Travel Agent. Introduction. What qualifications and skills are required?

Transcription

1 Travel Agent Business Opportunity Profile BOP247 March 2015 Introduction Travel agents source, arrange and book accommodation, flights and other services such as excursions for holiday, business and leisure travellers to both UK and overseas destinations. They act as agents on behalf of travel suppliers such as airlines and hotels, sell package holidays on behalf of tour operators and often provide related services such as currency exchange, car rental, travel insurance and advice about visas, passports and vaccinations. Travel agents who book and sell flights must hold an Air Travel Organisers' Licence (ATOL). The provision of package holidays is strictly regulated under the Package Travel, Package Holidays and Package Tours Regulations 1992 (PTRs), which are expected to be updated when new legislation comes into force in the UK in 2017 under the revised European Directive on 'Package Holidays and Assisted Travel Arrangements'. Travel agents should not be confused with tour operators. While travel agents act as agents for suppliers, tour operators provide package holidays and act as the principal in relation to bookings made by customers. For more information about tour operators, see BOP 407, Tour Operator. The UK travel industry is dominated by international providers, such as Thomas Cook and Thomsons, which often operate as both travel agents and tour operators. Hays Travel, the UK's largest independent travel agency, has more than 100 branches and reported an annual turnover of more than 650 million in This profile provides information about starting up and trading as an independent travel agent. It describes the skills required, the training available, the current market trends and the key trading issues. It also identifies the main legislation that must be complied with and provides sources of further information. What qualifications and skills are required? While there are no mandatory qualifications required to trade as a travel agent, independent agents require considerable experience and knowledge of the travel and tourism industry, an understanding of the regulations that apply to their sector, and extensive, up-to-date knowledge of holiday destinations, resorts, accommodation and activities, as well as any political and health factors affecting travel. The following courses are suitable for start-up travel agents, or those who need to develop their skills further, and for their less experienced staff: Level 3 Certificates and Diplomas in Travel and Tourism, which are accredited by various awarding bodies, including City & Guilds and Edexcel. The qualifications include optional units such as 'Promotions and Sales in Travel and Tourism', 'Customer Service in Travel and Tourism', 'Long-haul Travel Destinations', 'Tourism in the UK' and 'Arranging Business BOP247 Travel Agent Page 1 of 22

2 Travel'. City & Guilds also accredits Level 2 Awards, Certificates, Extended Certificates and Diplomas in Travel and Tourism. Go to for more information about the various qualifications, which are delivered at training centres throughout the UK. Course fees vary with location. Go to and for examples of training centres and course fees. Online Travel Training (OTT) e-learning Global Distribution System (GDS) courses. These include 'Amadeus Introduction', which costs 199 and takes 50 hours to complete, 'Amadeus Expert', which costs 229 and takes 70 hours to complete, 'Amadeus - Airline Reservations', which costs 160 and takes 40 hours to complete, and 'Amadeus - Hotel Reservations', which costs 115 and takes 20 hours to complete. Go to for more information. OTT also provides 'Product Training' courses covering topics such as business travel, car hire and airlines. There are separate courses covering the services provided by Aegean Airlines, Air Canada and British Airways. Most Product Training courses are provided free of charge. Go to for more information. Travel agents arranging overseas holidays, particularly agents specialising in niche activities or destinations that are less likely to be covered by English-speaking providers, will benefit from speaking several foreign languages. The Rosetta Stone offers online courses in more than 20 languages covering fundamental vocabulary and language structure. Go to for more information. Anyone starting up in business as a travel agent will benefit from training in general business and enterprise skills. Suitable courses include: Free webinars provided by HM Revenue & Customs (HMRC) covering topics including business expenses, self assessment online, VAT, self employment and becoming an employer. Go to for more information. Introduction to Buying, which is a one-day course provided by PTP that covers topics such as negotiation skills and understanding value and costs. The course is delivered regularly at training centres around the UK, and costs 450 (excluding VAT). Go to training-courses/introduction-to-buying for more information. Contracts of Employment, Recruitment and Selection, which is a distance learning course run by Stonebridge Associated Colleges that may benefit travel agents new to recruiting staff. The course costs from 60. Go to for information. 'Social media marketing', which is an online course costing 349 provided by The Digital Marketing Institute. The course covers the latest trends in social media marketing and using Facebook, Twitter and LinkedIn for business. Go to courses/social-media-marketing for more information. The CIM Foundation Certificate in Marketing, which is a distance learning course requiring 160 hours of study, provided by the Home Learning College. The course fee includes membership of the Chartered Institute of Marketing (CIM) and covers writing a marketing plan, understanding customer behaviour and segmenting customers to understand their BOP247 Travel Agent Page 2 of 22

