If you love to travel, enjoy helping friends to plan vacations, and have experience in the tourism industry, you might consider starting a travel agency.
It may seem difficult to start a travel agency from scratch. Don’t worry, though, because we will walk you through the whole process.
In this article, you’ll learn what to prepare before starting your business, how to get clients, and what the risks are of running a travel agency.
5 steps to starting a travel agency
It can be scary and confusing to start your own travel business. Check out these steps to help you get started with confidence.
Step 1. Plan your business
Whether you choose to start as an independent travel agent or work with a host agency, you need to create a business plan first.
It is a crucial tool, necessary for business success. To create a business plan, there are some decisions you need to make.
Focusing on a specific niche is necessary to differentiate your travel agency from the others.
Setting boundaries in what you sell makes it easier for you to determine who your target audience is.
Becoming an expert in a specific area also makes your competition smaller. By having fewer competitors, it’s easier to stand out.
You can start by doing research on general travel types before choosing a business niche. Adventure, food, and weekend trips are some popular types of travel that you might focus on.
A business name is an essential part of your brand identity.
- To choose the name for your travel agency, try finding keywords that relate to your service. For example, when you see the name of African Budget Safaris, you already know what services they offer to customers.
- Make sure your name is memorable and easy to say. Using a complicated name will risk it being misspelled and misunderstood.
One of the easiest ways to find a name is by using the Zyro Business Name Generator. Just enter keywords related to your agency, and the tool will provide suggestions for you.
When you pick a name, make sure to check it’s not already used by somebody else. If it’s available – copyright it to so you’re the sole owner.
With Zyro, you can register the business name as a domain for your website.
Whether you sell your services online or offline, you’ll need a location for running your business, and a workplace to accommodate future employees.
Choosing the right location for your travel agency gives a good impression to your clients, and builds a credible brand image of your travel agency.
When you have a physical location, the chance of your address appearing on search engines will be higher, primarily when people perform a local search.
A target market is a group of customers who are most likely to use your services.
It’s necessary to know your target audience before creating any marketing plan for your travel agency. Not knowing who your prospects are can waste a lot of money and time.
You can narrow down your target clients based on general categories like:
When choosing the perfect market for your business, think about who will get the most benefit from what you’re selling.
For example, if your travel agency focuses on selling cruise trips, then your clients will most likely be middle-aged and elderly groups.
Conducting research in your local area will help to pick the right target market for you.
Look at the majority of people in your community and think about what kind of services you can offer to them.
As a newcomer in the industry, it’s better for you to focus on a smaller target market. When your business starts growing, it’s possible to expand your target market as well.
Step 2. Arrange legal documents
After making a plan for your business, the next thing to do is prepare your legal documents.
To start preparing your business documentation, you need a professional to help you choose a business structure.
Picking a business entity is a crucial step to determine your tax planning and protecting your assets.
After choosing a business structure, you can register your company’s name with your local and federal authorities.
- If you choose to be a Sole Proprietor, then you have to file a DBA (Doing Business As) to register your business name.
Without a DBA, your name and personal assets won’t be separated from your company.
Keeping your account separate from your travel agency will make your accounting and tax payment process easier to manage. Moreover, it protects your assets in any event of a lawsuit.
Applying for an Employer Identification Number (EIN) is essential if you want to open a business bank account.
An EIN is also required if you’re going to hire employees and filing employment tax returns.
Furthermore, having a travel agency accreditation number is a must. It gets you recognized as a professional, lets you book tickets or trips, and allows you to receive commissions from travel suppliers.
Depending on your location, you may also be required to have a travel agency license by your state.
Another important requirement for a traveling business is having insurance to protect your company from unforeseen events.
You can skip the process of getting an accreditation number, license, and insurance when you opt to go with a host agency.
The benefit of signing up with a host agency is you can use their accreditation and license, so you don’t have to spend your money to get them.
Many host agencies include insurance policies for their members.
Step 3. Hire extra people
Running your business alone can be overwhelming. Besides focusing on your services, you also need to take care of the sales, finance reports, and marketing.
By hiring employees, you have more hands to help you run and grow your business.
As a new entrepreneur, you can start your company doing everything by yourself. But as your business grows, you’ll have more tasks than you can handle.
By relying on other people to help you, you give yourself more time to breathe and think of ways to expand your business.
Also, more people in your travel agency means you can handle more clients.
Everyone who works under the name of your travel agency will be the representation of your business. Therefore, it’s crucial to be selective when you’re looking for people to work with you.
Before you start hiring people, set company values for your travel agency:
- Knowing what your values are can help to determine whether someone is right for your business or not.
- You need to look for people who are passionate about your industry. Moreover, they should care about the services you offer and your business goals.
- Your employees should also have excellent interpersonal skills to be able to interact with your clients and business partners.
The hiring process takes time, and being in a rush can cause you to choose the wrong people.
However, if you know the necessary steps to hire someone, it won’t take a long time to find the right employees.
After you find potential candidates for the job, the next thing to do is interview them.
