tour.

A prospective tour operator also gives advice to intending tourists in various types of tour programmes, which they may choose for their leisure or commercial travel.

Tour operator buys individual travel components, separately from their suppliers and combine them into a package tour. Tour operators make tour package by assembling various travel components into a final product that is called a tour package which is sold to tourists with their own price tag. Making tour packages is also an important function of the tour Operator.

Tour operators make tour package and also arrange a tour according to tourist demands. Tour operators arrange the tour package and various tourists activities to provide the best experience to tourists/travellers.

Whatever the size of tour operators, it has provided necessary travel information to the tourists. This task is utterly difficult and very complicated. A tour operator must give up-to-date, accurate and timely information regarding destinations, modes of travel, accommodation, sightseeing, immigration, health and security rules about various permits required to travel in a particular area etc.

It is a very important function of all types of tour operators and travel agencies. Tour operators make all the reservations by making linkages with the accommodation sector, transport sector and other entertainment organizations to reserve rooms, and seats in cultural programmes and transportation.

Tour operators manage tours from the beginning to the end of the tour. A tour operator has the responsibility to look after the finer details of a vacation or tour such as hotel, accommodation, meals, conveyance etc. Tour operators provide travel guides, and escorting services and arrange all travel-related needs and wants.

Tour operators evaluate all available options to provide a unique or unforgettable travel experience to tourists during their journey. Tour operators evaluate the various options available for a tour package and provide the best of them to tourists.

Tour Operators makes tour packages and promote them into various tourists markets at domestic as well international level. Tour operators promote a travel destination to attract a large group of tourists at the domestic as well as international level.

In the promotion of tourist destinations, tour operators play a key role. Travel agencies or tour operators are called image builders of a country.

Tour operators do sales and marketing of tourist products. Tour operators buy individual travel components, separately and combine them into a tour package, which is sold with their own price tag to the public directly. Tour operators do the marketing of tourist destinations and tourism products to attract the attention of tourists/travellers.

Tours operators are also called handling agencies that handle tour package and take care of all the glitches and problems that arise during a tour package. Tour operators fix the glitches and provide the best available alternative to tourists during their journey.

Importance of Tour Operators

• Tours operators play a key role in the tourism sector. Tour operators create tourist product, promote them and finally sold them to tourist.
• Tour operators provide the best and competitive price to the tourist. Tour operators negotiate with suppliers of tourism product such as hotels, airlines and provide the best possible price to the tourist.
• Tour operators buy tourist product in bulk and get huge discounts from suppliers. So that they can provide tourist’s products at cheap price.
• Tour operators organized a tour in the best way. They personalize and make sure each and every component of the tour is well-taken care. Tour operators provide best travel experience during a tour. Tour operators save tourist’s times and money.
• Tour operators provide immediate support system at host country as well as foreign land. When tourists travel to a foreign land and things get uncertain, maybe it’s a health or loss of documents and need to return back or change of travel plan. A qualified tour operator takes care of all these unseen events with efficiency.
• Tour operator caters to the needs of tourists on the based on their taste of travel. Tour operator provides all the best available option according to tourist needs and demands.

Role of Tour Operators in Tourism Business

Tour packages creation.

The tour operator is in charge of developing and maintaining guests’ tour packages. The preparation of activities that appeal to the specific visitors embarking on the trip is part of tour package management. When and how to adjust a tour package to best adhere to the group or individual’s goals should be covered by the tour operator.

Make Travel Arrangements in Advance

In most circumstances, tour operators are responsible for making travel arrangements for the touring group. This covers transportation from one location to another, as well as ensuring that all members of the group arrive at their next destination. Tour operators frequently assist with flight tickets and collaborate closely with hotels to recommend lodging reservations, sightseeing alternatives, and other activities to group members.

Tour Operations Budgeting

Tour operators work hard to build tour packages that provide users with great service at a lower cost than if they booked each commodity separately, while still running a profitable business. Tourists purposefully seek out the assistance of a travel agent or tour operator in order to get more value for their money. Before finalising a tour package, tour operators should take the time to evaluate pricing.

Providing a Relaxed and Safe Tour

A tour should fulfil all of a traveller’s expectations and beyond. A tour operator should be skilled at putting together an experience that will leave guests with lifelong memories.

It’s just as crucial to providing a meaningful, good experience as it is to keep your passengers safe throughout the journey. Some tour activities may represent a possible risk to travellers, putting the tour organisation at risk. As a tour operator, you should encourage your visitors to purchase travel insurance. Insurance will give you and the tourists peace of mind as they go on once–in–a–lifetime experiences. Travel Agency & Tour Operators Roles & Responsibilities

Difference between Travel Agent and Tour Operator

There is a lot of confusion about the difference between tour operators and travel agents what exactly makes them different. The main difference between a Travel agent and a Tour operator are following as:

• A travel agent is a person who has a full knowledge of tourist product – destinations, modes oftravel, climate, accommodation and other areas of the service sector. He acts on the behalf ofthe product providers/principals and in return get a commission.
• Tour operator is an organization, firm or company who buys individual travel components,separately from their suppliers and combines them into a package tour, which is sold withtheir own price tag to the public directly or through middlemen.
• Tour operators are like wholesalers and travel agents are the retailers.
• A tour operator makes the package holidays up and the travel agents sell them on.
• Tour operator taking up the bulk of the responsibilities and his fee is obviously much greaterthan a travel agent.
• A tour operator has the responsibilities to look after the finer details of a vacation or tour suchas hotel, accommodation, meals, conveyance etc.

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The Ultimate Guide All About Outbound Tourism

All About Outbound Tourism, also known as international tourism, is an ever-growing sector that has been gaining popularity in the past few decades. With the increase in globalization, people have become more interested in exploring new cultures, cuisines, and destinations around the world.

In this highly competitive travel industry, it’s important to understand the ins and outs of outbound tourism to stay ahead of the game. Whether you’re a travel enthusiast, a travel agent , or a seasoned professional in the industry, this ultimate guide will provide you with a comprehensive understanding of outbound tourism.

We will discuss everything you need to know about outbound tourism, including the current trends, the top destinations, the benefits and challenges of outbound tourism, and the best practices for the industry. We will be delving into the different types of outbound tourists, such as business, adventure, and leisure travelers, and their unique requirements.

Table of Contents

All About Outbound Tourism In Details

Traveling overseas to experience new cultures is becoming increasingly popular among leisure travelers. This section covers everything you need to know All About Outbound Tourism its definition, reasons why it’s preferred over domestic travel, top destinations favored by outbound tourists like Spain and France, and planning tips.

It’s worth noting that international tourism supports economies around the world with a positive impact on GDP, as per WTO and United Nations reports.

Historical Overview Of Outbound Tourism

Outbound tourism, or traveling to a foreign country for leisure or business purposes, has a long and fascinating history. While ancient civilizations such as the Greeks and Romans engaged in travel for trade and diplomacy, it wasn’t until the 19th century that leisure travel began to take off.

The advent of steamships and railways made it easier and more affordable for people to travel abroad, leading to the rise of mass tourism. In the early 20th century, advancements in aviation technology further revolutionized outbound tourism.

Air travel has become faster and more comfortable, making it possible for people to visit far-off destinations in hours rather than days or weeks. Outbound tourism is a major industry today, with millions of people traveling abroad each year for vacation, education, business, and other purposes.

As technology continues to evolve and the world becomes increasingly connected, it will be interesting to see how outbound tourism continues to change and adapt over time.

Factors Affecting Outbound Tourism

There are several factors that can affect outbound tourism, including economic conditions, political stability, cultural differences, and technological advancements. Economic conditions play a significant role in outbound tourism, as individuals are more likely to travel when they have disposable income and job security.

Political stability is also an important factor, as individuals are less likely to travel to countries with high levels of political unrest or instability. Cultural differences can also impact outbound tourism as individuals may be hesitant to visit countries with vastly different customs and traditions than their own.

Technological advancements have also made travel more accessible and affordable, allowing more individuals to participate in outbound tourism. By considering these factors when planning for outbound tourism, individuals can make informed decisions and have a safe and enjoyable travel experience.

Planning An Outbound Trip

Planning an outbound trip can be an exciting and daunting task. To ensure a smooth and enjoyable experience, it is important to consider a few key factors before embarking on your journey. First, decide on your destination and research any necessary visas or travel requirements.

Next, budget your trip, including transportation, accommodation, and activities. Creating an itinerary to make the most of your time abroad may also be helpful. When booking flights and accommodations, compare prices and read reviews from previous travelers.

Finally, don’t forget to purchase travel insurance to protect yourself in case of any unexpected events. With careful planning and preparation, you can have a successful outbound trip filled with new experiences and unforgettable memories.

Choosing A Destination

Choosing the right destination is crucial while planning an outbound trip for leisure or vacationing abroad. Cost-effectiveness, accessibility by air or road transport, and safety concerns must be considered when selecting a place.

Researching the local culture and customs can ensure that travelers are respectful to natives and avoid offending them at any cost. Weather patterns and climatic conditions in the desired location are equally important before making any reservations. Opt for a spot that caters to your interests, such as historical sites or adventure activities.

Transportation Options For Outbound Travel

Travelers going on an outbound trip have multiple transportation options to choose from. For longer distances, air travel is the most popular and convenient choice. Land transport like buses, trains, and cars can be chosen if you’re traveling shorter distances or in groups.

Sea transport options such as cruises and ferries offer a unique experience with onboard amenities while exploring different destinations. Budgets and personal preferences help determine which mode of transportation to select.

Accommodation Options For Outbound Travel

When selecting accommodation options for outbound tourism, you must take into account your budget and travel style. Hotels are renowned for their variety of services and facilities; however, they tend to be more costly than other choices.

Hostels are an economical option that fosters socializing amongst travelers while sacrificing privacy. Vacation rentals provide homelike vibes, with kitchens and living rooms requiring prior scheduling. Homestays offer an authentic experience of the local culture but necessitate adaptability.

Activities And Attractions For Outbound Travel

When traveling outside your home country for leisure or business purposes, there are many activities and attractions you can experience as part of outbound tourism. From sightseeing to adventure sports and cultural experiences to food tours, there is truly something for everyone.

Popular outbound tourist attractions include museums, historical sites, national parks, and beaches. As always, conducting thorough research before departure ensures a meaningful travel experience. Outbound tourism has a positive impact on global economies through international trade growth and inbound tourism increases.

Cultural Considerations For Outbound Travel

When planning an outbound trip, it is essential to consider cultural differences in your destination. Understanding different customs and traditions can help you avoid potential misunderstandings while traveling abroad. Dressing appropriately and respecting religious practices are also important factors to consider.

Awareness of these cultural considerations will help make your outbound travel experience even more enjoyable. Outbound tourism significantly contributes to the GDP of many countries, including Spain, France, America, Germany, Australia, Italy, Japan, and Thailand.

Health And Safety Precautions For Outbound Travel

To avoid potential health and safety risks while traveling outbound, it’s vital to research potential risks and take necessary precautions.

This can include obtaining vaccinations or medications before the trip, packing appropriate clothing and gear based on local weather conditions, researching any safety concerns or political instability in the destination such as in the United States or Spain, being aware of cultural norms like respecting religious practices and restrictions on photography or other activities such as leisurely visits to France’s wine country.

Outbound travelers should also keep in mind the positive impact of outbound tourism on GDPs, like in Germany or Australia, as well as international trade per the WTO. By following these guidelines for safe travel during outbound tourism, you can enjoy your travels worry-free.

Economic Impact Of Outbound Tourism

Outbound tourism can have a significant economic impact on both the home country and the destination country. Individuals who travel abroad typically spend money on transportation, accommodations, food, and entertainment. This spending can generate revenue for local businesses and help stimulate the destination country’s economy.

Additionally, outbound tourism can create job opportunities in the travel industry and related sectors such as hospitality and transportation. On the flip side, outbound tourism may also have an impact on the home country’s economy. While individuals are spending money abroad, they may not be contributing to their home country’s economy.