3 needs. More information and details of course fees are available on request from Home Learning College ( Apprenticeships Travel agents often take on trainees as apprentices. The travel agent is required to provide appropriate training and mentoring, but funding is available towards the cost of training, depending on the apprentice's age and where in the UK the agent is based. Go to for more information about Apprenticeships in England. For information about funding for Apprenticeships in Wales go to employers/server.php?show=nav Go to for more information about Modern Apprenticeships in Scotland. Information about Apprenticeships in Northern Ireland can be found at Industry awareness Travel agents can keep up to date with news and developments in their sector by attending events and reading trade journals and industry resources, including: 'Destination UK' ( which is an online trade journal providing news and information about tourism and visitor attractions across the UK, as well as in-depth features about market trends and opportunities. 'TTG' ( which is an online and print-based trade journal for travel professionals. It provides industry news and opinion and details of forthcoming networking events. Registered users can also access online training and sales and marketing resources. 'World Travel Market' (WTM, which is an annual four-day trade event held each November at Excel, London. It provides opportunities to network with exhibitors from all sectors of the travel and tourism industry, including UK and overseas tour operators, international airlines, car hire services and cruise providers. TravelMole ( which is an online community for the travel and tourism industry that provides industry news and comment, networking opportunities and supplier directories. 'The Local' ( which publishes news stories in English covering a range of European countries, including France, Spain and Germany. Networking events and opportunities for members of the Association of Independent Tour Operators (AITO) including the annual Overseas Conference and online forums ( 'Travel Wantapreneur' ( which is a website published by the Travel Trust Association (TTA) that provides advice and guidance for travel agents to help them set up and run their travel service. BOP247 Travel Agent Page 3 of 22

4 What are the key market issues and trends? Some of the key current market issues affecting travel agents are as follows: The travel industry experienced a "mood of buoyancy" in 2014 compared to "the pits" of 2009, according to John Hays, the founder of Hays Travel, who reported that passenger numbers increased by 9% during In particular the number of long-haul and cruise bookings rose. Hays' profit margins increased by almost 11% between October 2013 and October 2014, and total sales and commission within the Hays group overall increased by 14% and 15% respectively during the same period. Go to Articles/2014/11/24/51233/hays-hails-mood-of-buoyancy-as-profits-rise.html for details. Many consumers now book holidays for themselves online instead of using a travel agent, and bookings are increasingly made on mobile devices. In 2014, 18% of consumers who booked holidays online used a tablet, up from 10% in 2013, while 17% used a mobile phone, up from 13% in Laptops and PCs remained the most popular devices for booking holidays online, with 93% of consumers using them in 2014, a slight decrease from 97% in 2013 ( The number of Britons who had been on holiday within the previous twelve months fell from 83% in August 2013 to 80% in August 2014, according to ABTA's Consumer Holiday Trends Report Around four in ten (41%) people had taken domestic and overseas holidays in the same period, 27% had taken UK-only holidays, and around 12% had holidayed exclusively abroad. Around 45% of UK holidays were booked directly with service providers, while 26% were booked with a booking website such as Booking.com or Expedia, 16% were booked directly with tour operators, 16% with travel agents online and 10% with high-street travel agents. Go to for details. The same ABTA report revealed that survey respondents aged between 25 and 34 took the greatest number of holidays (around four holidays each on average) between July 2013 and July 2014, in contrast with respondents aged between 45 and 54, who typically took around three holidays during the same period. Half of respondents said they had travelled with their partner, 35% with their immediate family, 20% with an adult-only group of friends, 19% with extended family and 13% on their own. The most popular overseas destinations for British travellers in 2014 included Spain, France, Italy, the USA, Portugal, Greece, Turkey, the Netherlands, Belgium and Ireland, according to the ABTA Travel Trends Report The report indicates that short haul destinations such as Italy, Barcelona and Paris will remain popular for 2015, while common long haul destinations will include the USA, Australia, New Zealand, Mexico, Canada and Thailand ( In a survey carried out by VisitEngland in September 2014, 21% of respondents in the UK said they had cut back on holiday spending. Of the respondents surveyed, 17% said they were holidaying more in the UK and less abroad, and 15% said they were increasing the number of short breaks they were taking and reducing the number of long trips. Go to %20website_tcm pdf for more information. There were 47.7 million domestic holiday trips made in the UK from January to October 2014, which is a 6% decrease on the number of trips made during the same period of 2013, BOP247 Travel Agent Page 4 of 22

5 according to the Great Britain Tourism Survey (GBTS) October 2014 Update. The amount of money spent by domestic holidaymakers also decreased by around 2% in January to October 2014 compared with the same period in 2013 ( According to a survey of 3,000 adults for the Travelodge hotel chain's 2014 Staycation Report, 74% of UK adults took 'staycations' in 2014, which is a record high and more than double the figure of 35% recorded in The report also revealed that 51% of Britons take short breaks throughout the year rather than one long holiday. The top ten destinations for staycations were London, Cornwall, Edinburgh, the Scottish Highlands, the Lake District, Devon, North Wales, York, Blackpool and Brighton ( press_release.php?id=548). Honeymoon couples are a key customer group for travel agents. In 2014 couples spent an average of 3,931 on their honeymoon, according to a reader survey conducted by Brides magazine ( average-cost-of-wedding). A record 23 million passengers are expected to go on cruise holidays in 2015, according to research published by the Cruise Lines International Association (CLIA). Almost two thirds (62%) of cruise passengers surveyed had been on a cruise before, and 69% said they thought cruise holidays were better value than land-based holidays. Caribbean cruises make up over a third of the cruise market share, with other popular destinations including the Mediterranean, Asia and Australia ( press_releases/2015/02/state-cruise-industry-2015-see-robust-growth). In November 2014, Cruise Lines International Association (CLIA) UK and Ireland announced that details of river cruises were to be added to industry resource Cruisexperts.co.uk by The CLIA described the move as a natural progression for the association, particularly as river cruise bookings by UK passengers rose by more than 22% during 2013, compared to a rise of less than 2% for ocean cruises. Go to clia+to+reflect+river+cruise+surge+with+new+resources+for+agents.html for details. From April 2015, the two highest Air Passenger Duty (APD) tax bands will be abolished, which will lower the tax cost of flying long haul. All flights currently taxed in bands C and D will be moved to band B, which will save air passengers over 200 million per year, according to ABTA ( The Consumer Protection (Payment Surcharging) Regulations came into effect in April 2013, and prohibit businesses from imposing excessive fees for payments made by credit card. Alan Bowen, legal advisor to the Association of ATOL Companies, admitted that such charges were a source of profit for some travel agencies, following an investigation by the BBC, which revealed that several agencies were contravening the newly introduced Regulations. Go to for more information. The Package Travel, Package Holidays and Package Tours Regulations 1992 (PTRs) are likely to be updated by the introduction of new legislation in 2017 under the revised EC Directive on 'Package Holidays and Assisted Travel Arrangements' (the Package Travel Directive or PTD). The revisions to the Regulations will bring package holidays sold by online travel agents within the scope of the PTRs and are also likely to affect the ATOL licensing scheme. BOP247 Travel Agent Page 5 of 22

