Travel Agency

A travel agency is a business that provides travel and tour-related services to the general public. Please note that a travel agency can also provide outdoor recreation activities, airlines, car rentals, cruise trips, hotels, travel insurance, package tours, insurance, guide books, VIP airport lounge access, arranging logistics for luggage and medical items delivery, public transport timetables, car rentals, and bureau de change services.

Available statistics show that the market size of the travel agency sector in the United States fell to 20.69 billion U.S. dollars in 2020, down from the previous year’s total of 56.96 billion U.S. dollars. But the market size of the Travel Agencies industry is expected to increase by 38.3 percent in 2023. in 2023, the market size of this sector was forecast to reach 34.64 billion and $407.7 billion in 2023.

Steps on How to Start Travel Agency

  1. Conduct Market Research

Conducting market research before starting any business is key to the success of the business hence you must not start a travel agency without conducting market research. This is because Market research provides critical information about your market and your business landscape. It can tell you how your business is perceived by the customers and clients you want to reach.

It can help you determine where your customers are, and which customers are most likely to do business with you. Thorough market research will help you understand how your target customers think and adapt to their needs to turn them into regular customers and brand advocates.

a. Who is the Target Market for Travel Agency?

If you are thinking of starting a travel agency then you should make target demographics all-encompassing. It should include corporate executives, socialites, students, migrants, entrepreneurs, business people, celebrities, military men and women, sportsmen and women, tourists, and every adult in your target market.

b. Is a Travel agency a Profitable Business?

Yes, the travel agency is a profitable business. The industry is projected to be worth $407.7 billion in 2023.

c. Are There Existing Niches in the Industry?

Yes, there are existing niches when it comes to the travel agency line of business. Here are some of them;

  • Independent Traveling Agencies
  • Consortium Traveling Agencies
  • Regional Traveling Agencies
  • Mega Traveling Agencies (They have offices in different cities of the world).
d. Who are the Major Competitors?
  • The American Automobile Association (AAA)
  • American Express
  • Avenues of the World Travel – Flagstaff, AZ
  • Beachfront Travel – Stamford, CT
  • Frosch Travel – Houston, Texas
  • En Route Travel – Pacific Palisades, CA
  • MK All Around Travel, Inc. – Oak Lawn, Illinois
  • TravelStore – Sacramento, California
  • CruiseOne, Hargarther, Thaler & Associates LLC – Ponte Vedra Beach, Florida
  • Independent Agency of Avoya Travel – Dearborn, Michigan
  • Cary Travel Express – Cary, Illinois
  • Frosch Travel – New York City, New York
  • CWT Vacations – Hammond, LA
  • Connie Lemmon Travel, an Independent Agency of Avoya Travel – San Diego, CA
  • LoBracco Travel, LLC, an Independent Agency of Avoya Travel – Margate, FL
  • World Travel – Tulsa, OK
  • First in Service – New York, NY
  • Bluegreen Travel Services – Indianapolis, IN
  • CruiseOne – Gary E. Smith & Associates – Eugene, OR
  • My Paradise Planner – Clearwater, FL.
e. Are There County or State Regulations or Zoning Laws for Travel Agency?

No, there are no county or state regulations and zoning laws for travel agencies, but players in this industry are expected to work with the existing regulations governing such businesses in the county or state where their business is domiciled.

f. Is There a Franchise for Travel Agency?

Yes, there are franchise opportunities for travel agencies. Here are some of them;

  • The American Express Company
  • Cruise Planners
  • Dream Vacations
  • Travel Leaders
  • Expedia Cruises
  • Results! Travel
  • Tix Travel & Ticket Agency
  • Expedia CruiseShipCenters.
g. What Do You Need to Start Travel Agency?
  • A Feasibility Report
  • Business and Marketing Plans
  • Business Licenses and Permits
  • A Good Office facility
  • EIN (Employer Identification Number)/Federal Tax ID Number.
  • A Corporate Bank Account
  • Office Equipment
  • Employees
  • Startup Capital
  1. Choose a Memorable Business Name

When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with. It is essential that the name you come up with can easily be pronounced, is unique and easily memorable.

