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How to Start a Travel Agency

Everyone likes traveling — new horizons, beautiful destinations
and unique experiences mean we love packing our bags and spending
time away from work and home. That’s why travel agents are so
important: they help bring our vacation dreams to life and build
memories that will stay with us forever.

Even with the rise of online travel booking, many vacationers
want the reassurance of a travel expert to talk them through
countries, destinations, hotels, flights, tours and more.
If you have the expertise to understand travel itineraries
and match the right people with the ideal experience, then
opening a travel agency could be a great business move.

Everyone likes traveling — new horizons, beautiful destinations and unique experiences mean we love packing our bags and spending time away from work and home. That’s why travel agents are so important: they help bring our vacation dreams to life and build memories that will stay with us forever.

Even with the rise of online travel booking, many vacationers want the reassurance of a travel expert to talk them through countries, destinations, hotels, flights, tours and more. If you have the expertise to understand travel itineraries and match the right people with the ideal experience, then opening a travel agency could be a great business move.

We know it can be daunting to start a travel agency, and we’re here to help. We’ve helped over 100,000 people form their business and provided answers, guidance and support to transform them into entrepreneurs. We’ll guide you through what you need to know to start your travel agency business and get it off the ground.

To get you started on the right foot, here’s our simple guide on how to become a travel agent. From highlighting important facts to validating your ideas, and from choosing the right structure to managing and running your business, you’ll find the answers you need.

Read on for some insight into creating your own travel business and becoming an entrepreneur. In this guide we will cover:

  • Facts and figures on the success of travel agencies
  • Learning if a travel agency business could be right for you
  • Ideas for the type of travel agency that you could form
  • Proving your travel agency can work
  • Travel agency business planning
  • Choose the right business structure for your travel agency
  • How to start your travel agency, with information on equipment, employees, location, permits, finances, taxes and more
  • Groups, forums and support for travel agency owners
  • Helpful software for travel agency business owners

Why You Should Start a New Travel Agency

The demand for travel and expert travel agents is growing.

900B

Is spent on private construction in the U.S. every year

$17B

Projected revenue a year for the travel agency industry in the U.S. by 2020

$15BT

Significant growth of annual revenue in 2015

  • Travel agency profits have also doubled from around 6% of revenue to 12%
  • Just over three-quarters of travel agent business revenue comes from commission, with the remainder from service fees
  • Over the last five years, the number of travel agency businesses has grown by almost 4 percent
The time to take advantage is now — we’ll help you be a part of that success!

Is a Travel Agency Business Right for You?

Before deciding to start a travel agency, it’s important to understand the skills and approach you’re likely to need.

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A Day in the Life of a Travel Agent

Here are some of the typical tasks you’ll be performing for your travel agency business on a daily basis:

  • Dealing with inquiries through your website
  • Creating itineraries, destinations and activities for customers
  • Keeping up to date with the latest offers from tour operators
  • Understanding available activities and travel options for specific locations
  • Booking and administering travel and other vacation plans
  • Answering questions and providing information to customers

Skills Needed by a Travel Agent Entrepreneur

The following skills will be very useful in your role as a travel agency small business owner:

  • Amazing administration skills to stay on top of every customer’s travel plans
  • Great interpersonal skills for dealing with customers, tourism operators, airlines, hotels and more
  • The ability to take in and analyze large amounts of information to help customers make the right choice
  • Understanding the vacation experience from the customer’s perspective and working to make that as good as possible
  • Willingness to spend lots of time on travel research and destination websites finalizing details

What Your Travel Agency Customers Are Looking For

Customers come to a travel agent because they want a really great experience, and they want a travel agent to help them achieve that. Some customers simply don’t want to deal with all the administration themselves and use a travel agent to take away that burden. Other customers have specialized needs that a dedicated travel agent can help them to meet.

What Type of Travel Agency Business Should You Start?

If you want to start a successful travel agency business, it’s important to know what your options are. Here are some of the more popular business ideas:

Strong research abilities

Specialize in Travel to a Specific Destination

Some travel agents have deep expertise in a particular part of the world. For example, some travelers may want to go to Japan and will need an experienced guide who can explain all of the cultural differences and idiosyncrasies. Other travelers may want a specialized trip to the Baltics and Scandinavia.

Good math skills

Specialize in a Particular Type of Vacationer or Traveler

Some vacationers will seek out a travel agent that can help with their particular needs. For example, some travel agents may provide specialized services to people with disabilities, choosing locations and activities that can be enjoyed from a wheelchair.

Excellent forecasting abilities

Specialize in Particular Dietary, Cultural or Other Needs

Other travelers may have preferences when it comes to diet, culture, religion or other aspects. A travel agent may choose to specialize in vegan or artisanal food and tours, while another may focus on all-female tour groups.

Great flexibility

Specialize in Types of Travel and Tourism Activities

There’s another niche for catering to vacationers who want to experience specific activities. For example, some tourists may want high-adrenaline activities, while others will want a deeply artistic experience.

You will also want to decide if you want to be a work-from-home travel agent, or if you have other options for where to locate your business.