However, some argue that outbound tourism can also benefit the home country by promoting cultural exchange and increasing international cooperation. Overall, outbound tourism has both positive and negative economic impacts that should be carefully considered when analyzing its effects on society.

The Benefits Of Outbound Tourism

Outbound tourism, or traveling outside of one’s home country, can have numerous benefits for individuals and society as a whole. For individuals, outbound tourism can provide new experiences, cultural immersion, and personal growth. It can also be a way to escape from the stresses of everyday life and recharge.

From a societal perspective, outbound tourism can bring economic benefits to both the home country and the destination country. It can create job opportunities in the travel industry and support local businesses.

Outbound tourism can also foster cultural exchange and promote understanding between different countries and cultures. Overall, many benefits to outbound tourism make it a worthwhile endeavor for both individuals and society.

The Impact Of Outbound Tourism On The Economy

Outbound travel continues to be a major contributor to economies around the world. It plays a crucial role in job creation and increased revenue across regions like Europe and Asia. In fact, many countries like Spain and France rely heavily on inbound tourists for their GDP growth.

Governments should continue implementing policies like visa facilitation or marketing campaigns that support this growing market. While it’s true that there are negative impacts like environmental degradation or cultural homogenization associated with it, we need to strike a balance between promoting outbound tourism for economic benefits and ensuring sustainable practices.

Planning an outbound trip can be a daunting task, but with the right information and preparation, it can be a wonderful experience. From choosing a destination to picking the right transportation and accommodation options, there are many factors to consider for a successful trip .

Understanding outbound tourism’s historical overview and cultural considerations can help you navigate different customs and traditions. It’s also important to take health and safety precautions to avoid potential risks while traveling. All About Outbound Tourism not only benefits individuals but has a significant impact on the economy as well.

Frequently Asked Questions

What is outbound tourism.

Outbound tourism means traveling from one’s home country to another destination for leisure or business. It has become more popular due to advancements in transportation and communication. This type of tourism benefits both the home country and the destination economically. Sightseeing, shopping, and trying new cuisines are among the favorite activities of outbound tourists.

What Are Examples Of Outbound Travel?

Outbound travel involves leaving one’s home country for another, be it for leisure, education, business, or other purposes. Examples include vacations, conferences, visiting loved ones, volunteering, and adventure tourism. Thorough research and planning are essential for a successful and safe trip.

What Is The Role Of An Outbound Tour Operator?

An outbound tour operator is responsible for arranging travel plans for people traveling outside of their home country. They collaborate with airlines, hotels, and transportation providers to create all-inclusive travel packages, handle visa applications and logistics, and aim to provide a stress-free and pleasurable experience for their clients while discovering new places.

What Are The 4 Main Types Of Tourism?

Tourism can be divided into four main categories: cultural, adventure, eco, and leisure. Cultural tourism involves visiting historical sites and landmarks to learn about a region’s culture. Adventure tourism involves thrilling activities like skiing or bungee jumping. Eco-tourism promotes sustainable practices and supports conservation efforts. Leisure tourism is a more relaxed form of travel for rest and relaxation.

What Are Some Popular Destinations For Outbound Tourism?

The choice of an outbound tourism destination depends on the traveler’s preferences and budget. Popular options include Europe, Southeast Asia, Australia, and the US, as well as beach destinations such as Mexico, Thailand, and the Maldives. Adventure travel to places like New Zealand, Iceland, and Canada is also becoming more popular.

Michael C. Herrera

I’m a travel blogger with a focus on safety. I’ve been to all seven continents, and I love sharing my tips for staying safe while traveling. I also have a lot of experience with travel hacking and finding the best deals on airfare and hotels. My blog features reviews of restaurants, hotels, and attractions around the world.

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Who is a Tour Operator? Know Roles and Responsibilities

If travel destinations and tourist places are something that interest you or fill you with enthusiasm, probably then, you must know about a tour operator. Tour operators advise customers about different travel options. They organize tours for individuals or different groups of travelers. As professionals, they prepare tour itineraries, and tour packages and coordinate with vendors for your holidays.

In this write-up, we delve into a tour operator’s roles and discuss the necessary skills, roles, and education qualifications for the job.

Who is a Tour Operator?

A tour operator is someone who belongs to the hospitality industry. He organizes tours and helps customers during trips so that they have positive reviews. Advising customers on different tour packages based on their budget and interests, and handling all logistics of a tour, such as booking tickets and accommodations, are some basic roles assigned to them.

Tour operators generally work for travel agencies or tour companies A tour guide will accompany tourists on their trips, but tour operators are solely available to answer their questions. They provide detailed information about tourists’ itineraries.

Types of Tour Operators

Here are some types of tour operators who can help you plan your holidays better and make them memorable!

1. Domestic Tour Operators

 Domestic tour operators provide tours and travel services within their own country. They serve tourists who desire to explore different regions or attractions within their country.

2. Inbound Tour Operators

These operators serve foreign tourists visiting their country. They plan and organize tours within their own country, and provide services such as transport, accommodation, guided tours, and activities.

3. Outbound Tour Operators

Outbound tour operators organize tours for residents of one country traveling to another country or countries. They arrange the trip, including flights, accommodations, transportation, and activities at the travel destination.

4. Special Interest Tour Operators

These operators specialize in planning tours catering to specific interests or hobbies, such as wildlife safaris, culinary tours, photography tours, adventure travel, or cultural immersion experiences.

5. Wholesale Tour Operators

Wholesale tour operators sell pre-packaged tour products in bulk to travel agencies or retail outlets. They often provide discounted rates to travel agents. Travel agents usually earn a profit by reselling the tours to clients.

6. Incentive Travel Companies

These companies organize travel experiences for corporate groups or organizations as rewards or incentives for employees or clients. They often tailor trips to meet the guided objectives and preferences of the organization.

Tour operators design and organize pre-packaged tours or holiday packages while the Travel agents help clients in booking individual travel components.

What is the Role of a Tour Operator?

Tour operators play a wide array of roles when it comes to planning holiday packages and dealing with tourists.

1. Planning Tour Packages

These professionals design and schedule travel packages for individual travelers or groups of tourists. They coordinate with their clients to discuss their likes and dislikes and then suggest a range of attractions, accommodations, and transportation options to enable the clients to select the tour packages that meet their preferences.

2. Negotiating Rates

Often the tour operators can try to book a group of room /blocks in a hotel for their bigger group. This leads to lower rates for the tourists.

3. Arranging Travel

Tour operators ensure that passengers have their train tickets to travel between the cities or even book a car rental to help customers visit the attractions according to their schedule.

4. Providing Customer Support

A tour operator offers travelers with the technical assistance that they may need before a trip. For example, they may reply to customer questions about a trip they are planning, tell them about currency exchange rates, or notify them if there are any changes in their itinerary.

5. Preparing Tour Budgets

A tour operator comes up with different price options with sample itineraries and counsels customers on the kind of lodging and attractions that are within their budget.

6. Researching Travel Options

Tour operators are specialists who gather and study data on traveling patterns to suggest itineraries to tourists about where they should go, where they will stay, and where they can eat on their trips.  

They read articles and browse online for details about travel trends and popular tourist spots that they can use to stay updated with what is trending currently.

Educational Requirements for a Tour Operator

To become a tour operator you need a high school diploma or equivalent. Some employers, particularly tour companies or travel organizations, may prefer to hire candidates with a bachelor’s degree.

Tour operators need a degree in tourism and travel services management or hospitality management. Many colleges and universities offer these undergraduate programs, and it typically takes four years for students to complete their degree. You can also consider doing short-term courses in the following streams.

• Hospitality finance
• Foundations of tourism
• International hotel management
• Tourism information technology
• Hospitality management strategies
• Sustainable tourism planning
• Revenue management
• Service technology
• Event planning
• Human resources management
• Hospitality sales and marketing

Difference between Travel Agent and Tour Operator

Tour operators and travel agents both play important roles in the tourism industry, but they have distinct functions and responsibilities. Let’s differentiate between the two.

Travel Agent :

A travel agent is an individual or a company that acts as an intermediary between travelers and travel service providers. They may specialize in certain types of travel, destinations, or services.

Travel agents typically earn commissions from the travel suppliers they book with, rather than charging clients directly for their services.

They assist clients in planning and booking the trip, including flights, accommodations, transportation, and activities.

Tour Operator :

A tour operator is a company that designs, organizes, and sells pre-packaged tours or holiday packages to travelers. Tour operators handle all aspects of the tour, including accommodations, transportation, meals, guided tours, and activities. They often work with travel agents to sell their tour packages to clients.

They may specialize in specific types of tours, such as adventure tours, cultural tours, luxury tours, or eco-tours. Tour operators also offer customized tour packages tailored to the preferences and needs of individual clients or groups.

Wrapping Up

The profile of a tour operator is special as it blends creativity, expertise, and impact. Tour operators have the privilege of turning travelers’ dreams into reality by crafting unique and immersive travel experiences tailored to specific interests and preferences.

They have an extensive knowledge of travel destinations, coupled with strong connections with local suppliers. This enables them to offer better service and access to exclusive travel opportunities.

Check also: Best Places to Visit in Kashmir

Moreover, tour operators play a crucial role in promoting sustainable tourism practices as they support local communities, and preserve cultural and natural heritage. Although they may face challenges such as changing rules and unforeseen circumstances, tour operators show professionalism in ensuring the safety and satisfaction of their clients.

A tour operator designs organizes, and sells pre-packaged tours or holiday packages to travelers. They plan and coordinate all aspects of the tour, including accommodations, transportation, meals, guided tours, and activities.

They also negotiate contracts with travel suppliers such as hotels, airlines, transportation companies, and tour guides. A tour operator promotes tour packages to attract clients.

Moreover, they assist and support to travelers before, during, and after the tour. They also ensure compliance with safety regulations and provide a high-quality travel experience.

While both tour operators and travel agents are involved in the travel industry, they have separate roles and functions.

A tour operator specializes in designing and organizing pre-packaged tours or holiday packages for travelers. They handle all aspects of the tour, from transportation and accommodations to planning activities and excursions.

On the other hand, a travel agent acts as an intermediary between travelers and travel service providers. They assist clients in planning and booking various aspects of a trip, such as flights, accommodations, transportation, and activities.

Travel agents may work with tour operators to sell their tour packages to clients, among other services.

A tour operator designs and creates pre-packaged tour itineraries tailored to specific destinations or themes. They negotiate contracts with hotels, airlines, transportation companies, and other travel suppliers to secure competitive rates and check availability.

They handle all logistics related to the tour, including booking accommodations, arranging transportation, and organizing guided tours and activities.

They market and promote tour packages to target audiences through online platforms, travel agencies, and promotional events.

A tour operator provides assistance and support to travelers throughout the tour, including addressing any issues or concerns that may arise.

Finally, they ensure compliance with safety regulations and industry standards to ensure the well-being and safety of travelers.

Last but not least, a tour operator continuously evaluates and improves tour offerings based on customer feedback and market trends to improve the overall travel experience.

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Tour Operator: Types, Certification, Management, and Functions

We see a variety of advertisements in day-to-day life in magazines as well as newspapers regarding a three-day or one-week tour that mentions the total cost of the package with an itinerary.

For instance, a one-week tour to Thailand under ₹ 50,000 or grab coupons worth ₹ 1000 on booking flights for Goa or heavy-off season discounts if you are headed to Fiji. These are tour package available for both individuals and groups. These tour packages are created by tour operator who has been in industry for a good amount of time.

Tour Operators

Get answers to all your questions about a tour operator.

What is a tour operator?