Some of the catchy business name ideas suitable for a travel agency business are;

Travel Agency Business Name ideas
  • The Queens© Travel Agency, Inc.
  • Philadelphian Connect® Travel Agency, LLC
  • Moris Jackson© Travel Agency, Inc.
  • Travel Solutions® Travel Agency, Inc.
  • Mason Gray™ Travel Agency, Inc.
  • Like Minds™ Travel Agency, LLC.
  • Sight and Sounds© Travel Agency, LLC
  • Jonny Moore® Travel Agency, Inc.
  • Travel Mamia© Travel Agency, Inc.
  • Anthonio Vicar© Travel Agency, Inc.
  • Jeff Levi and Sons® Travel Agency, LLC
  • Cally Benton® Travel Agency, LLC
  • Emily Elton™ Travel Agency, LLC
  • Tyler Benston© Travel agency, Inc.
  • Around The World® Travel Agency, Inc.
  • Santos Marcos™ Travel Agency, Inc.
  • Golden Trips™ Travel Agency, Inc.
  • Anderson Global© Travel Agency, Inc.
  • One Stop® Travel Agency, LLC
  • Fritz Greene™ Travel Agency, Inc.
  1. Register Your Business

a. What Type of Business Structure is Best for a Travel Agency?

The truth is that you have several options when it comes to the business structure of a travel agency, but the one that most players in this line of business consider is an LLC. It is common to consider an LLC because providers want to protect themselves from lawsuits.

Please note that an LLC will need an EIN if it has employees or if it will be required to file any of the excise tax forms listed below.

b. Steps to Form an LLC
  • Choose a Name for Your LLC.
  • File Articles of Organization.
  • Choose a registered agent.
  • Decide on member vs. manager management.
  • Create an LLC operating agreement.
  • Comply with other tax and regulatory requirements.
  • File annual reports.
c. What Type of License is Needed to Start a Travel Agency?
  • General Business License
  • Zonal Permits
  • Signage Permit
  • Operational State Facility Inspections
d. What Type of Certification is Needed to Start Travel Agency?

These are some of the certifications you can work towards achieving if you want to run a travel agency;

  • Certified Travel Agent (CTA)
  • Travel and Tourism Professional (TTP)
  • Total Travel Certification (TTC)
  • Professional Travel Agent (PTA)
e. What Documents are Needed to Start Travel Agency?
  • DBA
  • EIN
  • Business and liability insurance
  • Federal Tax Payer’s ID
  • State Permit and Building Approval
  • Certificate of Incorporation
  • Business License
  • Business Plan
  • Employment Agreement (offer letters)
  • Operating Agreement for LLCs
  • Insurance Policy
  • Online Terms of Use
  • Online Privacy Policy Document
  • Contract Document
  • Company Bylaws
  • Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?

If you are considering starting a travel agency, usually you may not have any need to file for intellectual property protection or trademark. This is because the nature of the business makes it possible for you to successfully run the business without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.

  1. Cost Analysis and Budgeting

a. How Much Does It Cost to Start Travel Agency?

The cost required to start a travel agency may vary significantly. It could be high, moderate, or low. But on average, you can budget between $10,000 to over $100,000 to start your travel agency.

b. What are the Costs Involved in Starting a Travel Agency
  • The total fee for registering a business in the United States of America – is $750.
  • Legal expenses for obtaining licenses and permits as well as the accounting services total – $1,200.
  • Marketing promotion expenses (2,000 flyers at $0.04 per copy) for the total amount of $80.
  • The cost for hiring a business consultant (writing of business plans inclusive) – is $2,500.
  • Insurance (general liability, workers’ compensation, and property-casualty) coverage at a total premium – of $2,400.
  • The cost of accounting software, CRM software, and payroll software – is $1,500
  • The cost for payment of rent for 12 months at $1.76 per square foot in the total amount of – $35,600.
  • The cost for facility remodeling – is $15,000.
  • Other start-up expenses including stationery – $500
  • Phone and utility deposits will cost – ($2,500)
  • Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $30,000
  • The cost for store equipment (cash register, security, ventilation, signage) – $3,150
  • The cost for the purchase of office furniture and gadgets (Computers, Printers, Telephone, TVs, Sound systems, tables and chairs et al) – is $8,000.
  • The cost of launching an official website – is $600
  • The cost for your grand starting party – is $3,000
  • Miscellaneous – $2,500
c. What Factors Determine the Cost of Starting a Travel Agency?
  • The size of the travel agency
  • The choice of location
  • The required licenses and permits
  • The type of facility
  • The cost for branding, promotion, and marketing of the travel agency
  • The cost of furnishing and equipping the facility
  • The cost of insurance
  • The cost of registering the business
  • Cost of recruiting and training your staff
  • The cost for the purchase and customizing of uniforms
  • The cost for the grand opening of the travel agency
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?