Validating Your Travel Agency Business Idea

The travel and tourism ideas above are all great starting points, but you will need to build on them to make the business your own. You have unique skills and insight that you can use to create a travel agency business that will really stand out. Your travel agency business will have dozens or hundreds of competitors, and you need to deliver superior travel and tourism services and excel in your chosen travel niche.

  • Identify your travel agency business’s unique selling points (USPs): When you know the travel niche you want to go into, make sure you have a compelling and unique tourism proposition. Your USPs set you apart from competitors and encourage customers to come to you.
  • Look at who your travel competitors are in the space: Having competitors is a good thing as it shows there’s a market, but if there are too many, you’re likely to struggle without a really good unique selling point. See how many other tourism experts operate in your chosen niche.
  • Understand your travel and tourism market: Clearly identify exactly who your vacation and travel customers are likely to be, where they hang out and how you’re going to reach them. This will be essential to your marketing, communications, sales and customer support.
  • Talk to clients: Speak with potential vacationers to understand what they want from your travel and tourism services. Ask about what they need from you to plan the perfect vacation or getaway.
  • Get involved with business communities and discussion groups: One of the great things about the travel agency business is that there are plenty of great communities and discussion groups. Get involved in them and learn the ins and outs of your chosen travel and tourism market before committing.
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Your Travel Agency Needs a Business Plan

Profit margins in travel agency businesses can be tight (between 6 and 12 percent), so you need to stay on top of your finances and business planning.

A business plan will help you decide and define how you’re going to run your travel agency business, where you will get money, how you will market your tourism services, how you will create your sales plan and what you envision for your profitability and future growth.

All travel agencies need a solid business model, which is how you will generate sales, provide services and make money. Think about your travel and tourism business model now, because it’s better to have that in place so you can start acquiring customers and generating revenue from day one.

Business plans do vary slightly, but they should all cover the following areas:

Here’s what you can expect in an average day
  • 1 An executive summary with the most important points from your business plan
  • 2 Your goals and what you hope to achieve with your travel agency business
  • 3 A description of your travel agency business, including background information, your chosen niche and context
  • 4 A market analysis and likely demand
  • 5 An overview of how your travel agency business is structured
  • 6 Your business model
  • 7 How you will market and sell your offerings
  • 8 Financial projections, revenue and profitability
  • 9 Appendice

Choose the Right Business Structure and Register Your Travel Agency

There are five main business structures you can have in the U.S., and it’s important to choose the right one. We’ve shared your options below. They are:

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Sole Proprietorship

This is the "default" business structure and is what your travel agency business will be if you decide not to create a more formal structure. We don't recommend this type of business as it doesn't give you the legal protections you need.

Limited Liability

Partnership

Similar to a sole proprietorship, if you go into business with someone else without forming a legal business entity, you will be treated as a partnership. This doesn’t give you limited liability protections, so we don’t recommend it for your travel agency business.

Series LLC

Limited Liability Company or LLC

The most common type of business entity. An LLC is fast, simple and inexpensive to set up and maintain. It protects your personal finances and assets and is a great way to start your travel agency business.

S Corporation

S Corporation

This is a more complex type of business and isn't generally recommended for smaller organizations, like a travel agency business.

C Corporation

C Corporation

These are the largest and most complex types of businesses and are typically far more than the average entrepreneur or travel agency business owner will need.

For more information on the advantages and disadvantages of different types of businesses, please see our in-depth guide. If you’ve still got questions, we’ve answered them to help you choose the right business structure for your travel agency business.

In most cases, our recommendation for your travel agency business would be to create an LLC. We’ve got a complete guide to everything you need to do. LLC formation does vary from state to state, but we’ve got you covered, wherever you are.

Setting up Your Travel Agency Business Operations

Once you've legally created your travel agency business, you’ll need to get some other things in place.

Location of Your Travel Agency

Many new tourism entrepreneurs choose to be work-from-home travel agents. In almost all cases this is the right choice, as you will be able to prove out your travel agent business model before investing in separate or shared office space. Don't forget that if you work from home, you can write off part of your utility and housing costs against your taxes.

Equipment for Your Travel Agency

The equipment needed to run a travel agency business is likely to just be a computer and a smartphone. Of course, you will also need to invest in good travel agency software that will make administering your tourism business that much easier.

Marketing Your Travel Agency

Marketing is everything to a travel agent, and you will want the right mix of marketing channels to target your specific niche. Email, social media and your travel agency website are the most popular channels for travel agents, although newsletters, community events and local networking are also useful ways to reach new customers.

Software and Processes

The right software and processes will make running your travel agency business much easier. See our list of the best apps and software at the end of this guide. You may also want to look into specialized travel agency software that can integrate with major tourism providers and make planning your itineraries and bookings that much easier.

Employees

To begin with, you probably won’t need to hire anyone else for your travel agency business, especially if you’re a good administrator.

Finances and Taxes

You will need a separate business bank account for your travel agency business. You might also want to consider a business credit card. Additionally, you will also need to keep careful bookkeeping records and file business and personal taxes. Here at Incfile we can even help you file your taxes.

Our Start a Business Checklist will get your travel agency business started in the best possible way.

Conclusion

The internet has lowered the barriers to finding the perfect vacation, but many people still need the experience and expertise that a great travel agent provides. Find the right niche, get your marketing right and you could see huge success as a travel agent.