Agency business model

The agency business model entails creating a team of specialized experts who can solve clients’ issues. Agencies do not sell products; instead, they provide services and charge a fee for them. 

In the B2B scenario, clients hire an agency to outsource non-core business activities such as marketing, advertising, HR, branding, etc. In the case of a B2C operation, agencies offer individuals services in the fields of finance, real estate, taxes, etc. The agency business model generally falls into the category of service business models, as opposed to manufacturing, retail, eCommerce, and franchise.

In the travel industry, the agency model is contrasted to the merchant model. Multiple businesses can operate on the agency model, including

• both brick-and-mortar and online travel agencies, 
• destination management companies, 
• tour operators, 
• travel management companies, etc.

Travel companies operating on the agency model act as agents between the customer and the service provider (e.g., hotel, airline). They facilitate the booking and collect a commission from the service providers after the customer pays.