The Ultimate Guide To Starting A Successful Travel Agency In 2022
Do you often find yourself sitting in front of the screen looking at flight options? Do you love collecting and redeeming flight miles and reward points? Are you a fan of traveling? If the answer to these questions is yes, then it’s possible you might have thought to yourself, “Can I become a travel agent?”
In this article, we will tell you how you can start your own travel agency and turn it into a profitable venture. We will also cover the travel agency startup costs that are involved with it, how you can raise the funds for it, and how you can market it.
#1 Create A Plan
Just like every other business, you will need a business plan for your travel business as well. Even if you don’t want to make a formal business plan and raise funding, a simple plan could always come in handy to help you structure your business well, and answer questions like:
- What is your target market?
- How much would your travel agency startup costs be?
- What will you name your business?
- How much can you charge customers?
Target Market
Ask yourself if you are good with international trips or want to stick to domestic trips in the beginning. That will help you find a target market for your business.
Moreover, you can further segregate into the kinds of customers you want to cater to. Do you want to plan exotic honeymoon trips, rejuvenating family trips, relaxing holiday trips for retired people, adventurous trips for youth, and so on?
Travel Agency Startup Costs
If you’re unaware of how to start a travel agency, one way to do it is through host agencies that take care of all regulatory and even back office requirements. While as per some sources, host agencies charge around $500 to $1,500 to get you started from home, others won’t charge you anything upfront but will take a commission on your sales.
An independent travel agency startup costs between $1,000 to $10,000 usually, depending on your target market. And the ongoing travel agency startup costs are normally low due to limited office paperwork, and in the case of host agencies, even advertising might be taken care of by them.
Name Of Your Business
You need to put a lot of thought into what you want to name your business. Not only will it play a major role in its branding but also give it a unique identity that your audience will relate to. You can also try our Travel Agency Name Generator to find some unique and catchy names. There are a few other things that you would want to consider when finalizing your business name:
- Your state’s business records
- Federal and state trademark records
- Social media platforms
- Web domain availability
Charging Your Customers
Independent travel agents usually charge $30 for flight bookings, $50 for room reservations in a single destination, and for research and planning advice, they might charge somewhere around $100 per hour. Travel agencies might also be able to procure commissions from hotels or airlines around 10% of the amount.
#2 Form A Legal Entity & Register For Taxes
The most common types of business structure are as follows:
- Sole proprietorship
- Partnership
- Limited liability company (LLC)
- Corporation
Even though you can start a travel business in any of the above structures, a legal business entity like a corporation or LLC would protect you from being personally liable in any litigation against your company.
Before you start travel agency, you will also need to register for the necessary state and federal taxes. And to register for taxes you will have to apply for an EIN or Employer Identification Number.
#3 Open A Business Bank Account And Get A Business Credit Card
The third step in “how to open a travel agency” is opening a business bank account and getting a credit card for it. Having a separate bank account and credit card will help in keeping personal assets safe.
It will help in having clarity in your business accounts and filing your taxes. And it will also help you in building credit history, getting higher lines of credit, and better interest rates for your business.
#4 Obtain Necessary Permits & Licenses
You’ll need to obtain the permits and licenses that are necessary to start your own travel agency. Not getting them could lead to fines and penalties, and sometimes even your business shutting down.
Many states also require you to obtain a Travel Sellers Registration License if you want to sell travel. You can do that by filling out an application, paying the fee, and submitting supporting documents for it.
#5 Get Your Business Insured
Just like licenses and permits, you need to get your travel business insured so that it can function safely and lawfully. In the event of a sudden loss, the insurance will protect your business as long as it’s covered under the policy.
There are different kinds of policies for different kinds of risks, but if you are not sure which one to go for, the simplest option is to pick General Liability Insurance. It’s the most common business insurance policy and is enough for you to start a travel business.
Besides, you might also need to get Workers’ Compensation Insurance. If your business has employees, your state will likely want you to provide them with Workers’ Compensation Coverage.
#6 Strategize Your Funding
We already covered above how much the travel agency startup costs come out to. Now to be able to cover those costs you will need to strategize your funding so that you have all the money you need to start your own travel agency.
Your travel agency startup costs would be low if you are planning to start small, and you won’t even have to invest in a space if you plan to start a travel business from home. Besides that, you would need money to build a brand for your business, and do the initial advertising and marketing through means like posters, flyers, business cards, online ads, creating your business website, etc.
