7 Steps to Start an Online Travel Agency Business
We live in the startup era, where budding entrepreneurs are passionate about turning their dream project into a lucrative business. Launching a travel agency business can be equally rewarding and intimidating in this booming entrepreneurial era. According to a study, 71% of businesses fail within 10 years of their operation. Turning your business idea into a travel company and getting it off the ground might seem challenging. But it would be best to start with proper planning, make appropriate financial and legal decisions, and much more to keep it operational. Online travel agencies or OTAs are the most dominant players in the travel market, with a share of $561 billion in 2021. OTAs are one-stop-shop to search and book everything from flights and accommodations to excursions, making it hassle-free for travelers to book for their upcoming trips. A new research by Statista predicts that by 2025, the OTA market is expected to reach $833.5 billion. 7 Steps to Start an Online Travel Agency Business Owning an OTA business in 2022 is lucrative as 81% of travelers heavily rely on OTAs to search and book for their upcoming trips. Let’s now dive into the top 7 steps that you need to take to start your travel agency business. This post can be a blueprint for launching your online travel agency. Also Read – Three Major Tips to Consider for Upcoming OTA Brands 1. Develop a Business Plan Your online travel agency business plan will be a roadmap for establishing your idea. The document will showcase every aspect of your business- company goals, vision, business strategy, financial plan, products or services, your target audience, marketing strategy and strategic partners: These can be suppliers and tech as well. Developing a business plan will keep you on track with your vision. Also, to stay competitive in the constantly evolving travel market, you need to revise your business plan constantly. Read More – The importance of responsive web design for OTAs and its implementation 2. Identify your Niche Market Since the travel industry is highly dynamic and competitive, you need to identify and choose which travel market do you want to target. Start with market research to understand your potential customer needs. In this step, you must focus on: Target audience travel behavior and preference Types of travel products such as hotels, flights, excursions, cruises, etc. to sell Finding niche travel markets Why is it essential to find your niche to start an OTA business? Well, the competition is fierce with brands like Booking.com, Tripadvisor, Kayak, Expedia, and much more. You need to stand out and compete efficiently in the travel market. And this can be possible by being an expert in your niche and answering every trip-related question the modern traveler asks. According to a research some of the booming travel niches that your business can dive into are: Bleisure travel Adventure travel Healthcare tourism Eco-friendly or sustainable tourism Gastronomy tourism Wellness and spiritual tourism Heritage and cultural tourism Recommended: Five Ways World Travel And Tourism Industry Digitalizing Journeys 3. Find the Right Mix of Partners and Inventory Suppliers The next step is to develop fortifying partnerships that can help your business grow. During the early stage of your startup, you need to work with multiple suppliers or providers to sell your travel products and make money through commissions. Let’s say your niche is heritage and cultural tourism in Italy. To sell your travel products and grow effectively, you must connect with a wholesaler with the largest hotel inventory, airlines, and other travel services. Talk to various providers, suppliers, compare their prices, services, and the commissions you might earn and then decide on the partnership. 4. Organize your Tech Platform With a business plan, niche and partners in place, it’s time to build a technology platform. Focus on these five main tech platforms: Search engine for customers to book Booking engine for automation of OTA workflow Back office for business operations Commission engine Recommendation engine to enhance customer experience It is difficult to work independently, and that’s why it’s ideal to integrate booking engine and other third-party APIs (flight search, hotel booking by suppliers, NDC, hotel mapping, car rental booking, payment gateways, CRMs) to your website for a hassle-free user experience. 5. Register your Online Travel Agency Business This is a crucial part of your business. With major tasks off your plate, it’s time to make your travel business legal by registering with the government. Here is the checklist to do so: Choose your business name Apply for licenses and permits as per your local laws Apply for business insurance Invest in accounting software 6. Gain Accreditation Accreditation will make your travel agency business credible. Obtain accreditation from IATA, ARC or any other reputed travel organization, contracts from GDS. This accreditation will review your industry experience, finances and even provide training and support to flourish successfully. Recommended: How Can IATA Travel Pass Help Countries Reopen Borders? 7. Financial Plan To successfully start your online travel business, you will need sufficient capital. There are different ways of funding capital. Some of them are: Personal savings Credit cards Money from family and friends Venture capital Angel investors Crowdfunding Small business loans and grants A combination of these funding sources can help you get off the ground. To secure this capital, you need to have a financial plan of how much money you need to raise and how your business will make a profit. You are now set to take off your online travel agency business with these essential steps. It can be daunting initially, and your startup might have roadblocks, but stay dedicated and remember these steps to start and grow your new business seamlessly.
