For the average traveler, definitions don’t matter much. You figure out the type of trip you want to take, whip out your credit card and do the deed. It’s really pretty damned simple. But, for every purchase you make, there are countless eyes watching. Nothing nefarious is going on; it’s all actually quite innocent. When you think about how many people rely on your willingness to open your credit card – and how the travel market as a whole is being beat to hell this year – it makes perfect sense that the industry will watch, analyze and try to find new and interesting ways to get you to lay out some cash for travel.
For the business, definitions are incredibly important. When they look at where the money is going, how a particular trip is defined allows these insiders to communicate, develop strategies and invest in different excursions. If one guy says, “Packages are hot,” and another doesn’t define packages the same way, limited resources will be wasted. When money is pissed away, there isn’t as much available for discounts and other promotions. So, nailing down the lingo actually helps you in the end.
What’s at stake in all this? Well, according to travel industry research firm PhoCusWright, just over $18 billion. Yeah, it’s in bold for a reason. This is a hefty chunk of the total U.S. travel market, but it’s also among the most difficult to understand. There are nuances that mess with the vocabulary. I spent some time as a strategy analyst covering this industry, and sorting out the details is an absolute nightmare.
So, if you’re at all interested in the business of travel, take a look after the jump at the different flavors of “package.” I know there have to be a couple of geeks like me out there who find this stuff fascinating.
Okay, you made it past the jump! You’re one of the devoted. So, let’s get into the weeds. PhoCusWright has a solid definition of package: “a travel reservation containing at least two of the three major travel components (flight, accommodation, car rental) where there was a single booking and payment transaction.”
This isn’t exactly brain surgery, until you think about the different ways that you can pull this formula together. There may be other components, including transfers, day tours, activities, meals and travel insurance. Is an all-inclusive a package? According to this definition, it is. But, you’re really just booking the resort, rather than using a service to pull together the different parts from several vendors. It can get muddy fast.
A package (or, “vacation package”) may include: flight, accommodation, rental car or transfer, day tours or activities, meals and travel insurance.
A charter, on the other hand, is “a flight where the tour operator takes risk on the inventory (or owns the plane) and, usually, sells the seats as part of a package.”
This, of course, differs from “escorted tours,” which “usually include more travel components and have fixed departure dates.”
If you’re looking for a definition of “FIT,” go for the most recent. It used to translate to “foreign independent travel,” which consisted of “leisure trips abroad without an escort or fixed package structure.” This has changed, however, and now refers to “flexible independent travel.” The parts may look like a package, but the itinerary is built specifically for the traveler.
And then, there’s group travel. This consists of both packages and FITs for groups of leisure travelers, with “group” starting at nine people. But, it can vary.
Got a handle on all this? Let’s make it worse.
There are also a number of package providers. “Total vacation packagers” (TVP) is used for all tour operators – but not the online packaging conducted by the major online bookers (like Orbitz). A tour operator provides all kinds of packaged travel, with “escorted operators” a subset that focuses on specialty programs that can become pretty complicated. Online packagers aggregate and sell (duh) online, and wholesalers bundle and resell different products as packages, even if there’s no common theme.
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