The travel planning industry has changed dramatically over the last two decades. During that time, we’ve seen the rise of the internet, direct-to-consumer travel planning websites, and the sharing economy (Airbnb, anyone?) to help consumers plan their trips. Not to mention a pandemic that brought most travel to a screeching halt in 2020.
Which begs the question, what happened to the travel agents?
In 2000, there were more than 124,000 freelance travel agents in the U.S. Today, that number has dwindled to 66,000. Nevertheless, people still need travel agents, albeit on a smaller scale than 20 years ago.
In fact, 43% of consumers say they prefer to use an agent to book airline tickets. This statistic isn’t surprising since there are so many rules, restrictions, and requirements to travel in a world still grappling with a pandemic.
If you’re embarking on a new adventure in the travel business, you should know a few things. Here are five steps to starting an online travel agency in Virginia.
Step 1: Make a Plan
Every great business, no matter what it is, starts with a plan. Business plans help entrepreneurs put their ideas into action by specifically naming their goals and strategies to achieve them. And for many, making a plan makes the difference between success and failure.
In the U.S., 20% of small businesses fail within their first year of operation. You need to do everything you can not to become another statistic. A business plan increases your chances of success by 16%.
According to Indeed, your business plan needs to include a business description, market analysis and strategy, a sales and marketing plan, and an organizational structure. You should also consider your financing needs and operating budget—29% of new businesses close because they lack financing. And every tailored business plan should include a well-thought-out insurance strategy, too.
Step 2: Get Insurance
Getting insurance is a critical step for every business. You work hard to build something to last; if you don’t protect your business and its assets with the right insurance, you could lose everything.
When researching insurance, consider the risks of your online travel business, what forces affect your industry, and the number of people you employ. Every company has unique insurance needs because every business operates differently.
A great place to start is with general liability insurance. This is the most basic, comprehensive type of business insurance every online travel agency should have. Because even though your job is to plan trips, you can’t plan for everything, which is why general liability insurance is so important.
General liability protects your business when the unexpected happens. Think of it as an umbrella to cover you when a natural disaster puts your business out of commission or a litigious client sues you for something bogus. General liability insurance covers everything from property damage to legal fees.
But what if, instead of something happening to your business, you make a mistake, yourself? You can still be protected with professional liability and errors and omissions insurance. And as a travel agent, you should strongly consider these policies. Your work is very detail-oriented, and the slightest keystroke error on your part could snarl a client’s entire trip. Of course, you aren’t perfect, but you can prepare for these inevitable errors by getting professional liability or errors and omissions insurance.
You should also think about your physical assets when considering business insurance options. If you have a vehicle or office space for the business, even a home office, commercial property and commercial auto insurance aren’t a bad idea. These policies protect vehicles and structures you need to operate your business—they aren’t usually covered by personal policies.
Last but certainly not least, you’ll need to look into workers’ compensation insurance. But be advised, this type of insurance is only necessary if you plan to have employees. Virginia requires all businesses with one or more employees to have workers’ compensation insurance. These policies protect owners and employees in case of an accident at work. And yes—accidents can and do happen in office environments!
Step 3: Register Your Business
Some states require special licenses for travel agents. This helps ensure that individuals selling travel plans and products are qualified to do what they claim. Virginia requires no such license, so you don’t need to worry about getting a permit or other permission to operate an online travel agency.
You will, however, need to register your business with the state. Doing so enables Virginia to keep records of your business and collect taxes. You can register online at Virginia’s State Corporation Commission website.
Step 4: Do Your Research
You probably started your business planning with research. But you need to do more. The better you understand your industry, market, and customers, your online travel agency will likely succeed.
What are the conditions of the travel planning market? What variables affect the market’s performance? Who is seeking travel planning services? Where do these customers want to go? What other companies are targeting the same segments of the market?
These are just a few of the many questions you need to unpack in your research. Fail to grasp these concepts and your chances of success decrease. For example, the second-leading cause of business failure is lack of market need; this is the reason 35% of companies fail. The third-leading cause is too much competition, which accounts for 20% of business failure.
Step 5: Find Your Niche
Your research should tell you a lot about what kind of travel planning is popular, what customers want, and what they’re willing to pay for. Now it’s time to put the information to good use.
Maybe you learn there’s a need for more corporate travel planners? Or perhaps you identify a need for more travel agents specializing in European vacations? Take what you’ve learned about the market and use it to specialize.
But also think about what drives your passion for travel. For example, do you want to help introduce people to new cultures? Empower other businesses to create transformative change with team building? Or even enable families to make memories to last a lifetime?
Yes, the market is a crucial consideration. But doing something you love is important, too. And you need to commit to a niche that will make you and your customers happy.
Once you’ve determined what you want to focus on, learn everything you can about your niche. You’ll glean a lot as you help more and more customers, but start your business off on the right foot by educating yourself about your destinations, customers, and more.
As fun as traveling is, owning an online travel agency isn’t a vacation. You need to invest a lot of time and effort into this business, but with the right plan, you can succeed!
