What would you do if you won the lottery?
The majority of Americans will instantly respond with “Travel!”
And that’s because traveling is an adventure. It’s literally a journey into a new place, where anything is possible. At home, you know what to expect. You go to the same job, do the same work, talk to the same people, and eat at the same restaurants. You watch the same TV shows and listen to the same music stations day in and day out.
But travel changes that.
Travel allows people to reinvent themselves and become someone they’ve always dreamed of being. That’s why it’s so special! And that’s why to celebrate their union, newlyweds always travel on their honeymoon to reset themselves as a married couple.
And that’s why travel agents are so important. We give the gift of the impossible to people.
How to Start a Travel Agency Business
If you’re an avid travel fan (and let’s be honest, who isn’t?) and have a good head for sales on your shoulders, then you may want to learn how to start a travel agency. The great thing about starting a travel agency is that you can do it from anywhere. You can even start a travel agency from home!
But a love of travel isn’t enough. There are guidelines to follow, and so many different aspects of a business you have to know.
Fortunately, you found this blog post. And by the time you’re done reading this article, you’ll be well on your way to sending people all over the globe as an entrepreneur with your very own travel agency!
Step 1: Learn How a Travel Agency Business Works
Most people see the front end of a travel agency.
But how does a travel agency work?
If people are going to pay you to put together a dream trip for them, you need to know every detail of the industry.
And there’s no better way to do that than to go work for a travel agency yourself.
By interning under a seasoned industry veteran, you get a chance to really understand the proper tools and special touches that make a travel agency shine. Learn about what services, trips, and packages you can actually offer and what you can’t. Have the right questions to ask, and questions to avoid asking clients. Know about the best followup strategies for clients and vendors alike.
Learn about staffing. Marketing. Budgeting. Profit margins.
Learn which type of clients prefer which packages.
You can research all day about the travel industry (and you should), but in the end, the best way to get the “secret sauce” is to study under the best.
If you’re serious about how to run a travel agency, go work at one and find out! By doing so, you’ll set your business up for success and it’ll be much easier for you to create a plan.
Step 2: Create a Plan
Why do travel agency businesses fail?
For the same reason as any other business – lack of a plan.
A business plan is your best friend when starting a travel agency business.
By investing your time and energy in creating a business plan before you actually start your business, you’re not only creating a clear plan for running your business, but providing financers a road map to look at when making a decision of it they want to back you or not.
Your business plan should include an honest evaluation of yourself and your skills, a look at your target market, your competition, your marketing plan, an industry analysis, an evaluation of where your office will be, your training and hiring plan, and more.
You’ll want to include your budget and operating expenses here, as well as any startup needs and future purchases your company may need, as well as any marketing collateral or association and licensing fees.
If you’re not sure where to start, Startup Jungle can help you create an expertly organized and professional business plan for your travel agency business.
Just email email@example.com, and they’ll give you the help you need.
Step 3: Discover Earning Potential
How Big Is The Travel Agency Industry?
IBIS World reports annual revenue from travel agencies at about $35 billion. Although the industry has seen an annual growth of 3.8% in the last five years, the Bureau of Labor statistics predicts that competition from online travel booking websites will result in a 12% drop in travel agency employment rates.
Why Starting A Travel Agency Now Is A Good Idea
Although Internet booking sites are cutting into the call for travel agent services, the speed of modern life in the 21st century limits the amount of time would-be travelers have. A person in the modern world doesn’t have time to spend time researching the best deals on every airline, cruise line, hotel, restaurant and entertaining attraction along the way.
As a result, many of these harried travelers still find value in engaging the personal services of a live travel agent who can take on the responsibility of arranging every detail to make their trip go smoothly.
There is value and peace of mind in the time saved if you can provide quality and reliable trip services, insider services, and the best deals and amenities to clients who entrust you with their itinerary.
How much do travel agents make?
According to Payscale.com, a travel agency manager’s salary ranges from $30,000 to $78,000 per year. A travel agent can earn $26,000 to $52,000 per year.
