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What is a Travel Agency? Types, Purpose, Function, Services

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The travel agency business is now something that most people want to do.

The main purpose of a travel agency is to make planning a trip easier and more useful for their customers by giving them information and making reservations .

Flights, hotels, transportation, trips, and other events can all be booked through the travel company.

If you learn about tour-related ideas and get knowledge from these articles, you’ll be able to start your travel agency in the travel industry. 

Table of contents

What is a travel agency, 1. traditional travel agencies, 2. online travel agencies, 3. corporate travel operators, 4. consolidators, 5. franchise travel services, 1. convenience, 2. expertise and advice, 3. access to deals and discounts, 4. risk management, 5. customer services, 1. travel planning, 2. booking services, 3. customized itineraries, 4. travel documentation, 5. emergency support, 6. customer services, services offered by travel agency, 1. booking services, 2. information and advice, 3. customer services, 4. negotiation and coordination, differences between travel agency and travel agent.

define travel agency

A travel agency is a business that helps people and groups choose, plan, and book travel-related services . Flights, hotels, rides, trips, sports, and other things can be a part of these services.

Most travel companies know about a lot of different trips that their clients can take that fit their wants and budgets.

A lot of travel and tour operators also hire people called tour agents who know a lot about important things like visa rules, places to visit, and travel trends. 

They plan and organize everything so that their clients’ trips are as easy, fun, and stress-free as possible.

Explore the beginner’s guide to launch your travel agency

Types of Travel Agency

types of travel operator-WP Travel

Several types of travel agencies meet the wants and tastes of different travelers.

These are the most common travel agencies related to the travel industry:

These agencies are physical office companies where customers can go and talk to the tour planners. They give specialized services and often a wide range of trip needs.

Online Travel Agencies(OTAs) run the online trip business, where their websites or mobile apps provide tourists with book flights, rooms, rental cars, and other trip services. Expedia and Booking.com are some examples.

The corporate travel service makes trip plans for companies and groups. They take care of bookings for businesses, make deals, and offer services like keeping track of costs.

Consolidators buy a large number of plane tickets at a discount, they sell them at a lower price to travel companies or directly to customers.

Franchise companies work under a bigger brand name and use marketing, technology, and support systems in the travel industry that have already been set up. 

Within the franchise network, owners of travel companies get the training and tools they need to run their businesses.

Purposes of Travel Agency

The main purpose of travel agencies is to facilitate and enhance the tour experiences for individuals and groups. 

Travel companies try to make planning a trip easier by letting people book flights, hotels, transportation, events, and other services related to travel all in one place. 

Trip planners hire knowledgeable agents who can offer expert advice and recommendations based on their suggestions of different places or destinations.

Similarly, travel agents shared their experiences of various destinations, travel trends, visa requirements and more.

Airlines, hotels, ship lines, tour operators, and other travel companies often offer deals, discounts, and packages that only travel agencies can get.

They can help customers get the most for their money and save money on their trip costs by taking advantage of deals.

Travel agencies help mitigate risks associated with travel by giving travelers information or knowledge on safety, health issues, and security in different places.

Travel agencies or companies make sure their clients are happy by giving each one of them high-quality service and individual care.

Overall, the travel company’s main goal is to make planning a trip easier, more fun, and less stressful for their costumes by giving them advice, making things easier.

What does Travel Agency do?

Travel agency works, services

Many services travel agencies offer to make it easier and better for people and groups to trip.

One of the things that a travel agency does is the following:

Travel agencies support the client in planning their trips by talking about their tastes, hobbies, income, and any special requirements they may have.  

These companies are called travel agents that help people book flights, hotels, rental cars, airport transfers, trips, events, and other services related to travel. 

They can use online tools and scheduling systems to get reservations for their clients.

Most tour operators make personalized trip plans based on what their clients want and what they’re interested in. 

It supports you on trip documents like passports, visas, travel insurance, and any other paperwork that is needed is available from travel companies. 

Before a client leaves on a trip, they make sure that all of their paperwork is in order.

Travel companies are there to help their customers in case of accidents or other problems that come up during their trip. 

