Last updated on December 10th, 2022
Travel agencies make traveling much easier for customers by eliminating all hassles attached to purchasing tickets, picking affordable packages, etc. In recent times, people are using online platforms to search for travel-related information and buy tickets & packages. This has given wings to people fond of exploring new places to start their travel agency business.
Planning to start a travel agency? Well, you landed in the right place!
The travel industry is profitable, and it’s continuously growing. And this is mainly due to people’s willingness to explore new places getting higher and higher.
In the United States, digital travel sales have increased to $180 billion, which is likely to exceed $213 billion by 2020. The travel market has a plethora of online travel agencies, including Expedia and Priceline group, showing that online travel agencies’ future is bright.
But there is still broad scope for conventional travel agents who earned their commission by working in the field. A survey found that in 2015, most travel agents (around 60%) had reported a growth in sales.
Whether starting an online travel business from home or a conventional offline agency, you need to follow some basics.
Remember that your new travel agency has many new and established similar companies as competitors. You should also take note that people generally prefer the older agencies.
So, it would be a tough job for your agency to get noticed in the market. These basics will help you know your travel agency requirements and run it successfully.
Here Are The 21 Easy Steps On How To Start A Travel Agency
01. Find Your Niche
When you start your travel agency, you should find your niche market. It will help you build your brand, set up your travel agency name, and more.
But if you start your travel agency without choosing any niche, it will create a lot of trouble. You will lose your specialty. It will be like moving in so many directions without a compass.
One of the mistakes many new travel agency business owners make is they want to sell everything. In that way, they are inviting tough competition from everywhere. That is not a wise thing to do for a startup as it lacks experience and resources.
So, find out your niche travel market. When you pinpoint a particular market segment, you reduce the competition since not many operators are active. A niche market is one that very few have explored thus far. There is always a good potential for growth in it.
What could be the niche when opening a travel agency?
To find it out, you need to do comprehensive research. First, explore the emerging new travel needs that very few agencies can meet. Then, as very few competitors are active in that niche, your agency can succeed fast.
For example, if you research the market, you may come to know that some newly married couples prefer going backpacking. They do not want to spend their honeymoon days in a conventional and relaxing way. Instead, they look for adventurous destinations.
If you find that not many travel agencies provide special travel packages to such couples, you can start doing so. That may be your niche. But do extensive research first before you start your own travel agency.
02. Know your target audience
When thinking about how to start a travel agency, know your target audience from the inside out.
You should do some online research to determine what demographic will be more interested in your agency services. Once you are aware of the demography, you can then target them in your promotional activities.
While researching the audience, you should closely analyze your area’s demographic information. You can get such data from your website or the city’s auditor office when you start a tour company.
You should also explore the travel statistics of your area of operation. Find out what percentage of people in your locality are interested in your travel niche.
03. Have a good cash flow
While finding out how to start a travel agency, be clear about your likely financial obligations. You may need to pay insurance premiums and fees toward business licenses.
Also, you will be paying taxes. This means you must first have a good cash flow before starting out the agency.
You should also consider your likely project income beforehand. The current travel market data and local target demographic presence should be the basis of the data. With such information, you can figure out the viability of your travel agency.
Also, do not forget to consider any unforeseen emergency expenditure. For all such spendings, you must have a cash reserve in advance.
So, it may be that you start your travel agency for free initially for a few days. But soon you will be spending a lot on various expenditures.
04. Choose a travel agency name
Your travel agency needs a name that people can easily remember. However, picking the right name for your business is crucial and challenging as well.
So don’t worry if you have no name for your company in mind. You can know how to generate business name ideas for a travel company by considering business name generators or taking help from family and friends.
When registering your travel business name, make sure to check it under:
- Federal & state trademark records
- The business records of the state
- Web domain availability
- Social media platforms
Once you have finalized a name, secure a domain name of the same before somebody else does.
05. Cover All the Legal Aspects
When you start a tour company, it must fulfil the legal requirements. However, in the U.S, the licensing process for a travel agency is easy. You are not supposed to undergo any training, testing, or qualification process.
All you must do is fill a simple form as far as the federal laws are concerned. But the state governments of California, Florida, Washington, and Hawaii have their own set of rules that you must abide by when you open a travel agency.
Therefore, you should thoroughly research the laws while starting a travel agency in your state. An easier way to find out these laws is to contact a host agency to inform you about the registration process and the licensing. You will also be required to apply for a Federal Tax ID number.
Another thing to note here is that you must obtain a trademark for your travel business. For example, your logo is the trademark of your agency. But, after you create a logo, get it legally registered with the concerned authorities.
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06. Make An Effective Travel Business Plan
An effective travel agency business plan keeps you on the right track. It guides you in your endeavor to run the agency successfully.