It is not compulsory to build a new facility for your travel agency, but if you have the required finance, it will pay you to build your own facility. The truth is that building or reconstructing a facility will help you come up with a facility that will perfectly fit into your overall business goals and vision.

e. What are the Ongoing Expenses of Travel Agency?
  • Utility bills (internet subscriptions, phone bills, signage, and software renewal fees et al)
  • Salaries of employees
f. What is the Average Salary of your Staff?
  • Chief Executive Officer – $62,000 Per Year
  • Admin and HR Manager – $42,000 Per Year
  • Travels and Tours Consultant – $40,000 Per Year
  • Marketing and Sales Executive $40,000 Per Year
  • Accountant – $38,000 Per Year
  • Customer Care Executive/Front Desk Officer – $32,000 Per Year
g. How Do You Get Funding to Start a Travel Agency?
  • Raising money from personal savings and sale of personal stocks and properties
  • Raising money from investors and business partners
  • Sell shares to interested investors
  • Applying for a loan from your bank/banks
  • Pitching your business idea and applying for business grants and seed funding from the government, donor organizations, and angel investors
  • Source for soft loans from your family members and friends.
  1. Write a Business Plan

a. Executive Summary

Travel Mamia© Travel Agency, Inc. is a US-based travel agency with head office in New York City, New York. Travel Mamia© Travel Agency, Inc. is a client-focused and result-driven travel and tours agency that provides broad-based experience at an affordable fee that won’t in any way put a hole in the pocket of our clients.

We will offer professional travel and tour services to all our clients at local, state, national, and international levels. We will ensure that we work hard to meet and surpass our clients’ expectations whenever they hire our services.

b. Products and Service
  • Travel and Tour consulting and advisory services
  • Selling of traveling-related insurance policy cover, guide books, and foreign currencies.
  • Booking for flight tickets
  • Securing transit visas
  • Booking for shuttle buses/taxi cabs
  • Car rental services
  • Hotel bookings
  • Cruise line bookings.
c. Mission Statement

Our mission is to establish a travel agency that will provide top-notch services to both individual and corporate clients in the United States and across the world.

Vision Statement

Our vision is to establish a standard travel agency that will be become the leading brand in the whole of New York, and also to be amongst the top 20 travel and tours agencies in the United States of America within the first 10 years of operation.

d. Goals and Objectives

The goals and objectives of the travel agency are to provide travel and tourism-related services to the general public.

e. Organizational Structure
  • Chief Executive Officer
  • Admin and HR Manager
  • Travels and Tours Consultant
  • Marketing and Sales Executive
  • Accountant
  • Customer Care Executive/Front Desk Officer

Marketing Plan

a. SWOT Analysis
Strength:
  • Ideal location for travel agency
  • Highly experienced and qualified employees and management
  • Access to finance from business partners
  • Availability of different types of travel and tourism-related services.
Weakness:
  • Financial constraints may restrict the publicity and branding of the business
  • A new business that will be competing with well-established travel agencies and franchises in the city and on the internet.
  • Inability to retain our highly experienced and qualified employees longer than we want during the teething stage of the business.
Opportunities:
  • A rise in the number of travelers
  • Online market, new services, new technology, and of course the starting of new markets.
Threat:
  • The arrival of a new travel agency within our market space
  • Low demand during the pandemic will reduce industry profitability.
  • Economic uncertainty
  • Liability problems
  • The government could change its regulatory status and decide to regulate and enforce strict regulations that can strangulate new businesses like ours.
b. How Do Travel Agencies Make Money?