Hiring employees is another big expenditure for which you would need cash in hand. Depending on how big you are planning your travel agency to be, there are various ways through which you can raise funds for your business.
Those thinking, “how to start a travel agency online” need minimal funding and can use their personal funds for it. If you don’t have enough personal funds, then you can take a little help from your family as well, as you won’t be needing a lot of money in this case.
For slightly bigger ventures, taking loans and a line of credit from banks is a great option. Once your business starts generating revenue you can start paying back the bank, and soon enough you might be able to repay the whole loan.
However, if you are planning to start a considerably bigger travel agency, raising money through angel investors and venture capital funding is always an option. You will have to give them a stake in your business, but in the long run, you both could benefit from a successful travel business.
#7 Build Your Brand
For any business, its brand is what helps in creating a unique identity for it. It’s how the public perceives your business, and how it stands out from your competitors in their eyes.
We already mentioned above, how essential a role the name can play for a business. There are so many travel businesses out there, and if your agency’s name doesn’t stand out, how do you think people will even remember to come to you for their travel needs?
Then you need to get a professional logo designed for your travel agency. The logo should have a unique appeal, and represent your business well, meaning that when someone looks at it, they should be able to relate it to your business.
You also need to have a unique vision for your business. You might feel that the objective of every travel business would be to help their customers with their travel plans. But if you think like this, you would never be able to provide your customers with a unique experience, and they wouldn’t come to you for their travel needs.
You need to tell your customers how you are different from your customers, and why they should book their travel with you and not your competitors. In fact, tell them why they should not book their travel on their own through online portals and come to you.
What more are you providing them with other than just booking their travel? Having a unique vision will help you answer all of these questions for your customers.
#8 Develop A Full-Fledged Marketing Strategy
The success of your travel agency will greatly depend on how comprehensively you have developed a marketing strategy that expands to all channels. The more channels you use, the bigger your audience will be, along with better brand visibility and a stronger online presence.
For instance, an effective Instagram campaign can bring a huge audience to your business who would then turn into your customers. Instagram is a highly visual platform and has just the right kind of audience for you.
Use it to showcase what kinds of trips you have planned for your customers and how great an experience you have provided to them. You can upload exotic pictures and eye-catching videos from the trips to attract people who want to have a similar experience.
Just like Instagram, you can use other social media platforms like Pinterest, Facebook, Twitter, etc. In fact, you can also start a YouTube channel where you upload highly appealing videos.
Besides, there are so many travel bloggers and influencers out there who have huge audiences on their social media handles. You can tie up with them and run social media campaigns together. You can also ask them to promote your agency to their audience in exchange for a free trip or something else.
Don’t forget to create a website for your travel agency, as all legitimate businesses have websites and you should too. Your website acts as a storefront, and when people look at it, they get the feeling of authenticity. A customer might be a little skeptical to book their travel through an Instagram account, but when they see a valid website for the same account, trust comes easy.
You can optimize your website for SEO, which will help in ranking it high in the SERPs when users search for something that you might provide on search engines like Google. For instance, if you specialize in bachelor trips in Vegas, and have optimized your website with keywords for the same, whenever a user searches for it, your website will show up.
Maintaining a blog with regular articles can help you market your travel agency as well. All you need to do is optimize your articles for SEO with relevant keywords, and the search engines will do the rest.
You can also use your blogs to create an email subscriber list. You can ask your readers to sign up for your list for exclusive offers and discounts. And you can also hide a part of some blog pieces that can be read only after sharing their email ids.
In this way, you can build an email subscriber list of your own, and use it for your email marketing strategy. You can keep sending them emails with exclusive offers, upcoming holiday trips, special packages, and so on.
Another great way to market your travel agency is by running online ads and promotions. Online ads work really well, as the algorithm keeps a track of users based on their usage history, and what they are really looking for on the web.
When you run an online ad, it is shown to the people who might already be your potential customers, and the chances of them converting are really high like this. And the best part is that most online ads are PPC or pay per click, which means that you will have to pay for the ad only when a customer clicks on it. So you are only paying when someone is actually interested in whatever you are offering, which seems like a great return on investment.
Final Thoughts
The love for exploring different places and cultures will never die. And with the huge online exposure, people now get to know so many unique things about different countries and want to visit them even more.
It’s never too late to start your own travel agency and help people in satisfying their quests, and make money in the process. We created this article to help you understand how to start a travel agency online, and have covered everything that you would need. Go for it!