But the business plan is not about setting the goals randomly and having a rough idea of what you will be doing. It is much more than that. You should prepare a detailed plan in advance.
Your travel agency business plan must include some key points. Make sure that you base it on your market analysis and sales strategies.
Make sure to mention your funding requirements and financial projections. Your business description should be precise to get a clear picture of your business goals.
Consider including some other points too. The business plan must state the resources available to you to start a travel agency. Do not forget to determine your goals and objectives.
At the same time, you should identify any constraints that you might face in operating the company. Finally, the plan should mention your strategy to remove the hurdles.
07. Set Practical Travel Business Goals
Starting your travel agency may encourage you to set higher goals instantly. But if those goals aren’t realistic, then your agency may end up achieving very little.
Experts suggest that travel agents set a realistic sales target and keep it lower in the initial days of the agency’s inception. First, consider your expenses, costs, and salary for yourself.
After setting aside this amount, any money you get additionally will be your earnings from sales. So, find out your sales target based on realistic goals.
08. Hire Efficient Staff
You may not be immediately in need of many people to help you get started while pondering how to start a travel agency. But you still have to hire some staff for online booking.
If you are running the agency from a physical office outside of your home, hire people to help you.
But ensure that you hire employees that have some experience. Such employees are great assistance in saving your time in running the agency smoothly.
09. Have A Dedicated Website For Your Agency
Most travellers make online bookings. So, you must have your travel agency portal or website. That will help people reach out to your agency quickly from anywhere.
But make sure that your travel agency website stands out in its design and use of images. If designed perfectly, the website will help you stand out in your competitive travel niche.
Put all the relevant and updated information for your target customers on the website pages. The intention here should be to educate your visitors and show your expertise in the field. Such an effort will project you as a professional travel agency.
The website should have essential pages such as About Us, Services, Pricing, Destinations, Customer Grievances, etc.
Also, do not make your website an image-heavy site as it may result in the site loading slowly. Consequently, your potential visitors may click on the other agency links. So, keep this in mind when thinking about how to start a travel agency.
10. Set Competitive Prices
Another crucial aspect to consider while thinking about how to start a travel agency is pricing. Do not follow the pricing structure of established agencies. They have loyal customers and offer some enticing services. So, they can charge higher prices.
Yours is a new travel agency which not many people know much about. Since you are struggling to earn recognition in the travel industry, you should not set high prices.
Instead, a better strategy will be to lower your price as much as you possibly can. Do not worry about your profit margin at this stage. Your plan should be to turn first-time visitors into your loyal customers.
So, set your pricing packages at the competitive level and even much lower than that of others.
Later, when your business grows, you can command higher prices and profit margins.
11. Acquire Funds
As you are starting a travel agency, make sure that you have a funding strategy in place. You may be starting the travel business on a small scale or from home; still, it needs a constant flow of money to meet various expenses.
If you want to work from home, probably your family members can provide the necessary support.
But if you need a proper office, staff, and online and offline marketing, you may be applying for a bank loan. Remember that you will need a lot of funds for marketing and create different promotional material. For example, businesses need professional website designs, which require dedicated funds.
12. Do Some Branding Exercise
When starting a travel agency, branding plays a significant role. It is all about creating a perception of your company and the products or services it sells.
One of the effective ways to build a positive perception is to create high-quality visuals such as an impressive logo design. Design other items such as brochures, travel agency business cards, etc.
Make sure that colors and typefaces in all the visuals are the same for brand consistency. If you can convey your brand message successfully through these items, customers will think positively about your travel products and services.
13. Run Well-Made Promotional Campaigns
At first, your travel business may not go as planned. Sales might be less, or your business might face some sluggishness.
Since not everyone knows your travel agency well, you have to run an aggressive promotional campaign to target your audience. But, first, you should let them know that your small travel business does exist.
You can either hire a digital marketing agency or build an in-house team for search engine optimization based on your financial capabilities.
They can also look after link-building, guest posting, reputation management, and other activities to improve your online existence.
Make sure to utilize all marketing strategies and channels for making people aware of your travel brand. For example, you can run ad campaigns using social media, leaflets, brochures, newspapers, and more.
14. Put Your Agency on Social Channels
People love posting their travel pictures on social media. It simply means your target audience is out there on social platforms! When opening a travel agency, create related social profiles on Facebook, Instagram, Twitter, etc.
Make sure your dedicated page is different from your competitors. Post content related to the interest of your audiences like discounted tours, adventure trips, places to explore for honeymooners, and a lot more.
Keep adding value to make people interested in your travel agency, and they would rush to buy your travel plan for sure.
15. Get Some Travel Partners
When thinking about how to start a tour company, know that you simply can’t run a travel agency without having something to sell.