6 Go to for details. Travel agency franchises provide both opportunities and competition for anyone starting up as an independent travel agent. Examples include Cruise Holidays ( which provides a home-based franchise for an initial investment fee of around 16,000 and a retail franchise for around 20,000, and Explorer Travel ( which provides an online travel agency franchise for an initial investment fee of around 12,000. Independent travel agents face competition from the established travel agency groups such as the Thomas Cook Group, Hays Travel and Thomsons, as well as leading travel websites such as Booking.com, Expedia and Travel Supermarket, which enable individuals to make bookings themselves. In December 2014, there were 8,850 travel agents in the UK listed on Yell.com, indicating the highly competitive nature of this sector. What are the main trading issues? Some of the main trading issues faced by travel agents include: Air Travel Organiser's Licence (ATOL) Under the Civil Aviation (Air Travel Organisers' Licensing) Regulations 2012, all UK air travel suppliers selling flights, whether separately, part of a package holiday or as a 'flight-plus' deal, must hold an ATOL. The scheme is run by the Civil Aviation Authority (CAA) and provides a fund of money based on contributions made by ATOL holders that compensates customers if their travel company fails. ATOL holders must pay an ATOL Protection Contribution (APC) of 2.50 per passenger each time a flight is sold. However, a travel agent who only sells flights on behalf of tour operators that hold an ATOL does not need their own licence. There must be a formal agency agreement in place between the tour operator as principal and the travel agent to authorise the sale of flights by the agent. Other exemptions cover travel agents who belong to an Accredited Body, which holds an ATOL Licence on behalf of its members. Examples of Accredited Bodies include travel agents such as Hays Travel Ltd ( and Travel Counsellors Ltd ( recruitment.travelcounsellors.com/gb), which enable individuals to set up and work from home on a self-employed basis as 'Personal Travel Consultants' or 'Travel Counsellors'. Travel agents selling flight-only tickets and acting as airline ticket agents are also exempt from the requirement to hold an ATOL. Go to for more information about the ATOL scheme. Under the Regulations, 'flight-plus' holidays (as well as traditional package holidays) are covered by ATOL. For a holiday to be a flight-plus holiday, the following criteria must be met: The holiday must include a flight and overseas accommodation or car hire. The flight must depart from the UK or, where alternative transport is used to leave the UK, it must return to the UK. The flight and accommodation or car hire must be booked using the same travel company, and on the same day, or within one day of each other. BOP247 Travel Agent Page 6 of 22

7 The travel period must be for at least 24 hours and include an overnight stay. If an ATOL Licence is required by an independent travel agent, the type of licence that must be held depends on the scale of their business: Travel agents intending to sell no more than 500 flights each year over a minimum of three years can apply for a Small Business ATOL, which costs 1,115. A 40,000 bond is also payable. Before approving their application, the CAA must be satisfied that the travel agent is fit to hold an ATOL. Travel agents intending to sell more than 500 flights each year can apply for a standard ATOL, which costs 1,890 plus a charge of around 0.12 per passenger. A 40,000 bond is also payable. Before approving their application, the CAA must be satisfied that the travel agent is fit to hold an ATOL and is financially solvent. Travel agents that start up via a franchise and intend to sell no more than 1,000 flights per year can apply for a franchised ATOL, which is a licence held by the franchisee on behalf of the franchise members, and which costs 710. A bond is not required. Applicants must satisfy the CAA that they are fit to hold an ATOL. Go to for an overview of the different types of ATOL and to for more information about how to apply for an ATOL. Travel agents that are members of ABTA can apply for ATOLs under the ABTA-ATOL Joint Administration Scheme, which entitles them to discounts on ATOL fees. Go to join-abta/become-a-member/the-abta-atol-joint-administration-scheme for more information about the scheme. Bonds must be held by a CAA-approved insurance company, broker or bank, and renewed annually. A bond is required for a minimum of four years, but the size of the bond may be reduced each time it is renewed. For a list of CAA-approved insurance companies and brokers, go to Travel agents must issue customers with an ATOL Certificate immediately on taking payment, making it clear that their flight or package is ATOL-protected. The CAA has published guidance about issuing ATOL Certificates, which is available at catid=2668&pagetype=90&pageid= Package travel regulations The Package Travel, Package Holidays and Package Tours Regulations 1992 (the PTRs) implement the European Directive 90/314/EEC (the Package Travel Directive or the PTD) into UK law. They require anyone, including travel agents, providing packages for various types of travel, both for private and work-related purposes such as holidays and business trips, conferences, educational visits and school trips, to comply with strict rules. These cover issues such as marketing, precontractual information and cancellations and define a package holiday as a holiday where at least two of the following components are sold at an inclusive price; transport, accommodation, and other tourist services accounting for a significant proportion of the package. The PTRs are enforced by local authority trading standards departments in England, Scotland and Wales, and the Department of Enterprise, Trade and Investment (DETI) in Northern Ireland. Customers can take civil court action against travel agents who have breached the PTRs. BOP247 Travel Agent Page 7 of 22

