Starting a Travel Agency from Home
If you're thinking of starting a travel agency from home, you're in luck. The start-up costs are relatively low and there are plenty of opportunities for someone with the passion to sell travel. Utilizing a host agency (we'll go more into what those are later) makes it a 'plug-and-play' experience with very little risk or low up-front costs. For those new to the industry, we're a huge fan of the host agency route. 😊
First Things First. HAR's Free 7-Day Setup
The fact is that there's a lot of groundwork that needs to take place in order to start a travel agency.
Luckily for you, we have a tool that will help you with exactly that, Host Agency Reviews' FREE 7-Day Setup: A Travel Agency Challenge. When you opt in, you'll receive a daily email for a week, which will cover information such as finding a name and niche, registering your business, setting up your travel agency financials and so much more. Here's a snapshot of the one of the emails:
It's like hiring us as consultants to help you start your travel agency! Except it's free. (Score!)
If working with a host agency is the route you decide to go, choosing which host to work with will come toward the end of the challenge, and by the time you get there, you'll know exactly what you're looking for in a host. When you speak to hosts or a franchise or consortia they'll be uber-impressed with all the research you've already done.
Can't wait to sign up? I don't blame you. Go ahead and sign up now, we'll still be here when you get back😉
What's the Difference Between an Agent Booking Travel, and a Consumer Booking Travel?
Is starting a travel agency from home a good idea? Doesn't everyone just book their trips on Expedia or Orbitz? I get this question a whole lot from folks who are contemplating starting a travel agency. And while, yes, many travelers do book their trips online, before you even consider starting a travel agency, it's important for you to realize that mega-online travel agencies (OTAs) aren't a traditional travel agent's competition. Does that sound counterintuitive?
When you start a travel agency, you will offer what OTAs do not (and cannot): In brief, that is service and expertise. (Read: Cost of a Travel Agent vs. Booking Online)
If someone is a first-time cruiser, how do they know what cruise would be a best fit for them? Imagine a Holland cruise customer on a Royal Caribbean or vice versa — two very different experiences! It's a travel agent's role to advise to direct clients so they have a great travel experience . . . that they'll want to recreate again and again :).
The logistics of booking will look different too. Travel agents have advantages such as:
1. Access to many supplier/vendor portals that consumers do not.
2. The capacity to develop closer relationships with supplier and vendor BDM's, which is a huge advantage to clients. BDMs will give agents first crack at promotions. Plus, if something goes south on a client's vacation, the agent will have more leverage to fix the problem.
3. If agents sell a certain volume of a product, they may have more access to FAM trips or other travel perks. And there's things travel agents can do that online booking engines can't. Read 3 Real-Life Ways Travel Agents Save You Money, That OTAs Can't article. That's right, travel agents. A whole new world is about to open up to you 😊 If you're still not convinced about the value of a travel agent, read our article A Travel Career — No, it's not a Oxymoron on the growth of the travel agent field.
Top 10 Reasons to Use a Host Agency?
When you choose to start a travel agency, there's a few routes you can take.
For independent agents (those that are not an employee of a travel agency), about 50% go with a host agency, 50% chose to get their own accreditation when starting a travel agency.
I'm an advocate of using a host agency for nearly all agents that are new to the industry: The 50% of independent agents that choose to get their own accreditation are nearly all experienced agents with large books of business and established supplier relationships, which can takes years to develop.
Now, if you're asking, "what is a host agency," that's a great question! About time I answer it too, huh? 😉 You can start by reading our post covering that topic. In the meantime, here's our top 10 reasons to use a host agency:
In a nutshell, a host agency will keep your costs down, help you earn higher commissions, do your back-end work like commission-tracking, and provide you with training and support. For more info on benefits of using a host, check out "7 Benefits of Using a Host Agency," which goes into more detail about why you would want to use a host travel agency.
