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.

Tour operators face particular concerns as a result of Brexit, due to currency fluctuations and confidence in booking travel abroad. Industry commentators have also warned of potential disruption to flights and to expected changes in financial regulations and payment mechanisms that could occur and affect tour operators if or when the UK leaves the European Union.

The provision of package holidays is strictly regulated under the Package Travel and Linked Travel Arrangements Regulations 2018 (the 2018 PTRs), 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 our guide, Travel Agent.

The UK travel industry is dominated by international tourism firms, such as the TUI Group. 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 legislation that must be complied with and provides sources of further information and support.