Speaking the same language as partners and suppliers is important to make sure you’re on the same page, whether you’re negotiating rates with hotels or setting up contracts. This comprehensive glossary serves as your reference guide to terminology and jargon that tour operators should know.
Next time you’re in a conversation where someone uses a term you’re not familiar with, jump back to this glossary to get a refresher. It can also be a great training tool for your entire team.
Jump to a section
A – B
C – D
E – G
H – I
L – N
O – P
Q – S
T – Z
A
Accommodation
Accommodation is any facility providing overnight lodging for travelers during their journey. When contracting accommodations, tour operators must consider room categories, meal plans, cancellation policies, and seasonal availability.
ADR (Average Daily Rate)
ADR is a key performance metric calculated by dividing total room revenue by the number of rooms sold. Tour operators use ADR to evaluate accommodation profitability and determine package pricing strategies.
Adventure Tourism
Adventure tourism involves exploration or travel, often with elements of perceived risk, physical challenge, or unique experiences. This type of tourism requires specialized insurance coverage and guide certifications but typically commands higher profit margins.
Allotment
Allotment is a block of rooms, seats, or spaces reserved for a tour operator’s use within a specified period. Understanding allotment terms (release periods, payment conditions, minimum guarantees) is crucial for managing inventory and maintaining competitive pricing.
B
B2B (Business to Business)
B2B refers to commercial transactions conducted between businesses rather than with individual consumers. Tour operators often operate in the B2B space when selling through travel agents or partnering with other operators.
Blackout Dates
Blackout dates are specific dates when special offers, discounts, or certain rates are not available. These typically coincide with peak seasons or special events when suppliers can command premium rates.
Booking Engine
A booking engine is a software system for processing and managing reservations across various travel services. An effective booking engine is essential for modern tour operators to handle accommodations, activities, and transportation bookings efficiently.
Bulk Fare
Bulk fare is a discounted rate offered when purchasing large quantities of services or seats. Tour operators can leverage bulk fares to secure better margins and competitive package prices.
C
Charter
Charter is the exclusive hire of transportation, typically aircraft or boats, for a specific period or route. Charter arrangements can provide tour operators with guaranteed capacity and better cost control for high-volume routes.
Commission
Commission is a fee paid to agents or intermediaries for selling travel products, usually calculated as a percentage of the sale price. Understanding commission structures is vital for maintaining profitable relationships with distribution partners.
Connectivity
Connectivity is the technical capability to link different reservation systems and platforms for seamless data exchange. Strong connectivity helps tour operators efficiently manage inventory and distribute products across multiple sales channels.
Consolidator
Consolidator is a company that buys travel services in bulk and resells them to other travel businesses. Consolidators can provide tour operators access to better rates, especially for airfares and hotel rooms.
Customer Relationship Management (CRM)
CRM is a system for managing all customer interactions, booking history, preferences, and communications. A robust CRM helps tour operators deliver personalized service and generate repeat business.
D
Day Tour
A day tour is an organized excursion or activity that begins and ends within the same day, typically lasting between 2-12 hours. These tours are important revenue generators and often serve as add-ons to longer packages or standalone products for local markets.
Double Room
A double room is a room designed to accommodate two people, typically with one double bed or two single beds. Double rooms often serve as the baseline for package pricing and room block calculations.
Demand-Based Pricing
Demand-based pricing is a strategy where rates adjust according to market demand, seasonality, and occupancy levels. Tour operators must factor in demand-based pricing when creating packages and setting customer rates.
DMC (Destination Management Company)
DMC is a local company that provides ground-handling services and manages tours, activities, and logistics in a destination. DMCs are crucial partners for tour operators working in foreign destinations.
DMO/Tourism Board
A DMO/tourism board is an official organization responsible for promoting a destination and supporting tourism development in that area. These organizations are valuable partners for tour operators, as they provide market insights, promotional support, and connections to local suppliers.