Working out the details of travel and pleasure takes a lot of time and effort. But as said before, it is a time-consuming process; there are travelers who want to spare the effort of planning their journeys, stays, etc. Rather they would pay someone else to do the entire arrangement. This demand led to the origin of tour operators. Today many people who like to wander and explore buy these packages as per their interests, priorities, and budget (which is always pre-determined). This package designed by the tour operator includes travel (to and fro/surface), accommodation, escort/guide, and so on. The person who puts together all these aspects of travel into a tour operator package is called a tour operator.

In general, we can say that a tour operator is a person who figures out information, plans, and co-ordinates travel with various agencies to create a package or service for the traveler. A tour operator is also responsible for the smooth conduct during the duration of the travel. Thus, tour operators can also be called tour consultants or tour coordinators.

A tour operator may or may not necessarily have their own product(s), but at the same time, they can choose to act as an intermediary to tailor a package to meet the demands/needs of the travelers. 

Importance of Tour Operators

Tour operators play an important role in organizing explorations, research, and holidays. We must remember that tour operators originated when the idea of romanticized travel came into the picture. 

Tour Operators provide the best and most competitive prices to the traveler. Tour operators play an important role in negotiating with tourism suppliers (such as hotels, cruises, guides, airlines, etc.) Tour Operators also buy products in bulk, getting them at discounted rates. As a result of it, travelers get the best holiday package possible.

When tourists travel to a different land, things can get uncertain, it can be a health issue, or emergency back in the homeland, or loss of documents and the need to return or maybe change their travel plans. It is important for a qualified tour operator to take care of it all. Tour Operators have good networks across the land, which helps travelers in case of emergency in the host country as well as in foreign land.

Tour Operators cater to a personalized experience based on the taste of the traveler. 

Types of Tour Operators

Typically, there are four different sorts of tour providers. These are categorized based on the type of business and how it operates.

• Inbound Tour Operators
• Outbound Tour Operators
• Domestic Tour Operators
• Ground Operators

1. Inbound Tour Operators

Incoming tour operators is another name for them. Inbound tour operators are defined as businesses that welcome visitors, customers, or tourists and handle arrangements within the host nation. For instance, if TCI Ltd. arranges for a group of American tourists to go via it to India and manages the group there, TCI is referred to be an inbound tour operator.

2. Outbound Tour Operators

Outbound tour operators are those who market trips to overseas locations, whether they be for business or pleasure. For instance, if Thomas Cook handles bookings for a group of French tourists traveling to India, Thomas Cook is referred to be an outbound tour operator in the context of France.

3. Domestic Tour Operators

Domestic tour operators are those that put up included trips from various tourist attractions and market them to domestic tourists. Typically, these tour firms offer domestic travel services to tourists.

Domestic inclusive tours and independent tours are offered to tourists by domestic tour operators working inside their own country’s borders.

4. Ground Tour Operators

These types of tour operators are often referred to as handling agencies, and their primary job is to plan tours for inbound passengers on behalf of foreign operators. Consider India as an example of a country with a diverse culture.

The issue occurs when a travel operator offers beach vacations, wildlife vacations, adventure tours, and historical tours at various locations. Therefore, it is the ground operator’s responsibility to manage the arriving travelers throughout the same season but at various locations and ensure that everything runs according to the package tours or agreements.

Functions of Tour Operators

A tour operator is an organization, individual, or entity in charge of setting up the actual transportation and lodging for any tour or holiday. Additionally, they organize and run vacations by hiring, scheduling, and combining different tour elements, including accommodation, food, transportation, guides, optional excursions, and occasionally even flights.

A tour operator is similar to a service provider in that they provide holidaymakers with the easiest way to arrive, stay, and depart from a place. A tour operator controls a significant number of travel-related airlines, services, and lodging. 

The following are some of the functions of tour operators:

1. Planning a tour

Planning a tour is one of the significant functions of the tour operators. Planning a tour, creating an itinerary, information about the destination, activities to do, and more are all the duties of the tour operator. A tour operator is also a tour consultant who offers his/her advice to the traveler on the basis of the interest they have, which they may choose for their next leisure or business trip.

2. Making Tour package

Tour operator buys travel components (such as flights, hotels, excursions, and more) to combine them into a package tour. They create a tour package by assembling various travel components into a final product that is sold to the tourist with a price tag of its own.

3. Arranging the tour

Travel companies create travel packages and organize tours based on visitor preferences. To give visitors/travelers the greatest experience possible, tour operators organize the trip package and numerous tourism activities.

4. Travel Information

No matter the size of the tour operators, it is always necessary to provide appropriate information to travelers. It is the most important function of tour operators to give timely updates degrading the destination, accommodation, sightseeing, immigration, health, rules, and regulation.

5. Reservation

One function that every tour operator or travel agency perform is making a reservation. A tour operator should be well connected to get the best price to make a booking, whether for hotels, flights, or entertainment activities.

6. Considering the Alternatives

Tour operators must evaluate available options to provide unique and unforgettable travel experiences. It is necessary for a tour operator to evaluate all the available options before they sell it to tourists.

7. Sales and Marketing

The only way a tour operator can make money is by selling the tour packages that they have carefully constructed, keeping in mind the traveler’s requirements. It is a salient function of the tour operator to market their packages in the right manner to generate revenue.

8. Taking Care of Problems

As said before, tour operators are also called tour coordinators who are responsible for the smooth conduct of the holiday if any problem arises. Tour operators correct the issues and offer travelers the best possible substitute during their vacation.

9. Tour Operator Certification

The highest ethical and environmental standards available are met by your operations if they have been certified by an Accredited Certification Body. The public’s concern about the negative and beneficial effects of travel and tourism is increasing, and certification offers a respectable answer to challenging environmental and social problems.

These are the following certificates that a tour operator can take to become a certified operator.

• IATA  – International Air Transport Association
• PATA  – Pacific Asia Travel Association
• WTTC  – World Travel and Tourism Council
• IATO  – Indian Association of Tour Operators

Being a tour operator is a multifaceted and exciting job. Building strong partnerships with suppliers and delivering outstanding customer service is key to success in this field. Additionally, to become and keep up with the latest trends in travel industry, tour operator training is provided by many organizations and education centers. Tour operators should ensure to enrol in these programs and use technology to their benefit.

Tour Operators FAQs

What is the main role of a tour operator.

A tour operator is a member of the hospitality industry that plans tours and offers assistance to clients, and ensures they have a comfortable time. Based on their financial situation and personal preferences, these experts provide consumers with advice on various travel packages.

Why does one need a tour operator?

They personalize the tour and ensure that every detail is taken care of. Everything from the airport to hotel transfer, meet and greet, hotel check-in, meals, transportation to the trade show, sightseeing, and other activities are scheduled to make the most of your time and money spent with them.

How do I start a tour and travel business?

Starting a tour and travel business can be an exciting and rewarding venture. Here are some steps to help you get started: – Know Your Business. – Determine Target Market. – Analyze Competitors. – Set Goals. – Outline Strategies. – Set a Budget. – Get to Work.

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How Do Tour Operators Work?

To unlock the tourism industry's business and leisure travel potential, you must understand how tour operators work.

From package holidays to bespoke tours, tour operators make memorable holidays. Whether you're a domestic operator focusing on your country's destinations or an outbound operator designing trips abroad, this guide is for you.

The Role of Tour and Activity Providers

At the heart of the travel industry, tour operators like you, whether inbound or outbound, design travel packages that simplify things for tourists. This involves meticulous planning of land arrangements, accommodation, tours, and transport.

As a tour company, you may specialize in specific types of trips, such as leisure travel or business trips, creating packages that cater to your target market's preferences.

What are the different types of tour operators?

• Domestic Tour Operators : Focusing on the domestic tourism market, these operators provide travel packages within their home country.
• Outbound Tour Operators : These companies design holiday packages for travelers visiting other countries, often incorporating international destinations into their itineraries.
• Inbound Tour Operators : Inbound operators cater to tourists coming into their host country, providing local insights and experiences.
• Ground Tour Operators : Often known as ground operators, these firms handle local arrangements in the destination country, often working in collaboration with other tour operators.

How do tour operators work with accommodation and transport providers?

Tour operators play a pivotal role in crafting the perfect travel experience, and a big part of this involves working closely with accommodation and transport providers. Here's a glimpse at how this collaboration typically works:

Building Relationships with Accommodation Providers

• Negotiating Rates : Tour operators negotiate contracts with hotels and resorts to secure competitive rates. This often involves bulk booking or agreeing on fixed rates for a certain period.
• Customizing Guest Experiences : They work with these providers to tailor lodging experiences that align with the overall theme of the tour, whether it's luxury, adventure, or cultural immersion.
• Ensuring Quality and Standards : Regular inspections and feedback mechanisms are put in place to ensure that the accommodation meets the expectations and standards required for their clients.

Partnering with Transport Providers

• Seamless Logistics : Tour operators coordinate with various transport providers, including airlines, bus companies, and car rental services, to manage the logistics of getting travelers from one point to another.
• Group Deals and Scheduling : They often negotiate deals for group travel and ensure that transportation schedules align seamlessly with the overall tour itinerary.
• Quality and Safety Checks : Ensuring travelers' comfort and safety is paramount, so tour operators regularly check the quality of vehicles and the reliability of transport services.

Creating Cohesive Travel Packages

By integrating accommodation and transport seamlessly, tour operators create cohesive and hassle-free travel packages. This integration is crucial in providing a smooth and enjoyable experience for travelers, where every aspect of their journey is well-coordinated and managed.

Adapting to Client Needs

Tour operators remain flexible and responsive to their clients' needs, often customizing aspects of accommodation and transport to cater to specific preferences or requirements.

To summarize, negotiating strategically, ensuring quality, and meticulous planning are crucial to the relationship between tour operators, accommodation providers, and transport providers. In order to deliver great travel experiences that aren't just fun, they must be safe, comfortable, and just right to match discerning travelers' expectations.  

How do tour operators work with travel agents and OTAs?

Tour operators team up with travel agents and OTAs? It's like having the best of both worlds in the travel industry.

Here's the lowdown: travel agents are like sales gurus. They've got the skills to match your cool tour packages with travelers looking for their next adventure. It's all about personal touches and making travelers feel special.

Now, let's talk about OTAs – think big names like Expedia and Booking.com . These guys are your ticket to the global stage. They're not just about showing off your tours; they're about connecting you with travelers from all over, 24/7. Plus, with their smart marketing tools and the power of customer reviews (which, let's face it, are gold in our world), you're setting yourself up for some serious visibility and street cred.

Combining travel agents' personal selling charm with OTAs' global reach is how tour packages stand out in this competitive market.  

Talking about creating packages, how can you work with accommodation and transportation providers?

How to create inclusive tour packages?

As a tour provider, crafting appealing and inclusive tour packages , also known as package holidays or package tours, is key to attracting travelers.

These packages bundle services like flights, accommodations, and transportation for a hassle-free experience. Here’s how you can create comprehensive offers:

• Understand Your Travelers : Know who you’re designing for. Are they families, solo travelers, or adventure seekers? Tailoring your packages to fit their preferences is crucial.
• Forge Strong Relationships with Suppliers : Collaborate closely with accommodation and transportation providers. Strong partnerships can lead to better rates and unique offerings, making your packages more attractive.
• Quality Over Quantity : When choosing hotels and transportation options, prioritize quality. A well-selected hotel or comfortable transport experience can elevate your entire package.
• Flexibility is Key : Offer flexibility in your packages. Options for room upgrades, transport preferences, or even alternative activities can make your package more appealing to a diverse range of travelers.
• Highlight Unique Experiences : Include special experiences travelers can’t find elsewhere. Unique local tours or exclusive access to attractions can make your package stand out.
• Transparent Pricing : Ensure transparency in pricing. Hidden costs discourage travelers. Clear, upfront pricing builds trust and satisfaction.
• Feedback Loop : Regularly gather feedback from your customers and adjust your packages accordingly. Continuous improvement based on customer insights can significantly enhance your offerings.

By focusing on these areas, you can create inclusive tour packages that meet but exceed the expectations of your travelers, ensuring memorable and hassle-free trips.

