Are travel agencies categorized differently from airlines and hotels?
Short answer
Yes. Travel agencies, airlines, and hotels are categorized differently across all major classification systems. Travel agencies are classified under NAICS 561510 (Administrative and Support Services) and merchant category code 4722.
Airlines are classified under NAICS 481110 (Transportation and Warehousing) with airline-specific merchant codes. Hotels are classified under NAICS 721110 (Accommodation and Food Services) with lodging-specific merchant codes.
These distinctions reflect fundamental differences in business models: airlines and hotels provide direct services (transportation and lodging), while travel agencies act as intermediaries that facilitate bookings.
Why the classifications differ
The categorical separation exists because these businesses operate in fundamentally different ways:
Travel agencies serve as intermediaries. They aggregate travel options from multiple suppliers, help customers choose among those options, and facilitate bookings. They earn revenue through commissions or planning fees, not by providing travel services directly.
Airlines are direct service providers. They own or lease aircraft, employ flight crews, maintain operations infrastructure, and transport passengers. They generate revenue by selling tickets for transportation services they provide.
Hotels are direct service providers. They own or manage properties, employ staff, maintain facilities, and provide accommodation services. They generate revenue by selling room nights and ancillary services at their properties.
How this affects credit card categorization
Credit card issuers recognize these distinctions when defining "travel" purchases for rewards programs:
- All major issuers include airlines, hotels, and travel agencies as separate travel categories
- Purchases made directly with airlines use airline merchant codes
- Purchases made directly with hotels use lodging merchant codes
- Purchases made through travel agencies (including online travel agencies like Expedia) use MCC 4722, regardless of what type of travel is being booked
This means a hotel booking made through a travel agency will code as a travel agency purchase, not a hotel purchase, even though the end service is lodging.
How Ramp categorizes travel spend
Ramp automatically categorizes transactions based on merchant category codes, making it easy to track spending across different types of travel vendors:
- Direct airline purchases appear as airline expenses
- Direct hotel bookings appear as lodging expenses
- Travel agency bookings (including OTAs) appear as travel agency expenses, even when booking flights or hotels
This automatic categorization helps finance teams understand not just what was purchased, but how it was purchased—whether through direct channels or intermediaries. You can view these categories in transaction exports and reporting to analyze booking channel preferences and identify cost-saving opportunities.