Business Idea

Start An Online Travel Agency

About

Starting an online travel agency requires a great deal of effort, dedication, and most importantly passion.

If you're interested in how to sell travel services, or selling travel services online, you can use this page as a guide for everything you'll need to know.

Key stats

market size
$596B
starting costs
$29.9K
gross margin
20%
avg product price
$200
time to build
270 months
growth
Direct sales
time investment
Full time

About

Starting an online travel agency requires a great deal of effort, dedication, and most importantly passion.

If you're interested in how to sell travel services, or selling travel services online, you can use this page as a guide for everything you'll need to know.

Key stats

market size
$596B
starting costs
$29.9K
gross margin
20%
avg product price
$200

 

time to build
270 months
growth
Direct sales
time investment
Full time

Startup Costs

Min Startup Costs Max Startup Costs
Office Space Expenses $0 $7,000
Employee & Freelancer Expenses $151 $352
Website Costs $223 $7,215
Business Formation Fees $5,600 $20,400
Software Expenses $162 $3,094
Advertising & Marketing Costs $0 $8,050
Specific Industry Expenses $0 $300
Total Startup Costs $6,136 $46,411

Successful Businesses

Business URL Rank
Priceline priceline.com #2,495
Costco Travel costcotravel.com #21,950
Travelgenio travelgenio.com #37,676
Your 360º travel partner bedsonline.com #72,322
PHPTRAVELS phptravels.com #114,707
Book cheap holidays: flights, hotels and car hire opodo.co.uk #117,355
VAX VacationAccess vaxvacationaccess.com #135,159
KAYAK kayak.com.au #145,007
Flight Expert Bangladesh flightexpert.com #167,424
Otrams otrams.com #180,905
TravelStore travelstore.com #200,851

Pros & Cons

Pros Description
Flexibility You can put as much time into the business as you'd like. If you like the work and have some initial experience, you can start small and manage all aspects of the business on your own.
Rewarding work Starting a online travel agency can be really rewarding work. After all, you are solving an immediate issue for your customer and you're working on something you truly care about.
Scalable With businesses and processes changing daily, there will always be demand for new features, products and services for your business. Additionally, there are several different business models and pricing tiers you can implement that will allow you to reach all types of customers.
Traffic to your website A online travel agency gives people a reason to visit your website and to keep coming back to you!
No overhead costs To get your online travel agency started, there are no costs associated with overhead, storage, packaging, etc. This will save you a lot of time and money!
Meaningful business connections You never know who you will meet as a online travel agency. This could be the start of an incredible business opportunity!
Cons Description
Longer Sales Process A online travel agency can be a big time and money investment for your customer, so it's important you plan and predict a longer conversion funnel and stay in communication with potential customers.
Security Issues With any Saas business, data loss and security issues may arise throughout your process of building your product. It's critical that you understand exactly what you're responsible for and how to avoid potential issues down the road.
Low margins The gross margins for your online travel agency are typically around 20%, which can make it more challenging to incur new expenses and maintain profitability.
Taxes As a online travel agency, you typically pay self-employment taxes which can be quite high. It's important to understand what you will be paying in taxes each year so you can determine if the work you're taking on is worth it.
Niche Market A niche business is not necessarily a bad thing, in fact, it can be the key to your success. However, it can be more challenging and time consuming to find the perfect niche market and target audience.
You may need to charge sales tax If you are selling your products in various states, you may be required to charge sales tax. Although this may not impact your financials specifically, it can be a headache to create a process and procedure for this. To learn more about sales tax, check out [this article](https://www.thebalancesmb.com/do-i-need-to-collect-sales-taxes-in-my-state-398913)

Marketing Ideas

  • 1

    Affiliate Program

    Affiliate marketing is a great way to bring in a new revenue stream, especially when you don't sell products or services.

    Simply put, an affiliate program is an agreement where a business pays another business or influencer ("the affiliate") a commission for sending traffic and/or sales their way.

    The affiliate typically gets a unique link where clicks and conversions can be tracked.

  • 2

    Direct Sales

    Direct sales strategy implies a direct contact between a seller and a consumer without the involvement of any third party. Direct selling is popular in sectors where sellers communicate with their clientele personally. The sales technique occurs at non-store locations which include at home, work, or online.

    For direct selling to succeed, hire a few (or many) salespeople to support the sales conversion process. It's critical that you assign them specific roles and responsibilities to nurture the client and provide excellent support.

  • 3

    Word of mouth

    Word of mouth is when a consumers reflects their interest in a company’s product or service in their daily dialogues.

    Therefore, word of mouth advertising is essentially a free advertising triggered by the customers experience.

    According to Nielsen, 92% of people trust recommendations from friends and family.

    Therefore, in today’s hyper-connected world, a single recommendation through a word of mouth can have a huge impact to your business.