Experiential travel: The concept, the market, and insights on starting the segment
As per a recent survey, millennials are about one-third of the world’s population, and when they travel, a whopping 86 percent travel for experience. As many as 60 percent of them consider the authentic culture of the destination as the essential constituent of their trip. It indicates evolving expectations of the travelers from the destination of travel. They want to go beyond guided tours and have experience-driven trips; that’s why there is an exponential rise in experiential travel. What’s experiential travel? And its market size Experiential travel primarily combines cultural exploration of the destination and activity-based experiences. It could be actively engaging with a destination’s community, getting to know their culture, food habits, their philosophy of life, and livelihood. Or it could be less intimate, where travelers engage in activities that are true to that destination. Generally, the “authenticity in travel” is getting more critical. People no longer want to visit a place and spend all their time gazing over the structure of the property they are staying in; with every new destination they travel to, they look for a unique experience. However, if you look for the term experiential travel, you will hardly find it in the travel market. Because the majority of the players in the travel industry package it as “adventure travel” or “experience travel.” Some luxury travel brands like Scott Dunn from the UK use and market the term experiential travel. Scott Dunn describes it as “Travel is by its very nature ‘experiential,’ but many of us now seek experiences that connect us to cultures and people in a more meaningful and enriching way. If you find yourself hankering for a more fulfilling travel experience that reinforces the things that make life worth living and is aligned to your personal values, you’re not alone”. Hence, only a few players in the travel market are positioning and marketing “experiential travel,” while the market size is huge. Per Fatbit’s estimates, the segment will reach US$266.7 Trillion in value by 2027. The segment is expected to grow at a CAGR of 7.7 percent. So, it poses a tremendous opportunity for the players in the travel market to come up with more “experience travel” offers, position and advertise them to cash-in this opening. Also Read – Top Marketing Strategies for Online Travel Agencies Four key factors to consider before starting an “experience travel” business Before you venture into the experiential travel segment, there are a few grounds you will have to cover. Here, we are detailing four crucial factors you should consider before starting an experience travel business. 1. Delivery To manage efficient delivery, you have to organize your sources. You can assume you will operate in a market where the end consumers are highly aware of their choices. So, the delivery should be targeted and precise. You can achieve this by having a good mix of suppliers, partnering with resellers, and being available on all good marketplaces. Also, to boost personal sales deploy POS and channel manager. 2. Positioning and Marketing The positioning of the offering will determine how you will fare in this segment in the long run. Identify your market, and you already have the story of “experience travel.” Yet, you must find a differentiator in terms of what you add to the story, work on your search engine optimization, leverage social media, and paid ads to position your offering. You will be good to go. 3. Presence We mentioned SEO, Social, and Paid Media. All this will come into play and become a force when you are available on all possible online mediums. When we say all mediums, we mean don’t discount a channel, don’t assume you don’t need an IOS app. Test and scale your presence everywhere, from the web to mobile apps. 4. Viability Experiential travel is directly related to localities and communities. Indeed, they will get incentives when you do business with particular communities and localities. But you have to keep sustainability at the top of the pyramid, keep your operations green, and maximize social benefits for people who are not directly involved in your business. Once you check these boxes, you can certainly build a viable and sustainable business on experiential travel. Recommended: Is Bliesure The Future Of Business Travel? In this piece, we detailed “how” many travelers are pivoting towards experience travel from conventional travel, the potential of the segment, and how you can introduce experiential travel on your platform with caution and efficiency, also for sustainability. The possibility of “experience travel” is there in numbers, and it could very well be the future of travel.