How do tour operators pay suppliers?

For tour operators, establishing and maintaining a solid financial relationship with suppliers — including accommodation and transportation providers — is crucial for a smooth and successful business and tour operation itself. Here's a look at how these payments are typically managed:

Advance Payments and Deposits

Tour operators often make advance payments or deposits to secure services well ahead of tour dates. This is especially common with hotels and special activities that require early booking.

Credit Facilities and Post-Payment Agreements

In some cases, tour operators may have credit arrangements with suppliers, allowing them to pay after the service is delivered. This requires a high level of trust and a proven track record of reliable payments.

Bulk Payment Contracts

For regular or frequent services, operators might negotiate bulk payment contracts. Under these agreements, they pay a lump sum for a specified number of services or bookings over a period, often at a discounted rate.

Net Rate Agreements

Suppliers may offer net rates to tour operators, which are discounted prices exclusive of commissions. The domestic tour operators then mark up these rates when selling to customers, and the difference forms their profit margin.

Direct Billing for Services

In some collaborations, suppliers might directly bill the tour operator for services rendered, usually after completion.

Electronic Payments and Wire Transfers

With the digitalization of financial transactions, most payments are now made electronically. This ensures quick, secure, and traceable transactions.

Managing Currencies and Exchange Rates

For international tours, operators must adeptly manage payments in different currencies, considering exchange rates and transaction fees.

Contingency Funds for Unforeseen Expenses

Operators often set aside contingency funds to cover unexpected costs or last-minute bookings, ensuring that the tour runs smoothly without financial hiccups.

Why is the booking process so important for selling tours?

The booking process is crucial in the tour industry for several key reasons:

• First Impression Matters : This initial interaction sets the tone for customer experience and expectations.
• Ease Equals Sales : A simple, user-friendly booking system encourages more purchases.
• Trust Building : A smooth process builds trust, showing customers that they’re dealing with a professional operator.
• Upselling Opportunities : During the booking, there’s a chance to offer additional services or upgrades, enhancing the experience and increasing revenue.
• Data for Personalization : The information collected can be used to tailor future offerings and improve service.
• Effective Communication : This stage is vital for conveying key tour information and ensuring customer understanding.
• Reputation Impact : A positive experience can lead to recommendations and positive reviews, while a negative one can harm the operator's reputation.
• Resource Management : Understanding booking trends helps manage tours and resources.

In short, the booking process isn't just about securing sales; it's about shaping the entire customer journey, from first impressions to post-tour feedback.

Tips for Operators

Invest in a good, easy-to-use, and cost-effective booking software solution. Granted, it may incur some fees on your part, but think of the heavy lifting it does for you.

It does more than take reservations and bookings. It saves you tons of time with manual tracking, guest follow-up, and ticket management. It also eases the customer journey from point one to post-tour feedback.

Booking software solutions like TicketingHub save you stress and ease your guests. It charges 3% only for successful bookings.

Trusted by Egypt Sound and Light Shows, The Immersive Gamebox, Secret Food Tours, Sipsmith Distillery , and a hundred folds more - this software solution is jam-packed with time-saving features in an easy-interfaced navigation.

Whatever software solution you pick, aim for the solution that saves you time from needless complexities in design and usability - all while helping you stay profitable and leaving your guests satisfied right from the booking page.

Conclusion: Making Great Tours Happen

In wrapping up, it's clear that being a tour operator is about connecting the dots to create amazing travel experiences. Whether you're showing off the best spots in your own country or taking people on adventures abroad, the key is in the details – from picking great hotels to organizing smooth rides.

Your partnerships with local travel agencies, agents and OTAs are super important too. They help you reach more people and make sure your tours stand out. And when making tour packages, remember to listen to what travelers want and keep things flexible and interesting.

Don't forget, managing your money well, especially when paying for services, keeps everything running smoothly. And the booking process? That's your chance to make a great first impression and keep things hassle-free for your customers.

So, there you have it – mix in a bit of planning, a dash of good relationships, and a sprinkle of creativity, and you're on your way to creating trips that travelers will love. Happy touring!

FAQ Section

How important are tour operators.

Tour operators play a pivotal role in the tourism industry. They create and organize tour packages, catering to both business and leisure travelers. These packages simplify travel arrangements, offering hassle-free travel.

Tour operators are the key architects of memorable trips, ensuring travelers can explore various destinations easily.

What is the life of a tour operator?

Tour operators plan meticulously and collaborate with various stakeholders. They work closely with outbound and inbound tour operators, accommodation and transport providers, and even travel agents and online travel agencies (OTAs).

Their goal is to create appealing package holidays, manage travel arrangements, and provide tourism products that meet their target market's preferences.

What are the strengths of tour operators?

Tour operators have several strengths, including the ability to create inclusive tour packages that simplify travel for tourists. They can specialize in various categories, such as business or leisure travel. They can also collaborate with distribution partners like travel agents and OTAs to reach a wider audience.

Tour operators leverage market data to sell directly to their target market, offering tourism products that cater to different preferences.

What's the difference between a tour operator and a travel agent?

Tour operators and travel agents serve different roles in the travel industry. Tour operators design and create tour packages, manage travel logistics, and provide tourism products.

Travel agents, on the other hand, act as intermediaries between travelers and tour operators or suppliers. They assist customers in choosing and booking the right travel options, including tours created by tour operators, but they don't create the tours themselves.

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Navigating Success: Essential Business Tips for Tour Business Owners

We've compiled a comprehensive guide of essential business tips tailored specifically for tour business owners.

Discover how tour operators create seamless travel experiences through great partnerships, flexible packages, and easy booking processes.

• Travel Agents
• Inbound Tour Operators
• Outbound Tour Operators
• Airline Vacation Companies
• Success Stories

Inbound Tour Operator

What is an inbound tour operator .

An inbound tour operator (ITO) is a specialized travel company or agency that focuses on organizing and managing travel arrangements for visitors coming into a specific destination. In simpler terms, it is a company that assists and caters to tourists and travelers from other countries or regions who are visiting a particular location.

The primary role of an inbound tour operator is to design and execute comprehensive travel packages for foreign tourists. These packages typically include accommodation, transportation, sightseeing tours, activities, and other services required for a seamless travel experience. Inbound tour operators collaborate closely with local service providers, such as hotels, transportation companies, guides, and attractions, to create well-rounded itineraries that showcase the best of the destination.

ITOs possess extensive knowledge about the destination they operate in, including its culture, attractions, history, local customs, and regulations. They utilize this expertise to curate unique travel experiences and ensure that visitors have a memorable and enjoyable stay.

Inbound Tour Operator Benefits

Engaging the services of an inbound tour operator offers several benefits to both travelers and the destination they are visiting:

Local Expertise

Inbound tour operators have in-depth knowledge of the destination, including its hidden gems, lesser-known attractions, and local customs. They provide invaluable insights that enhance the travel experience and help visitors discover the authentic essence of the place.

Tailor-Made Itineraries

These operators specialize in creating personalized travel itineraries based on individual preferences, ensuring that every traveler’s needs and interests are met. They take into account factors such as budget, duration of stay, specific interests, and group size to craft unique travel packages.

Efficient Planning and Logistics

ITO’s streamline the travel planning process by taking care of all logistical aspects. From booking accommodations and arranging transportation to coordinating sightseeing tours and activities, they handle the necessary arrangements, saving travelers time and effort.

Local Support and Assistance

Inbound tour operators provide on-ground support to travelers during their visit. They offer 24/7 assistance, ensuring that any issues or concerns are promptly addressed. This local support network provides peace of mind to visitors and adds an extra layer of security.

Access to Exclusive Deals

Due to their strong relationships with local service providers, an inbound travel agency often has access to exclusive deals and discounts. Travelers can benefit from cost savings on accommodations, transportation, and activities that are not readily available to individual tourists.

Inbound vs. Outbound Tour Operator

While inbound tour operators use inbound tour operator software to focus on receiving and assisting foreign travelers in a particular destination, outbound tour operators (OTOs) have a different orientation. 

Outbound tour operators are types of travel agency that specialize in organizing and managing travel arrangements for individuals or groups interested in exploring international destinations. They cater to local residents seeking to travel abroad. These operators possess extensive knowledge about various international destinations, including attractions, cultural nuances, and logistics. 

They work closely with international service providers to create tailored travel packages that meet the preferences and requirements of their clients. Outbound tour operators streamline the process of planning, booking, and coordinating international travel, offering local residents access to exciting and enriching experiences worldwide.

Here are some key differences between ITOs and OTOs:

• Tour operators for inbound travel primarily cater to foreign tourists who are visiting a specific destination. Their target audience consists of travelers from other countries or regions. On the other hand, outbound tour operators primarily serve local residents who are interested in traveling abroad. They arrange travel packages for individuals or groups looking to explore international destinations.
• ITOs possess extensive knowledge about the specific destination they operate in. They are familiar with local attractions, cultural nuances, and logistics. Tour operators for outbound, on the other hand, have expertise in various international destinations and are well-versed in the specific requirements and regulations of different countries.
• ITOs forge partnerships with local service providers within their destination. They establish collaborations with hotels, transportation companies, guides, and attractions to offer a comprehensive range of services. Outbound tour operators, on the other hand, establish relationships with international service providers to ensure a smooth travel experience for their clients in foreign destinations.
• Inbound tour operators focus on receiving visitors, while outbound tour operators focus on sending visitors.

In conclusion, inbound tour operators play a vital role in the travel industry by serving as the bridge between foreign travelers and their chosen destinations. 

With their profound knowledge, local expertise, and meticulous planning, these operators ensure that visitors have an immersive and seamless experience during their stay. By collaborating with local service providers, they curate tailor-made itineraries that showcase the best of the destination’s cultural heritage, attractions, and unique experiences. 

The benefits of engaging an inbound tour operator are manifold, ranging from personalized itineraries and efficient logistics to on-ground support and access to exclusive deals. 

Whether it’s navigating unfamiliar terrain, discovering hidden gems, or immersing in local customs, inbound tour operators enhance the travel experience and contribute to the overall satisfaction of visitors, making them an indispensable part of the tourism ecosystem.

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Multi-Day Tour Operators 2021: Reshaping Supply Chains and Distribution

Executive summary, definition and core products, the tour operator value chain, digital marketing to become primary sales channel, rise of online booking platforms, the ongoing shake-up of supply chain roles, the new era of modernization and professionalization, covid-19 is driving new types of tours, the pandemic also accelerated many existing trip trends, collaboration and transparency across the industry, bankruptcies are coming, what will the new multi-day tour landscape look like as covid fades, related reports, report overview.

Perhaps no sector has been as badly hit by the pandemic as tour operators, given their intrinsic connection to cross-border travel as well as  human interaction. Based on our research and discussions with over a dozen executives we see an industry on the precipice of major changes. 

This report will focus on the global multi-day tour operator sector with a heavy emphasis on itinerary-based guided tours. We will also briefly touch upon packaged tour sales. Multi-day tours are one of the last truly offline spaces of the travel industry. But that isolation cannot last. This report will cover the structure of this complex and fragmented industry. We see an ecommerce revolution occurring in the next five years that will reshape the way the industry supplies and distributes its products. 

We will also discuss the impact of COVID-19 on the industry and how we see the types of tours offered, and the operators themselves, evolving as a result.