In this case, they might rebook flights, arrange alternative accommodations, or give advice on medical help or legal issues.

Tour Operators prioritize customer happiness first by giving each client great services and individual care.

services offered

There are a lot of services travel agencies provide to meet the news and preferences of travelers. 

Trip planner aims to ease the trip planning process, provide expert advice and support, and ensure a smooth and enjoyable travel experience for their clients.

These are some common services provided by travel agencies.

  • Flight Booking
  • Accommodation Booking
  • Transportation Services
  • Tour Packages
  • Cruise Booking 
  • Travel Insurance
  • Visa Assistance
  • Destination Recommendations
  • Emergency Assistance

Overall, the travel agency’s purpose is to ease the trip schedule process, deliver expert advice and support, and provide smooth and enjoyable trip experiences for their customers.

Let’s launch your travel booking website today

Functions of the Travel Agency

The main function of a travel agency revolves around assisting and arranging various parts of travel and people and groups. 

The purpose of a travel agency is to ease the trip planning process, provide expert advice and support, and improve the entire trip experience for their customers.

Here’s an overview of the key tasks of a travel agency:

Travel agencies handle the planning process for flights, lodgings, transportation, trips, events, and other travel-related services.

Most travel agency provides guidance and formation on different parts of the travel, visa requirements, and health and safety measures. 

Travel companies put customer happiness first by giving each client great service and individual care.

The travel agencies deal with tour operator suppliers, including airlines, trip suppliers, and hotel and tour operators to secure good terms and rates for their clients.

A trip agency is a business company that offers other-related services, while a trip agent is a person hired by or connected with a tour operator who helps clients with their trip planning and bookings. 

These are some key differences between a travel agency and a travel agent:

differences between travel agency and travel agent

In summary, travel agencies may have multiple trip agents working under their umbrella to help the clients, while a tour agent may work separately as a part of a bigger company.

Travel companies are essential businesses in the travel industry, acting as intermediaries between tourists and travel providers. They offer a range of services to ease trip planning and booking.

These companies can take the form of standard brick-and-mortar businesses, or online-based platforms. 

Each type of service responds to different tastes and wants, providing accessibility to a wide range of travel-related customers. 

Regardless of their form, the primary goal of travel companies stays consistent: to provide ease, knowledge, and support throughout the trip process. 

They give personalized systems to help, access to exclusive deals, and 24/7 assistance before, during, and after the trip.

By offering personalized solutions and reducing travel risks, travel companies play a crucial role in allowing enjoyable and stress-free travel experiences for individuals and groups.

There are two types of agencies, retail tour operators and wholesale travel agencies.  These travel companies, as well as tour providers, operate as intermediaries. The main goal is the buying and selling process in the travel business.

The global market size of the travel agency industry is estimated at nearly 296 billion U.S. dollars as of January 2024. ( Source )

Overall, roughly 589 thousand travel companies operated in the tourism industry, with employment reaching approximately three million.

tourist agency meaning

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travel agency

Definition of travel agency

called also travel bureau

Examples of travel agency in a Sentence

These examples are programmatically compiled from various online sources to illustrate current usage of the word 'travel agency.' Any opinions expressed in the examples do not represent those of Merriam-Webster or its editors. Send us feedback about these examples.

Word History

1898, in the meaning defined above

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Dictionary Entries Near travel agency

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Cite this Entry

“Travel agency.” Merriam-Webster.com Dictionary , Merriam-Webster, https://www.merriam-webster.com/dictionary/travel%20agency. Accessed 6 Jul. 2024.

Kids Definition

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Travel Agency

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 product providers/principles and in return gets a commission. Technically, a travel agent is an owner or manage r of an agency, but other employees are responsible for advising tourists and selling packages tours/individual components of travel products.

A travel agent may be an individual /firm or corporation which is commonly known as a travel agency . An agency means the office of travel agent or organization where all travel goods and services are assembled and coordinated for the smooth conduct of travel agency business.

Travel agency is one of the most important organizations in the tourism private sector which plays a significant and crucial role in the entire process of developing and promoting tourism in the country or at a destination. It is a travel agency which packages and processes all the attractions, accesses, amenities and ancillary services of a country and present them to tourists. That’s why travel agency is known as ‘ image builder ‘ of a country.