8 Go to for guidance on the PTRs. Protecting client money in relation to package holidays Under the PTRs, travel agents must ensure that any payments they receive from customers for a package holiday are protected until the holiday has finished, meaning the customer can be refunded if the tour operator or any of their suppliers become insolvent. A travel agent with an ATOL is recognised as meeting this requirement to protect client money, while travel agents without ATOLs must protect client money by: Taking out appropriate insurance. Placing payments into a trust account, from which funds can only be withdrawn once the relevant holiday is completed; or Purchasing a bond from an Approved Body that is accredited by the Department for Business, Innovation and Skills (BIS) under the PTRs (referred to as 'being bonded'). The cost of taking out insurance or becoming bonded can be significant, with bonds typically exceeding 10,000, and most travel agents are likely to favour the use of a trust account. However, some professional associations such as ABTA require members to purchase a bond, and many have their own bonding schemes. Marketing restrictions and rules for package holidays Under the Consumer Protection from Unfair Trading Regulations 2008, travel agents must not describe a package holiday, the price of a package holiday, or any conditions of the contract for a package holiday in a way that is misleading. Additional requirements under the PTRs apply to travel agents marketing package holidays. For example, brochures for package holidays must indicate specific information about the holiday, which is listed in Schedule 1 of the PTRs. Information must be legible, comprehensive and accurate and must include details about the holiday destination and the type of transport, the type, location and category of accommodation, the meals included in the package, and general information about passport and visa requirements that will apply to the customer. Subject to exceptions, the information about a holiday package provided in a brochure is treated as implied terms and conditions (Ts and Cs) of the contract, and therefore binding on the travel agent. Booking terms and conditions (Ts and Cs) for package holidays Under the PTRs, travel agents selling package holidays must provide written Terms and Conditions of Booking (Ts and Cs) that include: The name and trading address of the travel agent. Full details of the package, including dates, destinations, the type of transport to be used, itineraries accommodation, and any meals, visits or excursions that are included. Whether a minimum number of bookings is required for the package to go ahead, and if so, the deadline for informing customers of a cancellation. BOP247 Travel Agent Page 8 of 22

9 The price of the package and an indication of any possible changes and any extra charges or taxes that are not included, the payment schedule and method of payment. Any special requirements that have been agreed between the customer and the travel agent. Additional pre-contractual information, as well as post-contractual information, must also be supplied by travel agents selling package holidays. Examples of required additional pre-contractual information include: General information about passport and visa requirements, including information about the length of time it is likely to take to obtain the appropriate passports and visas. Information about health formalities required for the journey, destination and the length of stay. The agent's procedures and policy for client money protection and, if applicable, arrangements for repatriation in the case of the agent becoming insolvent. Examples of required additional post-contractual information (that must be provided in good time before the start of the trip) include: The times and places of intermediate stops and transport connections, and details of the traveller's accommodation. The name, address and telephone number of the travel agent's representative at the customer's destination. If there is no such representative, the name, address and telephone number of another local agency that the customer can contact if in difficulty must be provided, and, if there is no such agency, the client must be provided with the tour operator's own contact details. Where the traveller is a child aged 15 or under and all or part of the holiday is abroad, information must be provided enabling direct contact to be made (for example by telephone) with the child or the person responsible at the child's accommodation. Unless the customer has been required to take out travel insurance, information about a suitable type of policy that they can take out. Travel agents selling package holidays on behalf of tour operators will need to be provided with a contract including the tour operator's Ts and Cs to pass on to customers. However, although it is the agent who gives customers the contract, the contract is between the tour operator and the customer. For a working example of Ts and Cs used by a travel agent, go to It is worthwhile having a solicitor examine Ts and Cs to ensure they comply with the law. Consumer rights and booking requirements for non-package holidays Travel agents selling travel services and holidays (other than package holidays) directly to consumers, meaning private individuals booking travel for purposes that are not related to their trade, business, craft or profession must comply with the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (CCRs), which were introduced in the UK in June BOP247 Travel Agent Page 9 of 22

