The tourism sector has become one of the world’s most significant economic drivers. It’s vital in developing countries and the birth of new businesses responsible for supplying the high demand for tourist services. For this reason, the option of creating a travel agency is one of the most profitable to be part of this growing industry.
Travel agencies unify accommodation, transport, and food services in plans, itineraries, or tourist products. In addition, they make it easier for people to access, purchase and enjoy trips to different destinations.
For this reason, today, we share this article with crucial information on creating a travel agency. We will talk about the requirements to start this business.
How much does it cost to set up a travel agency?
Setting up a travel agency involves considering a series of costs that include legal procedures, renting premises, adapting an office, and hiring staff. In addition, the purchase of specialized software and technology for reservation management and other aspects related to travel is necessary. And, not least, investment in marketing and advertising to promote the business.
These costs depend on the size of the agency, the number of people to hire, and, of course, the country in which it is located. Therefore, establishing a fixed total investment value is very relative and can vary due to the above. However, it is possible to project an average of the following costs:
- Legal procedures: between 100 USD and 250 USD
- Local rental: From 1,500 USD
- Local suitability: From 2,500 USD
What is needed to create a travel agency?
Here we will take branding, location, and promotion into the general account. We will also tell you what the requirements are to meet.
1. Create a brand
The first step in creating a travel agency is to create a brand that represents your new business. It will be essential to differentiate yourself from the competition and remember your potential customers. It would be best to think about the name and slogan and a brand logo and graphic identity. In other words, you will have to execute an entire branding strategy to ensure that your brand conveys the values and purpose of your business.
Remember that we are in an era where the visual is fundamental and the image is a direct vehicle to sell. So the best way to sell a package, product, or tourist destination is through audiovisual content that highlights its best features.
2. Market niche and products
Tourism is a sector with a vast field of action, so many agencies want to cover all market niches and thus achieve higher sales. However, this is not a good alternative for an emerging business, and it means competing with a more significant number of experienced companies. Therefore, if you are going to create a travel agency, the ideal is that you specialize in a specific niche and thus focus your products and services on a specific audience.
The preceding allows us to provide comprehensive solutions, provide quality service and reduce the share of competitors. This, at least while your business takes off and becomes known. Here the options are varied to choose between adventure tourism products, hiking, cultural tours, gastronomic tours, religious tourism, etc.
3. Business plan
When creating a travel agency, it is essential to design a business plan as in any other business. In which all actions are planned to comply with the company’s objectives. This will be your base guide for the correct administration and start-up of the enterprise and is made up of the following elements:
- Description of the business idea: Once the brand has been created and the market niche defined, a specific description of the travel agency must be made. That is to say, specify the services, the needs to which it responds, and the benefits that it will bring to the partners.
- Market study: Here, a complete investigation of the environment in which the travel agency will take place and its behavior is carried out. Therefore, data about demand, consumers, and competition are collected.
- Marketing plan: Its objective is to plan the strategies and tactics to promote the enterprise. And these can be applied in both traditional and digital media. The marketing objectives, communication channels, and implementation budget are also defined here.
- Financial projection: The financial projection contemplates the investment budget, fixed maintenance costs, and expected profit margin.
4. Legal procedures
A series of legal procedures must be carried out, including the company’s formal creation. These procedures are different in each country, and their creation will be more straightforward or complex. In addition, it is required to meet another series of requirements demanded by the ministry, office, or tourism institute, as the case may be.
Here you must be clear about what type of travel agency you are going to create because these can be classified into:
- Wholesale agencies are dedicated to the projection, elaboration, and commercialization of tourist products and services for retail agencies. They generally do not contract with the end customer.
- Tour operators: Are those that contract directly with suppliers for the organization and sale of tourism products to consumers.
- Retail agencies: Also known as retailers, they sell their tourism products and services directly to the consumer or wholesale agencies.
Creating a travel agency means planning the initial investment budget and contemplating the costs of maintaining the business during the first few months.
The initial investment includes, from the creation of the brand and the legal procedures to the adaptation of the office and the sales and promotion strategy. As for the fixed maintenance costs of the first months, you must consider the following: payment of rent for the premises, services (water, electricity, telephone, and internet) and staff salaries. In addition to this, there are insurances, tax payments, and the payment of services to your suppliers.
6. Alliances with tour operators
Whether you decide to create a wholesale travel agency, tour operator, or retailer, you will have to hire several tourism service providers. Therefore, you must carry out a careful search for companies located in your market niche. To do this, we recommend classifying them by type of services as follows:
- Ground transportation (van, minibus, bus, bus)
- Accommodation (Hotels, inns, camps, glamping)
- Tours and activities (hiking, trekking, bird watching, environmental contemplation, cultural tours, gastronomic tastings, extreme sports)
- Travel insurance
7. Office location
Selecting the right location to create a travel agency is crucial to pay special attention to. Well, this will be the location of your office and the place where your potential clients will visit you to quote and purchase your products and services.
Therefore, you must make sure that it is accessible, both by public and private transport, and a safe area. Also, you should note that there is the possibility of finding complementary services such as banks, ATMs, and parking lots in the surroundings.
Regarding the premises, it must have enough space to adapt the bathrooms, the reception, a waiting room, a meeting room and the offices for you and your employees. So we recommend that your area is approximately 80㎡. And so you can locate all the furniture and equipment necessary for the optimal provision of your services.
Remember that you must include tables, chairs, desks, a reception cubicle, computers, a television, and a filing cabinet within the furniture and equipment.
8. Promotion Strategies
In addition to the previous steps, this process implies strong and constant promotion and publicity work. Therefore, the importance of planning and executing marketing strategies to position your agency and make it known.
Digital channels have become the ideal medium to achieve this. As a result, many agencies decide to carry out their activity only online, selling through a website with an online reservation system and providing service by email, social networks, Whatsapp Business, among others. It is a viable option if you don’t have the budget to set up a physical office.
In both cases, you must take advantage of the potential and influence of the internet and invest in digital marketing techniques, such as SEO and SEM search engine optimization, content marketing, social media marketing, and video marketing. Develop a strategy in which you give relevance to the visual, creating content that responds to your target audiences’ interests.
We finish our tip for creating a travel agency, but not before saying that the tourism sector is projected to continue evolving and contributing to the development of countries. Well, it is a critical driver of the world economy. Intelligent and sustainable planning and management become a beneficial and harmonious activity with the communities and nature.
Therefore, it is the right time to take advantage of all its benefits and start your own business that meets the growing demand. It is based on study, research, and market knowledge.