However, if you’re good at what you do, you can bring in significantly more than that.
The American Society of Travel Agents states that most travel agencies will charge service fees to cover the cost of the time and labor in researching and putting together an itinerary as insurance against clients who do not follow through and book the planned trip. Typical service fees range from $100 to $350, depending on the complexity of the trip.
Besides the service fee, clients generally only pay the cost of the trip as the agency receives the majority of its revenue through arrangements and commissions with hotels, airlines, restaurants, cruise lines, and other tourist attractions.
So if you can optimize your time and really figure out what sells best, you can do quite well for yourself bringing joy into people’s lives.
Step 4: Set a Budget
How much does it cost to open a travel agency?
Well, that depends on if you want to work from home, be an independent travel consultant for an agency, or start your very own agency.
But the costs are significantly less than other businesses because your requirements are smaller. All you really need is an IATA number, which is needed to book flights with airlines, a computer (and software for booking), and miscellaneous expenses.
If you’re starting your own brick and mortar business, you’ll need to account for rent, too, as well as office furniture and decorations, along with the usual office supplies.
But other than that, travel agents have minimal costs when starting a business.
However, a budget is important because it helps you keep your personal and business costs separate for when tax season rolls around.
Tips to keep costs down: Keep receipts for everything your business needs in order to write them off on your taxes. You’ll find this helps save quite a bit of money down the road.
Step 5: Decide Which Products/Service to Offer
When opening a travel agency business, it’s important to choose a travel specialty.
You may risk losing some business by not offering the services those customers are looking for. For example, outdoor luxury travel experiences. If a family is looking to spend a week biking through the scenic Italian countryside in luxury, you should refer them to a business who excels at such trips rather than try to string together a poor experience for them. You might make a commission from their trip, but the cost of forever losing a client and scathing reviews can come back and hurt you down the road.
By choosing specialties such as cruises, or festivals, or camping trips, you’re able to provide a much higher value experience for your customers, ensuring that they continue to come back to utilize your services for their vacation needs.
Do you offer domestic/international packages?
You’ve got other options.
What about corporate retreats or team building exercises?
Or high-adrenaline adventures like mountain climbing or whitewater rafting?
If you can become an authority or expert in your specialization, you can charge more for your services because you’re guaranteeing their trip to be just perfect.
What is the Unique selling point? What can you offer that nobody else can? Maybe it’s you, maybe it’s your service, maybe it’s your experience, figure it out, write it down, and make it your store’s centerpiece, literally and figuratively.
Step 6: Decide on a Location
If you’re starting a business from home and just focused on online sales and traffic, then you’re already set and don’t need to worry about a location. And if you’re going to be an independent travel consultant working for an agency, then the agency will most likely provide you with office space.
However, if you’re going to be setting up your own office, look to set up in an affluent location with disposable income as that’s your target market – wealthier, high end customers who have the money to spend on a travel agent to save them the time and hassle of setting up a vacation.
Things to consider when choosing a location:
- Visibility from the road
- Ease of access
- Foot traffic
Starting a business is a lot of work, but wisely choosing a location can help make your business more successful. Put some thought into choosing yours.
Step 7: Find Suppliers
What equipment do you need to open a travel agency?
Fortunately, because your business is arranging other services for clients, your needs are few. In fact, you can find everything you need at a local office supply store such as Office Max or Office Depot.
Supplies you may need include:
- Filing cabinet
- Quality printer
One other consideration is signage and promotional printing supplies. A fun option for customized travel gear you can use towards marketing material is http://www.travelswag.com/store/.
Another fun site for signage is http://www.displays2go.com/Industry/Travel-Agency-Office-Supplies-Signs-Displays-32
Keep in mind that just because your supply needs are fewer as a travel agency doesn’t mean you should ignore your budget. Shop around and look for a blend of quality and price on everything to ensure you stay on track with your budget.