A prospective travel agency is one which makes arrangements of travel tickets (air, rail, road, and sea); travel documents (passports, visa and other documents required to travel); accommodation, entertainment, and other travel-related services from principle suppliers. It may also secure travel insurance, foreign currency for traveling people.

History of Travel Agency

The first Travel Agency of the world was established by Thomas Cook in 1845 in England. The use of the term travel trade dates back from the early years of the 19th century, but this should not obscure the fact that what we today describe as travel trade (travel agency and tour operation business) was taking place much earlier in history.

Throughout history, there was travel middleman who helped the merchants traveling for trade and others who traveled for religious purposes.

In 1841 a fortunate day comes in the history of travel trade when Thomas Cook , as secretary of South Midland Temperance Association, organized a trip by a train for 570 members for his association to the distance of 22 miles. He bought railway tickets in bulk to sell them to people.

The experiment was successful and everybody was exultant. Mr. Cook had done his job on a no-profit basis. But, incidentally, It gave him a new idea and turned it into a tour business.

Four years later in 1845 , he set up a ‘ World’s First Travel Agency ‘ to organize excursions.  Due to this innovative approach, Mr. Thomas Cook is known as the Father of Travel Agency Business . He co-ordinated railway and steamship excursions throughout England, Scotland and Europe.

However, the railways only gave him a 5% commission which was not enough to meet his overheads, so he decided to diversify this business into tour operation .

In 1855 Mr. Cook started operating package tours . He conducted the world’s first international tour from England to Paris.

Types of Travel Agency

Travel agencies are basically categorized into two types-: Retail Travel Agenc y and Wholesale Travel Agency .

Retail Travel Agency

A retail travel agency sells tourists products directly to the public on the behalf of the products suppliers and in return get commissions. Some package tour is sold in two ways i.e., on a commission basis and mark up the price.

When a travel agency sells a tour on the marked-up price it means that first, it markup the cost of the tour and then sell it at a higher rate. The markup price is the difference between retail price and wholesale cost.

Definitions of Retail Travel Agency

According to Airlines Reporting Corporation (ARC) a retail travel agency is defined as ” a business that performs the following functions: quotes fares, rates, make reservations, arrange travel tickets and accommodation, arrange travel insurance, foreign currency, documents and accepts payments.”

According to SARC (1967), ” retail travel agency business consists of the activities involved in selling tourism products/services directly to the tourists and performs normal functions such as issuing air tickets, making accommodation and transportation reservation, providing specialized services, and accepting and making payments.”

The main source of the revenue for the travel agency is the commission received from the vendors. However, the rate of the commission differs from organization to organization an travel component to the travel component.

A travel agency receives appx. 95% of their revenue from the commission, and the remaining 5% from consultancy services and others.

Wholesale Travel Agency

These agencies are specialized in organizing package tours, which are marketed to the customers/tourists through the network of a retail travel agency or directly to the prospective clients ( if wholesale travel agency has a retail division). A wholesale travel agency purchases tourists’ product components in the bulk and designs tour packages.

Sometimes, a wholesale travel agency buys travel components from the vendor in bulk and resell them to other travel business originations.

Wholesale travel agencies assemble package holidays and sell them to clients through retail travel agencies. A typical package tour includes – air tickets, accommodation, and something other services may also be included in it such as entertainment, sightseeing, and sports activities, etc.

These packages are referred to as ‘package tours’ most of these tours include the services of escorts but a few are sold to people who wish to travel independently.

Now a question arises – How a wholesale travel agency generates profits?

Generally, a wholesaler receives volume discounts from the principal suppliers because a wholesaler might agree to purchase a large number of seats from a particular airline or reserve a large number of rooms at a particular hotel or resort.

Practically, a wholesaler who sells package vacations/tours is called a Tour Operator .  However, technically there is a difference between a wholesaler and a tour operator. A wholesaler who sells tourists products individually without assembling them into a package tour is called a Consolidator .

Mostly, these are specialized in particular product components such as air tickets, accommodation, and conferences, and conventions, etc.

