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How to Start a Travel Agency - A Complete Guide 19 October, 2020   

So, you want to start a travel agency. Once you’ve decided to go where many professionals have gone before boldly, you will need to start drawing up a business plan: from planning to marketing and launching your business.

What does a travel agency do?

It caters to the needs of tourists, and anyone who needs to travel from point A to point B and needs the help of a travel agency to organize their journey. It covers all aspects of travel.

Now you have at your disposal a blueprint that tells you how to start a travel agency with a complete guide, in fact.

The travel agent’s place in the travel industry in 2018:

  1. The consumer is no longer dependant on travel agencies to book tickets and get travel concessions. This has become a largely online industry, with many companies providing this service for no commission.
  2. People who are wanting to book trips or vacations still value the human touch. This means there is still a niche for the travel agent. Not everyone has time to go running for a visa or an updated passport. Travel agencies can help with many tasks that the average business person or student doesn’t have the time to do. Acknowledging this can ensure you have the best travel agency.
  3. Travel agencies need to have good software to conduct their business, especially a good Global Distribution System, to liaise with airports and various airlines' ticketing systems.
  4. There are various niches a travel agency can choose to specialize in, including religious travel, luxury travel experiences, individual travel, group tours, corporate travel packages, etc. Usually, people need a point person who can coordinate and craft entire travel agencies from beginning to end. Also, being a local, an agent can check various hotels and venues for inbound tourism, do site visits, and make sure which hotels to recommend and aren’t worth visiting.

No matter what you’re specializing in, there are some questions you have to ask yourself before you leap into running your travel agency.

Do your homework:

  1. Review your idea. What is your motivation behind running a travel agency? Is there a steady outflux of people wanting to travel out of your city? Is there a demand to cater to?
  2. Check out the competition. Observe other travel agencies, if you can. It takes a while to get established in a new market. The more competitors you have, the tougher it will be. Do you have a plan to deal with them? If so, put it into words, and do a SWOT (Strength Weakness Opportunities Threat) analysis. Don’t be afraid to do this exercise honestly on your way to become a travel agent.
  3. Examine your business model. Is it sustainable? Ask the hard questions now, so you won’t have to later.
  4. Where are you sourcing your money? Central to every new business is the money factor.
  5. Make a list of resources you will need to run your day to day. This could include:
  6. Website and digital marketing company to do website maintenance
  7. A fleet of vehicles, or agreements and MOUs with local transport companies if necessary.
  8. Can you do your branding and marketing and social media marketing presence yourself, or do you need someone to do it for you?
  9. Be ready to document everything from the beginning.
  10. You will need a database of clients and vendors. How will you make this happen?
  11. How much experience do you have in the travel industry? Your answer will determine what your first step is. If you don’t have the experience to draw on, do you have a mentor whose experience you can use? Sometimes, even taking up a temporary job in the industry can be a starting point from which you can draw on your experience.
  12. Are you physically ready to devote all your time and waking hours to your new venture? The agency is your dream, and it is your drive that will help bring it to life.

Make a business plan:

A good business plan should include provisions for everything that a travel agency needs to do.

Market analysis efforts and business planning should start more than a year before the big to lay the foundation of not the average, but the best travel agency. 

The nature of your business plan will depend on the funding you’re looking for.

  1. Formal business plan: if you’re looking for a loan or investment from an angel investor or venture capital firm.

  2. A lean business plan: if you’re using your funds or plan to get funding later.

Elements of a business plan: 

a. Business overview

  • This is an introduction to your business

  • This will provide the big picture. Give an idea of the environment in which the business is operating.

  • What are the challenges or opportunities travel agencies in your particular market are bound to encounter?

  • What are the market trends your clientele is bound to follow?

  • What changes do you anticipate in the next 5 – 10 years?

b. Executive Summary

  • This is a summary of all the elements of your business plan. This will give a general idea of all the services that the travel agency will provide.

    c. Products and Services

    • Apart from consulting and advisory services, does your company also provide interpreters and tour guides?

    • Do you have foreign exchange facilities?

    • Do you sell travel insurance?

    • Can you secure visas?

    • Can you make hotel bookings, train and flight bookings, cruise line bookings?

    • Can you book shuttles and taxis?

    • Do you receive clients from the airport?

      d. Make a Vision statement. 

      Share your vision of where you see the company in the future, usually in less than 20 words. This will give your investors and shareholders the impression that you are not just looking at the present but also the company's future.

        e. Make a Mission statement.