10 The CCRs require travel agents to provide consumers with specific pre-contractual information before agreeing to accept a booking and enter into a contract with them. This applies regardless of how a booking is completed. The pre-contractual information required includes: Details of the travel agent's trading name, address and telephone number. Clear details about the specific services the travel agent provides. The total price for the booking and any additional charges made, such as charges for using a credit card when paying for or amending a booking. Arrangements for payment and details of any deposits required (which are typically nonrefundable and charged at between 10% and 25% of the total booking price). Details of cancellation rights. Under the CCRs there is no right to cancel a contract for bus, rail or flight tickets, or to cancel contracts for hotel bookings, vehicle rental, catering or leisure services if they are to be provided on a specific date or within a specific period, provided this was made clear in the travel agent's Ts and Cs. The CCRs are enforced by local authority Trading Standards officers who can be contacted for advice and guidance about complying with these regulations and other consumer protection legislation. Travel agents' right to alter or cancel bookings The rights of a travel agent to alter and cancel customer bookings depend on what type of holiday they are selling. In general, an agent selling package holidays has fewer rights to alter or cancel holidays than an agent selling non-package holidays. Non-package holidays The rights of a travel agent to alter or cancel a non-package holiday will depend on the Ts and Cs of the booking contract between the agent and the customer. Ts and Cs relating to alterations and cancellations in these circumstances will only be enforceable if they are deemed to be fair by law (see the unfair contracts terms section of this profile). Package holidays The PTRs restrict the rights of travel agents and tour operators to alter or cancel contracts for a package holiday, even in circumstances where the reason for the alteration or cancellation is beyond their control, such as civil unrest in the intended destination. Alterations to the holiday package Where a package holiday tour operator, such as a travel agent acting as a 'principal' who offers a package that they have put together themselves is required to alter an essential contract term significantly before the holiday begins, they must notify the customer of the proposed alteration as quickly as possible. In this situation the customer can cancel the contract without incurring a penalty or accept the alteration to the contract, including any resulting price revision. The customer must inform the tour operator of their decision to cancel as soon as possible. BOP247 Travel Agent Page 10 of 22

11 Where a package holiday tour operator is forced to cancel the contract for a package holiday before the holiday has commenced, or a proposed pricing alteration is rejected and the contract cancelled by a customer, the customer has a right to: A substitute package of equivalent or superior quality if the tour operator is able to offer such a substitute. A substitute package of lower quality, plus recovery of the difference in price between the substitute package and the original package. Recovery of all money paid for the original package. If appropriate, compensation for non-performance of the contract, unless: The cancellation of the original package is due to the number of purchasers falling below the minimum number required, and the customer is informed of the cancellation in writing within a period specified in the package description and Ts and Cs; or The cancellation is due to unusual and unforeseeable circumstances beyond the travel agent or tour operator's control, and cancellation could not have been avoided in these circumstances even if all due care had been exercised. Price alterations Most travel agents and tour operators provide for notification of price alterations when drafting their Ts and Cs, which will, provided they are not deemed unfair under the law, be binding on the customer. For example, in relation to post-contract price alterations that result from increases in transport costs, supplier costs, or relevant currency or exchange rates, Jet2 Holidays' Ts and Cs state that they: Will absorb any price alterations up to 2%. Will be entitled to alter the price of a holiday package by up to 10% until 30 days before departure, and stipulate that an administration charge of 1 per person and an amount to cover agents' commission will also be payable. If a price alteration of more than 10% is required Jet2 states that: Provided they do so within 14 days of receiving notice of the proposed amendment, the customer will be entitled to change to another holiday or cancel the holiday and receive a full refund. If the customer fails to change to another holiday or cancel within 14 days, the customer will be liable to pay the new altered price. Go to to see these Ts and Cs in full. Unfair contract terms The Unfair Terms in Consumer Contracts Regulations 1999 (UTCCRs) protect UK consumers from contract terms that are unfairly balanced in favour of traders. (These Regulations are expected to be amended or replaced by the Consumer Rights Act 2014, which is due to be introduced in 2015). The UTCCRs list terms that are automatically deemed unfair, such as those excluding liability for death or serious injury, and provide that any contract term is deemed unfair if it causes a BOP247 Travel Agent Page 11 of 22

12 significant imbalance in the parties' rights and obligations to the detriment of the consumer. When deciding if a term is unfair, a court will take into account whether it is difficult to understand or has been drafted in a way that means it could be used to harm, mislead or confuse the consumer. The Office of Fair Trading (OFT), which, prior to April 2014, was the body responsible for enforcing the UTCCRs, has published examples of unfair terms that have been included in package holiday agreements. Since April 2014, the UTCCRs have been enforced by the Competition and Markets Authority (CMA) in England, Wales and Scotland, and the Department for Enterprise, Trade and Investment in Northern Ireland (the DETINI). However, the CMA has approved the OFT guidance and published it, together with general information about unfair terms, at publications/unfair-terms-in-package-holiday-contracts and publications/unfair-standard-terms-in-consumer-contracts. Guidance to the UTCCRs for traders in Northern Ireland (also originally published by the OFT) can be downloaded from Sourcing package holidays and holiday components Details of tour operators can be found via specialist online directories and trade associations such as: Wanderlust, which lists tour operators providing both international and domestic tours ( Britain Express, which lists operators providing tours in England, Wales and Scotland ( The Association of Independent Tour Operators (AITO), which represents independent tour operators trading in the UK and publishes a searchable members' directory at and details of currently available tours at travelagents. The European Tour Operators Association (ETOA), which represents the European tour operator industry and publishes a list of members at Travel agents usually use a Global Distribution System (GDS) such as Amadeus to source holiday components directly from travel and tourism providers. A GDS provides travel agents and other travel professionals with access to services from a range of industry suppliers from the UK and overseas, and allows the agent to manage the reservation and purchase of airline tickets, accommodation and other tourist services. GDS software suppliers include: Amadeus, which provides a GDS that features automated invoicing facilities, tools to calculate fees, margins, currency exchange rates and online reservation management functions. Go to for more information about software options and prices. BOP247 Travel Agent Page 12 of 22