Difference between Wholesale Travel Agencies and Tour operators

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 these two essentially different:

  • Wholesale travel agency does not sell directly to the public, while tour operators do sell directly to clients.
  • A wholesale travel agency usually combines, assembles and contacts for existing travel services to formulate a new travel product she has his own one or more components of travel product i.e. ‘ inclusive tours.’
  • Wholesale travel agencies are less inclined than tour operators to perform ground services i.e. handling agency or ground operators.
  • A wholesale travel agency may deal with one component of travel product while a tour operator offers a variety of tour programmes.
  • The size of the business is large in the case of tour operators in comparison to a wholesale travel agency.

Features and Importance of the Travel Agency

Travel agency plays an important role in the travel sector business. Some most important features and importance of the travel agency business are following as:-

  • An important link between the clients and principal suppliers.
  • Image-Builder.
  • Ensures rapid travel services.
  • Provider of authentic and reliable travel information.
  • A social a continuous process.
  • Establishes a good relationship with clients and vendors.

These are the most important features of the Travel Agency Business.

Functions and Services of Travel Agency

Today, Travel Agencies have been recognized as a vital component of travel and tourism and have become an integral part of the travel and tourism industry at globally. They account for more than 90% of international and 70% of domestic tourist traffic

Further, more than 60%  of all travel agency revenues are derived from business travel. Most travel agencies sell both commercial and leisure travel but there are many travel agencies that only specialized in one sector or the other.

The operation of each travel agency is based on the scope of its activities and organizational size. Here we discuss the functions of a large scale travel agency that performs all types of activities such as Retail travel agency, wholesaling and tour operations, etc. The main function of a large-scale travel agency are:

Travel Information

Whatever the size of a travel agency, it has to provide necessary travel information to tourists. A travel agency must give up-to-date, accurate, and timely information regarding destinations mode of travel, accommodation, sight-seeing, shopping, immigration, passport, visa, customs clearance and procedure, health and security rules, and various permits required to travel in particular areas, etc.

Itinerary Preparation

The term tourists itinerary is used to identify the origin, destination and all the stopping points in a traveler’s tours. It is a composition of various elements and designed after a detailed study of the market. Travel agencies prepare an itinerary for tour packages.

Airline Ticketing and Reservation

A travel agency sells a variety of tourism products. Airline ticketing and reservation is still a major source of revenue. Travel agencies perform a function of airline ticketing and reservation on behalf of various airlines.

Tour Packaging and Costing

Travel agencies prepare a tour package and sell them to tourists. The coasting and pricing of tour packages depend to a large extent on the ability of travel agents as to how effectively he is able to negotiate with the principal suppliers.

Reservation

It is a very important function of all types of travel agencies. A travel agency consistently makes linkage with the accommodation sector, transport sector and other entertainment organizations to reserve rooms, and seats in the cultural programs and transportation.

Travel Insurance

Some large-scale travel agencies perform additional functions to serve their clients. Travel insurance protects travelers against the person as well as baggage losses resulting from a wide range of travel-related happenings and problems.

Currency Services

Approved travel agency authorized by Govt. body provides currency exchange services to tourists.

Organization of Conference/Conventions

Large-scale travel agencies offer a complete convention/conference package which includes registration of the participants at the venue to be picked up for dropped to the airport/hotel, overhead projectors, slide projectors, TV, VCR, information counter, sightseeing, etc.

Travel Agency Linkages and Integration

Basically, a travel agency serves two types of clients: business travelers and leisure travelers. Incidentally, the requirements of these tourists are different and an agency has to assemble or purchase-related components from the principal suppliers to cater to their needs.

Essentially, travel agencies maintain close ties with Airlines, hotels, car rentals, banks, insurance companies, railways, government, trade associations, foreign tour operators and travel agents, ground operators, cruise companies, and tourism educational institutes.

Tourism Teacher

What does a travel agency do?

What does a travel agency do? You will almost definitely have heard of travel agencies if you have ever booked a holiday or have an interest in the tourism industry. But what exactly is a travel agency, and what do they do?

What is a travel agency?

Independent travel agents, online travel agencies , visitor information centres, other types of travel agency, what can a travel agency book, big names in the travel agency industry, travel agency business model, a brief timeline of travel agencies, further reading.

