How to Start a Travel Agency: Steps and Tips

The travel and tourism industry in the United Kingdom (UK) is on the rise again. After the Covid-19 pandemic and lockdown orders eased, people are keen to see exotic parts of the world again and enjoy amazing travel experiences.

To tap into this niche, you’ll want to know how to start a travel agency.

This post offers a comprehensive guide to starting a travel agency, helping to combine your passion for travel with a lucrative, income-generating activity. Let’s dive in.

Planning and Research

Before getting started, it’s important to distinguish between the roles of a tour operator and a travel agency company. Tour operators are individuals or organisations that create travel packages, an offer akin to travel suppliers.

On the other hand, a travel agent sells these packages to private or business consumers. With this distinction out of the way, let’s explore the planning and research phases to starting your own travel business.

Identify your niche through market research

A niche in travel can range from arranging honeymoon trips, travel on cruise lines, business trips, family holidays, senior holidays, arranging transportation for out of town games, adventure travel, sustainable travel, luxury trips, and more.

With so many different types of holidays, you need to specialise in a niche market.

Many online travel agencies develop product portfolios with tours, packages and deals that customers can tap into for a more budget-friendly holiday. This portfolio should be constantly developed as per your market research. This will bring in repeat business if presented in an attractive manner.

This means choosing a niche that aligns with your personal and professional goals, knowledge and experience and that is backed by market research.

Market research in the travel industry involves looking at which niches receive the most demand, how much competition is out there in the particular niche and if there are any barriers to entry. Such hurdles can include a saturated market in a given niche or high costs of entry, preventing you from easily accessing the market. 

Create a roadmap for success with a business plan

The next step is to create a roadmap for success with a business plan. 

The business plan will contain details such as:

• An executive summary;
• An overview of the business’ ownership structure;
• Business structure (for more on this, take a look at the section below);
• Team overview (if you are planning on hiring others);
• A marketing and advertising plan to give your business more exposure;
• Financials, such as cash flow projections and anticipated revenue, anticipated break even point, how much capital you’ll need from lenders, and other relevant information;
• Appendices that contain any additional information about the business.

A travel agency business plan’s purpose is to both help you think through every element of your business and ensure that you convince lenders to lend you the capital you need to start your own travel company.

Choose the right business structure

Whether you choose to run an online travel agency, a travel franchise or a retail travel agency, you need to register a business. In the UK, the business model or business structure you choose will dictate whether your personal account is separate from your business bank account.

In addition, it will dictate whether your business liabilities are separate from your personal liabilities. For a sole proprietorship, business and personal liabilities are combined. This means that if your business fails and you are unable to pay your creditors, you will be personally liable for the business’ debts.

On the other hand, if you choose to operate as a limited liability company (LLC), your business and personal liabilities are separate as an LLC is considered a separate entity.

This is often the preferred route for many in the travel industry to take because your home, vehicle, and other assets will not be touched if your business does not succeed.

Understand legal requirements and regulations

Apart from registering your business as a sole proprietor or a limited liability company, you’ll need to understand the legal requirements and regulations for becoming an independent travel agent.

In the US, you’ll need a business licence and become a member of the International Air Transport Association, alongside following local state rules and regulations.

The situation is a bit different for British travel agents. There are several widely recognised trade associations to which you can gain membership (at rather high costs), such as the Air Travel Organiser’s Licensing.

Becoming a member of various travel agent associations and even joining travel associations means that your travel agency will have greater credibility. An ATOL licence, for example, gives travellers or your customers more assurance that their trip is covered in the event that your business does not make it.

Bear in mind that customers often book trips early on, pay a deposit, and then pay the remaining fee a few weeks before their trip. A lot of things can go wrong during this time period. Making sure you have coverage for your clients is key to them having a successful travel experience, whether they’re abroad or their trip hasn’t commenced yet.

Develop a unique selling proposition (USP)

Your unique selling proposition (USP) of your own travel agency is a single tagline or several key points that set you apart from the competition. Closely linked to your niche, your USP needs to clearly spell out what your unique offering is, be it honeymoon trips or cruises. 

It should also indicate what services you specifically offer that can help your clients understand that they’ll get the best deals and an exceptional customer service from you rather than your competitors.

