Starting a Travel Business
by NicoleD, Former Moderator
- Created: July 20, 2010, 11:55 am
What Services Do Travel Businesses Provide?
Travel businesses offer a wide spectrum of services, with the intent of saving their clients time or money. Creating travel itineraries, mediating on behalf of a traveler if plans become disrupted, and serving as a subject matter expert on customs regulations, travel advisories, and exchange rates are just a few examples of the services that travel businesses provide.
Clients of travel businesses typically fall into one of three categories: independent leisure, business, or group travel.
How Do I Start a Travel Service Business?
As with any new business venture, first understand the basics of starting a business, and then research the specifics that apply to your industry. To begin, follow these 10 Steps to Starting a Business for more information on financing your business, hiring employees, and complying with tax obligations.
You will need to decide how you will provide travel services to your clients. There are three common operation arrangements for travel service business: establishing your own agency, purchasing a travel agency franchise, or working as an independent contractor for another agency.
- Establish your own agency: If you decide to open your own brick-and-mortar agency, you will need to familiarize yourself with the legal and regulatory issues you'll encounter when selecting a business location, including zoning laws and commercial leases. Visit your state economic development agency to get help locating commercial office space and property. However, today many self-employed agents work from their home. Starting a home-based business still requires planning and attention to regulations, especially zoning ordinances. For resources to help you start, run and manage a home based business, visit Business.go;s Home Based Business Guide.
- Purchase a franchise: A franchise or business opportunity may sound appealing, especially if you have limited resources or business experience. If you opt to purchase a franchised travel business, you will have to follow the franchiso-s established business processes in exchange for the rights to use a successful business name and identity. Visit Business.go-s Franchise and Business Opportunity Guide for helpful advice on buying and evaluating a franchise and information on how to avoid common scams.
- Work as an independent contractor: If you work as an independent travel provider, you will likely be commissioned through a host agency. Independent contractors, also known as freelancers or consultants, are business owners, and are not employees of the host agency. Depending on your contract, a host agency may require a percentage of your sales or charge a transaction fee. Some travel providers that work as independent contractors work from the host agenc's office, while others are based out of their home. Read more about how to become an independent contractor at Business.gov.
What Special Licenses and Permits Do I Need?
Depending on where your business located, you may need to register in your stat's travel sellers registration program. Not every state regulates travel agencies, but some, like California and Florida, do. Registration requirements vary, but you will likely need to pay a fee and file information about your business, and in some case you may need to acquire bonds or letters of credit. If you are unsure whether you will need to register as a seller of travel, contact your stat's business licensing office. Learn more and discuss seller of travel registration in the Business.gov Community.
What Credentials Do I Need?
If your state regulates travel businesses, you may need to prove that you have experience in the industry to become a registered seller of travel. You may need to pass a state exam or show proof of your relevant work history. If your state does not regulate travel businesses, you may not need past experience in this field. However, you may still decide to obtain credentials for a competitive edge. Travel agent and tourism courses and programs are offered through universities, community colleges, and online programs. Additionally, travel and tourism industry associations, such as the American Society of Travel Agents*, provide members with various resources and networking opportunities.
How Do I Market My Business?
Federal, state and local governments regulate different forms of advertising. Some states require that travel providers display their seller of travel registration number on promotional materials.
Before starting a marketing campaign or even putting up sign in front of your store, you should familiarize yourself with some basic rules for advertising.
The tourism industry is tied closely to the state of the economy. Travel businesses often find that they need to specialize in a niche market in order to stay profitable during an economic downturn. A niche market can focus on a particular type of traveler (retirees, honeymooners); market (budget, luxury); destination (Caribbean islands, safaris); or special interest (hobbyists, religious travel).
Have more questions? Discuss them in the Community.
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