A travel agency is essentially the ‘middle man’ between travel companies and the general public i.e consumers. They book all sorts of travel-related experiences for customers on behalf of larger companies.

The main aim of a travel agency is to make the booking process simpler for the public, who might lack the time or confidence to book trips themselves.

Types of travel agencies

So what does a travel agency do? It mostly depends on what type of travel agency you’re looking at. This can be broken down into the following types…

Jobs in travel and tourism

An independent travel agent is the type you’ll see on Instagram or with their own Facebook pages, their feeds full of snaps from Amsterdam, Bali , or New York City. They tend to partner with a ‘host agency’, who will take a portion of the agents’ commission themselves in exchange for letting them use the company software and access their commission. Travel agents are also able to recruit other people, and in turn get a cut of their commission too. In this way, independent travel agencies tend to be a type of multi-level marketing scheme.

Online travel agencies are much more consumer-focused. They allow individual customers to book their own travel, but as a package or with the added protection from ATOL and ABTA. They act as a broker, allowing you to input your dates, desired destination(s), what board basis you wish to travel and so on. The site then pulls together a package deal, allowing you to book everything in one go with access to booking details so you can make amendments and keep up to date with any changes.

While these don’t offer flights and hotels generally, visitor or tourist information centres are found within cities or tourist destinations. They provide advice, maps, discounts and booking services for tours and excursions such as open top bus tours. These are usually run by local or national governments, or specific tourist boards. They are great for recommendations when travelling somewhere new!

Hotel concierge services work in this same way, often getting commission for booking trips for guests.

I won’t go into too much detail here, but there are other types of travel agencies too. You can learn more in this post about the different types of travel agents .

Overall, what does a travel agency do?

A travel agency does a multitude of things. During non-peak times, they will mostly spend their days researching new or upcoming tourist destinations and what makes them so great, advertising them as somewhere people can book future holidays to.

Travel agencies are also required to keep up to date with safety information for various destinations. They do plenty of research meaning they can tell customers about the best places to go, what they can do while they’re there, what documents they need and so on. This is particularly important now, as travel advice is ever-changing with regards to political conflicts and public health.

But during peak times and in the run-up to these times, travel agents will be busy actually booking trips. Nowadays they mostly do everything via the computer, using the internet to put holiday packages together which include at least the basics – flights and accommodation – for one price. However, they also call travel companies directly in order to get better deals or to see if there are rooms or seats available which might not be showing online for whatever reason. Because of this, travel agencies and agents tend to have great relationships with particular brands.

What does a travel agency do?

Travel agents can book much more than just flights and accommodation. Not all of them can book all of these experiences or features, but it is definitely worth asking if you are using a travel agency to book your next vacation.

  • Flights – short haul, long haul, & various classes
  • Accommodation – hotels, apartments, and villas
  • Airport transfers
  • Executive airport lounges
  • Airport parking
  • Cruises – river and ocean
  • Car rentals
  • Travel insurance
  • Excursions and tours
  • Taxi services
  • Currency exchange
  • Train tickets
  • Theme park & water park tickets e.g Disneyworld and Universal in Orlando, Florida

They will also advise on public transport services and timetables, as well as arranging for medical items to be delivered and any access requests you have.

Most travel agencies are actually online, and many of us use them regularly. There are still some in-store travel agencies, but with the impact of both modernisation and the Covid-19 pandemic the majority are online now. Below are some big names within the industry which you will likely recognise.

Expedia – founded by Microsoft in 2001

Cruise.com – specifically for booking cruises

American Express Travel – allows you to earn & use points when booking

Audley Travel – the largest operator in tailor-made travel

loveholidays – a British company founded in 2012

Lastminute.com – offering cheaper travel when you book last minute

Kiwi.com – specifically for booking air and ground transport

Booking Holdings – these are a travel technology company who own Booking.com, Cheapflights, OpenTable and more

Now we’ve looked at the question of ‘ what is a travel agency’, let’s take a look at the generic business model. Generally, travel agencies work in one of two ways. The first way is by receiving commission from the companies they book experiences with for customers. For example, if you were to use a travel agency to book your next holiday which included flights, a hotel stay and a transfer to and from the airport this is three separate components which will be booked through three different companies. The travel agency will receive commission from each of the three companies. There may be other benefits and incentives offered by the travel companies. Commission rates and these benefits mean that travel agencies are more likely to use some companies more so than others who might offer them less in exchange.

