How to Launch a Travel Agency

Mightycall Team
Mightycall Team
1 July 2016 Business Insights

If it’s true that “travel broadens the mind,” then the travel business must surely attract broad-minded businesspeople. Having a passion for travel and people is surely a prerequisite for entering the industry, but also a flair for organization. Other things to consider are the nature of your business: will you choose to work under an umbrella agency, open a franchise, or strike out on your own? We cover these and other factors to consider when opening a travel agency, including the benefits of a cloud-based telephone service like MightyCall.

If you love to travel and have accumulated rich experience in organizing your journeys, then maybe sooner or later you’ll want to turn your hobby into a business and open your own travel agency. Of course, there are already few free niches in this market, the competition is very fierce, but why not try? In any case, if you’ve decided to open your own travel business, you should carefully count all your steps.

The travel industry is home to businesspeople who are sociable, resistant to stress, have the ability to convince people, and are willing and able to take risks. While it is not necessary to have specialist knowledge, it can also be a good starting point. However, in the tourism business it’s more important to have a sincere interest in the work process and the ability to learn quickly.

Just some numbers

According to the US Travel Association, in 2015 direct spending on leisure travel by domestic and international travelers totaled $650.8 billion. Direct spending on business travel, including expenditures on meetings, events and incentive programs (ME&I), totaled $296.3 billion in 2015.

For every dollar invested in business travel, businesses benefit from an average of $9.50 in increased revenue and $2.90 in new profits.

Over half of travel agent users in the US reported that travel experiences planned by agents were better than those that they planned themselves. That said, many leisure and business travelers admitted that they did not use travel agents because they enjoyed researching and planning their trips themselves.

Fundamental aspects

If you decide to enter this market, the primary thing to decide is whether to become an independent travel consultant for a travel agency or a franchisee of an established travel agency, or to start your own business.

The host agency acts as an umbrella for travel agents that belong to their organization. All agents under the host will use the same booking number and will be seen by vendors as one agency instead of a conglomeration of agencies.

The most common business model is for the host agency to offer a commission split with the agent. There may or may not be fees attached to this, and the commission level splits vary drastically, so make sure you do some comparison shopping.

Independent travel consultants earn commissions for the work they do for a travel agency. As a consultant, you may be limited in the types of travel services you can provide clients.

Purchasing a franchise allows you to build a business on an already-successful brand, but you may still be limited in the types of services you can provide.

Starting your own agency admits you to sell a wider variety of travel services while allowing you keep all the proceeds from each sale.

Startup costs tend to be higher if purchasing a franchise or starting a business, because you will have to finance equipment, such as a phone, computer and software, internet service and marketing materials needed to run the business. You will also be responsible for building a client list.

Business plan

Once you have decided which route to take, another inevitable aspect for you will be a business plan — a set of goals and a message to financiers that you mean business. It helps you stick to the course of your new business’ launch and prevents distraction.

A travel agency’s main function is to act as an agent, selling travel products and services on behalf of a supplier. Consequently, unlike other retail businesses, they do not keep stock in hand. A package holiday or a ticket is not purchased from a supplier unless a customer requests that purchase. The holiday or ticket is supplied to the agency at a discount. The profit is therefore the difference between the advertised price which the customer pays and the discounted price at which it is supplied to the agent. This is known as the commission.

Other commercial operations are undertaken, especially by the larger chains. These can include the sale of in-house insurance, travel guide books and public transport timetables, car rentals, and the services of an on-site currency exchange, dealing in the most popular holiday currencies.

Business plan paragraphs are much the same for all startups. But each industry has its specifics. Essential points to think over at once are legal documents and profit and loss.

Also you have to determine your customers’ category — families, honeymooners, singles, retired people and snowbirds, summer abroad students, business travelers etc. The initial client base can be formed of your nearest entourage. However, such activities will not bring high income and can only be seen as a form of earning extra money with seasonal. To make the tourist business is the main source of income it is important to bring it to the level of the whole country.