Dynamic Packaging
Dynamic packaging is the ability to combine various travel components in real-time to create custom packages. This technology allows tour operators to offer flexible, personalized travel solutions while maintaining competitive pricing.
E
Early Bird
Early bird is a discounted rate offered for early bookings, usually requiring advance payment. Early bird offers help tour operators secure early commitments and better cash flow.
Escorted Tour
An escorted tour is a guided group journey with a professional tour leader accompanying travelers throughout the entire itinerary. These tours require careful logistics planning and skilled tour leaders to ensure consistent quality and customer satisfaction.
Excursion
An excursion is a short trip or tour, typically part of a larger itinerary or available as an add-on option. Well-designed excursions can increase package value and generate additional revenue through in-destination sales.
F
FAM Trip (Familiarization Trip)
FAM trip is a complimentary or reduced-rate trip offered to travel industry professionals to showcase destinations or products. FAM trips are valuable opportunities for tour operators to evaluate new destinations and suppliers firsthand.
FIT (Free Independent Traveler)
FIT is a term used for individuals booking their own travel arrangements rather than participating in group tours. The FIT market requires more flexible booking systems and customizable options.
Fly Drive
A fly drive is a travel package that combines air transportation with a rental car for independent ground transportation. This is particularly popular among FIT travelers seeking flexibility to explore destinations at their own pace.
Front Line Staff
Front-line staff are customer-facing employees who serve as the first point of contact with customers. Well-trained front-line staff are essential for maintaining service quality and handling customer inquiries effectively.
G
GDS (Global Distribution System)
GDS is a worldwide computerized reservation network used to book flights, hotels, and other travel services. GDS connectivity can expand a tour operator’s reach and streamline booking processes.
Ground Handling
Ground handling includes local services at a destination, including transfers, tours, and meet-and-greet services. Reliable ground handling helps ensure smooth operations and customer satisfaction.
Group Rate
Group rate is special pricing offered for larger groups, usually requiring a minimum number of participants. Group travel rates help tour operators maintain margins while offering competitive package prices.
H
High Season
The high season is the peak travel period when demand and rates are at their highest. Careful planning and early booking are essential during high season to secure availability and maintain profitability.
Hospitality
Hospitality is the industry that serves tourists and travelers. It includes accommodation, food service, and other guest services.
I
IATA
IATA is the trade association for the world’s airlines, representing and serving the airline industry. Tour operators must have IATA accreditation to issue airline tickets directly and access standardized airline booking systems.
Inbound Tour Operator
An inbound tour operator is a company specializing in bringing tourists into a country from abroad. Inbound operators need strong relationships with local suppliers and deep destination knowledge.
Incentive Travel
Incentive travel refers to travel rewards offered for business performance, often featuring luxury or unique experiences. The incentive travel market offers higher margins but requires exceptional attention to detail and service quality.
Inventory System
An inventory system is software that manages and tracks the availability of travel products such as hotel rooms, tour seats, and activities in real time. Tour operators rely on robust inventory systems to prevent overbooking, monitor allotments, and maintain accurate availability across all sales channels.
Itinerary
An itinerary is a detailed schedule of a travel program, listing activities, times, and locations. Clear, well-planned itineraries are essential for successful tour operations and customer satisfaction.
L
Load Factor
Load factor is the percentage of occupancy in transport or accommodation relative to total capacity. Understanding load factors can be helpful for optimizing pricing and inventory management.
Low Season
Low season is the off-peak travel period when demand and rates are at their lowest. This period often presents opportunities for tour operators to negotiate better rates and develop special promotions.
Luxury Tour Operator
A luxury tour operator is a company specializing in high-end travel experiences and premium services. This segment requires extensive supplier networks and exceptional attention to detail.
M
MICE (Meetings, Incentives, Conferences, Events)
MICE is a segment of business travel focusing on group events and corporate gatherings. This market requires specialized knowledge of venues and group logistics.
Minimum Stay
Minimum stay is the shortest booking period that a supplier allows during specific periods. These requirements often apply during high season or special events.