Alternatively, travel agencies will charge a fee for their services. This makes it more expensive for consumers to book trips through travel agents and agencies than it would to book themselves. However, as some people don’t feel confident booking themselves, many are happy to pay this additional cost. Holidays booked through travel agencies often come with the added benefit of being ATOL and ABTA protected.

  • Cox & Kings were the first travel agency, was established in 1758
  • Abreu Agency was the first public travel agency, was established in 1840
  • Thomas Cook , one of the most famous travel agencies, was founded in 1841
  • Brownwell Travel, the first travel agency in the US, was established in 1895
  • Nippon Travel Agency was the first travel agency in Japan, established in 1905
  • Intourist became the official state travel agency of the Soviet Union in 1929
  • The first travel agency in Australia which went on to become Helloworld Travel, was established in 1951
  • Henderson Travel Service became the first Black-owned travel agency, taking Black tourists to various African countries, in 1955
  • American Airlines’ Sabre unit created a direct-to=consumer booking tool for flights, hotels and cars in the early 1980s
  • Mode Tour became the first travel agency in South Korea, established in 1989
  • Hotel Reservations Network, which went on to become Hotels.com, was established in 1991 – at this point, hotels didn’t pay a lot of commission so it didn’t take off
  • Travelweb.com, the first online hotel directory, launched in 1994
  • The Internet Travel Network sold the first airline ticket online in 1995
  • Expedia launched in 1996, funded by Microsoft, and are now one of the biggest travel agencies 
  • In 2007, as the iPhone was released, more bookings were made online because mobile apps were now in use
  • Airbnb was established in 2008
  • HotelTonight, specifically for instant same-day hotel room bookings, was launched in 2011

If you enjoyed this article explaining what does a travel agency do, then I am sure you will enjoy these articles too-

  • What is a tour operator and how does it work?
  • The 3 types of travel and tourism organisations
  • 150 types of tourism! The ultimate tourism glossary
  • The 9 types of tourist destinations
  • 50 fascinating facts about the travel and tourism industry

Cambridge Dictionary

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Meaning of travel agency in English

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  • air corridor
  • amenity kit
  • caravanning
  • high season
  • package tour
  • phrase book
  • post-holiday
  • put something up
  • ranger station
  • tourist trap

You can also find related words, phrases, and synonyms in the topics:

travel agency | American Dictionary

Travel agency | business english, examples of travel agency, translations of travel agency.

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  1. What is a Travel Agency? Types, Purpose, Function, Services

    Travel agent works for a travel agency and helps customers plan and book their trips. It provides various services, like helping people get visas and booking flights and hotels. They help their clients make all the plans, schedule, documentations they need for their trip.

  2. Travel agency Definition & Meaning - Merriam-Webster

    The meaning of TRAVEL AGENCY is an agency engaged in selling and arranging transportation, accommodations, tours, and trips for travelers —called also travel bureau.

  3. Travel agency - Wikipedia

    A travel agency is a private retailer or public service that provides travel and tourism-related services to the general public on behalf of accommodation or travel suppliers to offer different kinds of travelling packages for each destination.

  4. Travel Agency - Definitions, Types, and Function or Linkages

    It is a travel agency which packages and processes all the attractions, accesses, amenities and ancillary services of a country and present them to tourists. That’s why travel agency is known as ‘image builder‘ of a country.

  5. What Does A Travel Agency Do? - Tourism Teacher

    A travel agency is essentially the ‘middle man’ between travel companies and the general public i.e consumers. They book all sorts of travel-related experiences for customers on behalf of larger companies.

  6. TRAVEL AGENCY | English meaning - Cambridge Dictionary

    TRAVEL AGENCY definition: 1. a company or shop that makes travel arrangements for people 2. a company or shop that makes…. Learn more.