What You'll Learn From This Report

• How the complex supply chain of the multi-day tour industry works and the different kinds of businesses and tours that exist within it.
• How digitalization is disrupting the industry and where the biggest new opportunities exists
• How tour operators have responded to the pandemic
• What we think the new multi-day tour landscape will look like as COVID-19 fades

Executives Interviewed

• Matt Berna, Managing Director, North America for Intrepid Travel
• Murray Decker, Chief Executive Officer of Tour Amigo
• Gavin Delaney, CEO and Co-Founder of TravelStride
• Tom Hale, Founder and President of Backroads
• Travis Pittman, CEO and Co-Founder of TourRadar
• Catherine Prather, President of the National Tour Association
• Massimo Prioreschi, CEO of MT Sobek
• James Thornton, Chief Executive Officer of Intrepid Travel
• Gavin Tollman, President of The Travel Corporation
• Enrique Velasco Jr., Chief Commercial Officer of Coltur Peru
• With special thanks to Jared Alster and Tom Buckley, Co-Founders of Dune7 for their background contributions to this report

From our vantage point today it’s easy to take for granted that people across the world would use their leisure time to travel. But tourism — traveling for the pure enjoyment of it rather than for trade or religion — is a relatively recent development in the grand scheme of things. Most date the birth of modern mass tourism to Thomas Cook’s first package tour in 1841. 

But naturally a lot has changed since then. Today’s tour operators need to be constantly evolving to keep up with the changing face of modern travel, as Thomas Cook itself discovered the hard way — and that was before a global pandemic hit!

This report will focus on the global multi-day tour operator sector with a heavy emphasis on itinerary-based guided tours. We will also briefly touch upon packaged tour sales. Though smaller than the hotel or airline industry, anyone seeking to understand leisure travel overlooks tour operators at their own risk. Pre-COVID, 12% of U.S. leisure travelers booked a package tour and in the United Kingdom, 47% of household travel spending was on packages. In Southeast Asia, 60%+ of trips were packaged or semi-guided tours.

Perhaps no sector has been as badly hit by the COVID-19 pandemic as tour operators, given their intrinsic connection to cross-border travel and human interaction. Many operators are still seeing revenues down 80%+ even as other sectors like hotels and airlines are moving to a recovery. The pandemic changed the kind of tours that people want, driving them to seek the outdoors, small groups, and domestic trips.  

Based on our research and discussions with over a dozen executives, we see an industry on the precipice of major changes. It is one of the last truly offline spaces of the travel industry, but that isolation cannot last. There is a need for new modern tools and digital distribution, which presents a massive opportunity for new tech startups in the space. We see an ecommerce revolution occurring in the next five years, similar to what short-term rentals experienced following the success of Airbnb. This disruption will be compounded by the profound damage inflicted by the pandemic

In a sense, we already have a bit of a roadmap based on the past trajectory of other travel businesses that moved offline to online. We expect to see the emergence of a few major online booking sites and a new class of intermediary tech vendors to handle online bookings, channel distribution, and inventory management. Eventually this will lead to conflicts over direct distribution, repeat guests, and rate parity. 

We also believe that the pandemic will spur a winnowing of the ‘middle class’ of tour operators. A wave of bankruptcies and mergers is likely to come leading to consolidation in a handful of large players on one side and on the other side a long-tail of specialist operators that can niche down into their own unique offerings.

The Tour Operator Landscape

The multi-day tour industry is a big tent that incorporates a wide range of operators, suppliers, and distributors. Plus, at times it seems like every company in the space is running a slightly different business model. 

Our first step towards untangling this web of interconnected tour companies is to put a basic definition in place. 

Tour Operator : A tour operator is any company that sells two or more trip components together. At its most simple this could be a flight, hotel, or cruise sold together as a package. More complex tour operators bring together transportation and accommodation with local meals, activities, and guides. 

There are three core products sold by tour operators: packaged travel, itinerary-based tours, and small ship & adventure cruises.

Small Ship, Adventure, and River Cruising

Small expedition ships and river cruises are often included as within the tour operator space. The same travel agents that sell land-based multi-tours frequently also offer specialized cruises. Major booking sites like TourRadar have a prominent and well-stocked river cruise section. 

This space was traditionally dominated by specialists, like Azamara, Lindblad Expeditions, orViking River Cruises and they are some of the fastest growing businesses in the entire cruising sector. Arguably these smaller companies have as much, if not more, in common with a land-based tour operator than they do with the mega-ships of Carnival or Royal Caribbean. And to that point, we are now starting to see traditionally land-locked operators go to sea, with, for instance, Intrepid Travel now offers polar cruises and TUI owns several cruise ships.

Small ships do meet our definition of a tour operator as they bring together transportation, accommodation, activities and food into one package. Though in fact, if you stop and think about it, so does the entire cruise industry, regardless of ship size. In order to prevent this report becoming too big we will set aside all cruising — big and small — as its own topic to be covered in future research. The rest of this report will be focused on land-based multi-day tours. 

Packaged Travel

Packaged travel offers the distilled essence of our original tour operator definition. These trips bring together two or more components of travel supply, usually a flight and a hotel, and offer the combination together as a single new product to the consumer. The main selling propositions for this kind of product is typically value for money, convenience, or unique supply. Packages are also very commonly sold as an upsell for travel suppliers.

Given that there is no itinerary design included, this type of product is most popular among those looking to ‘fly and flop.’ These guests are typically looking to spend their leisure time off in a hot location with a cold beverage. And they want to access that vacation as easily and cheaply as possible. 

One of the main reasons why package tours can offer better pricing to a traveler than assembling the separate components of the trip themselves is because, from the point of view of a travel supplier, packagers operate as an opaque selling channel. 

Take hotels as an example: in a package the customer is quoted a single price for the entire bundle – flight + hotel + car – so the traveler can’t pinpoint how much they are paying per room night. This means that hotels can offer discounted rates without violating rate parity and undercutting first-party pricing. Tour operators tend to move high volumes so hotels are incentivized to offer bulk pricing for their business. Bed banks and global distribution systems often act as intermediaries providing wholesale supply to tour packagers. 

Convenience is another main driver of packaged tour sales. There is a large segment of consumers, especially in Europe, that don’t want the stress and confusion of booking all of their own travel arrangements. While those of us that have the most severe cases of the ‘travel bug’ may have turned booking travel into a hobby (perhaps many of you reading this), we can admit that this is possibly not the most fun part of a trip for an average vacationer. 

Another reason why a traveler might pick a packaged tour operator is because they can offer exclusive supply. Perhaps there is a resort that the operator owns and therefore the only way to visit it is by booking via a package. One of the best examples of this is TUI owns or operates over 400 hotels to ensure it can control the guest experience and provide access to rooms in supply-constrained markets like Cape Verde. It also owns nearly a dozen cruise ships and several charter airlines. Jet2 also follows a similar model with its own in-house airline that complements its vacation packages as it can offer uniquely convenient airlift for its guests only. 

Dynamic Packaging

One of the most exciting developments in the packaged tour space is dynamic packaging. This is a relatively new development in the packaged tour space driven by the growth of tech connectivity in the industry. The concept is that, rather than operators or agents manually pulling rates and building bundles by hand, algorithms automatically create package deals live during the guests’ shopping experience.

The next step for this market is the development of open platforms that plug into suppliers’ booking engines and allow dynamic packaging ‘as a service.’ For example Hotelbeds offers dynamic packaging via an API that could allow for this. Third-party platforms for bundling opens up a whole new world of plug-and-play upselling capabilities for travel suppliers that might not have traditionally considered a packaged tour product, although it also brings with it the potential for rate parity issues.

Airlines have long used packaged tours as an upsell to drive revenue and margin on the flight products they were already selling. These bundled upsells often accounted for a small slice of revenue. JetBlue in a 2018 investor day disclosed that its attach rate for JetBlue Vacation was just 1.5% of transactions. However these small percentages can add up to big dollars, like at LatAm which sold $22 million worth of tour packages in 2020, still less than 1% of group revenues. But the package revenue shares can go quite high, even at a traditional mainline carrier. Japan Airlines Group (JAL) — certainly not a discount packager like Jet2 — sold $485 million of packaged tours in 2021, accounting for ~10% of group revenue, according to IdeaWorks . 

Most airlines, if they sell tours at all, operate closer to Jetblue with the business driving a low single-digit share of group revenues. But JAL and other exceptions prove just how high the numbers could potentially get. Many airlines see today’s low package numbers as a mere starting point from which to build significant ancillary revenue streams to complement their unbundled retail strategies. Dynamic packaging has made this far more feasible and now airlines of all types from AirAsia, Allegiant, and  EasyJet to Emirates and American Airlines are selling tour packages. 

In the past, standing up a packaged tour offering at an airline would require a lot of time-consuming negotiations with hotel and car rental suppliers and even after all of that work, supply might still be limited. Airlines are in the core business of selling flights and not negotiating hotel wholesale rate contracts. With dynamic packaging airlines have the ability to tap into B2B platforms that can build bundles around their routes with relatively low lift. Bedbanks, like Hotelbeds , GDSs, like Amadeus , and tech vendors, like Switchfly all now offer dynamic packaging tools. This means that in today’s fast evolving landscape, airlines can add new routes and immediately be selling dynamic packages around that destination on launch.

The development of dynamic packaging further blurs the line between a tour operator, like a TUI, and an online agent, like Expedia. If JetBlue (supplier), TUI (operator), and Expedia (OTA) can all sell the same flight plus hotel package, what is fundamentally the difference between these three companies? 

We believe that online travel agencies like Expedia and Booking will be some of the biggest beneficiaries of the move towards dynamic packaging and the above blurring of industry lines. In a dynamic world, having the most possible permutations of trip choices is a key differentiator. And the OTAs sit in a sweet spot where they have strong pre-existing direct customer relationships while also having millions of hotel, flight, and car listings across the globe already live in their databases. When guests shop for a flight, the OTA can then offer them the upsell to add on a hotel room or car booking, all for one packaged rate. The discounted package price is calculated automatically on the fly based on the unique combination of travel choices selected by the shopper. The discount can come from specific wholesale rates pushed by the suppliers to the OTA or the booking site might just choose to algorithmically reduce its commission margin to encourage an upsell to a higher ticket purchase. They can also resell their inventory and technology as white-label dynamic packaging tools to other agents, hotels, and airlines. Both Booking Holdings and Expedia as well as smaller OTA players like lastminute.com have all been running experiments around the best way to sell tour packages. Expect to see more developments in this space.

Itinerary-Based Tours

Itinerary-based tours are, arguably, the heart of the tour operator industry. These tours go beyond simply bundling component travel products, adding on top of that core package a layer of local expertise and itinerary design. These tour operators will be the focus of the rest of this report. 

Price is not often the main selling point here. Rather, the convenience of not having to plan, the assistance of a guide, or the uniqueness of an itinerary is the main selling point. There is quite a lot of variety within products offered in this space. 

There are three main variables that we can use to define the main types of itinerary-based tour products:

• Fixed-Date Departures vs. Custom: Fixed date tours are offered with a pre-scheduled departure date and a set itinerary. Travelers buy these pre-built itineraries off the shelf. In contrast, custom tours are built to suit each individual guest with a unique schedule and departure date.
• Guided vs. Self-Guided: Though the classic image of a tour includes a guide leading a group, this does not always have to be the case. Self-guided tours are growing in popularity. In this case, the traveler buys a travel package that can include local connections, activities, meals, and suggested sights, but no in-person guide to contextualize the destination. 
• Group vs. Individual: This has more to do with the buying behavior of the guest than the actual itinerary on offer. In group travel, the entire tour is booked up by a single organization, perhaps a school group, work retreat, or a large family. On the other hand, individuals traveling book a single slot as part of a larger overall planned departure that combines many other individuals or a small group of travelers that don’t know each other.

We can mix and match these different variables, offering for instance a guided group fixed date tour or an individual self-guided custom tour. 

In addition to the main products on offer, there are two primary layers of operators in the itinerary-based space. One is based on the source market that the travelers buying the tour are departing from, and the other based on the destination market that the tour is taking place in. 