Setting Up Your Infrastructure

Setting up your independent travel agency starts with finding the right location from which to operate and includes choosing the right payment methods to selecting the right software to sell airline tickets and attractive holidays.

Find the right location for your travel agency

You have several options when starting your business as an independent travel agent that sells travel services. You can choose to operate from a physical office or run your business from the comfort of your own home.

Whichever option you choose, you need to ensure you have sufficient office space and the right equipment and furnishings to create a welcoming and inviting atmosphere. Choosing to work from home will have lower overhead costs as you won’t be paying monthly rental costs to a landlord.

However, not offering a walk-in opportunity to your customers to meet with you face-to-face can mean you need to work much harder on your digital marketing strategies to attract your clientele.

Secure financing and budget for startup costs

After deciding whether you’ll be a work-from-home travel agent or you’ll have a physical office at which to meet customers, you’ll need to create a budget for your business and secure financing for it. 

Your budget should include aspects such as:

• Office space rental costs;
• The costs of hiring a team;
• Industry licencing, certifications and memberships;
• Software costs for email marketing, a customer relationship management (CRM) system, travel booking software, payment acceptance, and more;
• You also need to cover the costs of your marketing materials and website.

Calculate these costs by adding them up and ensure you have enough funds to cover these costs for the first year or two. In this competitive industry, breaking even and reaching profitability can take time. So, you need to ensure you have sufficient funds to cover your business during its initial months of operations until you can steadily stand on your own feet.

Obtain necessary licences and permits

Getting an ATOL licence should be accompanied by getting an Association of British Travel Agents (ABTA) membership. These can be quite costly and add up to several thousand pounds a year. However, they do offer extensive coverage and protection should anything go wrong with your business. Hence, they’re a critical investment for a successful travel agency.

Build a professional website

The travel agency industry is increasingly online. This means that you’re competing with clients who can do their own research online and find good prices for their holidays. In order to capture their attention and interest, you need a search-engine optimised (SEO) travel agency website.

Your website should be credible, easy to navigate, optimised for searches, and intuitive. Getting all of these elements together can be a costly endeavour that can set you back several hundred to several thousand pounds, depending on the investment you’re willing to make.

Offer seamless payment options for all customers

Your online booking systems for the travel industry must be accompanied by safe, convenient, and secure payment acceptance methods for all customers.

This means ensuring you partner with a payment services provider that is Payment Card Industry-Data Security Standard (PCI-DSS) compliant.

It’s also about doing your research into which provider can offer you instant settlement of funds for better cash flow and business management with no monthly fees, a free merchant account and a freebusiness card and support when you need it.

Luckily, myPOS offers all this and more. Integrating your payment acceptance software, be it through a point-of-sale (POS) terminal or card machine, or online payment acceptance, is a great way to ensure a seamless payment experience for every customer.

Marketing and Branding

When you run your own business in the travel industry, you need to attract and retain potential clients. To do this, you need an effective marketing strategy. 

In our digital age, this means treating your travel agency like a media company. What does this mean? Let’s explore a few strategies below.

Create a compelling brand identity

You need to create a brand identity. This is how you come across to the public. It’s about creating a logo, using your brand colours consistently and speaking in the same brand tone of voice throughout all your messaging. Pick a brand persona and stick to it. If you’re catering to honeymooners, make your branding romantic.

If you’re catering to cruise travellers, ensure you use a fun and adventurous tone of voice when communicating with them. Your brand identity is what makes your business memorable to potential and existing clients. Consistency is key here when conveying your unique selling points to them.

Implement effective marketing strategies

Effective marketing strategies go beyond having a search-engine optimised website. It’s about adding value at every step of the way.

Creating free guides, blog articles, white papers, advice and opinion pieces that show off your expertise and that are helpful will ensure your customers get value from you.

You need to combine email marketing by using lead magnets, social media marketing, SEO marketing and even paid ads in some cases to ensure that your business gets the broadest reach.

Utilise social media to attract clients

There are numerous social media platforms on which you can market your travel packages and services. Facebook, Instagram, and LinkedIn are just a few of these, although there are many others.

When you develop a niche for your travel business, you’ll also develop anideal buyer persona. Through this buyer persona, you can more easily figure out where your audience hangs out on social media and therefore which channels to target.

Whether it’s through organic posts or paid ads on social media, you can attract a loyal following and ensure that you reach even more potential customers through attractive copy and visuals that convert.

