How Do Tour Companies Operate?

How do tour operators work?

Tour operators help to save holidaymakers time and money by combining most aspects of a holiday into one simple package.  This usually includes:

  • Transport
  • Entertainment and other leisure activities
  • Accommodation
  • Some will also include food and drink as part of the package

Most of the time, tour operators then put together these packages and sell them to travel agents, where customers then buy these holidays from. However, there does exist some tour operator companies who will be involved in this process too.

Specialist tour operators

There is practically a tour operator company for almost any type of holiday you wish to go on
Some tour operators choose to specialise in a particular area of interest, for example:

  • Certain tour operators will specifically deal with backpacking tours, such as STA Travel
  • Others may put together packages for sightseeing purposes, such as tours for Christians, which organises trips for holidaymakers to destinations across the world that are of biblical religious significance, such as Israel, Turkey and Jordan
  • There are also domestic tours offered by companies including Haven Holidays, where holiday destinations are offered within the country where you already live. This could be in the form of tours of national parks or visiting places of historical significance
  • Other tour operators will specialise on holidays for solo travellers, such as, or
  • Some tour operators will focus on a particular age group, such as the 18-30 category, or holidays for over 50s such as Saga Holidays

How do tour operators make money?

Tour operators make their money in various ways, but generally speaking, they will negotiate net rates with suppliers and then add margins to the package for customers. For example, for a tour operator that includes flights in their package, the company may negotiate flight prices with airlines as they are buying so many plane tickets all at once. Once a discount has been obtained, an additional fee is added to the package to holidaymakers. This is to cover other costs that tour operators must pay for and to make the company profitable.

For example, all tour operators must comply with insurance regulations. Tour operators must have :

  • An Air Travel Organisers’ Licensing (ATOL) Licence if the package includes flights, which means that travellers do not end up stranded abroad or losing their money, and in the event of a tour operators failure assistance will be provided
  • Public liability insurance
  • An Association of British Travel Agents protection bond (if they are a domestic operator)

All tour operators must also comply with 1992 package travel regulations.  This means that tour operators must ensure that the holiday package is exactly how it is described in a brochure or online. Failure to do so can end up with a fine.The aforementioned insurance regulations are something you should look out for when choosing a company, as it is the tour operators responsibility to make sure you as a traveller are safe.

What are the benefits of using a tour operator?

There are different advantages to choosing to go with a tour operator, for example:


One of the main reasons people decide to go with a tour operator is that these companies have considerable experience of the country. This can be particularly beneficial if you are interested in deepening your knowledge of the area you area you are visiting. In addition, you are likely to benefit from a company having compiled reputable contacts in the country and having spent years knowing the place like the back of their hand, which ensures that you get to see and experience the very best the country has to offer.


Having nearly all aspects of your holiday organised at once by a knowledgeable tour operator is of course, extremely convenient and a huge advantage when it comes to tour companies. We all know how stressful trying to organise a holiday can be, so why not choose a tour company who can alleviate that pressure,  and so you can relax a little?


Peace of mind has to be one of the main benefits of going with a (reputable) tour operator. You can rely on their wealth of knowledge of the country you are going to visit, and in addition, you know that if something goes wrong, they will do everything in their power to resolve the issue as soon as possible as you are their responsibility.


Booking transportation, transfers, day tours, tour guides, accommodation, and leisure activities separately can end up becoming very costly. More often than not, choosing to go with a tour operator means that you will get value for money as tour operators can buy in bulk for flights, meaning you will likely to receive a better rate than you would if booked online individually yourself. This will also save time too, with everything having been organised by just one company.