Alternatives to Using a Host Agency
As much as we love host agencies, there are other options if a host isn't the right fit for you when starting a travel agency
1. Go Independent: This means that you get your own accreditation number for your travel agency. If you're a brand new travel agency, this might prove to be quite the bureaucratic feat (especially since most require at least 6 months experience). When you use a host agency, you don't have the cost or hassle of getting your own ARC, CLIA, or IATA accreditation number. But going independent can be a good option for experienced agents who already have established strong relationships with their own unique pool of vendors, operators or suppliers.
2. Join a Franchise: Joining a franchise is preferable choice to some travel agents who don't want to develop their own brand. The investment of joining a franchise is generally much higher (sometimes astronomically higher) because of all the branding and marketing legwork the franchise provides. Is the franchise model right for you? You can read up more on that option here!
3. Join a Consortium or Co-Op: A consortium is a network of travel agencies, hosts, suppliers and vendors with a shared focus (such as luxury travel), and a Co-Op is essentially a kind of Consortium. The network helps leverage benefits for all members involved (such as helping travel agents leverage access to suppliers and pass along exclusive upgrades or benefits to clients to make them competitive with other travel agencies and online agencies). The benefit to suppliers and vendors is their exposure to travel agents and their book of clients.
It's worth noting that hosts will often be a part of a different consortia, and can pass along some of the member benefits to a home based travel agent. So if you fall in love with a particular consortia, but don't meet their criteria, look for a host agency that is a member of that consortia to join!
Agencies can mix and match these models listed above—you can get your own accreditation and join consortia if you so desire (in fact, most most agencies that have their own accreditation belong to a consortia/co-op). It's also important important to note that joining a host agency won't exclude you from the advantages of these other travel agency models. Under the umbrella of a host agency, you'll be able to use their accreditation numbers and have access to their consortia/franchise perks and benefits.
What to Expect When Starting a Home Based Travel Agency
In general, it will take a few years to get your agency off the ground. This is the case with any entrepreneurial endeavor. We've found that it can take 3-4 years to really start generating a sustainable income.
The reason for the long wait is that
a.) it takes awhile to build a client base and develop your brand
b.) even when you do make your first bookings, you're not paid until after your client completes their travel (or after final payment for some vendors). So, if you make seven bookings in January but the clients aren't traveling until November, you can see how your first year money might be tight. Let's just say, if you're wanting to walk off your current job, and are thinking that the big bucks will roll in the next month, you might want to reconsider your strategy. 😉
c.) travel is something most people only do 1-2 times a year. Referrals and repeat clients take a lot longer to build up than a new restaurant or other service industries like a hair stylist.
What to Expect Money-Wise When Starting a Travel Agency
And money. You probably want to know what you can expect when it comes to money, huh?! 😊
How much will you eventually earn from starting your travel agency? I hate to admit it but there is no one set answer. It depends on soooo many factors. The good news is that we DO have have excellent data that takes all those factors into consideration. The data is derived from 700+ travel agents who went down the same path you're contemplating right now.
Here's a good reading list that will give you an idea of what you might expect to earn when starting a travel agency:
1. Travel Agent Income Report: Not to oversell it, but this is totally the article to read to figure out how much a hosted travel agent makes.
2. How do Travel Agents Make Money: Where does the money come from? This is exactly what the article explores. 😊
2. Travel Agent Commission: The income report answers the "how much," but how in the world do travel agent commissions work? This article gives a general break down of how travel agents are paid.
3. A Travel Agent's Salary: This gives a picture of what different types of travel agents earn (employees, home-based, corporate, leisure, etc.).
Getting Ready to Start Your Home Based Travel Agency
First things first! You've already signed up for our 7-Day Setup Travel Agency Challenge, right?
I swear, it will really guide you through the process of starting a travel agency! Here's a little sneak preview of what you can expect from the challenge:
- A Travel Agency Niche: A niche is your friend. It will help you establish your brand, create your travel agency name, and navigate the world of consortia when you get to that point. Starting a travel agency without a niche is like traveling without a compass (or, let's be honest, a smartphone). You can read up on developing a niche here.