• Outbound Tour Operators: These tour operators service international travelers. They typically focus on a single origin market but often service multiple overseas destinations. Outbounds specialize in the market that travelers purchasing a tour are departing from and can provide native language marketing, sales, and customer support. They also have the cultural context to understand what kind of itineraries may appeal in their home market. Outbound businesses may operate their own in-destination trips or outsource the local logistics to a destination management company. An example would be a UK based tour company that offers British travelers a variety of trips across Asia and continental Europe. 
• Destination Management Companies: Also known as inbound tour operators or receiving tour operators. These operators receive inbound international travelers. They typically focus on a single destination market but often service travelers from multiple overseas origins. By specializing in a single destination, they have the local know-how and logistics to ‘make the trains run on time.’ They can sometimes use their local connections to source unique experiences. DMCs usually contract with an outbound tour operator but increasingly may sell direct to the overseas consumer. An example would be a local Peruvian tour operator that specializes in running Machu Picchu treks for guests coming from many different outbound operators and nations. 

The line between outbound and inbound operators has always been blurry and it is only getting hazier. The core distinction we will be making when referring to outbound operators vs. DMCs is the difference between retail-specialists focused on the source market and logistic-specialists focused on the destination. 

These terms originate from the cross-border market but, especially as local tourism boomed during the pandemic, have a place in domestic markets as well. While they may not technically be ‘outbound’ operators when within the same country, there can still often be a separation between the retail tour operators and their domestic DMC partners or subsidiaries (though one could even argue New York City might as well be an outbound foreign market from the perspective of a Utah river guide).

Illustrative Example of the difference and connections between Outbound Tour Operators and Destination Management Companies.

With the baseline definitions and products understood, let’s examine the lifecycle of how a tour is created and comes to market in the land-based tour operator space.

Our model of the tour operator chain has three layers of value add. It starts with the supply of core travel products like hotels, flights, trains, and cars. These ‘raw materials’ of the tour might come from direct contracting with an airline or via a reseller like a bed bank. Some fully integrated tour operators  even own their own charter airline or resort properties. 

The next layer is the tour operator itself. “The tour operator is the manufacturer,” says Catherine Prather, President of the National Tour Association. Unlike a hotel or airline that is fundamentally anchored to a physical asset, tour operators sell a value-added travel service not tied to a single tangible product. By that we mean that tour companies ‘assemble’ unique trips by taking building blocks from other travel suppliers and adding an additional layer of intangible value-add. That value-add might be local expertise, cheap bundled pricing, or peace of mind. This transforms the raw materials into a more valuable new product which they can resell into the marketplace. 

We distinguish here between tour packagers that are doing pure bundling and itinerary-based tours where an additional layer of in-destination curation and expertise is used in the ‘manufacturing’ process. A company like TUI is still a multi-day tour operator at this tier. It ‘manufactures’ its own tour products and retails them through first-party channels and also re-sells through agents and other distribution channels. But the tour products it offers are mainly a bundling of different supply components. In contrast, a G Adventures both bundles the supply components and adds an additional design component by planning daily activities and arranging for local guides. 

There is also the opportunity in this layer for wholesalers and retailers. Specialist DMCs often design local tours that can be resold to larger retail travel agencies that can tap into their local market of outbound travelers. 

The final layer is that of distribution. There are three primary channels. First is the direct channel driven by in-house sales and marketing efforts. Then there are the two major intermediaries in the space, online booking sites, which operate on both commission and advertising models, and travel agents. It should be noted that tours are one of the last great bastions of traditional travel agents (along with business travel). A very significant volume of tour products is distributed by the large travel consortia and even, in some countries, by brick-and-mortar retailers. This is because tours are one of the most complex travel products, a result of the above ‘manufacturing’ process, making a human intermediary much more valuable. 

A hotel room might have a handful of core attributes (star rating, price, location, room type) and several more secondary ones (Wi-Fi, pool, view, floor height). But even the most basic tour can have dozens or more key attributes (departure date, size of group, length of trip, itinerary variations, level of physical activity, type of accommodation, age of participants, etc.). This creates difficulty to code for tours in the back end, as well as for consumers to shop and compare multi-day tours. This has made it doubly hard for online booking sites to take off in the space; however, these challenges are slowly but surely being overcome and digital platforms are growing in prominence as distributors of tours. 

We understand that we have tried to simplify a very complex space and so there may be many nits to pick with this diagram. But we think that these core mental models of three main tour products (packages, itineraries, and cruises) sold via layers of value (supply, operation, and distribution) is a useful way to help decipher the tangle of different operators in this industry. 

A lot of the confusion in the space seems to stem from the many different permutations of how vertically integrated an organization chooses to be and what permutation of products they choose to sell. But by building this mental model of the industry we can better see past the superficial differences of each specific company. A lot of the variation we see across tour companies is often reflective of different choices about what parts of the value chain to vertically integrate and what products to sell. But within each specific part of the value chain in isolation, business models are often more similar than they may first appear. 

For example, tour operators that run their own in-destination programs vs. ones that outsource to a DMC are not two fundamentally different types of tour companies but are instead making different decisions about how vertically integrated they want their organizations to be. Or a travel agent that sells tour packages is best thought of as vertical integration between the ‘manufacturing’ stage of packaging process and a distribution channel, rather than as a wholly separate kind of company from a tour operator with a large first-party salesforce.

Technology Shakes Up The Multi-Day Tour Industry

It is clear from our research that a wave of technological change is washing over tour operators as we write. Tours are one of the last major travel industry categories still heavily built off analog tools and manual processes. Catalogs and phone calls are frequently a part of the tour sales cycle. 

Research from the Adventure Travel Trade Association (ATTA) suggests that just 8% of bookings came via online travel agents. And that more than two-thirds of bookings came from some form of offline channel. Though this was just a small sample and only representative of a niche type of tour operator, it speaks to just how small online distribution platforms are in this space. 

Travel has attracted significant investor attention — nearly $30 billion of funding over the last five years — much of it focused on the digital transformation of the industry. Online platforms, which started in just airlines and hotels, have pushed into nearly every travel market. Nowadays practically every sub-sector from short-term rentals and business travel to day tours and packaged tours has either a major public company or a “unicorn” private startup valued at more than $1B, oftentimes both. All that is except for multi-day tours. 

Tours and in-destination activities have actually been one of the fastest growing categories of travel investment, raising nearly $900 million in 2019, but almost all of these dollars seem to focus on single-day, rather than multi-day tours. Three of the largest startups in multi-days tours — Evaneos, Tourland, and TourRadar, have collectively raised under $300 million in capital while activity OTA Klook has raised $720 million by itself.

Part of this is the challenge of marketing complex tours online as well as resistance from incumbents content with the old ways of doing business. But changing expectations among employees, supplies, and customers, accelerated by COVID-19, are driving digital innovation to the fore in the sector. 

This digital ‘splash’ will have ripple effects up and down the entire tour value chain, affecting everything from the smallest on-the-ground guide to the largest corporation. Gavin Tollman, President of The Travel Corporation, one of the largest tour operators in the world, believes that, “digital has really been one of the greatest evolutionary changes during [the pandemic] for us.” And being the last major travel sector to digitize does have a silver lining: by drawing on lessons from other sectors, we have a pretty good road map for how the industry may be transformed.

As with hotels and airlines, digital marketing will only continue to grow in importance to the industry. Naturally, this means that search engine marketing budgets will have to grow. 

This is especially true in the U.S. market. Matt Berna, Managing Director, North America for Intrepid Travel, explained that, “[in America] We spend the lion’s share, easily 80% of our budget, on direct digital marketing strategies.” Although Berna caveats that in other markets, like Australia, travel agents and retail storefronts remain key marketing tools, that a large tour operator like Intrepid is so heavily invested in digital marketing should be a sign of the times.  

But the rise of digital marketing goes beyond performance marketing. For instance, Search engine optimization is arguably just as important and when done right is not cheap either. “We’ve done a lot with SEO,” says Berna, “building a lot of new content, writing content, building out our pages and website.” 

Digital marketing also involves building brand recognition at the top of a sales funnel moving online, with brand advertising shifting to platforms like YouTube and ‘word of mouth’ being spread on social media. In fact, Gavin Delaney, CEO and cofounder of online tour site Travelstride told us that 90%+ of customers start their tour research online. 

Speaking to the power of social media, Tollman told us, “if you said to me, what has been one of our greatest success stories in the last year? It has been the use of social channels to tell our stories in a robust way that people can look and see. When the world was shut down and we were still operating trips, how powerful it was to show people that they could still go and show them what we were actually doing.”

Directly linked to the growth in digital marketing techniques is the rise of online booking platforms for multi-day tours. That’s primarily startup websites like TourRadar, Tourlane, Evaneos, and TravelStride. Today, these come in two flavors: commission-based agents (e.g. TourRadar) and advertising-based listing sites (e.g. TravelStride). There are still few true metasearch sites that search other online booking sites due to complexities of itineraries in the space. 

Complex itineraries make it difficult to convert online intent to online bookings and Travelstride’s Delaney says that two-thirds of the industry still ends up being booked over the phone or via another direct channel through an operator or agent. “One thing to keep in mind,” he explains, is that “a hotel and a flight, they have five key data points… a departure date, an arrival date, a return flight, a price, a seat type, right?” And while alternative accommodations may expand that to 10 data points, Delaney points out that, “In a multi-day tour, typically, we have 125 data elements… does day three include breakfast? What are you doing in the afternoon of day four? What’s the average physical level? How much walking is there? Is this appropriate for an age group? … [Multi-day tours are] a step function, more complex in terms of how you organize that information to make it useful for travelers to search and feel confident enough to book.” 

Adding to the difficulty of driving online sales is that these are expensive bookings, the average transaction at TourRadar is $2,500. But Travis Pittman, CEO and cofounder of the online booking site says that it regularly takes “bookings up to $10,000, $20,000.” In contrast the average transaction on Airbnb is ~$400. 

Despite these challenges, online booking sites are making strong headway. We note that large online travel transactions are becoming increasingly common. To continue the previous example, despite its low overall average transaction size, Airbnb’s fastest growing category is long-term stays of 28+ days which can easily run up to $2,000 – $3,000 ticket sizes, all sold online. 

And as aggregators of both tour supply and online demand, multi-day tour OTAs are uniquely positioned to win in a digital marketing heavy environment. We believe that the industry will inevitably close the gap between the 90% of travelers that start their searches online versus the third of travelers that end up completing this process by booking online. 

For starters, consumers are increasingly coming to trust these online platforms. To that end TourRadar’s Pittman highlighted that, “a key part of TourRadar has always been reviews…  that’s how we began really, and that’s stayed throughout.” Those reviews do more than just establish credibility with guests, they also help from a search engine optimization standpoint. 

Reviews paired with the wide range of tour supply on the platform, means that an online booking site will probably be a highly ranked organic result for high intent tour searches. This also drives a “billboard effect” where online users that are “passing by” while searching for travel inspiration repeatedly come across the same few multi-day tour aggregator and review sites. 

The guest starts by searching for a tour in Peru but also considers one in Columbia, and ultimately shifts focus to a Costa Rican trip. The destination specific brands will change each time, but TourRadar, TravelStride, and others will keep popping up. This familiarity drives trust in the platforms and makes users more likely to eventually book via an online intermediary, even if not for the destination they were originally searching for. 

These platforms also have an advantage in online distribution by means of the wide range of supply that they aggregate. This comprehensive supply lets them drive repeat customers who want to explore a variety of different tours and destinations. An Argentinian tour specialist will struggle to drive guest loyalty because as Delaney points out, “even if you have the best possible trip, most people won’t go back to Argentina twice in a lifetime.”

It’s more than that, customers can be quite picky about even simple things like departure dates. Says Delaney, “the vast majority [of tour customers], even when they have a great time with that tour operator, … It’s just like, oh, I really liked Intrepid, but their itinerary dates don’t quite match up and G Adventures has a very similar one but their dates … match up with what I want better.” This mercenary behavior plays into the hands of online booking sites and other aggregators like travel agents who have cross-brand supply and allow for comparison shopping across dates and prices for similar itineraries. 

