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!

What is a Tour Operator?

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.

Types of Tour Operator

1.Inbound Tour Operators

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.

2.Outbound Tour Operators

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.

3.Domestic Tour Operators

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.

4.Receptive Tour Operators

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.

5.Ground Tour Operators

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).

Roles of a Tour Operator

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.

Roles of a Tour Operator
  • 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.
Want to know which country ranks no. 1 in world tourism?

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?

Pros

  • 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:

Cons

  • 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.
Pros and Cons of Tour Operator

Importance of a Tour Operator

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.

Best Tour Operators

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]

RankTour Operator & Travel CompanyTotal Available Tours
1.Bamba Travel11
2.G Adventures31
3.Bindlestiff36
4.Southwest Adventure12
5.Amadeo21
6.Intrepid Travel50
7.BushBuck Wildlife4
8.Contiki17
9.Trafalgar36
10.Infinite Adventures4

Best Tour Operator Software

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:

RankTour Operator Software
1.WP Travel
2.Redzy
3.Peek Pro
4.We Travel
5.Bokun

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

Tour Operator vs Travel Agency

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:

Basis Tour Operator Travel Agency
Primary TasksA tour operator is responsible for planning trips and holiday packages.A travel agency sells holiday packages provided by travel companies.
Number of OptionsSpecialize in a few country destinations to provide tour packages.A travel agency works with many travel companies providing customers with a large variety of packages.
EarningsEarns more profits from each vacation package as they set the initial price.A travel agency earns a commission based on the number of packages they sell.
DependenceWorks independently. They can create packages and choose to market them themselves.A travel agency can’t operate without a travel company since they don’t create trip packages.
ResponsibilityTakes the responsibility of the customers.The travel agency only leads the customer to the company.
Scope of OperationTheir job begins when a client starts the vacation and ends when they return home.A travel agent’s job begins with convincing an undecided tourist and ends when they start the vacation.

Difference Between a Tour Operator and a Travel Agency (Infographics)

Diffrences between Tour Operator and Travel Agency
Want to know more differences between a Tour Operator and a Travel Agent?

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

Frequently Asked Questions

How to become a tour operator?

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.

How does a tour operator package a tour?

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.

How does a tour operator work?

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.

How to start a tour operator business?

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.

Is booking.com a tour operator?

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.