Network and form partnerships in the travel industry

Irrespective of whether you choose to become an independent travel agent or work with a franchise, networking and forming partnerships in the travel industry are essential aspects to your success.

These activities are good platforms to attract potential clients. With a travel franchise, you may wish to approach the British Franchise Association with your offering and see how you can take advantage of travel franchise opportunities.

On the other hand, if you’re going at it alone, there are other industry bodies you can tap into, such as ABTA, where you can potentially acquire new leads.

Build and nurture your client list with email marketing

A great way to build and nurture your client list is with email marketing. Email marketing ensures you reach your target market in an efficient and cost-effective way. Start by building your email list by offering lead magnets on your website.

Once your email list is sufficiently large, you’ll want to offer your customers newsletters, emails containing special offers and discounts and valuable information about different destinations as a value-add and lead generating exercise.

Operations and Customer Service

So, your travel business is off the ground. How do you ensure you provide an exceptional customer service and run smooth operations? The answer is aligning with and anticipating industry trends to run a successful business. But that’s not all. There are other key tips to bear in mind as you continue running your business.

Select and integrate booking systems and software

An essential staple of any travel agent’s job is booking flights, accommodation, car hire, activities, restaurants and more. For this reason, you’ll need the right travel agency software that helps you manage bookings at the best price for your clients.

Whether you use Phenix, iSell or any other software, you need to ensure you’re always able to manage multiple clients’ travel requests at the same time.

Your booking systems should therefore be integrated with your travel search and payment acceptance software, alongside your CRM and email marketing tools, for greater success and running a more efficient ship.

Provide excellent customer service

Customer service is an integral part of whether customers come back to book future trips with you or not. In fact, it’s not just about providing a customer service. It’s about providing an exceptional customer service that brings them back.

You’ll want to ensure heavy personalisation of your offering, be it through your email marketing or even face-to-face communication. Make sure you take small but effective steps to making your customers feel special.

Follow up with them randomly. Don’t forget to wish them on their birthday. Ask how their children or pets are doing. Overall, be a good human being that isn’t only about sales. Going above and beyond what’s expected will ensure that you set yourself apart from your competitors.

Train and manage your staff effectively

If you work with a team of travel advisors, you need to train and manage them effectively. This means you need to stay up to date with new industry developments all the time.

From new promotions and deals to seasonal fluctuations in the market, be sure your business always has new customers flocking. They should be able to take advantage of your travel agents’ expertise, friendliness and strong customer service offering to give them the best possible experience.

Track performance and customer feedback to measure success

Whether you are part of a global travel group or a host agency, travel agencies play a critical role in ensuring customers have a smooth travel experience.

Be sure to gather their feedback of your service and their trip after their holiday and make sure to use positive feedback such as testimonials, encouraging others to book with you.

You also need to track and monitor your performance on an ongoing basis to determine whether you are meeting your business goals and objectives. Make sure you set up key performance indicators (KPIs) in place before getting started.

These KPIs are like the ultimate aims you have for your business. They can include a certain number of travel packages sold per month or the total revenue you’re aiming to achieve over a quarterly period.

Conclusion

Starting a travel business comes with important advantages in a highly lucrative industry that’s on the rise once again. However, crafting your offering in a specialty niche is highly advisable as opposed to aiming to cater to broad audiences.

The more niche you are and the better you market your services, the higher your chances of success.

Of course, starting a travel agency requires prior preparation such as setting up your business structure, getting a business bank account, partnering with a payment services provider and doing ongoing marketing.

However, once the basics are in place, you’ll be up and running in no time, catering to unique travel needs that bring in a tidy sum each month.

Frequently Asked Questions

How do I choose a niche for my travel agency?

Whether you choose adventure travel, cruises, luxury holidays or anything else, make sure to consider your interests in combination with your expertise and target market.

What technology and software do I need to run a travel agency?

Travel booking software is essential. Consider software that integrates with your customer relationship management (CRM) tools. Also, create a user-friendly website to handle reservations and inquiries.

What financial considerations should I keep in mind when starting a travel agency?

Be prepared with the initial startup costs and ongoing expenses, keeping in mind the potential market and seasonal fluctuations. Budget for marketing, staff and tools. Make sure to also choose a payment services provider that offers you safe acceptance of payments with instant settlement of funds.