Travel agencies play a significant role in the tourism industry. Because of them, travelers can enjoy their vacations to the full extent. Their services encompass all aspects of the trip starting with booking the flights, preparing ground transportation, and reserving accommodation. Travel agencies also plan the activities that you will do once you land at your destination. If you love to travel and have a talent for organizing, starting a travel agency is a good potential business. Here’s a short, but helpful guide that can help you get started:
Find Your Niche
The whole travel and tourism industry is very large that’s why it is important for you, as a budding entrepreneur, to focus on one or two types of services in the beginning. It is very tempting to be an all-in-one service provider but in reality, it is more advisable to find and identify your particular niche. To do this you need to conduct market research. Find out the most common types of travel packages your target market is availing.
You can focus on food-centered trips or honeymoons for young couples. There is also the trend for adrenaline-pumping activities like mountain hiking and trekking. Others want to see the wild and choose an African safari holiday tour. Decide if you want to specialize in trips all over the United States, Latin America, Europe, or Asia. Choose whether you want to service young individuals or families. This way, you would be able to build a solid brand and reputation.
Register Your Business Name
Registering a business name is about making sure that your name is unique and is not being used by another business in the same industry. The first step that you need to do is to perform a search on the website of the State’s Secretary of State. Keep in mind that your request will be automatically denied in case the name is already being used by another business entity.
Since you will be making your own website, you also need to conduct a domain name search to check if your potential website name is still available as a web domain or URL. Last thing is you need t do is to trademark your business name. To do that, you can cross-check your name with the database of the U.S. Trademark Electronic Search System to see if the name is still available.
Get a Business License
Some states require travel agencies to register themselves as sellers of travel services. This process involves paying a fee and in some cases, acquiring a bond. To know more about the specific requirements, you can contact your local state’s business and licensing office or the website of the US Small Business Administration.
It is also important for you to get a certification that would establish you as a legal travel professional. You can get this type of certificate by completing a course from organizations like the American Society of Travel Agents.
How Much Will It Cost You?
Since you would be running this start-up business from home, you won’t have to worry about renting a commercial or office space. Generally speaking, the basic things that you would need are a stable internet connection, a working telephone line, a mobile phone, and a computer.
However, there are additional expenses that you should consider like paying for a host agency. A host agency will take care of the back office and regulatory requirements. They will also split the commission between you, the owner, and them. The cost of a host agency ranges between USD 400 to USD 1,200 while the overall price to start an independent agency can cost you somewhere between USD 1,000 and USD 10,000 depending on your types of services.
How Much Should You Charge?
Independent travel agencies usually charge at least USD 30 for booking a flight while the cost to take care of a single-destination sleeping accommodation can go up to USD 50. If you are going to plan the activities for the entire trip, you can price your service at USD 100 per hour. You can also get a 10% commission from your partner hotels and airlines.
When it comes to potential income, the earnings during your first year as a home-based travel agency are somewhere between USD 30,000 and USD 50,000. Once you expand your business and services, you can expect your earnings to reach USD 100,000 per year.
Make Your Business More Profitable
As mentioned above, it is advisable to focus on a particular type of service and this is because specialized agencies tend to earn more money. A study conducted by the U.S. Bureau of Labor and Statistics shows that travel agencies can take home an income between USD 30,000 and USD 50,000 annually. These are companies that focus on leisure, corporate, international, or medical tourism.
Though traveling is still limited because of the ongoing pandemic, there is nothing wrong with planning ahead. Once the global situation gets better, people would need an expert travel agency that they can trust. You will be there to offer your services and make sure they have the vacation of their lives.