Editor's note: This article was excerpted from our Travel Services start-up guide, available from Entrepreneur Bookstore.
Downturns in the economy can't stop it. Weather conditions can't shut it down-at least, not for long. Even the catastrophic events of 9/11 couldn't derail it. It, of course, is the travel industry, and while the economy and unforeseen incidents that tragic day in September have tended to slow down the pace of travel, the industry continues to enjoy robust activity despite challenges that are enough to send other industries into tailspins. No doubt that's because people will always want or need to go places, whether it's to a business meeting or conference, to spend the holidays with Grandma in another state, or just to enjoy some much deserved R&R.
- Prospective Clients
- Types of Services
- A Closer Look at Specialty/Niche Travel Services
- A Closer Look at Corporate Travel Services
- Low-to-No-Cost Promotional Techniques
This overall need to travel that's shared by average citizens and corporate denizens alike means that this is an excellent time to launch a travel services business. The travel industry is huge. Research by the Travel Industry Association of America (TIA) indicates that the travel and tourism industry generates $1.3 trillion in economic activity in the U.S. every year. That's equivalent to $3.4 billion a day, $148 million an hour, $2.4 million a minute and $40,000 a second. No wonder the opportunities for aspiring travel services business owners abound.
Today's travel services experts offer a wide array of valuable and time-saving services to individuals, groups and corporate clients. Besides acting as ticketing agents for the airlines, cruise lines, railroads and other modes of transportation, they also engineer complex itineraries. They suggest exotic destinations that might appeal to adventurous customers, then dole out advice on how to get passports and visas. They offer timely information about important travel advisories. They help coordinate all the details necessary to stage a special event, like conventions or weddings in tropical locations. And they know exactly who to contact to arrange a lei greeting at an airport or to have the body of a client's loved one shipped home.
Here's a brief look at the five different types of travel service businesses covered in this article, and in Travel Services start-up guide:
1. Homebased: If you want to keep your overhead low and your profits high, this could be the type of business for you. Thanks to the internet, homebased agents have at their command all the same tools that used to be available only at a traditional brick-and-mortar travel agency. The internet also has delivered another important advantage to homebased travel services: Such businesses are no longer expected to be brick-and-mortar. After years of buying books online, bidding and selling in online auctions, and paying bills online, customers today are very comfortable buying all kinds of services via the internet-and in fact, they look rather askance at companies that do not have an internet presence since they want to surf for information day and night.
It's also important to note that it's possible to run any of these five types of businesses from the comfort of your home, although specialty/niche businesses, corporate businesses and franchise business are the most likely to be based in a brick-and-mortar facility.
2. Independent contractor: If you like working in a traditional travel agency but love the freedom of being your own boss even better, then working as an independent contractor in the travel industry could be the right move for you. Independent contractors make their own hours (with the needs of the travel agency in mind, of course), build their own client list, and are solely responsible for paying their own way at tax time. At the same time, they benefit from having a physical office where they can meet with clients, pick up walk-in business, and drop the name of an established agency when they make cold calls or follow up on leads. That gives you the type of credibility that can be very valuable when you're just starting out on your own.
But you don't have to be present physically in someone's office to be an independent contractor. Some travel agents, like Bill Jilla, an independent contractor in Florida, handles travel arrangements and other services for an established company right from the comfort of his home office, although he also has worked as an independent contractor in a brick-and-mortar travel agency.
3. Specialty/niche business: Since leisure travel makes up 80 percent of total sales in the travel industry (according to Plunkett Research), there are plenty of opportunities for entrepreneurs who want to offer specialty travel services. You can get into the field in more than one way. First, you can offer tours and packages tailored to the interests and needs of particular groups. Second, you can choose to offer very specialized niche services that will appeal to a very narrow demographic. For example, California entrepreneurs Michael Chu and Ying Liu offer a highly specialized set of services to business travelers to China. Third, you can offer luxury travel services. For example, on entrepreneur we've met offers charter airline services to top-level business travelers and another arranges stays in luxury villas in both the United States and abroad.
4. Corporate travel: Actually a type of niche travel service, corporate travel has been singled out in this book because of the various opportunities it offers. But beware, it can be difficult to break into this particular field. A lot of companies already have their own in-house staff or have been dealing with the same travel agency for eons. However, new companies of all kinds with no previous travel agency ties spring up all the time and may be open to the idea of having their own travel service, while others may be looking for a new company because they aren't entirely happy with the job their existing travel agency is doing. Conversely, you might be able to land a spot as an independent contractor or homebased agent on a travel agency team that already has an established clientele. Either way, there is money to be made for the right entrepreneur.
5. Franchise: If you like the idea of launching a "plug and play" business that is ready to go right out of the box, then a travel services franchise could be your ticket to success. With a franchise, you purchase the rights to use a tried and true concept, as well as the name recognition and business procedures that come along with it. However, you do have to conform to the franchisor's established methods of doing business. In addition, the best franchisee is a person who has been successful in a previous career, because, of course, franchises don't run themselves and a basic knowledge of established business practices is necessary.