How to Start Tour and Travel Business [Agency and Online]

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Written by BusinessAlligators Support

Support Staff at BusinessAlligators is a team of business experts led by Shilpi Singh Trusted by over 100K readers worldwide.

December 22, 2017

The tour and travel industry has become the world’s one of the largest industry that records a global economic contribution of over US $7.6 trillion in 2016 (direct, indirect and induced). There is approximately 2.3 trillion U.S Dollar contribution recorded in the year 2016 in the direct economic impact of the industry that also includes accommodation, transportation, entertainment, and attractions. The countries such as France & U.S have maintained a consistency in terms of being popular tourist destinations since ages, though many not so well known places have also been emerging to procure the economic benefits of the industry. The worldwide tourism industry is thus experiencing a stable growth with every passing year.

The international tourist arrivals have noticed a major increase from 528 million in the year 2005 to 1.19 billion in 2015, as a forecast says it might exceed by 1.8 million by 2030. In order to receive the most international tourist arrival, Europe tops the list, producing a whopping sum of 607 million approx. outbound tourists in 2015, the region had more than double that of the second largest tourist origin which is the Asia Pacific region. In 2015 the global international tourism records an approx. revenue of 1.26 million U.S dollars which is almost double the sum recorded in 2005, where China had the largest international tourism expenditure followed up by the United States and Germany. Whereas Dubai holds a record topping the list of the city with the most spending international tourist place with a sum of more than 31.3 U.S billion dollars in the year 2016.

Well with the technicality of starting a tour and travel business I would recommend you to go through basic steps of starting a business also where we have mentioned about raising funds, legal of starting a business, finding team, etc.

Tour and travel business holds a supreme amount of success rate and thus have a great hold and contribution to the global market, but starting up and keeping up with the profit margin is a totally different and challenging task. So before you step ahead to invest in tours and travels business, make sure that you are fully equipped to provide your clients with these 3 key services:-

1. How are you going to get clients? Be sure about your resources and also make sure that you search out and make a list of the most popular travel destinations.

2. You are capable enough to provide the best and fastest visa, tickets, passports and services to your clients, and also sort out their issues regarding other relevant documents as well.

3. If any of your clients get to face any trouble in between the trip, then are you up to sort out the matter at the earliest do you have proper contacts to get them out of the situations.

Types of Travel Industry

Like any other business tours & travel business also have few ranges of variety, so if you have planned to open up travel agency then figure out the best kind of option in accordance with your plans and budget. Make sure about the priority that you want to keep this business according to your vision behind this business. Making it a compulsion or an option is totally up to you and your vision related to the business.

Tour and travel business can be divided into 2 types:

1. Online Tours and Travels Business

The global ratio of online sales of travels has witnessed a rapid growth in the past few years, the online travel sales have thus said to generate US $564.7 billion which are expected to grow to 817.5 billion U.S. dollars by 2020. The U.S. itself generated around 168 U.S. billion dollars through mobile and desktop travel sales, the largest share of online travel sales were conducted in North America in the year 2015. Expedia Inc. tops the list of being the world’s largest travel agents in terms of sale, followed by Priceline Group.

The online travel business is divided into 2 major parts –

  • i) Travel e-commerce sites &
  • ii) Review sites.

The travel e-commerce site deals with the sales of travel necessities such as flight booking, hotel booking, and car rental, which can be booked directly through a travel company’s website like or through an Online Travel Agency (OTA), such as Booking.com, Trivago, Goibibo, etc.

Travel review website such as TripAdvisor, permit the travelers to post their reviews about their travel experience and their purchase of other hospitality services that are offered by the online travel agencies. Travelers rely on travel review websites while choosing a trip.

2. Offline Tours and Travels Agency

Well, 20% of offline travel companies have shut shop in the past few years due to the drastic shift in the business towards the online platform. But there are still many people who choose face to face interaction instead of online services. So in order to open and to survive the offline tours and travels market and services then one have to be innovative and build specialties, providing niche services might turn out to work in your favor and let you survive the long run.

Plan Your Travel Business

No matter what kind of service you opt for, a proper business plan is a must. The travel and tourism industry is fragmented so having a crisp clear and defined niche and a plan might make you stand out. Making a proper business plan will help you in narrowing your choices, goals and might help you to get a clear and focused forward vision. The travel agency business plan might vary in accordance with the kind of agency you want to start or the kind of funding you are looking for.