Once you find the right employees for your travel agency, take some time to train them before they start work. Training helps enhance their skills so they can perform effectively.
Step 4. Connect with other businesses
As an entrepreneur, the ability to build relationships with other business owners is essential. The more people you know in your industry, the better your chance of success.
Build good relationships with travel suppliers, hotels and airlines.
Networking with people in the industry is also a great way to word-of-mouth work for your business.
When you have a good reputation in the industry, more people will recommend your travel agency to others who need your services.
Connecting with the right people allows you to gain more perspective, get new ideas, and learn about the latest trends in the industry.
As a new travel agent, you can start by interacting with other tourism businesses in your local area — hotels, car rental companies, or other travel agencies.
Also, try to build a relationship with your local Destination Marketing Organization (DMO), so they can help promote your travel agency.
Find out if there are any networking events held in your town.
Attending events that relate to your business niche is also a great way to meet prospective clients or partners.
For example, if you specialize in honeymoon trips, you can go to a wedding expo and talk with people who might be interested in your services.
You can try to be active in travel organizations. These groups let you know if there are events or educational opportunities that might benefit your business.
Step 5. Promote your travel agency
Your travel agency won’t be successful without promotion. The aim is to build brand awareness, generate sales, and to stay competitive in the industry.
When you know who your target audience is, you can create your ideal buyer persona.
Defining your client personas helps you make your promotion content attractive to the right people.
To make people aware of your travel agency, you can use these three methods to share your business information:
Direct marketing helps you reach clients fast, persuading them to take specific actions. This might include booking your services, visiting your website, or sharing your content.
Making flyers, sending emails, and posting ads in magazines are examples of direct marketing strategies.
Go to places where your potential clients are likely to visit. If your targets are tourists, then you can advertise with brochures in places like airports, train stations, or tourist attractions.
Having a website is proof that your travel agency is a trustworthy business.
Before using your service, most customers will use search engines to search your company name, and make sure that your business is legitimate.
With a website, you can share information related to your services in the form of blog articles, photos, and videos.
It’s also possible to let clients book your service on your site.
You can create your travel agency website using Zyro. This website builder helps you to make a stunning website fast, and at a low price.
All you need to do is join Zyro, choose a template, and start creating your site.
Having a social media presence helps to maintain an excellent reputation of your business and build trust with your clients. It can also help to drive traffic to your website.
Using social platforms is one of the most cost-effective marketing strategies for travel agencies. Signing up on most social platforms is free, and paid promotions cost relatively little.
It is helpful if you look at your objectives and target audiences when choosing the right platform.
If your prospects are mostly adults, then Facebook can be a great choice.
With social media, you can share informative and engaging content based on your client’s personas.
For example, if your target customers are millennials, posting Instagramable pictures can increase the possibility for them to choose your services.
By sharing astonishing photos and engaging content, they gain thousands of followers to their accounts.
Benefits of starting a travel agency
If you have a passion for traveling, starting a travel agency as your business allows you to make a living doing what you love.
You can make a decent living
According to the US Bureau of Labor and Statistics, the average income of travel agencies in 2018 is $38,700, yet 10% of total agencies earned more than $66,080.
With a great business strategy, it’s possible for your business to fall into the highest income category.
A travel agency gets money from service fees and commission from travel vendors — hotels, car rentals, and so on.
The more experienced you are in the industry, the more you can charge your clients for your service.
As an independent travel agency, you also get the chance to meet your travel vendors and suppliers directly.
If you have a good relationship with them, you can ask for more commission for each sale.
You get free trips
Another benefit of being a travel agent is the chance to get FAM — the short for familiarization — trips from travel vendors.
FAM trip is an exclusive trip for travel agents who sell the products or services of a travel provider.
Before selling their products to your clients, travel vendors will invite you to try what they sell. Sleeping in their hotels, eating at their restaurants, and trying out leisure trips.
What to consider before starting a travel agency
Before starting your travel agency, it’s wise to consider some risks that you’ll face.
Knowing what may occur in the future helps you know whether this business is for you or not:
- Time — You are most likely to work during the holiday season, meaning you will have less time to enjoy with your family and friends on holidays.
- Cashflow — When a holiday season is over, there is a chance that your revenue will decrease. You need to find a strategy to get more clients during low seasons.
- Responsibility — As a travel agent, you must be available to your clients whenever they need your help. While using your service, your client’s safety is in your hands.
How to start a travel agency recap
Despite all risks of starting a travel agency, being a travel agent is a fulfilling career if you are passionate and willing to work hard.
To start your travel agency, you can follow these steps:
- Plan your business — choose your business niche, name, location, and target market before starting your travel agency.
- Arrange legal documents — pick a business structure, register your business name, and get insurance for your business.
- Hire extra people — run your business with the help of more people to get more clients.
- Connect with other businesses — build relationships with other travel providers to help you expand your business.
- Promote your travel agency — use some marketing methods like direct marketing, a website, and social media channels to increase brand awareness.
After knowing what you need to start your travel agency, now it’s time for you to work and build your business.