Multiday Tour
A multiday tour is an itinerary spanning multiple days with various components including accommodation, transport, and activities. These tours require careful coordination of multiple suppliers and services.
N
NDC (New Distribution Capability)
NDC is a travel industry-supported program launched by IATA for the development of a modern, XML-based data transmission standard. This technology enables tour operators to access rich airline content and ancillary services through direct connections with airlines.
Net Rate
Net rate is the wholesale price before markup, representing the base cost to the tour operator. Understanding net rates is essential for building profitable package prices.
No-Show
A no-show is a booked customer who doesn’t arrive for their reserved service. No-shows can significantly impact profitability and require clear policies and procedures.
O
Occupancy Rate
Occupancy rate is the percentage of rooms or seats filled at any given time. This metric helps operators evaluate performance and adjust pricing strategies.
OTA (Online Travel Agency)
OTA is an internet-based travel booking platform selling various travel services. OTAs are both competitors and potential distribution partners for tour operators.
Outbound Tour Operator
An outbound tour operator is a company specializing in sending tourists abroad from their home country. These operators require strong international supplier networks and destination knowledge.
P
Package Tour
A package tour is a pre-arranged combination of travel services sold at an inclusive price. These products typically combine transport, accommodation, and activities into a single offering.
Partners
Partners are strategic allies in the tourism industry, and they’re essential for service delivery and maintaining successful tour operations.
PAX
PAX is industry terminology for passengers or people in a booking. This term is commonly used in operational documents and communications.
Payment Gateway
A payment gateway is a technology that processes credit card and other electronic payments securely between customers, tour operators, and banks. A reliable payment gateway is essential for tour operators to handle online bookings safely and efficiently while ensuring PCI compliance.
PNR (Passenger Name Record)
PNR is a unique booking record containing traveler details, itineraries, and other relevant booking information. Tour operators use PNRs to track and manage bookings across various systems and suppliers.
Q
Quad Room
A quad room is accommodation designed for four people, typically with multiple beds. These rooms are popular for family travel and group tours.
Queue
A queue is a system within GDS platforms for organizing and managing booking modifications, changes, and tasks. Queue management makes it easier to handle booking updates and customer service requests systematically.
R
Rack Rate
The rack rate is the standard published room rate before any discounts or commissions. This rate serves as the baseline for negotiating contracted rates.
Release Period
The release period is the timeframe when unused allotment returns to the supplier’s inventory. Managing release periods effectively is important for inventory control.
Reseller
A reseller is a business that sells another company’s travel products. Resellers are important distribution partners for expanding market reach.
S
Shoulder Season
Shoulder season is the period between high and low seasons with moderate demand. This period often offers good opportunities for balanced pricing and availability.
SIT (Special Interest Tour)
SIT is a tour focused on a specific theme or activity such as wildlife, photography, or culinary experiences. These specialized products often command premium prices.
Single Room
A single room is accommodation designed for one person. Single room supplements are an important consideration in package pricing.
T
Tour Leader
A tour leader is a travel professional who accompanies and manages a group throughout their journey. Experienced, high-quality tour leaders are essential for successful group tours.
Travel Advisor
A travel advisor is a professional who provides expert travel consultation and planning services. These professionals are important distribution partners for tour operators.
Transfer
A transfer is transportation between two points in a journey, such as from the airport to a hotel.
U
Upgrade
An upgrade is a move to a higher category of service than originally booked. Upgrade policies should be clearly defined in supplier agreements.
V
Voucher
A voucher is a document confirming paid services that customers present to suppliers.
W
Waitlist
A waitlist is a list of customers waiting for availability when a service is fully booked. Effective waitlist management can help maximize sales opportunities.
Y
Yield Management
Yield management is a pricing strategy aimed at maximizing revenue based on supply and demand. This practice is crucial for optimizing profitability across different seasons and market conditions.
Z
Zero Commission
Zero commission refers to a direct booking model with no payment to intermediaries. This model is becoming more common with the growth of direct booking channels.