After all, you need to sell tickets, packages, and many other things to potential travelers. Where do you get these?
You will have to approach a few established travel companies for permission to sell their packages from your agency. You need to sell their attractive offers to make money.
But to get their nod is not easy. The well-established businesses will ask many questions about your startup travel agency.
Most importantly, they would like to know what percentage commission your agency will charge. Therefore, have a competitive percentage in mind.
Remember that your new travel agency may not be in a position to demand an outrageous commission. However, consider also that you need the big operator more than they require you.
Indeed, you need to keep your commission and other demands comparatively low in the early phase of your business.
Another point to mention here is that you should earn the respect and trust of your partners. Once the big travel companies have faith in your ability to sell, they may consider your demand for a better commission.
Build your brand image by earning your partner’s trust. Maintain a good reputation for your agency by resolving the travel-related issues of your customers.
16. Optimize Your Online Travel Business
Whenever somebody needs to find information about something, they search it on Google. When you start a travel agency, make sure it appears in the top search results.
If your agency doesn’t appear on top in search results, people will hardly try to find you anywhere else. They will go with other travel businesses appearing on the top.
So, you must optimize your travel website for higher ranks. The first requisite for optimization is that your website design should be perfect.
You should also pick a set of keywords placed rightly in your content. Make a strong content marketing strategy that will help you build your audience.
17. Create and Grab Sales Opportunities
Some travel agents have this tendency to wait for sales opportunities. These are the ones who do not want to come out of their comfort zone. They wait for appropriate conditions and ultimately miss their sales goals by a considerable margin.
Rather than waiting for the clients to enter your agency’s door, a better way is to approach them. You should be doing everything to contact your potential clients.
Whenever you get the opportunity, seize it with both hands. These are the key aspects to consider when starting a travel agency.
18. Chalk Out An Advertising Plan
Advertisements take a business to a target audience that needs those products or services. Since ads are everywhere, they help catch potential customers’ attention. When pondering how to start a travel agency, you should also set out with an advertising plan.
You have many options to choose from in the advertising world. Word of mouth is the most cost-effective, in fact, a free way to generate publicity for your new travel agency. You can just talk about your startup with your friends, relatives, guests and whoever you meet.
Then, think of using local advertising platforms to your advantage. Put many places in your locality, such as billboards, walls, signboards, etc., to your use. You can also get your friends to recommend your agency in this circle.
But note that your new business setup may not afford to spend a lot on offline advertising, such as newspaper ads, as these are expensive. At the same time, do not ignore it completely.
Think of online advertising, which is less costly. Post advertisements online on a wide range of platforms to get maximum exposure for your agency.
19. Have A Strong Online Presence
A robust online presence is a must in this digital age. People should be able to find your travel agency on most online platforms.
To do that, your agency needs to be present on popular social channels like Facebook and Twitter and post your content regularly.
Write blogs not just only on your website but also on popular blogging sites, if possible. It will help you reach out to millions of people who are already on a popular site.
You should also join online forums where people discuss issues related to an industry. Find out the forums dedicated to travelling and offer your expert advice to the people who need to resolve their issues. Such efforts help in promoting you as a travel expert.
20. Develop A Voice and Personality
Your travel agency must develop a personality and voice that is different from your competitors. It means that people should know your services are beneficial and take your agency as offering great value.
Make sure that your agency evokes trust and dedication in your niche. When you think about how to start a travel agency business, think of giving it a unique voice.
You should avoid using trendy words like ‘cool’ and ‘dude’. Such cliché words give your agency a non-serious voice. So, craft the voice carefully and keep it consistent all across the online and offline platforms.
21. Focus On Building Customer Relationship
No travel agency can thrive without paying attention to customers’ concerns or building a rapport with them. When you start a tour company, you must take steps to build relationships with your customers who have already used your agency or are likely to use it shortly.
Ensure that you train your staff on how to treat your audience while enjoying their vacations. Your local cooks, tour guides, and drivers all staff should be aware of the value of treating your customers well.
If customers post complaints offline or on your website, address them and resolve their issues right away. To build a solid customer relationship, you should create videos to answer their travel-related queries and email them.
So, these key steps will surely lead you wisely when you think about how to start a travel agency. But do not expect the results to show up immediately. You should have patience and build your brand steadily with a focused approach.
While planning on how to start a travel agency, we have already emphasized the need to have a great website and visuals like logos and brochures.
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When planning on how to start a travel agency, you need to keep specific steps in mind. Start with knowing your travel niche to minimize your competition. Then, give a nice and catchy name to your agency and make a business plan. You should have a good cash flow to meet expenses. Have your website, social media channels and ensure a robust online presence for your travel agency. Your pricing also should be competitive.