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How To Start A Travel Agency In 8 Steps

Travel Agencies are still alive and kicking!

Thinking of starting a travel agency? Well, it’s the perfect way to begin a new career. The travel industry is profitable. It provides direct and indirect jobs to many people. From product sales to transportation and service deliveries.

What you ought to know is that the travel industry is not about to slow down. More people are traveling from one location to another with the help of travel agents. As an entrepreneur, this is the perfect moment for you to start your own travel agency.

Exotic travel travel agency services
Above the Pacific Ocean. Photo: © Captain John

Not extinct

You may have thought travel agencies went extinct when people started booking their own trips online in the early 2000s.

But that’s far from the truth. Well, travel agencies and travel agents are not as prevalent as they were. But this valuable travel service is still in demand!

Compensation and benefits

Many travel agents get opportunities to visit destinations to acquire experience and knowledge to make recommendations for their clients as well as colleagues.

Travel agencies typically charge $25 to $30 to book a U.S. domestic flight. Vacation bookings to a single destination usually carry a charge of $50 to $80.

The commission is paid by hotels, airlines, and resorts. Some travel agencies charge fees on top of these fees, because of time spent on research for the client. The typical rate for this is $100 an hour.

As a travel agency, you may also be in a position to have access to special pricing, which benefits your clients. Thus, the savings from the special pricing may justify your fee. The total cost for your client may actually be cheaper than what the client herself or himself can achieve by doing their own booking.

But, a client can typically expect a travel agent to cost around the same as if the clients booked it themselves.

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1 – Research

Before starting a business, it is important to perform extensive research. Why? Research enables you to learn how many niches are there in the travel industry. You also get to learn more about the market, your target customers and your competition.

Your travel agency niche

From the data you have gathered, find out the emerging travel needs. This enables you to find your niche.

There are many different niches in this industry. For instance, travel agents specializing in all included leisure travel sell vacation packages to the general public.

In this niche, you would be responsible for trip itineraries, which you’d base on your client’s needs, interests, and budget.

Or, a lot of travelers want to travel, surrounded by expensive luxury. They want to spend their holidays in upscale villas and not hotels. If no other travel agencies are offering such services, then you have found your niche.

Another niche that is still hot is to target corporations. In the past corporations would typically have their own travel department for booking business trips. This niche, however, is a competitive one to land new clients in, because of the lucrative contract.

Instead of spending money on such a department many corporations rather lean on utilizing a third-party travel agency to handle all their travel bookings. Secure such an account and you should do very well!

Training, experience, and accreditation

Do you already have a travel agent experience? Then you have a tremendous head start. But, if you are just entering the travel agency industry there are several things to consider, learn, and prepare for.

Travel agency travel to Tahiti
Maupiti, Tahiti. Photo: © Captain Les

2 – Establish a Host Agency connection

Connect with a Host Agency. One of the best tips is to connect with a host agency to begin a career as an independent travel agent.

Simply do a Google search under “host agency travel” to start this process.

As a matter of fact, most home-based travel agencies work with not just one, but sometimes several host agencies. Host agencies are accredited travel agencies, such as ARC/IATAN, which are bonded. You will make your bookings through your agency.

Your travel agency, however, would still be a separate agency, in your name. Your company is simply associated with the accredited host agency. You’d get a commission split of all sales.

Independent certification

Of course, you could go ahead and get independently trained and accredited, directly with i.e. IATA, but this is not a cost-effective way to start.

By connecting with a host agency they will train you, allow you to use their accreditation, and offer all the support and advice you need.

Finally, not working with a host agency is not a good idea. Accreditation is not required as a travel agency, but operating without it would present serious challenges convincing your clients to use you.

Plus, you would be extremely limited as to what you can do, beyond what the client could easily do themselves online when booking trips.

It is not a bad idea, however, to complete some independent courses on your own, independently of host agencies.

Many travel accreditation courses are available online. for example, The Travel Institute offers accreditations in Certified Travel Associate (CTA), Certified Travel Industry Executive (CTIE), and Certified Travel Counselor (CTC).

3 – Create a business plan

Benjamin Franklin once said, failing to plan is planning to fail. That said, no business can survive without a business plan. Not only does it contain the goals and objectives of your new business. It acts as a roadmap to help you meet these goals and objectives.

When preparing your business plan, include key points such as: 

Competition, company description, market analysis, product or service line, financial projections, and funding requirements.

With a complete business plan, you now have a clear picture of your business objectives and goals.

Learn more about writing your business plan here: 7 steps to a perfectly written business plan.

