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Destination Management Companies vs. Tour Operators: What’s the Difference

DMC vs Tour Operators

Destination Management Companies vs. Tour Operators: What’s the Difference

The travel industry is a booming one, and one that is going through constant changes and metamorphoses. In the age of internet, more and more people are becoming aware of how travel works, and how to plan their own trips. Between online travel agents, travel publications, travel apps, and a plethora of travel bloggers, most of the travel industry clientele is familiarizing itself of the working parts of any trip. Many are doing this out of curiosity, and to cut costs on middle men. However, many are also doing it to further understand the industry and how to bring disruptive changes to it.

So, as far as travel jargons are concerned, how different are destination management companies and tour operators? The two terms are commonly found in discussions of travel, particularly travel abroad and/or to unfamiliar, off-the-beat destinations. Given the lack of readily available information on these locations, many travel companies and travelers rely on destination management companies (DMCs) or tour operators. But how do you know which one to choose, and what their different roles are? We’re here to help you with that.

What is a Destination Management Company (DMC)?

As the name suggests, destination management companies – also known as DMCs – help with management at the destination/location. They are usually third-party companies that work directly with travel agents or event planners/corporates.

DMCs act as both executors, but also as knowledge banks, since they have the best local connections, deals, and know-how of how things work at the destination. From accounting, to logistics and execution, to securing bookings and transportation – they help in the flawlessly executing an itinerary.

What is a Tour Operator?

A tour operator is one who comes up with their own holiday itinerary and sells it as a package. These packages come in the form of fixed itineraries, meals, transportation, and prices. All the logistics and operations are handled by the tour operator, and the customer has to simply purchase the package from the operator in order to avail it.

This is not the same thing as a travel agent or designer, who sells packages or holidays either on behalf of a tour operator, or by combining packages from different operators. Tour operators only sell their own work, and take full liability for everything included within their trip. A tour operator may take the help of a DMC to create a package, but ultimately they handle the client relations and trip execution.

Which one is right for my travel needs?

As mentioned, the strengths and expertise of DMCs lies in their ability to execute large-scale travel plans, group events, and connecting others with local guides and experts. Since their work takes place on a larger scale, they are more likely to work in a business-to-business (B2B) arrangement. These can include travel agents and operators, but also companies organizing foreign events and sending delegations abroad. If you’re a travel agency, a corporate travel office, or an event management company, then a DMC is the correct choice to handle your travel needs.

However, for smaller tourist groups and leisure travelers, a travel agency or tour operator is a better choice. This is because a trip on a smaller scale does not require that degree of end-to-end management on the customer’s end. While your agent may use a DMC to provide you with authentic information about a destination, the experience and itinerary is something that can be handled in the form of a package or customized itinerary without directly being in touch with a DMC. Tour operators are a better choice for business-to-client (B2C) needs.

Ultimately, it is about making the choice about how you want your trip. Tour operators also have a degree of rigidity in their packages, but can have a lot of personal needs met for clients looking to travel on their own terms. Similarly, customized packages are more suited for travel agents who work with operators and DMCs. However, personally taking on logistical execution of a large event at a place you have little information about is not a gamble that works well. In that case, opting for a DMC is a much better choice.

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