13 Dolphin Dynamics, which provides a GDS that features automated booking and facilities enabling online booking, blogs and newsletters. Go to for more information about the software and prices. Online training for most GDS systems is delivered by Online Travel Training ( Independent travel agents sourcing services from small, independent travel and tourism providers will have to contact these providers directly in order to negotiate a bulk reservation or purchase of services, and will benefit from a basic level of fluency in the appropriate language. Travel agents usually purchase accommodation and other tourist services in two ways: under an allocation (sale or return) contract, where they reserve accommodation but do not pay for any services they have booked but have not actually sold; or a fixed or guaranteed contract where they must pay for all of the services they have booked. Accommodation providers in destinations where there is very high demand often require travel agents to book accommodation on a fixed contract basis and the travel agent must bear the risk of rooms they have booked remaining unsold. Dealing with overseas suppliers Travel agents dealing directly with overseas suppliers should, as best practice, include 'governing law and jurisdiction' clauses in any agreements reached with them, for example when reserving accommodation. Governing law clauses and jurisdiction clauses in contracts with international suppliers stipulate the contract law that will apply to the contract (for example, English law) and in which courts disputes will be heard. Contract law varies considerably between countries; for example, terms legally enforceable under the law of one country may not be legally enforceable under the law of another. Go to and id_resource=4640 for more information about governing law and jurisdiction clauses. Overseas suppliers usually require payment in their local currency. The majority of banks and other payment providers charge a transaction cost for processing international payments, which is typically paid by the money sender - i.e. the travel agent. Alternatively, a travel agent can open a foreign currency account, which enables them to hold money in a specific foreign currency. Income and cash flow Travel agents selling package holidays on behalf of tour operators usually take commission of around 10%-12% of the booking fee charged to the customer. It is typically only when the customer has paid for the package that the travel agent passes the full amount to the operator. Commission rates may be dependent on the agent selling a minimum amount of tours. Some travel agents choose to sell a tour operator's package at a lower price than the operator recommends, or pass on a share of their commission to the customer in the form of a discount. Under the Restriction on Agreements and Conduct (Tour Operators) Order 1987, it is unlawful for a tour operator to refuse to deal with a travel agent for this reason, or to give preferential treatment to another agent because they agree not to offer discounts. Under the Foreign Package Holidays (Tour Operators and Travel Agents) Order 2001, tour operators are prohibited from requiring agents to offer the same incentives on their packages as BOP247 Travel Agent Page 13 of 22

14 those offered on other operators' packages, or from discriminating against agents for refusing to do this. Commission on cruises, flights, hotel bookings, car hire and other associated travel services is typically around 10%-15%, although some airlines pay commission at rates as low as 1%. Travel agents selling or arranging travel insurance on behalf of an insurance provider receive commission of around 25% of the value of the policy. Some providers will provide commission at a variable rate that depends on the travel agent's sales reaching a minimum amount. Mark ups charged by travel agents on holiday components vary greatly depending on factors such as the type of component, time of year and the provider. If the travel agent books accommodation, flights and other holiday components and pays in a foreign currency several months later, any changes to the exchange rate between booking and payment can have a significant effect on their profits. In order to reduce this risk, some banks offer 'hedging' schemes, under which currencies can be purchased by travel agents at a rate agreed in advance, subject to a fee. Travel agents normally advertise holidays more than a year in advance but later they are able to charge customers a different price for non-package holidays from the one originally advertised, if this has been stipulated in the booking terms agreed with the customer. However, alterations to the price of a package holiday once a contract has been signed are restricted by the PTRs, regardless of whether the cost of the holiday or individual components has risen more than initially expected. Many travel agents enable customers to pay for their packages in instalments. Planning, forecasting demand, and negotiating with suppliers are therefore extremely important in safeguarding profit margins and maintaining a healthy cash flow. Some travel agents generate extra income by joining an affiliate marketing scheme run by international travel and tourism providers such as Thomas Cook ( affiliates), Thomson ( Jet2 ( and ebookers ( Affiliates are usually paid on a 'cost per sale' (CPS) basis, where the provider pays commission up to around 30 for each booking made by customers referred to their site via the travel agent's own website. Taking payment Travel agents taking payment from customers in person will require a chip and PIN machine to process credit and debit card payments. Examples of providers include lloydsbankcardnet.com, and Alternatively, they can be leased from banks. Equipment rental costs between 15 and 35 a month, plus pertransaction charges of around 2%. It will be necessary to apply for an online merchant account to process online payments. Examples include PayPal ( WorldPay ( PayPoint ( and Nochex ( Increasing numbers of traders are joining online payment security schemes such as Master Card SecureCode ( index.html). Retailers usually join these schemes through their online payment processor. BOP247 Travel Agent Page 14 of 22

15 Travel agents taking bookings online must ensure their ordering process meets the requirements of the Electronic Commerce (EC Directive) Regulations This includes providing clear information about the technical steps to follow to conclude the contract, and how the consumer can identify any input errors before confirming their booking. The Consumer Rights (Payment Surcharges) Regulations 2012 prohibit travel agents from charging consumers more than it costs them to process a type of payment. For example, travel agents are prohibited from charging clients for using a credit card by an amount that exceeds the cost to the operator of processing the credit card payment. Guidance on the 2012 Regulations is available at attachment_data/file/175298/ guidance-on-the-consumer-protection-paymentsurcharges-regulations-2012.pdf. VAT registration and liability Once their turnover reaches the mandatory threshold, travel agents must register for VAT. HM Revenue & Customs (HMRC) sets out three ways in which a travel agent can operate, which will affect their VAT liability: As an agent/intermediary. The travel agent sells holiday services on behalf of travel and tourism providers, including tour operators, and receives commission on sales. In their own name. The travel agent sells holiday services on behalf of travel and tourism providers using their own name, with customers remaining unaware of the actual service provider's identity. As a principal. The travel agent purchases services from travel and tourism providers then resells the services to the customer at a higher price, with the difference in price representing the agent's main source of income. Go to vat-notice-7096-travel-agents-and-tour-operators and select 'Introduction' for more information. Where an agent acts as an intermediary, the value of the supply upon which any VAT may be due is the amount of commission due from the principal (the provider of the travel and tourism services) or the fee that the travel agent charges the customer. Agents acting in their own name or as a principal must account for VAT under the Tour Operators' Margin Scheme (TOMS), although exceptions apply for travel agents that hold a franchise. Under the TOMS, a VAT-registered travel agent must account for VAT on the difference between the price they paid to the supplier of the services, and the price at which they sell them on to the customer - the margin. Go to for more information about the TOMS. VAT rates on package holiday components vary depending on the type of component. For example, admission to some cultural venues including art galleries and museums is exempt from VAT, passenger transport in a vehicle, aircraft or boat that carries at least ten passengers is zerorated for VAT, and hotel accommodation is standard-rated for VAT. BOP247 Travel Agent Page 15 of 22

