A travel agency helps its personal clients plan the vacation of their dreams, and helps its corporate clients lower the costs of its business travel. Travel agencies can provide their clients with discounted rates, improved booking options, ticket management, and more.
Operating a travel agency has many perks, including flexible hours, the joy of helping a family plan and afford their dream getaway, and the satisfaction of developing your business and watching it grow. Tourism and travel are also both consistently profitable industries, which may give you peace of mind as you set out on this venture!
The costs of opening an agency can vary wildly. At minimum, you’ll likely need a computer, internet connection, and professional website, which can run into the hundreds of dollars. For agencies opening a brick-and-mortar storefront, the cost can grow into the six figures. How long it takes to reach profitability will largely depend on these early decisions!
But whether you’re starting a traditional travel agency in a swank downtown office or a modern online travel agency with a sleek website, we’ve got eight best practices that can help you take that first step with your new business.
Define Your Niche
Did you spend your teens and early twenties white water rafting and rock climbing? Are you the kind of sports fan who loves to plan trips for you and your friends to all the out-of-town games?
Do you have a passion for helping people afford the honeymoon of their dreams, or have you worked for a major corporation, helping them plan their travel? These kinds of interests and experiences can help a startup travel agency get started on the right foot.
If you already know or simply enjoy researching the ins and outs of traveling to a place, the sites and destinations your clients may be interested in, and the best places to stay, then you’ll be able to provide the kind of experience that will bring you repeat customers, and will earn you word of mouth advertising!
Here are some other types of travel niches:
By starting out with a limited focus on your defined niche, you can shape the rest of your business accordingly. As your business grows you can branch out into new markets, or bring in associates who themselves are specialists in different areas.
Research The Current Market & Trends
Once you’ve defined the niche for your travel agency, you’ll want to do some market research to make sure your niche actually presents a viable business opportunity. You’ll also want to learn about the people who may be interested in your services.
Here are some questions you might want to answer while doing market research:
Answering questions like these can help you form a big-picture understanding of the industry you’re diving into. With that information, you’ll be able to make sure your goals are attainable, be one step closer to starting a business poised for success, and will have important information that potential investors may want.
Look Into Travel Tools & Ensure You Have The Necessary Skills
Now that you’ve outlined the type travel agency you want to open, you’ll want to take a closer look at the technologies and resources people typically use to find success in your arena.
When you’re opening up a new, independent travel agency, consider how you want to set up your sales and booking operations, for example, using a website and booking software.
Here are some types of software you may want to get familiar with:
Several software solutions combine these different functions into a single package, making it easier to run your travel agency from an integrated system. Pipe drive, for example, combines booking, customer management, email marketing, and more into one platform.
Another way to make sure you have the right skills to open a travel agency is to look into getting travel agent certifications and joining travel agent associations.
Travel agent certifications that can help your business look reputable include these top certification programs:
The Travel Institute Travel Agent certifications
Certified Travel Associate (CTA)
Cruise Lines International Association (CLIA) Travel Agent certifications
Other Travel Agent Certifications
Travel industry associations also offer benefits when you become a member. While there are quite a few organizations you can join, many travel agents look to American Society of Travel Agents (ASTA), the United States Tour Operators Association (USTOA), and the U.S. Travel Association.
Make A Budget
The next step in developing your business strategy is to spend some time calculating how much money you’ll need to spend to launch a travel agency poised for success.
The startup costs for your travel agency don’t need to be exorbitant, especially if you’re running an online-only operation.
If you're starting out with only one employee yourself and minimal office expenses, you can budget to spend around $5,000 to $15,000, depending on your specific plan and preferences.
Below are some startup expenses a new travel agency typically may need to budget for:
Determine which components your new agency requires, and calculate a total estimate for your entire startup budget.
With your budget in mind, you can move forward with creating a more detailed financial plan (part of your business plan more on that later). A financial plan can include looking into financing options if you need a large amount of capital to meet your startup goals.
Create A Travel Business Plan & Company Name
Writing a business plan can seem like a lot of work, but it’s an important step in the pursuit of success. No matter how you structure your plan or what details you include, you shouldn’t shy away from developing a solid strategy for how your business will operate from the get-go.
While a business plan can include a wide variety of information including your market analysis, your financial forecast, the number of employees you plan to have, and how they will be compensated there are a couple of basic questions you can answer to start formulating the big picture.
First, you want to decide if you’ll operate a traditional brick-and-mortar travel agency or just an online travel agency (you may want a website either way). If you want to open a physical office space in your local community, the costs will be higher but you may benefit from foot traffic, local advertising, and the simple cachet that comes with having a dedicated space.
Starting an online-only, home-based travel agency using a travel website is one of the easiest ways to open a new agency with minimum startup costs. A home-based travel agent could become just as successful as an agent with a physical office.
For your next step, you’ll need to decide on the type of business your agency will be. The most common options for startup business owners in the travel market are to operate as a sole proprietor or a limited liability company (LLC).
For expert help developing the rest of your travel business plan, consider hiring a top-rated business plan writer who can guide you and strengthen your overall approach while you’re launching your new travel agency.
With a clear vision for your travel agency, it’s time to start developing your business name. Think about what the name of your travel agency should convey to customers.
Also consider how this name will serve your interests online. Is a matching domain name available for your new website? Are other companies already using a similar name?
These are important questions to ask while you choose the exact wording, spelling, and punctuation of your company name.
Once you have your travel agency business plan and business name nailed down, you can move on to making it official.
Obtain All Necessary Licenses & Registrations
There are at least two main sets of paperwork you need to complete when formally starting your own travel business standard business licenses and registrations and occupational travel agent licenses.
Independent travel agents may need their own licenses. If you’re partnering up with a host agency, you may be able to use their existing licenses and registrations and save hassle and money on those fees.
Standard Business Licenses & Registrations
Any new business will likely need to gather a few standard registrations to operate legally.
These are just the basics. Make sure to cover all your bases by looking into the local city, county, and state requirements in your new travel agency’s business location.
Travel agencies should also make sure they have adequate liability insurance, in case, for example, a client sues you due to losses related to their trip.
Travel Agent Licenses
Licensing varies by jurisdiction. For example, most U.S. states and the federal government do not require travel agents to have a professional license in order to offer travel services.
However, a few states do require such an occupational license. Make sure to check the requirements in your state.
Create A Brand Image As A Travel Agent
Every successful business needs great branding. Your brand goes beyond your company name. It represents all different aspects of your travel agency's image. When developing your brand, you'll decide on everything from your logo and color scheme to your slogan and company values. The branding you come up with can be as simple or complex as you’d like.
Your brand image overall is a combination of your own brand strategy and how people feel about your company. According to a study on consumer trends to watch out for in 2023, the most important aspect when building your brand is to find ways to humanize the interactions your clients have with your company.
Customers want to feel a human connection with the companies they engage with. If your brand image doesn’t offer that personal, empathetic experience, you risk losing clients to a travel agency that does cater to this fundamental desire in consumers.
To get help creating your travel agency’s brand image, explore professional branding services offered by expert marketing contractors. They can assist you in developing an image that shows your company cares about humans, not just money, and position your new travel agency to outshine your competitors.
Promote Your New Business
It's time to count down to your grand opening. With your new travel agency set up and ready to go, start getting the word out to potential clients that you'll be launching soon.
Below are some common ways to promote a new business:
Need help with your marketing strategy? Consider hiring a marketing consultant who can create high-quality marketing materials, advertise your agency, and find your first potential customers fast.
If you're an independent travel agent, you could also consider joining a host agency to help you get your business off the ground.