Independent agencies usually cater to a special or niche market, such as the needs of residents in an upmarket commuter town or suburb, or a particular group interested in a similar activity, such as sporting events, like football, golf, or tennis.
You can specialize, for example, on ecotourism or to organize holidays for families with children or maybe you will choose, for example, the organization ofarranging cruises for seniors or honeymooners.

The question of successful marketing is also very important. You may be willing to create marketing materials, such as brochures, business cards and flyers to promote your travel agency. You can also build a client list that includes email addresses, travel preferences, past travel destinations. Additionally, you may send email updates of travel specials, events or other information of interest to clients each business quarter to encourage sales.

Advertisment Advertising is also a key point, because it iscan be very costly. For this purpose reason you can use choose to advertising advertise in on social networks and free ad sites. According to statistics, 60 percent of travel agents use social media for general promotion and advertising and to generate new business.

The majority of travel agents feel need to protect themselves and their clients against the possibilities of commercial failure, either their own or a supplier’s. Many American agencies and tour operators are bonded with the International Air Transport Association (IATA), for those who issue air tickets, Air Travel Organisers’ Organizers’ Licensing (ATOL) for those who order tickets in, and the American Society of Travel Agents (ASTA), for those who sell package holidays on behalf of a tour company.

Professional organizations provide support, further education and training opportunities, resources, networking opportunities, travel tools, publication access, evaluation services, invitations to seminars, expos and summits, scholarships for students and salary tools. These organizations also give you access to job boards and travel school directories, if you’re looking for career rejuvenation.

Membership in ASTA starts at just $325 a year.

Important formalities

Depending on your location and business set-up, you may need a travel agent license (if you have a host, you may be able to use their license number). Even if you don’t live in an area that requires one but are planning to sell to residents of those states, it’s worth looking into.

Several US states currently have seller of travel laws, including California (the strictest and most complex), Florida, Iowa, Washington, Hawaii, Nevada , Louisiana and Delaware.

Office and staff questions

These days, travel agents may work from home as most travel arrangements are made online. If you’re working from home, create a space that allows you to work comfortably at your computer while providing adequate storage for computer equipment and software, marketing materials and files.

If you decide to have an a physical office you should contact a local commercial real estate agents to find available retail space. Choose a space in a busy retail area with ample parking. The space should be large enough to meet with clients while housing computer equipment, furniture and marketing materials.

When you’re just starting out it’s almost always better to hold off on hiring staff, but if it’s unavoidable because of the nature or anticipated volume of your travel business, you’ll have to spend some time managing your employees. Tasks may include creating work schedules, managing payroll and refereeing when disagreements break out. This also applies if your staff is not onoffsite, in which case you may have to make site visits from time to time to check things out.

To start your travel agency, you will without any doubt need a separate business phone number. MightyCall can offer either one virtual number for all mobile devices of the company, and or several phone numbers — with the incoming calls will be directed to one phone. Another indispensable feature is a call forwarding. You can forward calls from your business number to your personal cell, home phone… to anywhere you want. Call forwarding lets you take charge of how your business calls are handled, taking charge of everything from how calls are managed to setting your office hours.

Managing your website

Nowadays, when with people spending most of their life lives in the Internetinternet, you absolutely can’t get by without a good website.

You may decide to use a contract web designer/administrator to look after your site, you may also be able to do the updating yourself. Additionally, if your site is your travel business, you’ll need to check your e-mail often to keep up with requests for information, brochures and those all-important travel reservations.

Create a website that includes a description of travel services, contact information and on-line booking options. Invest in computer software programs that process client bookings and payment from your website, track online marketing campaigns and captures email addresses.

Travel agencies also use the services of the major computer reservations systems companies, also known as Global Distribution Systems (GDS), including: Amadeus CRS, Galileo CRS, SABRE, and Worldspan, which is a subsidiary of Travelport, allowing them to book and sell airline tickets, car rentals, hotels, and other travel travel-related services. Some online travel websites allow visitors to compare hotel and flight rates with multiple companies for free; they often allow visitors to sort the travel packages by amenities, price, and proximity to a city or landmark.

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