The travel agency industry in the United States is expected to generate revenue of approximately 17.3bn US$ by 2020. The above figure clears all our doubts about the impact these agencies have on a nation’s economy. This sector has witnessed a radical change in recent years that has boosted its growth to that length as reflected in the figure above.
Most importantly, the digitalization and availability of user-friendly travel software services in the market have stimulated the growth of travel agencies in numbers all around the world. In fact, online travel market sales are expected to exceed 213bn US$ by 2020, with Expedia ruling the market as the largest online travel agency worldwide.
The same study also stated that 41% of travellers prefer booking a trip with Expedia. Needless to say, these travel technology companies have made things a lot easier for travellers to book and plan their entire vacation online easily.
But, there are a few things to keep in mind before you take a plunge into the bandwagon of agencies ruling the travel industry today.
Things to consider for future travel agencies
It is a known fact that travel agencies make travelling an easy-breezy affair by eliminating the hassles involved with purchasing tickets, booking hotels, and managing the rest of the travel itineraries. The efficient travel agents have taken that responsibility on their sturdy shoulders.
Further, the online booking engine for travel agents has empowered travellers to easily arrange for their vacation themselves – a list of hotels and flights to a particular destination is available on a travel agent’s site. Customers can compare the fares and book according to their budget, time, and aesthetic preferences.
But, there are millions of small and big agents in the market already – Big brands like Expedia, TripAdvisor, MakeMyTrip, and Booking.com who are dominating this niche.
Survival is tough because the market is saturated with competition.
So, the question is where do you stand? The following seven factors will give you the much-needed initial head start for your travel venture.
1. Learn everything about your niche
It is really important to understand that the preferences of modern travellers have changed radically over the years. They are aspiring more for building experiences than merely enjoying the comfort of the hotels. Selecting a particular niche for your travel business is important because your customers will expect a lot more from you than what a regular agent does, i.e. arranging convenience and accommodation for travellers merely. They will look up to your knowledge while planning their travel itineraries such as what are the places to explore and which are the activities to try for gaining new experiences.
Also, other agencies commit the mistake of covering every single niche, thereby attracting competition from everywhere. Try selecting a specific niche that interests you and then grow your business gradually after achieving success in that niche. After all, not many travel agents have strategized to serve a niche market only.
So, select your niche and develop an in-depth understanding of the same to rightfully guide your customers.
2. Choose the right technology
Modern technology serves as a tool to help businesses perform better, faster, and smarter than the human workforce. But choosing the right technology requires a lot of research and a deep understanding of the company’s pain points. Once you get a hang of your pain points, you will know which area requires improvement and where you can implement the right software that will streamline your process.
The biggest challenge faced by the tour operators and travellers is to find the perfect vacation destination with proper accommodation and convenience at affordable rates. The cumbersome task of searching multiple hotels from different sites and comparing their rates can be sorted within minutes using the most suitable travel agency software service.
Online booking engine for travel agents like My Hub Pro spares the customers from the hefty task of filling multiple forms or approaching different agents.
Today, more and more travellers are opting for online agencies where they can compare rates, book accommodation, and convenience, as well as plan their travel itineraries from one site. In fact, the new generation travel agents and tour operators have become a part of the big computer network, also known as Global Distribution System, to cater to the changing expectations of the new-age millennials.
What is the Global Distribution System?
GDS or global distribution system is a large computer network that allows travel agencies and their respective clients to access travel data, compare rates for reservation and plan other itineraries. Other segments of travel also use the same network.
So, don’t be just a tour operator, rather be a B2B travel consolidator, just like DMC+.
3. Become a B2B travel consolidator
A B2B consolidator will offer a chain of hotels, flights, trains or other conveyance services like bus or car rentals from known companies listed on their site, displaying different rates for the users to compare and book according to their budget and aesthetic preferences.
You can either have your own chain of hotels or freight of vehicles listed on your site or connect with big brands via their XMLs. Further, you can connect with other networks of tour operators for budget-friendly tour packages and offer the best service to your customers. You are the mediator, so ensure your customers avail the best travel options using your travel agency software service.
For example – DMC+ is a robust B2B and B2B2C system designed to help local DMCs with their requirements that include proper management of their products like hotels, transfers, and sightseeing activities. The system can either give out API/XML of its own products or connect to 40 major suppliers via their XMLs.
4. Strive for a strong online presence
As mentioned earlier, the new generation practically resides online. A start-up travel venture can survive the competitive and overly-saturated market only if they have a strong online presence. Posting their services online, either on Facebook, Twitter or Instagram can help them reach out to the young millennials and generation Z.
But, a recent study states that seniors are the fastest-growing group of Facebook active users.
Also, ‘Facebook has nearly 2.41 billion active users and more than 140 million businesses use Facebook apps every month’, according to Facebook survey
So you see, targeting these two generations is important because Millennials and primarily ‘Generation Z is growing in influence and spending power, especially in the travel arena’, according to Forbes article.
Besides using the digital platform for carrying out business operations, social media sites can be utilized to communicate with your customers about the new services, new packages, and changes in package rates, etc. Facebook and Instagram pages and messages can be shared easily, thereby expanding your reach across the platform. In fact, 100bn+ messages are shared every day.
Also, attractive tour videos and images can increase the same page views, serving as an important marketing tool for your travel agency.
Such is the power of social media today. Having a proper Facebook or any social media travel business page can prove to be a game-changer for your company.
5. Reach out to different funding resources
You cannot ignore the importance of raising funds for your travel business even though it operates online. But, low overhead expenses of online businesses will not push you to fall a victim to loan sharks, thankfully.
Still, funding is required if you wish to give your travel website a professional look. And, the software, as well as the type of technology you use, will decide the amount of money your venture will need as capital. Then again, paid promotions online, for example, paid per clicks add on Google will not go easy on your pocket.
Now, there are ways to raise small funds for your business. Besides using up your savings, you can approach banks for personal loans or raise funds through venture capital funding and approach small investors – the options are endless. The whole idea is to maintain a continuous flow of cash to meet any unexpected expenses, which in business, is not an isolated incident.
6. Take care of all the legal procedures
Every business has to meet with certain legal standards and fulfil country-specific legal requirements before running its operations. Obtaining a business license for your travel agency is easy but the laws pertaining to the same are different in different countries. Understand your state laws correctly and comply with the requirements before running your operation.
7. Prepare a comprehensive business plan
Finally, you need to have a proper plan before you go ahead and open a travel agency. The travel industry has become highly saturated with small travel agencies, individual agents and big brands competing to win the rat race. In fact, the annual Economic Impact Research report of World Travel and Tourism Council has stated that the tourism industry is responsible for generating nearly 7 million new jobs worldwide.
You cannot just simply launch your own travel business without a comprehensive business plan covering all the key points. A well-planned and detailed business plan can serve as an important source of information you can refer back to whenever you are building a strategy.
The actual journey begins here!!!
The above-described factors are just the tip of the ice-berg. Launching a new business altogether requires a lot of hard work because the niche is already saturated with big, established and experienced brands. Targeting the right social media platform for the promotion of one’s business, acquiring the best travel agency software services in the market, and maintaining a healthy vendor relationship will help your travel business to easily climb the ladder of success.