Step 8: Promote Your Travel Agency
No business can survive without customers, so it’s critical to promote your agency.
There are many ways to do this, but really it breaks down into traditional marketing methods and digital marketing.
For traditional marketing, take advantage of flyers and mailers to get eyes on your company. This has pros and cons. You may be wasting money on sending material to people who may not be interested in your service, but you might snag some big fish, too – especially if you’re flying or mailing to affluent neighborhoods. You can also stand on the sidewalk with flyers or coupons and hand them to passersby who fit your target demographic. For example, if you see a well dressed woman holding two kids, perhaps you suggest a trip to Disney.
On the other hand, digital marketing allows you to highly target your audience based on interests and internet searches. If you specialize in a particular travel niche, you can target your customers on Facebook by looking for their interests. Mountain climbers may list specific mountains such as Everest or Mount Kilimanjaro. Or they may list activewear or sports such as mountain climbing itself. Within Google, you can take advantage of AdWords to show up as sponsored results in specific Google searches.
You’re only limited here by your creativity.
Make sure you’re paying attention to any and all review sites you can think of, such as TripAdvisor, HomeAway, and Yelp. People always research a service before utilizing it, so if your service has terrible reviews, your business will have a hard time staying in business.
Step 9: Create a Staffing Plan
If you’re working from home, chances are that you’re working by yourself. However, if you’re starting an agency in person, you’ll need some help. And having a plan in place for that help can save you from making a bad hire and allow you to grow accordingly.
For example, how many employees will you need? Where will you find them?
Asking friends and family if they want to join your endeavor when you start is a good idea because you’re bringing on people you can trust.
But also ask yourself, what will you pay them? When will you schedule them? What is their training? What are their responsibilities?
Have answers for all these questions and plan ahead to make sure you have the manpower you need when you need it.
Step 10: Decide on a Style/Design
Your design should represent your brand. You want to be authentic and show some of your style and flair, but be careful not to overdo it and scare people away. Your brand should be reflective of who you are and what you offer as an agency.
Struggling with what to name your travel agency? Here are a few ideas:
|Honeymoon Destinations||Savannah Bound|
|Family Adventures Travel||Global Connect|
|Travel ’n Time||Wilderness Treks|
|Vision Tours||Tropical Travelers|
|Escape from Reality||Road of Dreams|
|Jungle Journeys||Memory Makers|
|Wild Blue Yonder||Wizards of Travel|
If you’re not sure about a logo, check out 99designs.com and choose from a pool of designers competing for your prize money. This is a great tool to use for quality work on a budget.
Invest time in your design since it reflects your business.
Step 11: Create an Accounting Plan
Having an accounting plan is not a “nice to have” option. It’s a must have.
As a business, your taxes will always come under scrutiny. So it’s critical to have every dollar accounted for and everything in order.
Equally important, you’ll be able to project your sales more easily with proper tracking, in addition to knowing if you are on track to stick to your budget. You’ll also be able to tell if anything is missing from your office, making an accounting plan part of your store’s security measures.
Here are a few accounting software we have seen:
Step 12: Get Into the Travel Agency Community
It’s important to stay involved in the travel agency community because this allows you to stay ahead of the field by learning new industry best practices, secrets, and even special promotional offers.
Join newsletters, build relationships with hotels and entertainment companies, and join an association. Start with the American Society of Travel Agents.
Look for groups to join on Facebook, or follow big industry leaders on Twitter or Instagram.
But if you don’t stay active in the community, you may find yourself rowing without a paddle as the rest of the industry passes you by.
The Bottom Line
Opening (and running) a travel agency is a lot of work. But if you do it right, it’s not only rewarding, it’s a lot of fun.
You get to be your own boss and bring sheer joy into people’s lives everyday.
Hopefully, you put this guide to use.
If this was helpful for you and you want to learn more about opening a travel agency, StartupJungle.com has a 21 point checklist for starting your new business. Make sure you download this if you’re serious about getting started.
Simply click below to download this checklist now.