16 Privacy and data protection To comply with the Data Protection Act 1998 (DPA), any personal details or information about customers that the travel agent holds should be stored securely, either manually or electronically, fairly and lawfully processed, and used only for their clearly intended purpose. Travel agents should also check with the Information Commissioner's Office (ICO) to see whether they should themselves register as a data controller under the Act. Registration fees are currently 35 per year. Go to for details. The ICO provides a guide to complying with the DPA, which can be viewed at for-organisations/guide-to-data-protection. Providing travel insurance The provision of insurance, including travel insurance, is strictly regulated in the UK. Travel agents involved in selling travel insurance that is connected to their business (known as Connected Travel Insurance, or CTI) may need to be authorised by the Financial Conduct Authority (FCA), depending on their involvement: Travel agents who pass customer contact details to a broker/insurer must be authorised as an Introducer Appointed Representative (IAR). Travel agents who act as a channel for the transmission of information between customers and brokers/insurers or assist customers to complete applications for insurance are likely to be deemed as arranging insurance and will need to be authorised as an Appointed Representative (AR). Travel agents recommending whether or not a customer should take out a specific CTI product must be authorised by the FCA. Authorisation is not required for travel agents who advise customers that they should take out travel insurance, provided that no specific CTI product is recommended, as the agent is exempt from the authorisation requirement because they are simply providing 'incidental information'. This exemption applies regardless of whether the agent receives commission on subsequent sales. Go to for more information about authorisation requirements. IARs can only introduce customers to brokers/insurers, while ARs can arrange insurance themselves, acting as an agent of a principal insurer/broker. In order to become an AR, there must be a written contract between the travel agent and the insurer/broker. Go to for more information about becoming an AR. Go to for an example of a broker offering AR and IAR status to travel agents and other travel organisers. The Association of British Insurers (ABI) has a list of members, some of which provide AR and IAR status, which can be viewed at BOP247 Travel Agent Page 16 of 22

17 Currency exchange Under the Money Laundering Regulations 2007, a travel agent who provides foreign currency exchange services must usually be registered with HMRC as a Money Services Business (MSB). However, travel agents who exchange currency only on a limited basis do not need to register, provided: Their turnover from money service activities is less than 64,000 a year or less than 5% of their annual turnover. Currency exchanges worth more than 1,000 are limited to one per customer. The money service activities are secondary to the main business and only available to its customers and not to the general public. The business is not operating as a Trust or Company Provider or an Accountancy Service Provider. Go to for more information about registering as a MSB. Trade associations Membership of a trade association can provide a wide range of business benefits. Relevant associations include: ABTA ( which represents the UK's travel industry. Travel agents can join as 'principal' members, and benefit from access to training, industry statistics, and up-to-date information about worldwide holiday destinations. Annual membership fees depend on turnover, and start at 817 for agents with a turnover of up to 500,000. An application fee of 330 and a joining fee of 1,200 are also payable, and members without an ATOL must pay a minimum of 300 towards protecting client money. The Travel Trust Association (TTA, which represents the UK's independent travel industry, including independent travel agents. The TTA is also the only body authorised to provide franchise ATOLs, which are available to TTA members only, at a considerably lower cost than small business or standard ATOLs, and provide protection for up to 20,000 flights per year. Details of the annual membership fee are available on request from the TTA. The Association of Independent Tour Operators Agents (AITO Agents, which is a sub-group of the Association of Independent Tour Operators that only accepts specialist independent travel agents as members. Further details about the strict membership entry requirements are available on request from AITO Agents. The ABTA Code of Conduct Members of ABTA must adhere to its Code of Conduct, Standards on Brochures and Booking Conditions and Standards on Websites and Online Trading. Both sets of standards are set out in guidance to the Code and require travel agents to ensure: Brochures include the month and year of publication, and the edition number on the front cover. BOP247 Travel Agent Page 17 of 22