        This will summarize your company’s reason for being. It plans to do on a day-to-day basis at its very essence, usually in less than 50 words. It will indicate how your company will achieve its vision.

          f, Core values

          This is an indicator of how your company plans to conduct business and the behavior and ethics it will display every day. 

          The mission, vision, and core values serve as a guideline for employees regarding how they are expected to behave and their aims. This is only to be expected of the best travel agency.

          No matter what the intended size of your business is, make an organization chart. Who is doing what, and at what level?

          It is a list of employees, as well as information on who reports to whom. This provides great clarity in working relationships. The importance of staffing contributes to making the best travel agency.

            Write detailed job descriptions of what everyone in your organization does.

            This is a concrete reference document and can even be used in legal disputes, as it is a clear outline of what is expected of an employee, skills needed, and an idea of what they are meant to do. 

              Do an anticipatory SWOT (Strength Weakness Opportunity Threats) analysis of your company. This can change as your business environment changes.

              Market Analysis:

              • Market trends.

              • Your target markets.

              • Your competitive edge.

              Marketing Strategy:

              • Recruitment plans for the Sales and Marketing team

              • Plans for introducing the agency locally and online.

              • Bidding for travel and tours contracts from government organizations, corporate organizations

              • Plans to attend expos, corporate events, trade shows, etc.

              • Recruit a digital marketing team to start a website and manage your online presence.

              • Apply for listings on local directories and listing sites.

              • Draft a plan for packages and rates.

              Determine Sources of Income

              Your sources of income will depend on what services you provide and the extent of your clientele. This takes time to develop, so it is better not to be discouraged at the beginning. Patience is necessary. It’s part of the change you have to embrace to become a travel agent.

              Do a Sales Forecast (based on industry projections)77

              This is based on the prevailing business environment in and around your location. It can be based on your closest competitors' nationwide or citywide trends to give an idea of what to expect. These projections are largely subject to change based on worldwide events, Acts of God, and economic trends.

              Make a pricing strategy.

              There are many options here. Do you want to start with low prices and gradually increase them? Are you aiming at the luxury segment? Low pricing will put you at a disadvantage if you are providing high-end services.

              What commission will you earn on various services? Keep in mind that it will take a while to break even, and some of your profit margins have to be re-invested in your business and pay the salaries of your employees, among other things. Choose the price mix that works best for you. Successfully doing this can make yours the best travel agency.

              Determine payment options

              Outline what payment options in which you are willing to conduct business transactions. In online transactions, you need to have payment portals in place if you expect payment on your website. It is also worth arranging for an SSL certificate and other security protocols to ensure your online transactions are secure.

              Determine promotion and branding strategy

              The options you choose will partly depend on your budget set aside for this activity:

              Are you starting with billboards and advertising in print media, newspapers, and radio commercials? On which TV channels would you choose to advertise?

              If advertising on social media, do you want to do a Google ad campaign, or would you prefer social media channels, such as Facebook, Instagram, or, more recently, Twitch?  

              Branding and advertising can push your travel agency from a good travel agency to the best travel agency.


              This is a detailed plan of how much money you will allocate to purchasing everything you need to run your business and how much you will allocate to your office overheads and marketing activities. This will help you to estimate how much money you need to put into your business and if you need to apply for a loan. 

              Financial forecasting

              Financial forecasting will encompass the past and future of the company’s financial activities and determine future requirements that will determine policy decisions.

              Getting the funds

              This element of starting up your business will determine where you are getting your funds.

              Are you financing everything?

              Will you apply to investors and venture capitalists?

              Will you appeal to friends and family?

              This decision is largely based on the size of your business and the scope of services.

              No matter where you get your funds from, you have to ensure that you will have sufficient funds to get your business off the ground and maintain it to become a travel agent.

              Business growth

              Do you plan to stick to one office, or do you eventually plan to branch out to other cities?

              Will you continue to operate nationally in ten years, or would you go international?

              While it is too early to know these things, it is a good idea to know what you want and what your dreams of expansion are, so you can add them to your plans and make them definite as your business grows.

              Once your plan is ready, think of national and international bodies and franchises you would like to be a part of.

              For an agency that is starting in the tough, competitive world of other more established agencies, you might prefer a franchise's security blanket to reap the benefits of experience and well-established relationships with clientele.

              Joining a global body like IATA may not be compulsory, but it will certainly lend your agency the credibility you need from the get-go if you are prepared to pay a fee to join.

              What sort of travel agent do you want to be? Will you work from home or out of an office?

              No matter what your business dream, remember that although travel agencies exist in an extremely competitive world, they can be quite rewarding and fun to run as well. Plan ahead, do your homework, and get ready for your next adventure, now that you know how to start a travel agency!

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