This means that all else equal, the same exact customer probably has a higher lifetime value to an online booking site than they do to a regional tour operator. Pittman emphasized that, “CRM [customer relationship management] and bringing customers back is an extremely important part of this journey.” Accordingly, TourRadar and similar sites can ‘afford’ to outbid regional tour operators in performance marketing because even though they may end up paying more in dollar terms, they could still well be earning the same or an even better ROI on their ad dollars than what the regional specialist was targeting. 

The final piece of the puzzle comes from the focus and size of an online travel agency. As we have seen with flight and accommodation OTAs, these booking sites eventually grow to have larger marketing budgets than most individual tour operators can hope to muster. This, paired with the above ROI efficiencies, let online booking sites win more online performance marketing search auctions, more consistently than other operators, driving traffic. 

All of this means that if, as we believe, the amount of multi-day tours being booked online grows, then the relative importance of these OTAs is also likely to grow.

In our previous section on the tour operator value chain, we discussed the difference between local wholesale tour operators and outbound retail tour operators. In the past these two businesses had a mutually beneficial relationship. Running dozens of local operations was impractical for the retailer while for a local operator, in Morocco say, it would have been unthinkable to directly market tours abroad in multiple countries.

But the accessibility of online marketing and digital distributors has upended this relationship. It has opened a whole new world of opportunities that were never before possible while also bringing with it a whole new slew of challenges. “We’re seeing DMCs also work with us now,” says TourRadar’s Pittman. “… They’re [DMCs] seeing the opportunity to go direct to market. So they’re not just reliant on these bigger operators to get to [market]”.

That local DMC in Morocco can now list its tours on an online booking site and collect bookings from across the globe. Though it will have to pay a commission – likely 15% to 25% –  a DMC can now cut out the intermediary and bring those retail margins in-house. All of this without a direct booking engine! If the Moroccan DMC chooses to invest in an English-language webpage and a modest AdWords budget it could be in the direct tour business across the U.S., Canada, UK, and Australia almost overnight. 

“What’s happening is that the producer and the consumer are getting closer and closer and closer,” says Enrique Velasco Jr., Chief Commercial Officer of Coltur Peru, a local DMC. “They [the producer and consumer] can start speaking to each other. Whereas before, they were thousands of miles apart, there was no communication between them.”

Wholesalers are now competing directly against their retail partners. And to make matters more confusing, many of these retail tour operators also distribute through travel agents and OTAs. That means that the same exact tour could well be marketed to the consumer in four different places (direct via wholesaler, direct via retailer, indirect via OTA, and indirect via travel agent). 

Adding in another layer of complexity, Pittman told Skift that TourRadar plans to launch a new platform for redistribution by the end of the year that will, “basically allow any third party to distribute the inventory that we have… the GDS of multi-day [tours].” The ability to push the same tours through as many distribution channels as possible will never have been easier. 

On the one hand, this breadth of channels means more shots on goal and more chances for the right guest to find the right tour. As TTC’s Tollman puts it, “Consumers are going to buy travel where they want to buy travel. And we will ensure that we are in those places for them.”

But on the other hand, imagine a physical store putting the same exact products right next to each other on the shelf, just with slightly modified packaging. Each variation with different pricing and margins. That would never fly in the real world, the consumer would optimize for lowest price and the manufacturer for best margin until only one product remained. 

The main reason it works with tours is because of confusion in the space and unsophisticated customers that prevent true comparison shopping. Travel agent clients today are unlikely to be comparison shopping with online travel agents or direct channels. And guests are often afraid to book complex and expensive itineraries online or with a party they don’t have a pre-existing relationship with. 

Compounding this, many tour operators – both wholesale and retail – are heavily reliant on third-party sales. Though they see the potential of direct, it is currently too small a part of their business to be self-sufficient and they are afraid that too sharp a pivot towards direct will alienate distributors and result in a net overall decline in sales. 

But we would argue that fear and opacity are not a strong foundation to build a business on. The clear trend in online shopping is towards more transparency across products and prices and for the rising generation of customers to be more comfortable with making large ticket purchases online. Plus, over time, tour operators will become more confident in the size and stability of their direct channels and more willing to confront distributors over commissions. 

We think that the blurring of industry lines will drive several reactions. It will cause distributors to delineate their value add more clearly, with travel agents for instance retrenching into high-touch luxury service with many add-ons and complex arrangements. Wholesalers will be able to compete on price as direct-to-consumer wholesale clubs like Costco do today. And retailers will be driven to vertically integrate so that they can offer more destinations, in turn driving repeat guests, and potentially also create more exclusive supply arrangements so that they cannot be undercut or resold by other players. 

James Thornton of Intrepid told us that, “I think we’ll increasingly be more vertically integrated as an organization. In 80% of the cases it’s our DMCs operating the products that we sell [and] you’ll see us potentially move into other aspects of verticals. It might be more accommodation, it might be having exclusivity of certain routes or departures. You might see us have more small ships, for example.”

Let’s face it, most founders of a tour operator didn’t jump into the business out of their love for programming. They did it for the love of travel! But with the world going the digital direction we describe above, the need to modernize and professionalize many tour operators, especially smaller ones, is becoming increasingly urgent.

Many operators still keep the details of their tours logged on excel or even pen and paper. And we know of operators and travel agents that need to make multiple phone calls to confirm a booking. According to Tourism Research Australia, 88% of bookings are still made manually through email booking requests and offline methods. A survey by ATTA found that just 50% of operators they surveyed have an online reservation system that takes credit cards. This won’t fly in the coming era of tour operators. 

In order to drive effective direct to consumer capabilities, tour operators will need to develop a full technology stack. This includes responsive websites with SEO in mind, booking engines to capture sales, customer relationship management software to track guest inquiries and bookings and MarTech tools for performance advertising, retargeting, and email marketing, among other techniques. 

James Thornton told Skift that Intrepid Travel wants to have “more focus on customer experience on the website. [We are] trying to improve the overall digital experience both at the point where people come into the brand and transact with us, but then also when they come on the trip more of the documentation being served up in a digital format, the feedback loops being in a digital format. And that just helps us as an organization be able to react more real-time than previously we would.” 

Shockingly to us, Intrepid Travel only installed its first CRM system just three years ago. This is a standard sales and marketing tool for major corporations and Intrepid’s late adoption of this software speaks broadly to the industry’s need to modernize its tech stacks. 

We should note that Intrepid still managed to attract 460,000 customers a year and a 25% repeat rate without CRM software. Pretty good. But it could be better, and looked at from a glass half full perspective there is a huge amount of untapped potential ahead for Intrepid to grow into as it modernizes its sales operations. 

Even though Massimo Prioreschi, CEO of MT Sobek, a boutique mountaineering and outdoor adventure company, runs a smaller business than Thornton, he too has been investing in new technology. “In the last 18 months we’ve revamped our reservation system, phone system, CRM, and guest portal” he says. “This time of fallow, where there weren’t guests traveling”, Prioreschi explains, “[was an] opportunity to upgrade our technology. And so I think in five years, our guests will feel this ease of dealing with us.”

Above these core investments, a particularly exciting tech development we heard about came from The Travel Corporation, which “started using robots for all yield management,” according to its President Tollman. “We have dynamic pricing on all of our trips,” he explained. “And what that has done for us is … if costs are added to [a tour], we can adjust them dynamically as we move. So we are not stuck with flat pricing, which is one of the most high-risk features of the old way that tour operators used to work.”

This kind of revenue management is industry standard in the airline and seeing growing adoption across hotels. Based on this cross-industry trend, while TTC may be an early adopter, we expect more tour operators to adopt similar pricing tech. 

And all of this is just on the direct-to-consumer side. 

The technology for business-to-business (B2B) distribution is evolving as well. “Historically it was PDF and Excel files,” Berna explains. “[Peak DMC would] get a quote and then they’d send it to an Intrepid salesperson, who would make it look good and send it to the client.” That approach won’t fly anymore. Berna says that, “technology is going to improve a lot … [to allow us to] provide quicker quotes, more accurate quotes, better looking quotes so that DMC can work directly with those tour operators.” 

Tour operators aren’t exempt either as they have distribution partners of their own – online and offline travel agents – that will be demanding modern booking capabilities. For instance, Tollman told us that The Travel Corporation is, “evolving our APIs to expand and let agents actually get even more content, and more content that’s relevant. Not just dates and rates, but all robust content there too.” Interestingly, he sees potential for APIs to expand the company’s distribution reach even outside the bounds of traditional channels, teasing that “We are also looking at a number of distribution channels, which typically have never sold multi-day tours.”

And although the largest operators in the world are starting to evolve, the reality is that most small and medium sized tour companies lag significantly behind. Here’s a striking fact: Murray Decker, the CEO of multi-day tech vendor Tour Amigo, told us that, “of all the operators we’ve had discussions with, about 95% of them actually don’t have a dedicated multi-day tour [backend] system, or are using a mix of multiple systems that are designed for other travel business (day tours, activities, etc).”

If there is to be a post-COVID gold rush in multi-day tours then these back-end vendors, like Tour Amigo, are selling the pick-axes. Inventory management, content management, and booking engines are part of a standard digital retail tech stack in airlines, hotels, short-term rentals, and most recently day tours. Not only do they allow for operators to keep up with evolving distribution channels, but there is a major book-keeping and business management benefit as well.

Digitizing inventory allows for more advanced sales analytics, quicker account reconciliation, fewer back-end staff, and reduced errors. Murray estimates that at large travel agencies and tour operators the error budget due to manual loading mistakes can run into the millions of dollars.

The path forward is clear to us: DMCs and tour operators alike will need to buy or develop new back-end systems that can deliver live pricing and availability. Intrepid’s Matt Berna reflects that, “I used to talk to product managers and ops directors about how great our products were. Now I talk to data science engineers.” 

These backend systems and APIs are increasingly table stakes to participate in the current digital tour operator landscape. But they don’t come cheap and an unfortunate reality is that, especially in the wake of COVID-19, many operators will not have the cash on hand to upgrade these systems, shutting them out of modern tour distribution. We see this creating a class of have and have nots, especially in the more commoditized product offerings. This will drive some to sell out to more sophisticated tech platforms or simply to fall behind and go out of business.

The Impact of COVID-19 on the Multi-Day Tour Sector

Up until this point in the report we have discussed the structure of the industry and how long-term changes in technology are causing tour operator business strategies to evolve. In this section we will discuss the more immediate changes caused by COVID-19. This includes both new trends in the actual tour products being offered, as well as how some industry-wide practices and standards are evolving in the wake of the pandemic.

“We are going through a seismic shift in our world,” says Gavin Tollman, “the fact is we’ve entered just an entire new world.” COVID-19 has caused a dramatic shift in what kind of tours that travelers take. Some of it is due to changing preferences, such a desire for more cleanliness and safety, while other changes are due to government orders such as the closing of borders. Regardless of the reason, tour operators have responded by creating new types of tours for the pandemic era.

Rise in Domestic Tourism

The biggest new trend to emerge from the pandemic is the new emphasis on domestic tourism. At Intrepid Travel, Berna tells us that, “before COVID, about 60% of our customers worldwide came from Australia. … It’s flipped now. The US is our biggest booking market for Intrepid worldwide… 50% now of all travelers are American.”

Tollman of The Travel Corporation concurs. “Our domestic US travel brands [are doing] unbelievably well. Our domestic Australia brands, pre their last shutdown, [were also] unbelievably well… One is really beginning to see whether it’s  in South Africa, the U.S., Australia, or the UK, domestic first, near-destination second, and international third.”

Focus on Sustainability 

The other major new shift has been towards a more thoughtful understanding of travel’s impact on ourselves and the world around us. “If you said, what is fundamentally changed,” Tollman asks, “it’s going to be sustainability.” His family of tour brands are making significant shifts to be more respectful of the communities they visit and have pledged to be carbon neutral by 2022. 

James Thornton, the CEO of Intrepid Travel was emphatic about this point. “Increasingly people want to be purchasing and working for and buying from companies that are truly sustainable, not companies that say that they’re sustainable, but companies that really are and have the independent accreditations to back that up,” he explained. Intrepid Travel is the world’s largest certified travel B-Corp and has been carbon neutral since 2010. 