18 Brochures indicate whether services advertised in brochures are provided by firms that are members of ABTA or not. Travel websites provide details of their trading name, address, address and telephone number, their usual hours of business and their ABTA membership number, as well as general information about the passport and visa requirements for each destination advertised. The full Code and guidance can be downloaded from Accreditation schemes Membership of an accreditation or quality assurance scheme can demonstrate to potential customers that the travel agent meets minimum professional standards. Relevant schemes include: The Green Tourism Business Scheme (GTBS, which is a sustainable tourism certification scheme for tourism providers across the UK, and is validated by VisitBritain. A travel agent must have undergone a quality assessment by one of the national tourist authorities before it can become a member of the GTBS. The International Air Transport Association (IATA) accreditation scheme, which enables travel agents to become agents of IATA members. IATA is the leading trade body for the world's airlines and represents 250 airlines worldwide. Full IATA accreditation provides travel agents with authorisation to sell both international and domestic air tickets on behalf of IATA-member airlines and provides access to a dedicated billing and payment 'interface' that enables efficient invoicing between agents and airlines. As an alternative to full accreditation, travel agents can join IATA's Travel Industry Designator Service (TIDS), which is a unique code that enables industry suppliers to recognise bookings made by travel agents and speeds up reservations while protecting payments. Registration with the scheme costs around 1,500 Swiss francs (around 1,000) and the annual scheme membership fee starts from around 140 Swiss francs (around 100). Go to services/accreditation-travel/accreditation-travel/pages/index.aspx for more information. Health and safety Under the Management of Health and Safety at Work Regulations 1999, all employers, including those who are self employed, are required to undertake a risk assessment of their workplace and provide employees with adequate health and safety training. The Health and Safety Executive (HSE) publishes guidance for the retail sector at which may be useful for travel agents. According to the HSE, the most common types of accident in a retail environment are slips and trips, manual handling (for example lifting injuries) and falls from height. The Workplace (Health, Safety and Welfare) Regulations 1992 stipulate that workplaces must meet the health, safety and welfare needs of all employees, including those with disabilities. The Regulations stipulate requirements for the provision and maintenance of the workplace and equipment, ventilation, temperature, lighting, cleanliness, space, seating, toilets and washing facilities, and provision of drinking water. BOP247 Travel Agent Page 18 of 22

19 General advertising standards The UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing (CAP) Code relates to the rules in the UK governing standards of 'non-broadcast' advertisements. The CAP Code is administered by the Advertising Standards Authority (ASA, to protect the public from misleading marketing communications. For more information about the CAP Code, go to The general principles that apply under the Code are that adverts should be legal, decent, honest and truthful. The Code includes specific guidance relating to holiday promotions, for example that advertising must not include exaggerations such as '24-hour service' (used to describe a hotel with 24-hour reception). Complaints upheld have included those claiming that a brochure included misleading information by describing a hotel as 'family friendly', which led the complainants to assume that it was located in a quiet area, when it was actually sited among bars and restaurants. The guidance can be viewed at Promotions.aspx. Promotion Opportunities for promoting a travel agency include: Advertising in specialist online directories such as: letmetravel.co.uk ( which provides a free basic listing. Travel Agents Finder ( which provides a free basic listing and charges 10 per year for premium listings. My Travel Directory ( which charges around 10 for a basic listing. Joining See Your Travel Agent (SYTA), which provides a platform for travel agents to talk to potential customers via Skype. Registration is free of charge and a broadband connection speed of at least 1 megabyte per second is recommended ( join_us.php). Joining professional bodies such as ABTA that enable potential customers to search for members online. Go to for an example. Advertising niche holidays in special interest magazines and websites. Building links with local independent tour operators, tour guides, accommodation providers and tourism transport providers. Creating a Facebook business page to encourage customer referrals. Facebook pages can be customised with the travel agent's name, logo and other information, and regularly updated with customers' holiday reviews, photos of new destinations, holiday advice and special offers. Go to and for examples of travel agents with a Facebook business page. Creating a five-minute video sample of a holiday, uploading it onto online video sharing websites such as YouTube and including a link back to the agent's website. Go to BOP247 Travel Agent Page 19 of 22

20 and enter 'travel agent UK family holidays' in the search box for examples of other travel agents doing this. Uploading photographs of destinations to photo-sharing websites such as Flickr ( Tumblr ( and Pinterest ( Go to and enter 'UK travel agent family holidays' in the search box for examples of other travel agents doing this. Participating in professional networks such as LinkedIn ( to gain introductions and referrals. There are several groups for travel agents and other travel professionals on LinkedIn that may provide networking opportunities. Insurance Travel agents require a number of insurance policies including: Public liability insurance, which covers an agent against claims from customers, suppliers and members of the public injured or adversely affected as a result of its activities. Professional indemnity insurance, which covers an agent against claims of negligence, loss of documents or data and breach of confidentiality. Client money protection insurance or Travel Bonds (if the agent is selling package holidays and does not hold an ATOL). Employers' liability insurance, which is mandatory as soon as an agent employs staff. Legal expenses insurance, which provides cover for the defence or pursuance of claims arising from contractual disputes with suppliers and third parties such as tour operators and airlines or landlords, or to defend employment tribunal cases. Building and contents cover for the premises, office and IT systems and equipment against accidental damage, fire, flood, theft and any business interruption arising as a result. Cover for the theft of cash by staff as well as cover for the loss of cash and cheques from the premises. Cover for use of any vehicles for business purposes, which must include a minimum of third party cover. Specialist insurance for travel agents, which includes cover for injuries to customers while they are travelling abroad or on holiday that result from the travel agent's negligence, and Travel Bonds are available from insurers and brokers such as BJP Insurance Brokers ( Towergate Chapman Stevens ( and Vantage ( Legislation This section is intended as a starting point only. It provides an introduction to some of the key legislation that regulates the activities of travel agents. Professional advice about the impact of legislation should always be obtained before making any business decisions. Relevant legislation includes: BOP247 Travel Agent Page 20 of 22