How to become a Tour Operator

  • Price: £5.99
  • Published: September 2016
  • Type: Business Opportunity Profile
  • Format: PDF
  • What qualifications and skills are required?
  • Key market issues and trends
  • Trading, commercial and legal issues
  • Legislation
  • Further information

Tour operators source accommodation, transport and other tourism services directly from suppliers, arrange these services into package holidays, which they supply directly to customers and via travel agents. Managing cash flow and profit margins is a major issue for tour operators, who usually organise and advertise packages more than a year in advance and are vulnerable to factors such as changes in fuel costs and currency exchange rates.

Independent tour operators often specialise in holidays to a particular destination, for a particular type of customer or focused on an activity such as horse riding, golf or wine tasting.

The provision of package holidays is strictly regulated under the Package Travel, Package Holidays and Package Tours Regulations 1992, 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. Tour operators selling package holidays including flights, or who sell flights separately, must also hold an Air Travel Organiser's Licence (ATOL).

Tour operators should not be confused with travel agents. While tour operators purchase services to resell as part of a package holiday, travel agents act as agents for suppliers, rather than purchasing services directly. For more information about travel agents, see BOP 247, Travel Agent.

The UK travel industry is dominated by international tourism firms, such as Thomas Cook and TUI Group (the parent company of Thomson Holidays). These organisations operate as both tour operators and travel agents, and also own airlines, hotels and cruise liners.

This profile provides information about starting up and trading as an independent tour operator. It describes the skills required, the training available, the current market trends and the key trading issues. It also explains the main legislation that must be complied with and provides sources of further information and support.

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