How to Start a Travel Service

Prospective Clients

No matter which type of travel service you choose to start, you'll find that your clients will come from many backgrounds and from across socio-economic lines. Among those who are likely to use your services are:

  • Families
  • Honeymooners
  • Singles
  • Retired people and snowbirds
  • Spring break and summer abroad students
  • People who want to arrange specialty group tours (i.e., physically challenged, gay/lesbian, Christian, etc.) and are looking for services designed specifically for them
  • Business travelers
  • People who are relocating due to a change in job or other circumstances

In addition, others who are likely to turn the wheel of their trip planning over to you include:

  • The internet-challenged, who don't have the knowledge or are unwilling to navigate through online reservation websites
  • People who need help planning the many facets of a complex trip
  • First-time cruisers who don't know where to begin
  • People looking for adventure on an ecotour (i.e., ecologically or environmentally focused tours, like a trip down the Ganges river or through a Brazilian rain forest)
  • Anyone who wants to save time and money by taking advantage of travel agents' insider knowledge

Earnings Potential
With so many people potentially clamoring for your services, you would think it would be a cinch to earn a living in this industry. But the reality is, it takes time to build a clientele, and as a result your earnings could be a little low in the beginning. For this reason, travel industry experts recommend working on a part-time basis until you've acquired enough regular clients to keep the business afloat. Alternatively, if you have a spouse or significant other who can cover the household expenses and provide the health-care insurance while your business is in its infancy, you have a better chance of surviving those lean early years.

As you may know, today's travel services earn their living from two sources: Commissions paid by travel-related bookings and service fees charged to the end-user (aka client). Unfortunately, though, it's not unusual for a travel agent to spend a lot of time planning a trip, coordinating details and ticketing, and otherwise toiling on behalf of the customer, then earn just a $40 fee for their trouble. It should be clear that volume-as well as sales of higher-end products like all-inclusive cruise packages-is key to success in this industry. On the commission front, the industry standard is 10 to 15 percent of the net cost of the product. Very high-volume cruise companies pay as much as 18 to 20 percent, although this is relatively rare.

As for what you might be able to earn annually once your client base solidifies, the OOH reports that the median annual earnings of travel agents is $27,640, while the lowest 10 percent earn less than $17,180 and the top 10 percent earn more than $44,090. It's important to note, however, that these figures reflect earnings for travel agents in traditional businesses; OOH does not collect information about homebased travel services. But it's probably safe to say that because homebased agencies have much lower overhead, the potential to earn more exists.

"After a few years, you can easily clear six figures. It just depends on how good a salesperson you are," says Evan Eggers, a New Hampshire online cruise business owner. "Your number-one indicator of success is a proactive sales personality. You can't just sit back and take orders-you have to do things like follow up with clients and send 'thank you' notes after their trip. Once you have the train rolling down the tracks, you'll be OK. But in the beginning, it can be ugly. You need to assume your cash flow will be delayed by a year-and that's a conservative estimate."

In fact, a recent Travel Weekly magazine article indicated that some homebased travel agents, including some who work just part time, earned well over $100,000 a year. That could be you, too, with some hard work and determination.

How to Start a Travel Service

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