- Choosing your travel agency's name: The host agency will want to know your travel agency name for their records so have one ready before you choose a host. You'll also need it for other documentation (listed below). Read our "Tips for Choosing Travel Agency Names" for some guidelines.
- Choose a Business Structure (LLC or Sole Proprietor or Corporation): You'll want to talk to your tax advisor to see where you'll get the largest financial benefits. This article here will give you the down and dirty on how to choose.
- Register DBA/your company with the state: DBA is an acronym for "Doing Business As." If you choose to become a sole proprietor, you may need to register it with your state as a DBA. The Small Business Administration (SBA) website shows how to register your company's name by state. If you are an LLC, the SBA also has a state by state guide on how to register your LLC.
- Get an EIN (optional): Technically, you may not need an Employer Identification Number (EIN) since you can use your social security number with certain business structures. However, I personally prefer not to give out my social security number if I don't have to and I also like to get my pencils lined up from the get-go. In general, I would recommend getting an EIN when starting a travel agency. Also, make sure to check in with your tax professional when it's tax filing time—for certain business structures, you may still file under your SS# even though you have an EIN. Confusing, I know. That's why you go to the professionals! 😊
- Set up your travel agency financials: Again, you don't need a separate business bank account or credit card if you're a sole proprietor, but you'll have wished you'd had set one up come tax time! Separating your personal account from the business account from the start makes accounting easier and will help you keep track of business expense write offs. Lastly, if you're anything beyond a sole proprietor, you want to keep your money separate to reiterate to the IRS that you and your business are separate entities for tax purposes!
- Read our Home Based Travel Agent Resources page: I put together a page with loads of links so you don't have to scour the web. Here she be, the Home Based Travel Agent Resources page. 😊
As you can see, there's lots of things to do as you start a travel agency. Yikes. Don't be overwhelmed, take a deep breath and let's take it step-by-step together with free HAR 7-Day Setup Travel Agency Challenge! Once you start your travel agency from home, you'll have lots of other things that will demand your attention so laying the proper groundwork as soon as you can is smart business.
Choosing the Best Host For You: A Video
If you've come to the conclusion that you're ready to start your travel agency, and you'd like to go the host agency route, great! Not sure how to find your perfect host agency? You're not alone. Here's a video to help lighten the burden of you info-overloaded brain. 😊
Signing up with a Host Agency
Signing up with a host agency is an easy process and doesn't take long. But choosing a host agency is another story. The end of the 7-Day Setup will walk you through the process of researching and narrowing down your host agency options to help you figure out what's best for your travel agency model.
When you reach out, many host agencies will do a background and/or credit check before you're accepted into their program. Some host agencies require phone interviews. There are many, many host agencies vying for your business. So make sure you've done your due diligence and found the best fit as you start your travel agency from home!
Marketing Your Travel Agency
Starting a travel agency from home is surprisingly easy. The difficult part is learning the travel industry and building up your clientele. While starting a travel agency is relatively inexpensive, you've still got to watch the bank. But as the saying goes, you need to spend money to make money! That's why we created the $100 Travel Agency Marketing Plan to walk you through inexpensive ways to start your travel agency. The video is full of lots of juicy details but the full article has downloadable resources for you (like a marketing calendar template), so make sure to take a look!
And if you're looking for more marketing ideas, check out the full list of the Host Agency Reviews marketing articles
Here's the long and short of it, folks. Starting a travel agency requires passion, drive, and patience. Having been a host agency director for over 5 years (and running this site for over 6 years), I can tell you it takes around 2-4 years before most new home based agents feel comfortable in the industry and begin to see their businesses take off. But don't let that scare you: I can also tell you that those agents that had the passion, drive, and patience haven't looked back since and are living their dream! 😊
Questions? Ask Away.
I've worked with thousands of agents looking to start a travel agency from home over the years. The travel industry opens possibilities of traveling to beautiful places to help you do your job better. It's important to understand that you still have to (*ahem*) work in the travel industry (boo)—you just get to have a lot more fun doing it than most people (yay)! 😊