Travel agencies make money (commissions) by offering the following services;

  • Travels and Tours consulting and advisory services
  • Selling of traveling-related insurance policy cover, guide books, and foreign currencies.
  • Booking for flight tickets
  • Securing transit visas
  • Booking for shuttle buses/taxi cabs
  • Car rental services
  • Hotel bookings
  • Cruise line bookings.
c. Payment Options
  • Payment via bank transfer
  • Payment with cash
  • Payment via credit cards/Point of Sale Machines (POS Machines)
  • Payment via online bank transfer
  • Payment via check
  • Payment via mobile money transfer
  • Payment via bank draft
d. Sales & Advertising Strategies
  • Introduce your travel agency by sending introductory letters alongside your brochure to corporate organizations, hotels, transport companies, households, sports organizations, gyms, schools, socialites, celebrities, and other key stakeholders throughout the city where your travel agency is located.
  • Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across
  • Create a basic website for your business to give your business an online presence
  • Directly market your products.
  • Join local travel agency associations for industry trends and tips
  • Provide discount days for your customers
  • Advertise our business in community-based newspapers, local TV and radio stations
  • List your business on yellow pages ads (local directories)
  • Encourage the use of word-of-mouth marketing (referrals)

Financial Projection

a. How Much Should You Charge for your Service?

The amount traveling agencies charge their clients depends on the type of services rendered and the commission the third-party provider is willing to give.

b. How Much Profit Do Travel Agency Owners Make a Year?

It depends, but available reports show that on average, a small to medium-sized travel agency can earn anywhere from $50,000 to $120,000 in personal income.

c. What Factors Determine the Amount of Profit to Be Made?
  • The capacity of the travel agency
  • The types of services offered
  • The location the travel agency is covering
  • The management style of the travel agency
  • The business approach of the travel agency
  • The advertising and marketing strategies adopted by the travel agency
  • The number of years the travel agency is in business
e. What is the Profit Margin of a Travel Agency?

Travel agents earn commissions as the bulk of their income. Most travel agents who earn commission booking tickets on airlines earn 5 percent on domestic flights and 10 to 20 percent on international flights. The commission rates are similar for booking hotels.

f. What is the Sales Forecast?

Below is the sales forecast for a travel agency. It is based on the location of the business and other factors as it relates to such startups in the United States;

  • First Fiscal Year: $320,000
  • Second Fiscal Year: $450,000
  • Third Fiscal Year: $540,000
  1. Set Up your Office

a. How Do You Choose a Perfect Location for Travel Agency?
  • The demography of the location especially as it relates to people that travel regularly
  • The demand for the services offered by travel agencies in the location
  • The purchasing power of businesses and residents of the location
  • Accessibility of the location
  • The number of travel agencies in the location in the location
  • The local laws and regulations in the community/state
  • Traffic, parking and security et al
b. What State and City are Best to Start a Travel Agency?
  • Las Vegas, Nevada
  • Los Angeles, California
  • Ponte Vedra Beach, Florida
  • Dallas, Texas
  • Silver Spring, Maryland
  • Rowland Heights, California
  • Portland, Oregon
  • Oak Lawn, Illinois
  • Green Bay, Wisconsin
  • New York City, New York
c. What Equipment is Needed to Operate a Travel Agency?
  • Booking software
  • Computers and laptops
  • Printers
  • Telephone
  • Fax machine.
  1. Hire Employees

When it comes to hiring employees for a standard travel agency, you should make plans to hire a competent chief executive officer (you can occupy this position), human resource and admin manager, accountant, travel consultants, and call center agents.

  1. Launch the Business Proper

No travel agency opens its door for business without first organizing an opening party to officially launch the business. You can choose to do a soft opening if you are operating on a low budget or you can go for a grand opening party.

The bottom line is that with a proper launching of the travel agency, you will officially inform people in your city that your agency is open for business.

a. What Makes Travel Agencies Successful?
  • Choose a good location and office facility to launch the business
  • Make sure you partner with key stakeholders and offer a wide range of travel and tours services (give your customers options)
  • Be deliberate with your marketing sales approach
  • Encourage the use of word of mouth to promote your travel agency
  • Leverage all available online and offline platforms to promote your travel agency
b. What Happens During a Typical Day at a Travel Agency?
  • The office is open for the day’s work
  • The walk-in areas, chairs, and tables are properly arranged
  • Walk-in customers are attended to
  • Deliveries of visas, flight tickets, and hotel bookings are made
  • Reports are written and submitted to superior officers
  • The business is closed for the day.
c. What Skills and Experience Do You Need to Build Travel Agency?
  • Excellent customer services skills
  • Interpersonal skill
  • Accounting and bookkeeping skills
  • Business management skills
  • Bargaining skill
  • Work experience in a travels and tours environment
  • Experience in managing people
  • Experience in business administration
  • Experience in handling different types of booking software.
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