This is not just a COVID shift but a generational one, according to Thornton. “Increasingly millennials and gen Z are wanting the higher standards of environmental and social expectations when they travel. … Younger people are expecting brands to reflect their own values and particularly think about things like climate change.”

The shift towards sustainability doesn’t have to come at the cost of the trip experience, and if executed thoughtfully, can even enhance the overall experience. Thornton gives the example of a trip to Cambodia which would typically have an internal connecting flight. But the airport is a generic and stressful experience. “What we’ve now done,” he explains, “is remove the flight aspect of that trip and introduce a boat trip. One, it’s a more relaxing experience. Two, it’s a more local experience. Three, it emits a tiny proportion of carbon by comparison.” 

Thornton also believes that demand for domestic travel can continue due to its climate impacts. “I think there’s going to be more questioning about just jumping on a plane to fly to the other side of the world, to go there for a week,” says Thornton. “I think you’ll see a trend towards people traveling closer to home more frequently, but then when they go for longer trips overseas, those trips will probably be a bit longer in nature to factor in the carbon emissions.”

Small Groups

There has also been a shift towards smaller groups, custom itineraries, and more high-end accommodation. This kind of travel provides extra space, flexibility, and exclusivity which are perceived as cleaner and safer, the ultimate luxuries during pandemic. 

But rather than this being a new trend introduced by lockdown, Catherine Prather of the National Tour Association explains, the move towards small groups, “was already happening prior to COVID and that’s really been amplified [by the pandemic]. I think that’s something that’s really just here to stay because people were already wanting to have a smaller group experience, but that was being driven by not only generational changes, but also by people wanting those authentic experiences. It’s easier and better to have that with a smaller group.” She also highlights luxury travel as, “something that was already happening.” But now, Prather says that “People equate luxury with safety and cleanliness and security.”

Active Vacations

Another big COVID-19 winner has been active and outdoor vacations. This was already a fast growing trip type but the perceived safety of the fresh air and the backlash to lockdown really poured a lot of gas onto the fire for these tours. 

Tom Hale, Founder and President of Backroads, a leading bike and active tour operator, told Skift that, “demand for active travel was already growing pre-pandemic, and COVID has accelerated the trend with people wanting to spend more time outside in a safe and active environment.” 2022 bookings at Backroads are currently 70% above 2019 levels, its best historical year ever. 

Further reinforcing the above domestic trend, Hale spoke to how Backroads quickly pivoted to add domestic capacity, leading to them taking “20% more guests on trips in the US than we ever had before.” Hale sees the trend towards smaller, active trips continuing even as the pandemic fades. “We expect to see huge demand for Europe and other international locations in 2002] … and predict that … 2023 will see unprecedented numbers of active travelers.”

Outside of product offering, another major industry transformation due to COVID-19 that many spoke to us about was a new sense of teamwork and transparency across the industry. 

“There has been a lot more collaboration,” says Prather, “hey, this tour can go, but I really need five extra people. Do you have clients who may want to experience or go on this trip?” This is partially born out of a sense of camaraderie brought about by the near-death experience of COVID and a realization that it will be a group effort to keep the sector afloat. 

“People are a lot more open,” agrees Matt Berna. “What I mean by that is DMCs will go to the partners and say, ‘Here’s our costs. You can see them, but I need to make 5%.’ … Nowadays, it’s open books. We’re all in this together. We need to all make money, but we also need to see where our costs lie… That trust piece I think that still will continue.”

There is also an element of working together to develop best practices and industry standards in the face of a rapidly shifting disease picture. “There definitely has been a lot more sharing of information,” Prather explains, “How are you dealing with this? Are you asking for proof of vaccination? Are you masking on your tours?”

The final reality of COVID is that despite many operators’ best efforts – all of their cost cutting, pivots to new tours, and industry-wide collaboration – many will not make it through this crisis. There have been far fewer bankruptcy cases than expected, but we believe that this is mostly because of emergency funding, lenient creditors, and forgiving customers. All of this will soon begin to wear out. 

Prather warns, “I don’t think we’ve seen the shakeout as much yet in terms of true consolidation because of the PPP loans [A U.S. small business aide loan] and idle loans and things like that, that have helped people survive.” Gavin Delany of TravelStride goes even further, “there definitely is going to be significant consolidation. A number [of tour operators] have already gone out of business, mostly smaller ones.”

Many businesses went into hibernation but may find that restarting is more challenging than expected.  For instance, many tour operators’ first trips back will be 2020 tours rescheduled into 2021. And while it must feel good to be operating again, the timing of cashflows can be deadly. There are few new dollars coming in the door as these were mostly previously paid for, but staff salaries and suppliers need to be paid all the same. This further draws down already diminished cash reserves. 

Delaney says that, “I’m actually sort of surprised at this point. I would have thought more companies would have gone out of business. So up until this point, they’ve been fairly resilient.” He points out another challenge of coming out of hibernation. “I think part of the challenge is the rebound will actually be slowed a little bit by the fact that [tour operators] cut all these sales staff. So in June, pre Delta variant, we had this surge in interest. People wanted to book trips and there were not enough people to answer the phone and answer questions.” As with seemingly every other industry, tour operators are being plagued by labor shortages and supply chain backups.

There is also a great disparity between the types of services that tour operators provide and the kinds of regions they service. Those with a domestic outdoor focus are obviously doing better than an operator that specialized in international study abroad, which has been totally shut down for the foreseeable future.

On the whole though, revenues are still down dramatically. the ATTA, in a survey of adventure tour operators found that 74% of respondents had seen a 80% or greater reduction of revenue in 2020 compared to 2019. And these are the outdoor operators that are supposed to be doing the best! Prather says that “our members are telling us… It won’t be until 2023 that we will really see a full recovery in terms of getting back to 2019 levels.” 

And that’s a long way for a struggling tour operator to make it alone. Add in the investment required to digitize and the scale increasingly needed for effective distribution, and the hurdles become insurmountable for some.  In that same ATTA survey, 15% of tour operators surveyed said they are possibly closing down, 3% are definitely shuttering. 28% surveyed were interested in being acquired by or merging with another company. 

As bad as things have been for tour operators, we believe that we have yet to see the full wave of bankruptcies and consolidation to come in the multi-day tour industry. 

Overall, we believe it is possible to look at how flights and accommodations were transformed in the wake of their digital revolutions in the early 2000s as a road map for the multi-day tour industry. 

The flip side of the rise of digital marketing and online booking sites is that, as many an airline or hotel discovered, tour products will become increasingly commoditized. Both OTAs and Google search encourage suppliers to fit their tours into the neat boxes drawn up by online distributors. And comparison search engines necessarily require that the more unique aspects of a tour be minimized in favor of the more standardized feature sets like departure date, price, length, and destination. 

Matt Berna, Managing Director, North America for Intrepid Travel told us that, “the reason I say that the price is becoming more important is some of these OTAs.” Berna clarified that, “we like to work with review sites like the TourRadars of the world where [the sort algorithm] goes by customer reviews… whereas [if] we go just to a platform that sells a price only, it’s going to be really, really competitive and it may not be worth the business for us.”

Commoditization, in which the main means of competition becomes price, is exactly what the rise of digital distribution did to airlines, hotels, and alternative accommodations. True, tours are more complex products, and therefore may never become quite as commoditized, but the direction of the trend is clear to us. 

Using this as a benchmark, we see four broad paths forward for tour operators to follow in response to the rise of digital channels and online and the commoditization it will bring.

1) Embrace Commoditization : If you can’t beat ‘em, join ‘em, as the saying goes. Rather than try to fight it, some tour operators will choose to compete on price and make up for lower margins with volume. Call it the Walmart strategy.

Sometimes customers just want, “your bread and butter trips” says Berna. Berna explains that Intrepid works very hard to differentiate even these trips based on quality, but admits that, “once you get into that competitive set, we’re all selling the Inca trails… of course, the only way to really compete sometimes is the price.” Intrepid, as one of the largest tour operators in the world, has the scale necessary to run trips like this. 

But very few other operators will be able to grow to the size necessary to win at this game. Expect only the largest operators in the world to pursue this strategy. That leads us directly into the next industry shift we expect to see.  

2) The Big Get Bigger Through M&A: There’s safety in numbers, and more importantly, operating leverage. We discussed in the earlier online booking section how these sites have a scale advantage in performance digital marketing. The airlines and hotels both found the best way to compete was to consolidate to build this same marketing advantage for themselves. Call it the Marriott/Starwood strategy. 

By consolidating, the biggest players broaden their supply choices which makes it easier to drive loyalty program customers who consistently book direct and have higher lifetime values, justifying higher upfront marketing acquisition costs. This makes large-scale businesses better able to compete with booking sites in performance marketing. Plus, with growing name recognition they can invest in brand marketing which drives new customers and makes performance spend more effective.

Consolidated suppliers also have more leverage to negotiate lower commissions with travel agents, both online and offline. Finally, with larger balance sheets comes the ability to control exclusive and/or scarce resources that can only be sold through exclusive first-party channels. By this we mean sources of unique supply like national park permits, private islands, or wholly owned hotels and resorts, which are very expensive to acquire or develop.

3) The Boutique Route: For many, competing on price and volume is a race to the bottom that only the biggest can win. Like with the boutique hotel movement, we think there is a great opportunity for tour operators to de-commoditize their product by providing very high service or specializing in a very specific niche.

The niche for these ‘boutique’ tour operators can be anything from a specific region, a type of tour (e.g., mountaineering or biking), an affinity group (e.g., photography or cooking) or a style of travel (e.g., train travel or sailing). But the key is that it needs to be something where the operator can be differentiated and best in class. By committing to a niche, it precludes growing to a large size, but it means that you can be the world leader in your particular area and attract direct bookings looking for this unique offering. Even better, because fewer other operators commit to any given niche there will be less competition and these boutique businesses can have stronger pricing power.

A good example of this is MT Sobek which has a 53 year pedigree in mountaineering and adventure travel that started in Nepal. Massimo Prioreschi, its CEO, told us that, “[adventure travel is] a tough business to scale… It’s hard to manufacture deep knowledge and excellence in guides.” He explains, “I’ve been at companies before that were very scale driven. And [MT Sobek] isn’t, it’s quality driven, it’s connection driven, it’s relationship driven. And that really, I think that’s why we’re still here.” Prioreschi has turned the slow process of grooming a mountain guide into a competitive moat for his business by embracing the boutique nature of their organization. As a result MT Sobek sees 90% direct traffic and 75% of their business comes from repeat guests or word of mouth. 

4) Embrace The Complexity of B2B: In response to an increasingly competitive B2C market, some may drop it altogether and pursue the still largely offline B2B market. Coltur Peru , a local DMC is an example of this. As a result of COVID it reorganized to drop its lower-end consumer offerings. Now Coltur focuses largely on complex custom group tours and special interest itineraries. 

“There’s this mass hysteria that everybody has to be with one foot in B2B and one foot in B2C and if you’re not in B2C, then you’re going to die,” says Coltur’s Chief Commercial Officer Enrique Velasco Jr. Dismissing this conventional wisdom, he says that the company is, “trying to focus in market segments that do need the middleman. That segment … might, as a percentage of the whole industry… become smaller. But it’s not going to die.” Velasco sees the challenges incumbent in planning a custom itinerary as a competitive moat, telling us, “the more complex what you’re looking for, the more we stand apart from our competition, that’s what we believe.” 

This is akin to the strategies pursued by business travel agencies which, up until COVID-19 hit, had continued to grow by providing high-touch service to large organizations while leisure offline travel agencies shrunk in the face of D2C challengers. There is still a lot of value to be had in planning high-value and complex tours. The addressable market may be smaller than the mass-market D2C opportunity, but those that can successfully hang onto their slice of the pie will be rewarded with stable cash flows.