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6. Travel Business Network

Why read this section? Within travel, just about everything about the holiday is delivered by another company, your suppliers. If there is something wrong with the holiday, the fact that it was delivered by your supplier rather than you is irrelevant. As has been said before, customer perception is reality as far as your business is concerned. Therefore, you need to decide which parts of the customer proposition to deliver yourself (in-house), and which to get other companies to deliver for your customers (out of house). Similarly, which parts of the operation will be performed in-house, and which out of house. For some of these components there is little or no choice, like a credit card facility to take customer payment. This is going to be out of house as it will be performed by a financial services company.

What you need to know before you read this section: The basic travel business operations.

The table below lists out the components of the business. It also defines some typical solutions for a start-up tour organiser, an established tour organiser and a home worker. For each component it is either:

  • In: this work is performed in-house
  • Out: this work is performed by another business on behalf of the travel business
  • Not applicable or not utilised: where the component is not used by the business or customer proposition
 
You Start-up tour
organiser
Established
tour
operator
1. Front office
 
 
 
Marketing
 
In
In
Sales
 
In
In
Travel shop
 
-
In
Web presence
 
In
In
 
 
 
 
2. Back office
 
 
 
Booking management
 
In
In
Travel suppliers (see 3)
 
See 3
See 3
Managing finances (see 4)
 
See 4
See 4
Infrastructure and support (See 5)
 
See 5
See 5
 
 
 
 
3. Travel providers
 
 
 
Flights
 
Out
Out
Accommodation
 
Out
In
Car Rentals
 
Out
Out
Attractions
 
Out
In
 
 
 
 
 
 
 
 
4. Banking and finance
 
 
 
Trading account
 
Out
Out
Credit card facilities
 
Out
Out
Capital
 
Out
In
Regulatory requirements
 
Out
In
Accounts and cash flow
 
In
In
 
 
 
 
5. Office infrastructure
 
 
 
Premises
 
In
In
Office furniture 
 
In
In
IT
 
Out
In
Stationary supplies
 
In
In
 

Some tips on designing your company network:

  • There ought to be two lists. The first is those things that you enjoy, do well and have the assets to perform. Those ought to be the in-house components around which you design the business. The second list is those things that have massive set up costs and capabilities which you don’t have. Most of the finance, travel provider components will be out of house. The items that are not on either list are what you should spend time thinking about
  • Be realistic about what you are capable of. Don’t underestimate how much time it can take to run successful sales and marketing campaigns similar to esports bettings
  • Start-up costs will be impacted. Typically taking something in-house will increase control but also increase start-up costs
  • Some parts of the travel business are low profit. Some are more profitable. Don’t end up with a network where everyone else makes all the profit. That might be where you start, but don’t plan to finish there
TTA exists to help other people set up and run their travel businesses. We have years of experience, technology and supplier contracts to help. We are strongly geared towards tour organisers and independent travel agents.
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