How to Start a Travel Agency
Thinking you’d like to start a travel agency? We’ve round up the most important elements for you to consider and tips for ensuring your business’ success.
Travel agencies exist in order to facilitate the planning and booking of a trip for a person or group of people. The travel industry is booming, and by 2020 in the United States digital travel sales are expected to reach 213 billion dollars. But in 2018, it may seem as if travel agencies are a bit dated — after all, websites like Expedia, Hopper, and countless others have made booking all of one’s own activities quite simple. In 2015 though, it was found that over 60 percent of travel agencies surveyed had experienced growth in their businesses. Ultimately, online travel agencies aren’t actually competition for independent travel agents or agencies — as a person with expertise, you’ll be offering your services to customers who might not know what they’re getting into when they travel differently or to new places.
The tourism industry’s growing success, given the price democratization of the travel industry and other factors, shows no sign of letting up, and there’s scarcely been a better time to start a travel agency. As for any business, you’ll need a solid business plan, so don’t forget to check out our free business plan templates, they’re there to help you get started. And read on for our best advice to help you start your travel agency!
Start a Travel Agency: First Steps
If you’ve decided to start a travel agency, you’ll need to think of a couple things before anything else. Of course, you’ll need to decide upon a name for your agency and you’ll probably want to open a bank account in order to keep your business finances separate from your personal ones come tax time. Depending on where you’re opening your travel agency, there may be certain licensing and registering obligations in place that you’ll need to think about. In the United States, for example, states like Hawaii, California, Florida, and Washington follow non-standard practices.
Will you be setting up at home? Renting an office? Hiring people, or working independently (at least at first)? These are important questions for you to ask yourself, because they’ll have important repercussions on the preliminary decisions you need to make about your business. Are you going to set up as a Sole Proprietor, or as a Limited Liability Company or even Corporation, for instance? In this case, it’ll depend on factors like whether you took out a loan, joined a host agency, are buying or renting property, and have investors in your venture or not. To help you figure this out, check out our article on choosing a business structure in the United States, the UK, and France.
Whether or not you’re buying or renting property, using your car for work, hiring employees, and travelling for work will also have an important effect upon your insurance considerations. Be sure not to sleep on these liabilities, as they can throw a wrench into your plans at any moment.
Host Agency or Independent?
There’s also the option of setting up with a franchise group or a managed agency. These are called host agencies, and they’ll greatly reduce your costs when you start a travel agency. They also tend to offer their own accreditations to agents, higher commissions, and tools related to marketing, administration, and client management that are valuable to any travel agent, especially one who’s just decided to start a travel agency. In 2018, Travel Professional News ranked the following host agencies the highest:
- Avoya Travel
- Travel Planners International
- Outside Agents
- Cruise Planners
You’ll also find that you can find a vast number of host agencies on the web.
But if you want to start a travel agency that’s entirely independent, you’ll need to get your own accreditation number. This number is meant for your suppliers (airlines, hotel chains, and more), so that they can recognize that you are, indeed, a travel agent. There are loads of different accreditations and they vary a fair amount — some accept non-US agents, others don’t; some allow agents to buy airline tickets, but ; they also have an effect upon your commission. For example, there’s the Airlines Reporting Corporation or ARC: it doesn’t accept non-US agencies, but it is airline-associated; it exists in order to make dealings between airlines and travel agents easier. The International Air Transport Association, IATA, on the other hand, accepts international agencies and is also associated with the airline industry. And then, if you’re an agent that doesn’t specialize in longer-distance trips or book much air travel, there’s a host of other accreditations that are more pertinent for your business. This is the major difference between a Corporate Travel Agency and a Leisure Travel Agency: the former counts airlines and airline booking as its meat and potatoes (and, of course, paycheck!), where the latter specializes less in corporate bookings but in finding customers well-suited classes, activities, and lodgings, and personalized itineraries, for instance.
Of course, there’s no such thing as a free lunch: both host agencies and accreditation associations usually require a fee, but it most often comes in the form of a commission. At the end of the day, host agencies still greatly reduce your start-up and operating fees and offer you accreditation that’s tailored to your work; getting your own accreditation will be a cost that you incur among others. It’s all a question of exactly how independent you want your agency to be.
Which brings us to the next essential element to take into consideration when you start a travel agency:
Find Your Niche
When you decide to start a travel agency, you’ll need to figure out exactly what you’re providing that existing agents, and especially the internet, can’t provide customers. Where’s the hole in the market? This should be tailored to your strengths. For example, if you speak different languages and have cultural connections to foreign regions, you may consider specializing in those destinations. If you’re an experienced equestrian who also happens to love travelling, you can gear your services towards people who also like to mix the two, and it’ll be easier for you to establish relationships with your specific suppliers. Are you for the finer (and more expensive) things in life? Luxury travel could be a good niche for you.
These four main considerations will help you find your niche; consider them all, and combine for greater specificity:
- Destination: what destinations jive with your passion and expertise?
- Network: what networks (equestrians, rock-climbers, rich people) do you have access to and understand the best?
- Hobbies: what pastimes do you love and know a lot about? Sailing, calligraphy, anything can fall under this category.
- Type: Adventure, Luxury, Ecological, Historical — this will be question of what your customers will be seeking from their experience.
By thinking carefully about where your own interest and expertise lies, you’ll find the strongest idea to help you start a travel agency that corresponds to a specific enough demand that you’ll be able to offer exactly what distinguishes you as a travel agent from Google: a personal touch that can only come from your own experience and passion.
Marketing Your Agency
Once you’ve decided upon all the aforementioned factors: your location, name, structure and level of independence, and the niche you’ll be targeting with your travel agency, you’ll need to market it! It would be a shame to start a travel agency that filled an interesting niche in the market that potential customers would never hear about.
Instagram and Pinterest in particular are made for aspirational travel imagery, which is the lifeblood of any travel marketing scheme. We won’t go too far into the particulars here, but don’t hesitate to check out our marketing and communication articles to help you get the word out about your exciting new venture!
If you’re passionate about travel and seeing the world, then it could be a great idea to start a travel agency or associate yourself as an agent with a host. With airlines becoming more and more accessible, sites and applications like Airbnb changing the way we “stay,” and a worldview that becomes more and more cosmopolitan and open with each generation, the travel and tourism industries are filled with interesting opportunities that are just waiting to be found.