To avoid mistake, make a list of objectives that you want to fulfill. Try to set up proper contacts, figure out the sources that might fetch you some good clients. Pre-plan about what if any client faces troubles during the trip then how are you going to compensate, what if any situation of missing of passport and visas pops up then how are you going to rescue the client.

Try to keep a check over the profit margin of yours in accordance with your competitors, and look out and plan for ways to enhance it further. The most important thing to plan is the way you are going to compete with the already established and trustworthy businesses. To compete with the big tour and travel companies you may offer niche services like- educational tours, pilgrims tour etc because you cannot beat them in every area in the very beginning, so it is advisable to start with a niche tour and travel business.

On the other hand, online tours and travels business majorly rely on user navigation, consumer’s technology experience, landing pages, offers, advertisements, etc. And while caring these factors most of the people starting up new online business forget the most important thing and that is the cost of customer acquisition. So try to look out for every possibilities and impossibility & keeping them in mind, set a perfect business plan accordingly that would later help you in fetching some profits and also make your business run smoothly. If needed take help from some professionals.


Budget in this field will vary in accordance with your field of choice of services and the enlisted objectives that you need to fulfill in accordance with your services. If you are opting to start tours and travels business than keeping a budget of Rs 15 lakhs (US $25,000 approx) would be passable. As you need to acquire a proper set of software and many more tech-enhanced things to run your business smoothly and to provide your customer a glitch-free service. So keeping an average cost in hand would be advisable.


Likewise other businesses, it also requires capital to make it a full-fledged tourism business, with a proper set of updated software, websites, and a lot more. The need or the amount may vary in accordance with your future expectation or the vision behind the business, and also the niche of services you will be providing. Well, whatsoever services you might choose to offer, be rest assured to keep a proper set of balanced capital in order to make your business run glitch-free. And for that, you can opt for bank loan schemes as every country provide loans for starting tour and travel business because these businesses bring foreign currency into the country. For example, in India State Bank of India offers a Paryatan Plus Loan scheme to people who are planning to start tour and travel business. So, find out what your country has to offer. But before applying for the loan make sure you have the proper set of documents and license required along with a perfect business plan for the approval of the loan.


In terms of starting tours & travel business, there you will have few license requirement that might vary by the state or country law, as different countries have their own set of rules. For example, USA in general, need no specific license in terms of starting a travel business, however, the state laws may vary. In California, Washington, Hawaii, Lowa, and Florida you need to get a seller of travel license. Canada also has the requirement of the license but the laws there vary by location.

You have to become a member of IATA (International Air Transport Association) and need to get an IATA number to become eligible for the booking of international flights, except US where a local organization (Airline Reporting Corporation) provides the accreditation. Along with the other licenses, the Federal Tax ID number is a must-have. Get your business accredited by the Department of Tourism, it will also help you in marketing.


When it comes in terms of selecting the manpower then make sure to select accordingly and wisely who will be flexible enough to work in accordance with the work pressure during the high demand season and then train them to work properly and confidently. Also have a strong online manpower, as most of the major part of the tourism business is dependent on the hi-tech software, so just to have a glitch free service experience one need to hire people who can promptly deal with the technical faults or the breakdowns and do keep your business technology updated with the latest trends.

If you want to set up a proper office to provide offline tours and travels services, then along with few equipment’s you might need to hire few employees, try to train them well before letting them handle any client because one wrong information or one wrong booking might land you and your client into major trouble and also you need to compensate with a high penalty for the fault.

Advertisement and Marketing

When it comes to marketing, try to get involved with local business organizations like the Chamber of Commerce or Rotary club and other famous organizations who have a great influence in the society. In order to generate leads, you can rely on the digital advertisement mediums. Start advertising your business with the creation of your own website and start blogging about different destinations, that might help you to fetch some good clients as it can be said that these days content marketing has become one of the most influential tools in order to advertise any business. Instagram, Facebook, WhatsApp are few other major social media platforms, globally connecting people.

Also, try to keep your consumers updated with the new schemes and plans, for this you can opt for e-mail marketing strategy, as for these kinds of business e-mails and pop up ads do turn out to be a good mode of communication and do let you fetch some bulk orders as well. Newsletters and feature article has turned out to be one of the most powerful tools when it comes to the public relation or in terms of reachability among the public.

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  1. Sunny yadav

    Very well written priyanka!! Being from this field I can find all the facts & data very true helpful.

  2. krunal desai

    Thank you


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