4 – Lease space for your business or Start a Home Based Travel Agency

Reiseburo Travel Agent
Reiseburo in German means Travel Agency

Home based travel agency

To save on overhead cost I’d recommend you start your travel agency as a home based business until you grow the business large enough to justify a retail location.

The con about the home based business option is that you will be isolated in your house, unable to market your agency as a serious walk-in retail business accessible from the street.

If you do decide to start your business as a home-based agency make sure you have a home office with ample space for furniture, computers, equipment, and files.

Retail storefront or office

Local customers prefer to visit your offices to chat with you (and your staff as you grow) and book available packages. As you already know, location is one of the most important factors to consider when starting a business. To find the best location for your travel agency, seek the help of a local real estate company.

From the options provided, choose a busy retail location with ample parking. The office space should be enough to host your office, future staff, computers, and furniture.

Unless you operate from home, do not forget to buy general liability and worker’s compensation insurance if you have employees. The insurance packages pay for costs incurred in case of accidents in the workplace.

Step Five – Create your brand name

Your travel agency cannot trade without a business name. A business name gives your travel agency a unique identity. This separates your entity from your competitors. What you need to know is that coming up with a business name is not easy. The good news is that there are methods you can use to simplify the exercise.

First and foremost, take a pen and paper. Write down any business names you have in mind. If this proves difficult, there are business name generators online. Try a few and make your work easier.

Bookings using travel agency

6 – Legal Requirements

Now that you have a business name, it’s time to register the name. Failure to do so means your business will not be recognized as a legal entity by the local authorities. Also, a business license will not be issued to you.

Head over to the local issuing office and register your business name. Alternatively, hire a business lawyer to help you with this. The benefit of hiring a business lawyer is that he or she prepares all legal documents for your business, and more. Don’t forget to get a business license for your travel agency.

Additional legal requirements may include other permits. For instance, as a travel agency in California, you are required to obtain a Seller of Travel Permit.

Make sure you do your due diligence in researching all licenses and permits required for your location.

7 – Create a website

Having a website ensures your business has an online presence. Without a business website, it will be difficult for customers to know what packages are on offer. To get started, choose a domain name, in this case, your business name.

Hire a professional web designer to create a top of the line website and post content related to your business. That includes services offered such as: 

Hotel and villa reservations, transportation arrangements, cruise packages, airfare, and many other listings.

Invest in an online travel management software for bookings and payments. Don’t forget to have a mobile app and blog for your business.

In many cases your host agency can help you with your website presence and software too.

This ensures that you get to connect with customers on all platforms. Also, add social share buttons, comment and testimonial sections on your website.

Build your email list and stay in touch with your clients frequently through valuable email blasts offering travel tips, as well as great travel offers.

Oslo City Hall and Harbor
City Hall (left) and Akershus Castle, Oslo, Norway, at the harbor. Photo:
© Captain Les

8 – Promote your business

Now that you have a business website and offices for your travel agency, the next step is to promote your business. There are tools you can use. The first tool you can use is internet marketing.

Internet marketing deals with business promotion on the internet. Tools or channels such as SEO, PPC, email and social media marketing are used.

Another option you can use is marketing materials such as flyers, and business cards. Using all these marketing strategies, helps you build a client list. From time to time, send travel specials and other information to your customer’s inbox.

Your goal is to sell tickets, packages, tours, and anything travel-related to your potential clients.

Being a travel agent is similar to that of a real estate agent. When you first start you have no business! You earn and you build your business by marketing your services and yourself every day.

You need to approach your clients. Don’t expect them to come to you int he beginning.

And, a word on a question you will be asked often: What commission does your agency charge?

BONUS: How to increase travel agency sales

Have a competitive commission charge in mind before you approach people. Then highlight the benefits they receive by using you for travel agency.

Actively market your agency on social media.

Always upsell your products, explaining how experience is everything when traveling.

If your client has never been to a destination before: Make your client’s trip unique, presenting your client with your “insider” knowledge of their destination.

Always learn everything about your client’s destination before presenting what you have to offer.

Online booking software is a must.

Live flight progress monitor Transatlantic Flight from Europe to the U.S.
Transatlantic flight monitor, Oslo, Norway to Los Angeles, California. Photo:
© Captain Les

Continued operations

There you have it. A step by step guide on how to start your own travel agency. Now that your travel agency business is up and running, there are a few things you need to do.

First, continue your research to find out what your competitors are doing and offer better packages. Second, promote your brand using all marketing channels. Finally, focus, be disciplined, stay motivated, learn and re-invent yourself.

Need to learn more about starting and running your travel agency business? Check out howtosmallbiz.com for great street-smart business advice in general!

Please leave your comments below and let us know what you think about the travel agency business.

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